Barchart Morning Call
Overnight Developments
Global Financial Calendar
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- Global stocks this morning are higher with the Euro Stoxx 50 up +0.40% and Dec S&Ps up +7.30 points. The dollar is lower and Treasuries are little changed, while commodities are mixed as crude oil posted a 3-1/4 month high. Steps by European leaders to address the region's debt crisis is boosting equities as Italy's Senate will vote on debt-reduction measures today that will pave the way for a new government led by former EU Competition Commissioner Mario Monti, while Greece will swear in former ECB Vice President Lucas Papademos to head a unity government. A fall in Italian and French government bond yields lifted the euro, although gains were muted after ECB Council member Nowotny said the ECB could act "more decisively" if the European economy is going into a slump.
- Asian stocks today closed mixed with Japan up +0.16%, China -0.17%, Australia +1.23%, South Korea +2.95%, India -0.97%. Asian stocks rallied as European leaders took steps to address the region's debt crisis, although gains in Japanese stocks were limited as exporters weakened after the yen rose to a 1-1/2 week high against the dollar. China's lending rose more than expected last month; a sign the government may be loosening loan quotas to support economic growth. Oct China new loans rose 586.8 billion yuan, more than the 500 billion yuan expected and the highest amount since June. Losses in Chinese shipbuilders were a drag on the overall market after the Xinhua News Agency reported that Vice Commerce minister Zhong Shan said that China faces a pessimistic foreign trade outlook amid global economic turmoil, rising labor and raw material costs and mounting pressure on the yuan.
- December S&Ps this morning are trading up +7.30 points. The US stock market yesterday moved higher as European debt concerns eased and after weekly U.S. jobless claims unexpectedly fell to a 7-month low: Dow Jones +0.96%, S&P 500 +0.86%, Nasdaq Composite +0.00%. Bullish factors included (1) reduced European debt concerns after Italian bond yields fell after Italy drew double the bids for the amount offered at a bill sale, which temporarily eases concern that it faces funding challenges, (2) the action by Greece to chose a Prime Minister to lead its coalition government, which may now implement austerity measures it needs to secure additional financing to avoid default, (3) the action by Standard & Poor's to reiterate its AAA credit rating on France after rumors started that S&P might cut France's credit rating, (4) the unexpected drop in weekly initial unemployment claims to their lowest level in 7 months (-10,000 to 390,000 versus expectations of +3,000 to 400,000), and (5) the unexpected fall in the Sep trade balance which narrowed to a 9-month low and may boost Q3 GDP (-$43.1 billion versus expectations of -$46.0 billion).
- Bearish factors included (1) concern over contagion of the European debt crisis to France after credit default swaps to insure French government debt rose to a record high, (2) comments from ECB Council member Kranjec who said Europe's economic situation is "worsening" as it struggles through the debt crisis, and (3) weakness in technology stocks after Apple declined when analysts at Cleveland Research cut their predictions of iPad shipments to 12 million from 14 million for the quarter ending December due to supply restraints.
- Walt Disney (DIS) rose 3.1% in European trading after the company reported Q4 earnings of 59 cents a share, beating analysts' estimates of 55 cents.
- December 10-year T-notes this morning are down -1.5 ticks. T-note prices yesterday moved lower after weekly U.S. jobless claims unexpectedly fell to a 7-month low and safe-haven demand subsided after Italian government bond yields fell and as Greece finally chose a new prime minister to lead a coalition government: TYZ11 -15, FVZ11 -5.7, EDH12 -1.5. Bearish factors included (1) the unexpected drop in weekly initial unemployment claims to their lowest level in 7 months (-10,000 to 390,000 versus expectations of +3,000 to 400,000), (2) the unexpected fall in the Sep trade balance which narrowed to a 9-month low and may boost Q3 GDP (-$43.1 billion versus expectations of -$46.0 billion), (3) reduced safe-haven demand for Treasuries as stocks rallied after European debt concerns eased when Italian bond yields fell and after Greece chose a Prime Minister to lead its coalition government, which may now implement austerity measures it needs to secure additional financing to avoid default, and (4) slack demand for the Treasury's $16 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.40, below the 12-auction average of 2.65. Bullish factors included (1) the weaker-than-expected Oct import price index (-0.6% m/m and +11.0% y/y versus expectations of unchanged m/m and +11.8% y/y), (2) comments from ECB Council member Kranjec that may boost the safe-haven demand for Treasuries when he said Europe's economic situation is "worsening" as it struggles through the debt crisis and (3) comments from Fed Chairman Bernanke that may signal support for additional stimulus when he said the Fed is concentrating "intently" on reducing unemployment and that inflation will stay under control for the "foreseeable future."
