BARCHART MORNING CALL 3/26

BARCHART MORNING CALL

Wednesday, March 26th, 2014View Older Reports

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OVERNIGHT MARKETS AND NEWS

June E-mini S&Ps (ESM14 +0.34%) this morning are up +0.28% and European stocks are up +0.97% at a 2-week high after a gauge of German consumer confidence remained at a 7-1/4 year high. Also, in a sign that the European sovereign debt crisis continues to recede, the yield on Portugal's 5-year government bond fell to 3.007%, the lowest in over 4-years. U.S. stocks received support on comments from St. Louis Fed President Bullard who said the U.S. is in "good shape" to have economic growth of more than 3.0% for the remaining quarters in 2014. Asian stocks closed mostly higher: Japan +0.37%, Hong Kong +0.72%, China -0.16%, Taiwan +0.55%, Australia +0.75%, Singapore +1.26%, South Korea +1.40%, India +0.18%. Chinese stocks bucked the trend and closed lower after Li Daokui, a former member of the PBOC monetary policy committee, said that China is headed for a "mini crisis" in its regional debt market. Commodity prices are mixed. May crude oil (CLK14 +0.26%) is up +0.10%. May gasoline (RBK14 +0.35%) is up +0.32%. Apr gold (GCJ14 +0.25%) is up +0.28%. May copper (HGK14 -0.85%) is down -0.82%. Agriculture and livestock prices are mixed. The dollar index (DXY00 +0.14%) is up +0.14%. EUR/USD (^EURUSD) is down -0.17%. USD/JPY (^USDJPY) is up +0.12%. June T-note prices (ZNM14 -0.09%) are down -3 ticks.
Speaking at an Asian Investment Conference in Hong Kong, St. Louis Fed President Bullard, a non-voting member of the FOMC this year, said that the U.S. is in "good shape" to have economic growth of more than 3.0% for the remaining quarters in 2014 and may reach that pace for the full year and that the unemployment rate is likely to dip below 6.0% by the end of the year.
The German Apr GfK consumer confidence was unchanged at 8.5, right on expectations and the best level in 7-1/4 years.
The Japan Feb corporate service price index rose +0.7% y/y, slightly less than expectations of +0.8% y/y.

U.S. STOCK PREVIEW

Today’s Feb durable goods orders report is expected to show increases of +0.8% and +0.3% ex-transportation following January’s mixed report of -1.0% and +1.1% ex-transportation.  There is one of the Russell 1000 companies that report earnings today:  Paychex (consensus $0.42).  Equity conferences during the remainder of this week include: TAG Spring Consumer Conference on Tue, Gastech Conference & Exhibition on Mon-Wed, BB&T Capital Markets Commercial & Industrial Conference on Wed, CIBC Retail and Consumer Conference on Wed, JPMorgan Insurance Conference on Wed, Oracle Storage Summit New York on Wed, Jefferies Animal Health Day on Thu, and Jefferies Animal Health Day on Thu

OVERNIGHT U.S. STOCK MOVERS

Corning (GLW +2.29%) was upgraded to 'Positive' from 'Neutral' at Susquehanna.
Walgreens (WAG +3.28%) was downgraded to 'Neutral' from 'Outperform' at Macquarie.
Covanta (CVA +4.55%) was upgraded to 'Outperform' from 'Neutral' at RW Baird.
Carlyle Group (CG -1.01%) was upgraded to 'Buy' from 'Neutral' at UBS.
Garmin (GRMN -0.89%) was upgraded to 'Buy' from 'Neutral' at Citigroup.
Lockheed Martin (LMT +1.50%) was awarded a $698.03 million government contract to procure long lead parts, materials and components in support of 57 IX F-35 Lightning II Joint Strike Fighters.
Facebook (FB +1.23%) said it agreed to acquire Oculus VR for approximately $2 billion.
International Game (IGT +0.34%) fell over 8% in after-hours trading after it cut its fiscal 2014 adjusted EPS outlook to $1.00-$1.10 from $1.28-$1.38 and said it will reduce its global workforce by 7%.
Steelcase (SCS -0.55%) reported Q4 EPS of 18 cents, higher than consensus of 17 cents, which prompted Raymond James to upgrade the stock to 'Strong Buy' from 'Outperform.'
Peabody Coal (BTU +1.18%) and Arch Coal (ACI -0.64%) were both downgraded to 'Neutral' from 'Buy' at UBS.
PVH Corp. (PVH -1.71%) reported Q4 EPS of $1.43, better than consensus of $1.42, but then lowered guidance on fiscal 2014 EPS to $7.40 to $7.50, well below consensus of $7.81.

