Overnight Developments
- Dec E-mini S&Ps are little changed this morning. The Euro Stoxx 50 index this morning is slightly lower by -0.15% and the large Asian stock markets closed mildly lower with Japan down -0.12%, Hong Kong down -0.16%, and China down -0.46%. The markets in part are awaiting developments from today's Eurozone finance ministers meeting on Greece. Israel has put its ground invasion of Gaza on hold while it waits to see if Egypt can convince Hamas to stop firing rockets into Israel. Commodity prices this morning are slightly lower by -0.10% with Jan crude oil down -0.19%, Jan gasoline down -0.56%, Dec gold down -0.02%, Dec copper down -0.17%, and agriculture prices mixed. The dollar index is slightly lower by -0.05%. Dec 10-year T-note prices are down 5.5 ticks.
- The Bank of Japan at the 2-day meeting that concluded today left its monetary policy unchanged and did not raise its asset purchase target. The BOJ had already raised its asset purchase target in each of the last two months in September and October. Today's lack of action was in line with market expectations. The market is now expecting the BOJ to raise its target again at its meeting in December. The BOJ will come under increased pressure to ease if the opposition LDP party wins December's general election as expected since LDP leader Shinzo Abe recently called on the BOJ to engage in unlimited easing and to boost its inflation goal to 2% or 3% from the current 1%.
- Chinese foreign direct investment fell -0.2% y/y to $8.31 billion, which was the eleventh decline in the last twelve months. The report indicated that foreign investors are pulling back from China due to slower economic growth and various administrative restrictions designed to rein in the economy and inflation.
- Japan's Sep all-industry activity index fell -0.3% m/m, which was a bit stronger than the expected -0.5% decline.
- Japan Oct nationwide department store sales fell -2.4% y/y, down from -0.2% y/y in Sep. Tokyo Oct department store sales fell -1.5% y/y versus the +0.7% y/y increase in September.
- The German Oct producer price
report of unch m/m and +1.5% y/y was slightly weaker than market expectations of
+0.1% m/m and +1.6% y/y and was down from +0.3% m/m and +1.7% in Sep.
Market Comments- Dec E-mini S&Ps this morning are slightly higher by +0.25 points (+0.02%) as the market pauses in the wake of yesterday's sharp rally. Global stocks are mildly lower this morning on balance. The stock market is looking ahead to today's housings starts report and the outcome of today's Eurozone finance ministers meeting regarding Greece. U.S. stocks on Monday rallied sharply on hopes for Eurozone approval of the Greek bailout tranche as soon as Tuesday and improved hopes for a fiscal cliff resolution, along with the stronger-than-expected U.S. existing home sales data and NAHB housing market index. Closes: S&P 500 +1.99%, Dow Jones +1.65%, Nasdaq +2.43%. The Nov NAHB housing market index rose sharply by 5 points to a 6-1/2 year high of 46, which was much stronger than market expectations of unchanged at 41. U.S. existing home sales rose +2.1% to 4.79 mln units, which was stronger than market expectations for a report of 4.74 million units.
- Dec 10-year T-notes this morning are down 5.5 ticks as safe-haven demand continues to ebb. Dec 10-year T-note prices on Monday closed moderately lower on the stronger-than-expected housing market data and reduced safe-haven demand with the rally in stocks: Closes: TYZ2 -9, FVZ2 -3.25.
- The dollar index this morning is slightly lower by -0.04 points (-0.05%). EUR/USD is virtually unchanged and USD/JPY is up +0.10 (+0.12%). The dollar index on Monday closed lower due to reduced safe-haven demand with the sharp upward rebound in the U.S. stock market. EUR/USD on Monday closed higher on hopes for Eurozone approval of the Greek bailout tranche and was able to shake off news of a downgrade in the French credit rating. Closes: Dollar index -0.38 (-0.47%), EUR/USD +0.0071 (+0.56%), USD/JPY +0.71 (+0.56%).
- Jan WTI crude oil prices this morning are down -0.17 (-0.19%) and Jan gasoline is down -0.0152 (-0.56%) as the petroleum market runs into some long liquidation pressure after yesterday's rally. Dec crude oil and gasoline prices on Monday closed higher on (1) Middle East tensions with Israel on the verge of a ground invasion of Gaza, and (2) weakness in the dollar index and the rally in stocks: CLF3 +2.36 (+2.72%), RBZ2 +0.0502 (+1.87%). The market consensus for Wednesday's weekly DOE report is for a 1 million barrel increase in crude oil inventories, a 1 million barrel increase in gasoline inventories, a 1 million barrel decline in distillate inventories, and a 0.5 point increase in the refinery utilization rate.
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Today's U.S. Earnings Reports Earnings reports (ranked by market cap): Medtronic (Consensus:$0.88), HPQ-Hewlett Packard (1.14), CRM-Salesforce.com (0.32), HNZ-Heinz (0.88), CPB-Campbell Soup (0.85), HRL-Hormel Foods (0.50), VAL-Valspar (0.85), BBY-Best Buy (0.12), SIG-Signet Jewelers (0.37), PDCo-Patterson Cos (0.48), EV-Eaton Vance (0.48), CHS-Chico's Fas (.23).
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.Tuesday 11/20/12 United States 0745 ET ICSC (Int'l Council of Shopping Centers) weekly retailer sales. 0830 ET Oct housing starts expected -3.7% m/m to 840,000, Sep +15.0% to 872,000. Oct building permits are expected at -2.9% to 864,000, Sep +11.1% to 890,000. 0855 ET Redbook weekly retailer sales. 0900 ET Richmond Fed President Jeffery Lacker speaks on monetary policy in NY at the Shadow Open Market Committee's Fall Symposium. 1130 ET Weekly 4-week T-bill auction. 1215 ET Fed Chairman Bernanke speaks to the Economic Club of NY. 1630 ET API weekly U.S. oil statistics. Euro-Zone n/a Eurozone finance ministers meeting. Japan n/a BOJ 2-day meeting concludes. 0030 ET Japan Oct nationwide department store sales, Sep -0.2% y/y. Oct Tokyo department store sales, Sep +0.7% y/y. 0200 ET Japan Oct convenience store sales, Sep -1.6% y/y. 1850 ET Japan Oct merchandise trade balance expected -360 bln yen, Sep -562 bln yen. Oct adjusted merchandise trade balance expected -492 bln yen, Sep -980 bln yen. Oct trade exports expected -4.9% y/y, Sep -10.3% y/y. Oct trade imports expected -3.2% y/y, Sep +4.1% y/y. CHI 2100 ET Conference Board's China Oct leading economic index. Germany 0200 ET German Oct producer prices expected +0.1% m/m and +1.6% y/y, Sep +0.3% m/m and +1.7% y/y.
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