Barchart Morning Call
Overnight
Developments
- Sep E-mini S&Ps this morning are trading unchanged while commodity prices are trading mildly lower on balance. The main bearish factor overnight was Japan's downgrade of its economy while the main bullish factor was successful Spanish and Italian bill and bond auctions. European stocks are down -0.49%. Isaac is moving slowly and has yet to turn into a hurricane. Oct crude oil prices this morning are up +0.49% while Oct gasoline is down -0.34%. Sep 10-year T-note prices are up 3 ticks. The dollar index is down -0.20% while EUR/USD is up +0.34%.
- Asian stocks today closed mixed: Japan -0.57%, Hong Kong +0.07%, China +0.46%, Taiwan -1.42%, Australia +0.36%, Singapore -0.15%, South Korea -0.08%, India -0.27%, Turkey +0.80%.
- Spain today conducted a successful bill auction, selling 3.6 billion euros of bills that was above its target amount of 3.5 billion euros. The yield on the 3-month bills of 946% was far below the 2.434% that Spain was forced to pay just a month ago. The yield of 2.026% on the 6-month bills was down sharply from 3.691% at last month's auction. Meanwhile, Italy today sold 3.75 billion euros of zero-coupon and inflation-linked bonds. The 3.064% yield on the zero-coupon bonds was down sharply by almost 2 percentage points from the last auction a month ago. Looking ahead, Italy will sell 9 billion euros of 6-month bills on Wednesday and 7.5 billion euros worth of bonds on Thursday including a 10-year bond.
- Tropical Storm Isaac is expected to reach hurricane force later today and make landfall south of New Orleans early tomorrow morning as a Category 1 hurricane, less than previous expectations of a Category 2 hurricane. The storm has halted 78% of oil production and 48% of natural gas production in the Gulf of Mexico, according to the U.S. Bureau of Safety and Environmental Enforcement. In addition, four refineries in Louisiana have so far closed, representing 4.8% of total U.S. refining capacity or 832,700 barrels per day.
- ECB President Draghi canceled his trip to the Fed's Jackson Hole conference due to a heavy work load over the next week. Mr. Draghi had been scheduled to be on a panel on Saturday at the Jackson Hole conference. The ECB meets next Thursday on Sep 6 and is expected to announce its bond-buying program.
- Firefighters are battling fires for a fourth day at Venezuela's largest refinery. The temporary shut-down of the Amuay refinery will further tighten up U.S. product supplies since that refinery exports refined products to the U.S.
- Japan's Cabinet Office in its monthly report downgraded its assessment of
the Japanese economy for the first time in 10 months. The Cabinet Office said
that risks include "further slowing down of overseas economies and sharp
fluctuations in the financial and capital markets." The report said, "The
Japanese economy is on the way to recovery at a moderate pace, partly due to
reconstruction demand, while some weak movements are seen recently."
Market Comments- Sep E-mini S&Ps this morning are trading unchanged. The U.S. stock market continues to tread water ahead of this week's full slate of economic reports and Friday's Bernanke speece at Jackson Hole. The U.S. stock market on Monday closed mixed: S&P 500 -0.05%, Dow Jones -0.25%, Nasdaq 100 +0.16%. The Nasdaq 100 index closed higher with help from the 1.9% rally in Apple on its $1 billion patent victory over Samsung and its improved competitive position with the victory relative to Google and other players in the technology space. The S&P 500 index and the Dow were weighed down by the weak Chinese July industrial profit report of -5.4% y/y, the weaker-than-expected German August IFO business climate index of -1.0 point to a 2-1/2 year low of 102.3, and continued worries about global economic growth. Supportive factors for stocks included Chicago Fed President Evans' call for an open-ended QE3 program that buys bonds until unemployment falls for two or three quarters, and the call by Chinese Premier Wen Jiabao for additional growth measures to underpin the Chinese economy in Q3.