MARKET COMMENTS

June E-mini S&Ps (ESM14 +0.34%) this morning are up +5.25 points (+0.28%). The S&P 500 on Tuesday closed higher. Stocks rose on optimism over the U.S. economic outlook after U.S. Mar consumer confidence (Conference Board) rose +4.0 points to a 6-year high of 82.3, a bigger increase than expectations of +0.4 to 78.5. Gains were limited as Feb new home sales fell -3.3% to a 5-month low of 440,000, a bigger decline than expectations of -4.9% to 445,000. Closes: S&P 500 +0.44%, Dow Jones +0.56%, Nasdaq +0.34%.
Jun 10-year T-notes (ZNM14 -0.09%) this morning are down -3 ticks. Jun 10-year T-note futures prices on Tuesday closed higher. A larger-than-expected decline in U.S. Feb new home sales to a 5-month low offset a jump in U.S. Mar consumer confidence to its best level in 6 years. Closes: TYM4 +1.50, FVM4 +2.75.
The dollar index (DXY00 +0.14%) this morning is up +0.109 (+0.14%). EUR/USD (^EURUSD) is down -0.0024 (-0.17%). USD/JPY (^USDJPY) is up +0.12 (+0.12%). The dollar index on Tuesday closed little changed. The dollar garnered support from an increase in U.S. Mar consumer confidence to a 6-year high, while EUR/USD retreated after the German Mar IFO business climate fell more than expected. Closes: Dollar index +0.010 (+0.01%), EUR/USD -0.00126 (-0.09%), USD/JPY +0.015 (+0.01%).
May WTI crude oil (CLK14 +0.26%) this morning is up +10 cents (+0.10%) and May gasoline (RBK14 +0.35%) is up +0.0093 (+0.32%). May crude and gasoline prices on Tuesday closed lower. Crude prices erased early gains and closed lower after the Houston Ship Canal was partially reopened, which reduced concerns that crude production at refineries along the Gulf Coast will be sharply reduced. Another bearish factor is the outlook for weekly EIA crude stockpiles on Wed to rise +2.815 million bbl, their tenth consecutive increase. Limiting losses was the larger-than-expected increase in U.S. Mar consumer confidence to a 6-year high. Closes: CLK4 -0394 (-0.39%). RBK4 -0.0040 (-0.14%).

GLOBAL EVENT CALENDAR03/26/2014

US	0200 ET	St. Louis Fed President James Bullard speaks at a conference in Hong Kong on the topic Central Banks: Will policy making ever be conventional again?
	0700 ET	Weekly MBA mortgage applications, previous -1.2% with purchase sub-index -0.9% and refi sub-index -1.3%.
	0830 ET	Feb durable goods orders expected +0.8% and +0.3% ex-transportation, Jan -1.0% and +1.1% ex-transportation. Feb non-defensive ex-aircraft capital goods orders, Jan +1.5%.
	0945 ET	Mar Markit services PMI expected +0.7 to 54.0, Feb 53.3.
	1030 ET	EIA Weekly Petroleum Status Report.
	1130 ET	Treasury auctions $13 billion 2-year floating-rate notes.
	1300 ET	Treasury auctions $35 billion 5-year T-notes.
	2020 ET	St. Louis Fed President James Bullard speaks at a conference in Hong Kong on the topic What are the prospects for U.S. monetary policy?
GER	0300 ET	German Apr GfK consumer confidence expected unch at 8.5, Mar 8.5.
CHI	2130 ET	China Feb industrial profits, Jan +12.2% year-to-date y/y.

