MORNING CALL 12/23

MORNING CALL

Wednesday, December 23rd, 2015View Older Reports

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OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH16 +0.42%) are up +0.22% and European stocks are up +1.75%, led by strength in mining stocks and in energy and raw-material producers as the price of copper and crude oil rose. Crude oil prices (CLG16 +1.52%) are up +1.41% ahead of today's weekly EIA inventory data after API data released late yesterday showed U.S. crude supplies fell by -3.6 million bbl. Asian stocks settled mixed: Japan closed for holiday, Hong Kong +0.96%, China -0.43%, Taiwan +0.28%, Australia +0.49%, Singapore +0.37%, South Korea +0.43%, India +1.01%. China's Shanghai Composite jumped to 4-month high on speculation the government will boost stimulus measures to revive growth, but profit-taking emerged near the highs and stocks erased their gains and settled lower.

The dollar index (DXY00 +0.06%) is up +0.01%. EUR/USD (^EURUSD) is down -0.24%. USD/JPY (^USDJPY) is down -0.18%.

Mar T-note prices (ZNH16 -0.10%) are down -3 ticks.

UK Q3 GDP was unexpectedly revised lower to +0.4% q/q and +2.1% y/y, weaker than expectations of no change at +0.5% q/q and +2.3% y/y.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -1.1% with purchase sub-index -2.8% and refi sub-index +1.4%), (2) Nov personal spending (expected +0.3%, Oct +0.1%) and Nov personal income (expected +0.2%, Oct +0.4%), (3) Nov PCE deflator (expected +0.1% m/m and +0.4% y/y, Oct +0.1% m/m and +0.2% y/y) and Nov core PCE deflator (expected +0.1% m/m and +1.3% y/y, Oct unch m/m and +1.3% y/y), (4) Nov durable goods orders (expected -0.6% and unch ex transportation, Oct +2.9% and +0.5% ex transportation), (5) Nov new home sales (expected +2.0% to 505,000, Oct +10.7% to 495,000), (6) final-Dec University of Michigan U.S. consumer sentiment index (expected +0.2 to 92.0, prelim-Dec +0.5 to 91.8), (7) the Treasury's auction of $13 billion of 2-year floating-rate notes.

There are 4 of the Russell 3000 companies that report earnings today: Cal-Maine Foods (consensus 2.40), Lindsay Corp (0.54), Biglari Holdings (5.42), Nobilis Health (0.02).

U.S. IPO's scheduled to price today: none.

Equity conferences this week: none.

OVERNIGHT U.S. STOCK MOVERS

Nike (NKE +1.58%) rose nearly 3% in pre-market trading after it reported Q2 EPS of 90 cents, higher than consensus of 86 cents.

Celgene (CELG +0.27%) jumped over 6% in after-hours trading after it settled patent litigation with Natco Pharma Ltd. relating to patents for REVLIMID (lenalidomide).

Delphi Automotive (DLPH +0.79%) was upgraded to 'Buy' from 'Neutral' at Sterne Agee CRT with a 12-month price target of $102.

Finish Line (FINL +9.79%) was upgradd to 'Buy' from 'Hold' at Brean Capital with a 12-month price target of $23.

Steelcase (SCS -22.93%) was downgraded to 'Market Perform' from 'Strong Buy' at Raymond James.

CUI Global (CUI -1.43%) was rated a new 'Buy' at Rodman & Renshaw with a 12-month price target of $12.

Lindsay Corp. (LNN +1.30%) reported Q1 EPS of 62 cents, better than consensus of 54 cents, although Q1 revenue of $121.5 million was below consensus of $127.7 million.

Micron Technology (MU -1.08%) slipped over 4% in after-hours trading after it said it sees a Q2 adjusted EPS loss of -5 cents to -12 cents, below estimates of a gain of 23 cents, and said it expects Q2 revenue of $2.9 billion-$3.2 billion, well below estimates of $3.48 billion.

Bullish newsletter writers tracked by Investors Intelligence fell to 36.7% fom 37.8%, the lowest in 10-weeks.

Galena Biopharma (GALE +1.87%) plunged over 15% in after-hours trading after it received a subpoena from the U.S. Attorney for District of N.J. for documents related to the product Abstral.

MARKET COMMENTS

Mar E-mini S&Ps (ESH16 +0.42%) this morning are up +4.50 points (+0.22%). Tuesday's closes: S&P 500 +0.88%, Dow Jones +0.96%, Nasdaq +0.63%. The S&P 500 on Tuesday closed higher on carryover support from a +0.26% rally in China's Shanghai Composite to a 3-week high on the prospects of increased stimulus from the Chinese government and on strength in oil prices, which boosted energy producing stocks.