- Sep 10-year T-notes this morning are up 3 ticks as the market continues to hope for Bernanke hints on QE3 on Friday. Sep 10-year T-note futures prices on Monday closed mildly higher: TYU2 +7.5, FVU2 +3.0. Bullish factors included general worries about global economic growth, continued hopes that Fed Chairman Bernanke at his Jackson Hole speech on Friday may provide additional hints about QE3, and worries about the European debt crisis as crunch time is coming in September and October.
- The dollar index this morning is mildly lower by -0.16 (-0.20%). EUR/USD is up +0.0042 (+0.34%) on the successful Spanish bill and Italian bond auctions today. USD/JPY is down -0.09 (-0.11%) this morning. The dollar index on Monday closed slightly higher: Dollar index +0.09 (+0.11%), EUR/USD -0.0013 (-0.10%), USD/JPY +0.07 (+0.09%). EUR/USD was undercut on Monday by Bundesbank President and ECB Council member Jens Weidmann's comments in a weekend Der Spiegel interview in which he continued to express opposition to the ECB's bond buying plans. EUR/USD was also undercut by the weaker than expected German Aug IFO business climate index, which fell 1.0 point to a new 2-1/2 year low.
- Oct WTI crude oil prices this morning are up +0.47 (+0.49%) while Oct gasoline is down -0.0100 (-0.34%) as the market continues to adjust to anticipated impacts from Isaac. Oct crude oil and gasoline prices on Monday closed mixed: CLV2 -0.68 (-0.71%), RBU2 +0.0395 (+1.36%). Crude oil closed lower on expectations that Isaac is not large enough to cause any significant long-term damage to oil rig and transportation infrastructure in the Gulf of Mexico. However, gasoline prices rallied on the continued effects of explosion and fire at Venezuela's largest refinergy and on expectations that Isaac will cause a significant refinery shut-downs in the U.S. and likely cause U.S. gasoline inventory conditions to tighten. There is plenty of slack for oil inventories, which are still excessive at 6.3% above the 5-year seasonal average. Product inventories, on the other hand, were already tight going into Tropical Storm Isaac with gasoline inventories 2.5% below the 5-year average and distillate inventories at 17.0% below average. The market consensus for Wednesday's weekly DOE report are for a 2 million barrel decline in oil inventories, a 1.4 million barrel decline in gasoline inventories, a 400,000 barrel climb in distillate inventories, and a 0.3 point drop to 90.9% in the refinery utilization rate.
- For the complete subscription version of this daily report (plus a 13-page
big-picture weekly report), along with the earliest possible delivery in the
morning, please visit http://www.barchart.com/register/crbfms_usmc.php
Today's U.S. Earnings Reports Earnings reports (ranked by market cap): SFL-Ship Finance (Consensus $0.42), CYBX-Cybernoics (0.36), SAFM-Sanderson Farms (1.07).
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.Tuesday 8/28/12 United States 0745 ET ICSC (Int'l Council of Shopping Centers) weekly retailer sales. 0855 ET Redbook weekly retailer sales. 0900 ET S&P/Case-Shiller June Compose 20 home price index expected +0.3% m/m and -0.2% y/y, May +0.91% m/m and -0.66% y/y. Case-Shiller Q2 home price index, Q1 -1.92% y/y. 1000 ET U.S. Aug consumer confidence (Conference Board) expected +0.1 to 66.0, July +3.2 to 65.9. 1000 ET Richmond Aug Fed manufacturing index expected +6 to -11, July -16 to -17. 1130 ET Weekly 4-week T-bill auction. 1300 ET Treasury auctions $35 billion 2-year T-notes. 1630 ET API weekly U.S. oil statistics. Japan 0100 ET Japan Aug small business confidence, July 46.6. Germany 0200 ET German Sep GfK consumer confidence survey expected -0.1 to 5.8, Aug 5.9. Euro-Zone 0400 ET Eurozone July M3 expected+3.1% 3-mo avg and +3.2% y/y, Jun +3.0% 3-mo avg and +3.2% y/y. 0700 ET EU President Herman Van Rompuy meets Spanish Prime Minister Mariano Rajoy in Madrid.
No comments:
Post a Comment