U.S. STOCK CALENDAR03/26/2014

Company Name	Ticker	Time	Event Description	Period	Estimate
PVH Corp	PVH US	9:00	Q4 2014 Earnings Call	Q4 2014
Flowserve Corp	FLS US	9:00	Analyst Day	Y 2014
Iron Mountain Inc	IRM US	9:00	Investor Day	Y 2014
Cabela's Inc	CAB US	9:30	Analyst Day	Y 2014
McCormick & Co Inc/MD	MKC US	10:00	Annual General Meeting	Y 2014
Xcel Energy Inc	XEL US		Investors Meeting - Day 2	Y 2014

Barchart Morning Call 11/8

Barchart Morning Call

BC - 15 mins ago

Overnight Developments

• Dec E-mini S&Ps this morning are mildly higher by +0.18% after yesterday's drubbing. The Euro Stoxx 50 index is up +0.81% this morning. Asian stocks closed lower today on the impact from yesterday's sharp sell-off in U.S. stocks. Commodity prices this morning are slightly higher by +0.11%. Dec crude oil is up +0.99%, Dec gasoline is up +1.00%, Dec gold is up +0.20%, Dec copper is up +0.29%, grain prices are mildly higher, and livestock and softs are mostly lower. The dollar index is mildly higher by +0.14%. Dec 10-year T-notes are up 0.5 tick.
• The ECB at its meeting today left its refinancing rate unchanged at 0.75%, which was fully in line with market expectations. The ECB is in a holding pattern at present, enjoying the lull in the Eurozone debt crisis and hoping that the Eurozone economy will stabilize and start to improve next year.
• The Bank of England today left the base rate unchanged at 0.50%. The BOE also left its asset purchase plan at 375 billion pounds, which was disappointing to some market participants who had been hoping for an extension of the BOE's quantitative easing program. The BOE halted its QE program for the time being since UK inflation of +2.2% is above the BOE's target of 2% and since some BOE members had doubts about QE's effectiveness.
• German Finance Minister Schaeuble said today that he does not think Eurozone officials will be able to make a final decision on the Greek bailout package next week. Greece took a big step forward yesterday when its parliament approved the necessary austerity package. The Greek parliament plans to vote on Sunday on the 2013 budget.
• Spain today successfully sold 4.76 billion euros of debt securities, which was above its 4.5 billion euro target. As part of today's package, Spain was able to sell 731 million euros of 20-year bonds at 6.328%, which was the longest-dated bond sold since May 2011 when Spain sold 30-year bonds.
• German Sep exports fell -2.5% m/m, which was weaker than market expectations of -1.5% and more than reversed the revised +2.3% m/m gain seen in August. Meanwhile, Sep imports were also weak at -1.6% m/m versus expectations of -0.4% m/m. Germany's Sep trade surplus of 16.9 billion euros was larger than market expectations of 15.5 billion euros.
• The Greek unemployment rate in August rose to 25.4% from 24.8% in July. The unemployment rate for young people between the ages of 15 and 24 was 58%. The European Commission is forecasting that Greek GDP will fall 6% this year and by 4.2% in 2013 for a total GDP decline of 20%, which qualifies as a depression. The European Commission is forecasting that Greek GDP will finally show growth of +0.6% in 2014.
• Japan's Sep machine orders report of -4.3% m/m and -7.8% y/y was substantially weaker than market expectations of -2.1% m/m and -4.9% y/y.
