Overnight Developments
- Dec E-mini S&Ps this morning are moderately higher by +0.58% on a rally in European and Asian stocks on speculation that the Chinese government may be close to announcing a new fiscal stimulus program and stock support measures. The Euro Stoxx 50 is up +0.67% this morning. Asian stocks closed higher nearly across the board with Japan +0.48%, Hong Kong +1.14%, and China's CSI 300 +3.06%. Commodity prices are up +0.20% with Nov crude oil +0.91%, Dec gold +0.19%, Dec copper +0.58%, and agricultural prices trading mostly lower. The dollar index is mildly lower by -0.15%. Sep 10-year T-notes are down 9.5 ticks.
- Chinese stocks rallied today on a report by the Shanghai Securities News that the China's Securities Regulatory Commission would announce 10 new measures to support stock prices. There were also rumors that China might announce a large fiscal stimulus program after China National Day on Oct 1.
- The Spanish 10-year bond yield today rose by 1 bp to 6.04% after yesterday's 32 bp surge to 6.03%. Spanish Prime Minister Rajoy today presented his 2013 austerity budget that cuts the deficit by another 18 billion euros. Protesters in Madrid marched for a second night to protest austerity.
- The UK Q2 GDP was revised slightly higher to -0.4% q/q from -0.5% q/q but the year-on-year figure was left unchanged at -0.5% y/y.
- Germany's Sep unemployment rose +9,000, which slightly less than the expected +10,000. The German Sep unemployment rate of 6.8% was unchanged from Aug and was in line with market expectations.
- The Eurozone confidence indexes
were a little weaker than market expectations. The Eurozone economic confidence
index of 85.0 was a little weaker than market expectations and the Aug report of
86.1. The Sep industrial confidence index of -16.1 was down from Aug's -15.3 and
was weaker than market expectations of -15.0. The Sep services confidence index
of -12.0 was weaker than market expectations of -11.1 and was weaker than market
expectations of -10.8.
Market Comments- Dec E-mini S&Ps this morning are up +8.25 (+0.58%) on some short-covering after recent losses, the rally in European and Asian stocks, and the speculation about a new Chinese fiscal stimulus program. The S&P 500 index on Wednesday closed moderately lower and posted a new 2-week low: S&P 500 -0.57%, Dow Jones -0.33%, Nasdaq 100 -0.82%. Bearish factors included (1) the weaker-than-expected U.S. new home sales report of -0.3%, (2) the worsening Japan-China territorial conflict over the islands in the East China Sea which is putting a dent in both country's economies, and (3) increased concerns about Europe with general strikes and street protests.
- Dec 10-year T-notes this morning are down 9.5 ticks as the rally in stocks has sapped safe-haven demand. Dec 10-year T-note prices on Wednesday posted a new 3-week high and closed moderately higher: TYZ2 +15, FVZ2 +5.75. T-note prices received a boost from the weaker-than-expected new home sales report of -0.3%, the continued slide in global stocks, and increased safe-haven demand with the street protests and social unrest in Spain and Greece.
- The dollar index this morning is mildly lower by -0.12 points (-0.15%) on reduced safe-haven demand with the rally in stocks. EUR/USD little changed while USD/JPY is down -0.07 (-0.09%). The dollar index on Wednesday closed higher: Dollar index +0.27 (+0.34%), EUR/USD -0.0026 (-0.20%), USD/JPY -0.05 (-0.06%). The dollar index continued to rally on increased safe-haven demand with the sell-off in global stocks and with the social unrest in Spain and Greece. That social unrest is making it more difficult for those nations to meet Eurozone austerity measures and qualify for bailout aid. The Eurozone debt crisis took a turn for the worse on Wednesday after Germany, the Netherlands, and Finland sent out a letter saying that governments should handle bank bailouts before the ESM bailout facility, raising questions about whether the ESM can be used to help bail out Spain's banks.