- The dollar index this morning is weaker with the dollar/yen -0.26 yen and the euro/dollar +0.34 cents. The dollar index yesterday settled lower as the euro strengthened when Italian bond yields fell and after Standard & Poor's reiterated its AAA credit rating on France: Dollar Index -0.183, USDJPY -0.169, EURUSD +0.00681. The dollar index posted a 1-month high but gave up its gains and closed lower. Bearish factors included (1) strength in the euro after Italian bond yields fell after Italy drew double the bids for the amount offered at a bill sale, which temporarily eases concern that it faces funding challenges, (2) the action by Standard & Poor's to reiterate its AAA credit rating on France after rumors started that S&P might cut France's credit rating, and (3) comments from Fed Chairman Bernanke who said the Fed is focusing "intently" on supporting job growth, which may lead to additional dollar negative stimulus measures. Bullish factors included (1) the action by the European Commission to cut its Euro-Zone growth forecast for this year to 1.5% from an earlier projection of 1.6% and the cut in its estimate for next year to 0.5% from an earlier estimate of 1.8%, which is euro negative, and (2) comments from ECB Council member Kranjec who said Europe's economic situation is "worsening" as it struggles through the debt crisis.
- Dec crude oil prices this morning are up +7 cents a barrel at a fresh 3-1/4 month high and Dec gasoline is -2.00 cents per gallon. Crude oil and gasoline prices yesterday finished mixed as a drop in U.S. jobless claims to a 7-month low and reduced European debt concerns boosted crude, while the action by the European Commission to lower its GDP forecast for the Euro-Zone undercut gasoline: CLZ11 +$2.04, RBZ11 -0.74. Dec crude posted 3-1/4 month high. Bullish factors included (1) the weaker dollar, which increases investment demand for commodities, (2) the unexpected fall in weekly U.S. jobless claims to their lowest level in 7 months, which spurs optimism a recovering economy will boost fuel demand, and (3) reduced European debt concerns after Italian bond yields retreated from record highs, which eased concern the European debt crisis was worsening. Bearish factors included (1) the action by the European Commission to cut its Euro-Zone growth forecast for this year and next, which signals reduced fuel consumption, and (2) the action by the IEA to reduce its 2012 global oil demand forecast for a third month as it cut its consumption forecast for next year by 20,000 barrels to 90.5 million barrels a day because of lower usage expectations for the U.S. and Japan.
Global Financial Calendar
| Friday 11/11/11 | |
|---|---|
| United States | |
| 0955 ET | Preliminary Nov U.S. University of Michigan consumer confidence expected +0.6 to 61.5, Oct +1.5 to 60.9. |
| 1315 ET | Fed Vice Chairman Janet Yellen gives luncheon keynote address at the Chicago Fed?s 14th Annual International Banking Conference. |
| 1445 ET | San Francisco Fed President John Williams speaks on a panel titled ?Monetary and Macro-prudential Policies: Challenges and Solutions? at the IMF?s annual research conference. |
| n/a | Cash U.S interest rate and forex markets closed for Veterans Day. Equities open regular hours. |
| United Kingdom | |
| 0430 ET | Oct U.K. PPI input prices expected -0.3% m/m and +14.6% y/y, Sep +1.7% m/m and +17.5% y/y. |
| 0430 ET | Oct U.K. PPI output prices expected +0.2% m/m and +5.9% y/y, Sep +0.3% m/m and +6.3% y/y. |
| 0430 ET | Oct U.K. PPI output core expected +0.1% m/m and +3.6% y/y, Sep +0.3% m/m and +3.8% y/y. |
| Euro-Zone | |
| 0630 ET | ECB Council member Jose Gonzales-Paramo speaks in a round table discussion on ?Financial Stability: What Role for Securities Markets?? at the CNMV International Conference in Madrid. |
As per this report in my opinion the stock market soon will improved.The stock market is one of the most important sources for companies to raise money.Let's hope for the future profit growth.
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