• Japan reported a Sep adjusted current account balance of a 142 billion yen versus expectations for a 206 billion yen surplus. Japan's Sep trade deficit of -471 billion yen was moderately wider than market expectations of -414 billion yen. The trade report was mildly bearish for the yen.
• Japan's Oct Eco Watcher's outlook index of 41.7 was weaker than market expectations of 42.7 and was down from Sep's report of 43.5. The Eco Watcher's Oct current index of 39.0 was weaker than market expectations of 40.5 and was down from Sep's report of 41.2.
• China's central bank governor Zhou Xiaochuan said today that the Chinese economy stabilized in October and some economic indicators are rebounding. The market consensus at present is that China's GDP in Q4 will improve to 7.7% y/y from the 3-year low of +7.4% seen in Q3.
  Market Comments
  • Dec E-mini S&Ps this morning are up +2.50 (+0.18%) on some short-covering after yesterday's sharp sell-off and on today's 0.81% rally in European stocks. U.S. stocks on Wednesday closed sharply lower as the market braced for a tough fight over the year-end fiscal cliff and the possibility that the lack of an agreement would cause a recession in the first half of 2013: S&P 500 -2.37%, Dow Jones -2.36%, Nasdaq -2.55%. The stock market was also hit with heavy technical selling with the S&P 500 index falling to a new 3-month low.
  • Dec 10-year T-notes this morning are slightly higher by +0.5 tick. Dec 10-year T-note prices on Wednesday closed sharply higher on safe-haven demand with the sharp sell-off in stocks combined with the fact that President Obama's victory likely paves the way for a dovish bond-buying policy to continue if necessary even after Mr. Bernanke's term ends in January 2014: TYZ2 +28, FVZ2 +13.75.
  • The dollar index this morning is slightly higher by +0.12 points (+0.14%). EUR/USD is down -0.0030 (-0.23%) and USD/JPY is down -0.13 (-0.16%). The dollar index on Wednesday closed mildly higher on some safe-haven demand with the sharp sell-off in stocks: Dollar index +0.14 (+0.18%), EUR/USD -0.0043 (-0.34%), USD/JPY -0.35 (-0.44%).
  • Dec WTI crude oil prices this morning are up +0.84 (+0.99%) and Dec gasoline is up +0.0258 (+1.00%) on some short-covering after yesterday's plunge and on today's mildly higher trade in E-mini S&Ps. Dec crude oil and gasoline prices on Wednesday plunged on heavy technical selling, the bearish weekly DOE report, and talk that President Obama may offer Iran an aggressive last-ditch compromise on its nuclear program: CLZ2 -4.27 (-4.81%), RBZ2 -0.1100 (-4.08%). The weekly DOE report showed a 1.8 million barrel increase in crude oil inventories, a 2.875 million barrel increase in gasoline inventories, a 131,000 barrel increase in distillate inventories, and a sharp -6.1% drop in gasoline demand due to Hurricane Sandy. In addition, U.S. weekly crude oil production edged higher by +0.1% to a new 17-3/4 year high of 6.677 million barrels per day.
  • 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): DIS-Walt Disney (Consensus:$0.68), DUK-Duke Energy (1.44), PSA-Public Storage (1.07), FE-FirstEnergy (1.06), PPL-PPL Corp (0.67), KSS-Kohl's (0.88), JWN-Norstrom (0.72), NVDA-Nvidia (0.36), CG-Carlyle Group (0.67), MCHP-Microchip Tech (0.48), CFN-Carefusion (0.41), VMC-Vulcan Materials (0.16), AAP-Advance Auto (1.21), WIN-Windstream (0.12).
    Global Financial Calendar
    