- Nov WTI crude oil prices this morning are up +0.82 (+0.91%) and Nov gasoline is up +0.0267 (+0.93%) on the slightly lower dollar and the rally in global stocks. Nov crude oil and gasoline prices on Monday closed mixed: CLX2 -1.39 (-1.52%), RBV2 +0.0514 (+1.82%). Crude oil continued to see weakness on the higher dollar, lower global stocks, and concern about the global economy. Crude oil prices were unable to get much support from the bullish news that DOE U.S. crude oil inventories fell by 2.446 million barrels versus expectations for an increase of +2.0 million barrels. Gasoline inventories fell -481,000 barrels (versus expectations of +500,000 barrels) and distillate inventories fell 482,000 barrels (versus expectations of a +900,000 barrel increase). Gasoline prices rallied sharply for the second consecutive day on tight gasoline inventories in the northeast and California. Gasoline inventories in the northeast, which includes the NY Harbor where Nymex gasoline is priced, fell to a 4-year low due to refinery closures in the U.S., Canada and the UK. Gasoline imports into NY harbor have dropped sharply and hit a 10-year low for this time of year due to refinery shutdowns in the UK for autumn maintenance. U.S. gasoline imports also continue to be undercut by the low 60% operating rate of Venezuela's largest refinery after the Aug 25 explosion and fire. Meanwhile, gasoline inventories on the west coast (Padd 5 region) fell to a 6-week low.
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Today's U.S. Earnings Reports Earnings reports (ranked by market cap): ACN-Accenture (Consensus:$0.88), NKE-Nike (1.13), DFS-Disover Financial (1.03), MKC-McCormick (-0.76), MU-Micron Technology (-0.24%), GPN-Global Payments (0.87), ATU-Actuant Corp (0.54).
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.Thursday 9/27/12 United States 0830 ET Weekly initial unemployment claims expected -7,000 to 375,000, previous -3,000 to 382,000. Weekly continuing claims expected +18,000 to 3.290 mln, previous -32,000 to 3.272 mln. 0830 ET Q2 GDP expected to be unrevised at +1.7% q/q annualized. Q2 personal consumption expected unrevised at +1.7%. Q2 GDP price index expected unrevised at +1.6%. Q2 core PCE expected unrevised at +1.8%. 0830 ET Aug durable goods orders expected -5.0% m/m, July +4.1% m/m. Aug durable goods orders ex-transportation expected +0.2% m/m, July -0.6% m/m. 0830 ET Benchmark revisions to payrolls. 0830 ET USDA weekly Net Export Sales. 1000 ET Aug pending home sales expected unchanged m/m and +14.2% y/y, July +2.4% m/m and +15.0% y/y. 1100 ET Sep Kansas City Fed manufacturing index expected 5, Aug 8. 1300 ET Treasury auction of $29 billion in 7-year T-notes. 1630 ET Weekly money supply report and Fed balance sheet. Germany 0200 ET Aug import price index expected +0.8% m/m and +2.7% y/y, July +0.7% m/m and +1.2% y/y. 0355 ET German Sep unemployment change expected +10,000, Aug +9,000. Sep unemployment rate expected 6.8%, Aug 6.8%. 0400 ET German Aug Eurozone M3 expected +3.8% y/y, July +3.8% y/y. 1901 ET German Sep GfK consumer confidence survey expected -28, Aug -29. United Kingdom 0430 ET UK Q2 final GDP expected unrevised from last -0.5% q/q and -0.5% y/y. 0430 ET UK Q2 current account, Q1 -11.2 bln pounds. 0430 ET UK final Q2 total business investment expected unrevised from last -1.5% q/q and +1.7% y/y. 1901 ET UK Sep GfK consumer confidence index, Aug -29. Euro-Zone 0500 ET Eurozone Sep business climate indicator expected -1.2, Aug -1.21. Eurozone Sep economic confidence expected -25.9, Aug 86.1. Sep industrial confidence expected -15.0, Aug -15.3. Sep services confidence expected -11.1, Aug -10.8. Japan 1915 ET Japan Sep Markit/JMMA manufacturing PMI, Aug 47.7. 1930 ET Japan Aug jobless rate expected 4.3%, July 4.3%. Aug job-to-applicant ratio expected 0.83, July 0.83. 1930 ET Japan Aug overall household spending expected +1.1% y/y, July +1.7% y/y. 1930 ET Japan Aug national CPI expected -0.5% y/y, July -0.4% y/y. Aug national CPI ex-fresh food expected -0.3% y/y, July -0.3% y/y. Aug national CPI ex-food and energy expected -0.5% y/y, July -0.6% y/y. 1930 ET Tokyo Aug CPI expected -0.6% y/y, Aug -0.7% y/y. Aug CPI ex-fresh food expected -0.3% y/y, Aug -0.5% y/y. Aug CPI ex-food, energy expected -0.9% y/y, Aug -0.8% y/y. 1950 ET Japan Aug retail trade expected -0.3% m/m and -0.3% y/y, July -1.5% m/m and -0.7% y/y. Aug large retailers sales expected -1.7% y/y, July -4.4% y/y. 1950 ET Japan Aug industrial production expected -0.5% m/m and -3.4% y/y, July -1.0% m/m and -0.8% y/y.
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