Mar 10-year T-notes (ZNH16 -0.10%) this morning are down -3 ticks. Tuesday's closes: TYH6 -12.50, FVH6 -7.00. Mar T-notes on Tuesday closed lower on the stronger-than-expected U.S. Q3 GDP revision (+2.0% versus expectations of +1.9% y/y), which bolsters the case for the Fed to keep raising interest rates, and on the rally in stocks which reduced the safe-haven demand for T-notes.

The dollar index (DXY00 +0.06%) this morning isup +0.006 (+0.01%) . EUR/USD (^EURUSD) is down -0.0026 (-0.24%). USD/JPY (^USDJPY) is down-0.22 (-0.18%). Tuesday's closes: Dollar Index -0.128 (-0.13%), EUR/USD +0.0042 (+0.38%), USD/JPY -0.12 (-0.10%). The dollar index on Tuesday closed lower on the fall in U.S. Nov existing home sales to their lowest level in 1-1/2 years and on strength in EUR/USD after German Dec GfK consumer confidence rose more than expected.

Feb crude oil (CLG16 +1.52%) this morning is up +51 cents (+1.41%) and Feb gasoline (RBG16 +2.44%) is up +0.0257 (+2.17%). Tuesday's closes: CLG6 +0.66 (+1.84%), RBG6 -0.0245 (-2.01%). Feb crude oil and gasoline on Tuesday settled mixed with Feb gasoline at a contract low. Crude oil prices were boosted by a weaker dollar and by the stronger-than-expected U.S. Q3 GDP revision of +2.0% (versus expectations of +1.9%). Crude oil prices were undercut by weakness in gasoline prices as nearest-futures (F16) fell to a 6-3/4 year low on reduced refinery demand for gasoline after the crack spread tumbled to a 1-month low. In addition, Wednesday's EIA report is expected to show that crude inventories rose by +1.0 million bbl and gasoline supplies rose by +1.5 million bbl.

GLOBAL EVENT CALENDAR12/23/2015

US	0700 ET	Weekly MBA mortgage applications, previous -1.1% with purchase sub-index -2.8% and refi sub-index +1.4%.
	0830 ET	Nov personal spending expected +0.3%, Oct +0.1%. Nov personal income expected +0.2%, Oct +0.4%.
	0830 ET	Nov PCE deflator expected +0.1% m/m and +0.4% y/y, Oct +0.1% m/m and +0.2% y/y. Nov core PE deflator expected +0.1% m/m and +1.3% y/y, Oct unch m/m and +1.3% y/y.
	0830 ET	Nov durable goods orders expected -0.6% and unch ex transportation, Oct +2.9% and +0.5% ex transportation. Nov capital goods orders nondefense ex-aircraft & parts expected -0.2%, Oct +1.3%.
	1000 ET	Nov new home sales expected +2.0% to 505,000, Oct +10.7% to 495,000.
	1000 ET	Final-Dec University of Michigan U.S. consumer sentiment expected +0.2 to 92.0, prelim-Dec +0.5 to 91.8.
	1030 ET	EIA Weekly Petroleum Status Report.
	1300 ET	Treasury auctions $13 billion of 2-year floating-rate notes.
	1500 ET	USDA Q4 Hogs & Pigs inventory.
UK	0430 ET	UK Q3 current account balance expected -21.5 billion pounds, Q2 -16.8 billion pounds.
	0430 ET	Revised UK Q3 GDP, previous +0.5% q/q and +2.3% y/y.
	0430 ET	UK Q3 unit labor costs expected +2.2% y/y, Q2 +2.1% y/y
	0430 ET	UK Oct index of services expected +0.2% m/m and +0.6% 3-mo/3-mo, Sep +0.4% m/m and +0.7% 3-mo/3-mo.
	0430 ET	UK Dec Lloyds business barometer, Nov 55.
JPN	n/a	Japanese markets closed for Emperors Birthday.

U.S. STOCK CALENDAR12/23/2015

Company	Ticker	Time	Event Description	Period	Estimate
Lindsay Corp	LNN US	Bef-mkt	Q1 2016 Earnings Release	Q1 2016	0.543
Lindsay Corp	LNN US	11:00	Q1 2016 Earnings Call	Q1 2016
Cal-Maine Foods Inc	CALM US	Aft-mkt	Q2 2016 Earnings Release	Q2 2016	2.396
Hubbell Inc	HUB/B US		Special Meeting
Biglari Holdings Inc	BH US		Q4 2015 Earnings Release	Q4 2015	5.42
Nobilis Health Corp	NHC CN		Q3 2015 Earnings Release	Q3 2015	0.023
Scorpio Bulkers Inc	SALT US		Extraordinary Shareholders Meeting