    Thursday 11/8/12
    United States
    0830 ET	Weekly initial unemployment claims expected +2,000 to 365,000, previous -9,000 to 363,000. Weekly continuing claims expected -3,000 to 3.260 mln, previous +4,000 to 3.263 mln.
    0830 ET	Sep trade deficit expected -$45.0 bln, Aug -$44.2 billion.
    0830 ET	USDA Export Sales.
    1300 ET	Treasury auctions $16 billion in 30-year T-bonds.
    1630 ET	Weekly money supply report and Fed balance sheet.
    2000 ET	St. Louis Fed President James Bullard speaks on the U.S. economy and monetary policy at Washington University.
    Germany
    0200 ET	German Sep trade balance expected 15.5 bln euros, Aug 16.3 bln euros. Sep exports expected -1.5% m/m, Aug +2.5% m/m. Sep imports expected -0.4% m/m, Aug +0.4% m/m. Sep current account balance expected 10.8 bln euros, Aug 11.1 bln euros.
    United Kingdom
    0700 ET	BOE policy meeting outcome (base rate expected unchanged at 0.50%, asset purchase target expected unchanged at 375 bln pounds).
    Euro-Zone
    0745 ET	ECB meeting outcome (refinancing rate expected unchanged at 0.75%).
    CHI
    n/a	China's 18th National Congress of the Communist Party of China begins to decide on once-a-decade leadership changes.
    2030 ET	China Oct CPI expected +1.9% y/y, Sep +1.9% y/y. Oct PPI expected -2.8% y/y, Sep -3.6% y/y.
    Japan
    0000 ET	Japan Oct eco watchers current index expected 40.5, Sep 41.2. Oct eco watchers outlook, Sep 43.5.
    1850 ET	Japan Oct M2 expected +2.4% y/y, Sep +2.4% y/y. Oct M3 expected +3.0% y/y, Sep +2.0% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

Barchart Morning Call 8/8

Barchart Morning Call

BC - 2 hrs 46 mins ago

Overnight Developments

• Sep E-mini S&Ps this morning are trading mildly lower by -0.27% due to the -0.63% sell-off in European stocks and weaker-than-expected German industrial production and export reports. Commodity prices are trading -0.28% on average with Sep crude oil down -0.65%, Dec gold -0.18%, Sep copper -0.71%, and agricultural prices mixed. The dollar index is up +0.22% and EUR/USD is down -0.27% on the return of some safe-haven demand. Sep 10-year T-note prices are up 2.5 ticks.
• The German June trade balance of 17.9 billion euros was wider than market expectations of 14.6 billion euros, but exports fell by -1.5%, which was a larger drop than market expectations of -1.3%.
• The German June industrial production report of -0.9% m/m was slightly weaker than market expectations of -0.8% m/m and was substantially weaker than the May report of +1.7% m/m.
• The British pound strengthened today after Bank of England Governor Mervyn King said that policymakers discussed a rate cut but "we concluded for the time being, that it would be more counterproductive than beneficial."
• Standard & Poors yesterday cut the outlook to negative on Greece's CCC rating, which is eight notches below investment grade, citing the possibility that Greece might not qualify for its next bailout disbursement from the Eurozone and IMF.
• Japan's June adjusted current account balance report of 773.6 billion yen was wider than market expectations of 714.7 billion yen and was supportive for the yen.
• Japan's July Eco Watchers outlook index of 44.9 was stronger than expectations of 44.0 but was down by 0.6 points from 45.7 in June.
  Market Comments
  • Sep E-mini S&Ps this morning are down -3.75 (-0.27%) this morning on long liquidation pressure and on this morning's 0.63% sell-off in the Euro Stoxx 50 index on the weaker-than-expected German industrial production and export reports. The stock market on Tuesday closed moderately higher and the S&P 500 index edged to a new 3-month high: S&P 500 +0.51%, Dow Jones +0.39%, Nasdaq 100 +0.86%. The stock market saw continued support from the stronger-than-expected Q2 earnings season and hopes for ECB and Fed action in September. Boston Fed President Eric Rosengren on Tuesday said the Fed should pursue an "open-ended" quantitative easing program of "substantial magnitude" to boost economic growth and employment.
  • Sep 10-year T-notes this morning are up 2.5 ticks on the lower trade in E-mini S&Ps and on some short-covering after Tuesday's sharp 17 tick sell-off. T-note prices on Tuesday closed sharply lower: TYU2 -17, FVU2 -8.25. Bearish factors include reduced safe-haven demand with the 3-month high in the S&P 500, improved sentiment on the U.S. economy after last Friday's payroll report of +163,000, and the sharp 20 bp increase in 10-year inflation expectations seen in the past two weeks driven by last week's FOMC meeting where the Fed essentially promised QE3 if the economy continues to show weakness.
  • The dollar index this morning is up +0.18 (+0.22%) on the return of some safe-haven demand with the sell-off in stocks. EUR/USD is down -0.0034 (-0.27%) and USD/JPY is down -0.29 (-0.37%). The dollar index on Tuesday edged to a new 1-month low and closed slightly lower: Dollar index -0.07 (-0.09%), EUR/USD -0.0002 (-0.02%), USD/JPY +0.36 (+0.46%). The dollar continued to lose ground on reduced safe-haven demand as the S&P 500 index hit a new 3-month high and as economic sentiment improved. The Spanish 10-year bond yield on Tuesday rose by 12 bp to 6.82% while the Italian 10-year bond yield fell by 3 bp to 5.95%.
  • Sep WTI crude oil prices this morning are down -0.61 (-0.65%) and Sep gasoline is down -0.0160 (-0.53%). Bearish factors this morning include the higher dollar index, lower stocks, and some long liquidation pressure after Tuesday's sharp rally. Crude oil and gasoline prices on Tuesday rallied sharply: CLU2 +1.47 (+1.59%), RBU2 +0.0691 (+2.36%). Sep crude oil posted a new 2-1/2 month high and Sep gasoline posted a new 3-month high. Crude oil saw strength on technical buying, the slightly lower dollar index, expectations for a 1.6 million barrel decline in oil inventories Wednesday's weekly DOE report, and improved economic sentiment with the rally in stocks and last Friday's stronger-than-expected payroll report of +163,000. Gasoline is also seeing strength from refinery outages and strength in Brent crude oil prices. The market consensus for Wednesday's weekly DOE report is for a 1.6 million barrel decline in crude oil inventories, a 2 million barrel decline in gasoline inventories, and an unchanged level of distillate inventories.
  • 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): NWSA-News Corp (Consensus $0.32), CTL-Centurylink (0.62), PPL-PPL Corp (0.41), M-Macy's (0.64), RL-Ralph Lauren (1.78), DISH-Dish Network (0.66), CLR-Contl Res (0.74), MNST-Monster Beverage (0.61), LMCA-Liberty Media (0.73), HFC-Hollyfrontier (2.24), CG-Carlyle Group (-0.04), BIP-Brookfield Infrastructure (0.34), TEG-Integrys Energy (0.41).
    Global Financial Calendar
    

    Wednesday 8/8/12
    United States
    0700 ET	Weekly MBA mortgage applications, previous +0.2% with purchase sub-index -2.3% and refi sub-index +0.8%.
    0830 ET	Q2 non-farm productivity expected +1.4%, Q1 -0.9%. Q2 unit labor costs expected +0.5%, Q1+1.3%.
    1030 ET	DOE Weekly Petroleum Status Report.
    1300 ET	Treasury auctions $24 billion 10-year T-notes.
    Japan
    0030 ET	Japan July bankruptcies, June-16.3% y/y.
    0100 ET	Japan July eco watchers survey current, June 43.8. July eco watchers survey outlook, June 45.7.
    1950 ET	Japan June machine orders expected +11.0% m/m and -5.3% y/y, May -14.8% m/m and +1.0% y/y.
    n/a	BOJ begins 2-day policy meeting (expected no change to the 0.00% to 0.10% benchmark target rate).
    Germany
    0200 ET	German June trade balance expected +14.6 billion euros, May +15.3 billion euros. June exports, May +4.2%. June imports, May +6.2%.
    0600 ET	German June industrial production expected -0.8% m/m and +0.3% y/y, May +1.6% m/m and unchanged y/y.
    United Kingdom
    0530 ET	BOE releases quarterly inflation report.
    CHI
    2130 ET	China July CPI expected +1.7% y/y, June +2.2% y/y.
    2130 ET	China July PPI expected -2.5% y/y, June -2.1% y/y.

    Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

Barchart Morning Call 5/15

Barchart Morning Call

Tue, 15 May 2012 07:00:00 -0500

Overnight Developments

E-mini S&Ps this morning are mildly higher by 8.0 points (+0.60%) on this morning's stronger-than-expected European GDP reports. Commodity prices are mildly higher on balance on some short-covering. The dollar index is trading slightly lower by 0.02 points and EUR/USD is up 0.30 cents. June 10-year T-notes are down 5 ticks on reduced safe-haven demand. European stocks are trading slightly higher this morning with the Euro Stoxx 50 up +0.07%. European stocks received some support from the European GDP reports but the market remains on edge as the Greek political situation has yet to be resolved. Francois Hollande will be inaugurated today as French president. He will then travel to Berlin to have dinner with German Chancellor Merkel and they will give a joint news conference after the dinner. Ms. Merkel's spokesman said the two leaders will not make any policy decisions today. The Eurozone Q1 GDP report of unchanged q/q was stronger than the market consensus of -0.2% q/q. Eurozone GDP received a significant boost from Germany's Q1 GDP report of +0.5% q/q (+2.0% annualized), which was stronger than market expectations of +0.1% q/q (+0.4% annualized) and returned to positive growth after the -0.2% q/q decline seen in Q4. French Q1 GDP was unchanged q/q. Italy's Q1 GDP fell sharply by -0.8% q/q (-3.2% annualized). This morning's ZEW confidence indexes were mixed. The Eurozone May ZEW economic sentiment index fell to -2.4% from 13.1 in April. The May German ZEW economic sentiment index fell to 10.8 from 23.4 in April, which was weaker than the consensus of 19.0. The German ZEW May ZEW current situation index rose to 44.1 from 40.7 in April, which was stronger than the market consensus of 39.0. Greek President Papoulias today will meet with the leaders of the main parties at 2PM Athens time to see if he can convince them to allow a new technocratic government to rule the country. However, the odds appear slim since that idea has already been shot down by the leaders of the Democratic Left and Syriza. Greece appears to be moving towards new elections in June, at which time the anti-bailout forces will have even more power based on recent voter polling. Greece today successfully sold 1.3 billion euros of 13-week Treasury bills with a yield of 4.34% and with a bid cover ratio of 2.32 times. The markets are waiting to see how Greece handles a 436 billion euro payment that is due today on a floating rate note covered by non-Greek law. Greece may simply fail to make the payment but claim a 30-day grace period. Today's note is one of 7 billion euros worth of Greek securities that are covered by non-Greek law and were not part of the recent Greek bond swap, which forced a haircut of about 50% on the bond holders. The markets are waiting to see if Greece will pay the note or whether it will default and end up in a long litigation process with the holders of the note, who are still demanding 100% payment. Greece previously said that bond holders of the non-Greek-law debt will receive a deal no better than the haircut on the bond swap deal. Asian stock markets today closed mixed: Japan -0.81%, Hong Kong +0.81%, China +0.07%, Taiwan +0.25%, Australia -0.71%, Singapore +0.44%, South Korea -0.70%, India +0.69%, Turkey -0.22%. Chinese April foreign direct investment (FDI) fell -0.7% y/y to $8.4 billion. That was the sixth consecutive decline in FDI, illustrating that foreign companies are pulling back from investing in China with the slowing economy and real estate markets.

Overnight U.S. Stock News

June E-mini S&Ps this morning are trading +8.00 points (+0.60%) on the better-than-expected European GDP report and slightly higher European stocks. Earnings reports today include Home Depot, TJX and JC Penney. Facebook raised its IPO range to $34-38 from $28-$35, suggesting demand is running strong for the largest-ever Internet-company IPO. US stocks on Monday closed sharply lower: S&P 500 -1.11%, Dow Jones -0.98%, Nasdaq 100 -0.98%. The US stock market on Monday took another heavy hit on continued worries about Greece, the poor showing of German Chancellor Merkel's CDU party in state elections in North Rhine-Westphanlia which is likely to make Ms. Merkel even less willing to provide more bailout money, the sharp 2.33% sell-off in the Euro Stoxx 50, the 0.3% decline in Eurozone March industrial production, and the growing trading loss at JPMorgan which is reportedly already doubled to $4 billion from $2 billion last Thursday.

Today's Market Focus

June 10-year T-notes this morning are trading -5 ticks on some reduced safe-haven demand with the mild rally in E-mini S&Ps. T-note prices on Monday closed higher: TYM2 +11, FVM2 +3.25. June 10-year T-note prices posted another new record high on Monday while the 10-year bond yield fell to 1.77%, which is just 10 bp above the record low of 1.67% posted last September. Bullish factors included continued safe-haven demand with the ongoing slump in stocks, increasing doubt even among Eurozone officials about whether Greece can stay in the Eurozone given its political climate, and the increasing chance for further Fed security programs if the global situation continues to get worse. The dollar index this morning is trading slightly lower by -0.02 points on reduced safe-haven demand. EUR/USD is up +0.30 cents and USD/JPY is up 0.07 yen. The dollar index on Monday closed higher: Dollar Index +0.34, EUR/USD -0.94 cents, USD/JPY -0.08 yen. The dollar index on Monday edged to a new 2-month high and nearly posted a 4-month high. Meanwhile, the euro extended its 2-week plunge to a new 4-month low. The dollar was boosted by safe-haven demand and the euro was undercut by the increasing speculation about Greece leaving the Eurozone. July WTI crude oil prices this morning are trading unchanged and July gasoline is up 0.85 cents in mostly technical trade as the market awaits Wednesday's DOE report. Crude oil and gasoline prices on Monday closed sharply lower: CLM12 -1.35 (-1.40%), RBM2 -0.0418 (-1.39%). Oil prices were hit hard along with the rest of the commodity sector on commodity liquidation and the rally in the dollar. In addition, Saudi Oil Minister Ali al-Naimi on Sunday said that crude oil prices should fall because global supply is outweighing demand. He said, "We want a lower price than where it is right now. We need to get the price to a level of around $100 a barrel" for London Brent crude oil. June Brent crude last Friday closed at $112.26, which means Mr. Naimi is calling for another 11% drop in oil prices from last Friday's level. The market consensus for Wednesday's weekly DOE inventory report is as follows: U.S. crude oil +1.5 million barrels (+0.4%), which would be a 21-3/4 year high, Cushing crude oil +470,000 barrels, gasoline +800,000 barrels, and distillates +300,000 barrels. The consensus is that the refinery utilization rate will rise 0.5 point to 86.9%.

Today's U.S. Earnings Reports Earnings reports (sorted by mkt cap): HD-Home Depot (consensus $0.65), TJX-TJX Co. (0.54), JCP-JC Penney (-0.08), CG-Carlyle Group, DKS-Dick's Sporting (0.38), VAL-Valspar (0.82), RAH-Ralcorp (0.85), SINA-Sina Corp (-0.23), SKS-Saks (0.18).
Global Financial Calendar

Tuesday, May 15
1130 ET
US American Iron and Steel Institute's steel production report for period ended May 11
1200 ET
USDA weekly weather-crop summary for period ended May 13
1630 ET
American Petroleum Institute's US oil statistics for week ended May 11

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