Barchart Morning Call

BC - 2 hrs 24 mins ago

Overnight Developments

• March E-mini S&Ps this morning are little changed as the market remains nervous ahead of Q4 earnings season and the debt ceiling battle that will start in earnest in February. European stocks are up +0.49% this morning on the improvement in the Eurozone confidence indexes. Asian stocks today closed mostly lower on overhang from Monday's weak U.S. stock market session. Japan today closed down -0.86%, Hong Kong closed down -0.94%, and China closed down -0.42%. Commodity prices this morning are mildly higher by +0.16%. Feb crude oil is up +0.54%, Feb gasoline is up +0.94%, Feb gold is up +0.63%, March copper is up +0.12%, and agriculture prices are trading mostly lower. The dollar index is slightly lower by -0.10% this morning. EUR/USD is up +0.05% and USD/JPY is down -0.32%. March 10-year T-notes are up +2 ticks.
• The European Stability Mechanism (ESM) will sell up to 2 billion euros in 3-year bills later today in its first debt auction. The sale will be a test of investor interest in buying securities that provide bailout aid to Eurozone countries and that are backed by Eurozone sovereign commitments.
• The Eurozone Dec economic confidence index rose by 1.3 points to 87.0 from 85.7 in Nov, which was stronger than market expectations for a +0.6 point increase to 86.3. The other Eurozone confidence indexes showed some improvement and were mixed relative to market expectations. The Dec Eurozone business climate indicator improved to -1.12 from a revised -1.17 in Nov although it was weaker than market expectations of -1.09. The Dec Eurozone industrial confidence report improved to -14.4 from a revised -15.0 in Nov and was slightly stronger than market expectations of -14.5. The Eurozone Dec services confidences index improved to -9.8 from -11.9 in Nov and was stronger than market expectations of -11.5.
• German Nov exports fell by -3.4% m/m, which was weaker than market expectations of -0.5% m/m and was a disappointing sign for the German economic outlook. German Nov imports fell by -3.7% m/m versus expectations of +0.5% m/m. The German Nov trade balance widened to 17.0 bln euros from 15.8 bln euros in October.
• The German Nov factory orders report fell -1.8% m/m and -1.0% y/y, which was weaker than market expectations of -1.4% m/m and -0.4% m/m.
• The Eurozone Nov retail sales report of +0.1% m/m and -2.6% y/y was slightly weaker than market expectations of +0.3% m/m and -2.1% y./y, but was at least an improvement from Oct's revised report of -0.7% m/m and -3.2% y/y.
• The Eurozone Nov unemployment rate rose slightly by 0.1 point to a new record high of 11.8% from 11.7% in October.
• The chances are increasing for a cut in the Chinese reserve requirement ratio for banks in January, according to the official Xinhua News Agency, which cited "industry insiders."
  Market Comments
  • March E-mini S&Ps this morning are slightly lower by -0.25 points (-0.02%) as the market looks ahead to today's unofficial start of the Q4 earnings season with Alcoa's earnings report after the close. The S&P 500 index on Monday closed mildly lower on long liquidation pressure after last week's rally sparked by nervousness ahead of earnings season and the debt ceiling battle in February. Banks rallied on the decision by global banking regulators to delay liquidity ratio requirements. Closes: S&P 500 -0.31%, Dow Jones -0.38%, Nasdaq -0.01%.
  • March 10-year T-notes this morning are up 2 ticks. March 10-year T-note prices on Monday closed mildly higher on the mildly lower close in stocks and on a little short-covering. Closes: TYH3 +2, FVH3 +0.5.
  • The dollar index this morning is slightly lower by -0.08 points (-0.10%). EUR/USD is up +0.00006 (+0.05%). USD/JPY is down -0.28 (-0.32%). The dollar index on Monday closed mildly lower on some long liquidation pressure after last week's sharp rally. EUR/USD rallied despite the outside chance that the ECB at its meeting on Thursday may cut rates by 25 to jump-start the Eurozone economy. Closes: Dollar index -0.24 (-0.30%), EUR/USD +0.0048 (+0.37%), USD/JPY -0.36 (-0.41%).
  • Feb WTI crude oil prices this morning are up +0.50 (+0.54%) and Feb gasoline is up +0.0260 (+0.94%). Feb crude oil and gasoline prices on Monday closed mildly higher on continued supportive sentiment from last week's fiscal cliff deal and on last Friday's 11 million barrel plunge in U.S. crude oil inventories. Closes: CLG3 +0.10 (+0.11%), RBG3 +0.0131 (+0.47%).
  • 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 ReportsEarnings reports (ranked by market cap): MON-Monsanto (consensus $0.36), AA-Alcoa (0.06), IHS-IHS Inc (1.11), RMP-RMP Intl (0.42), GPN-Global Payments (0.87), AYI-Acuity Brands (0.83), APOL-Apollo Group (-0.90), LNN-Lindsay Corp (0.75).
    Global Financial Calendar

    Tuesday 1/8/13
    United States
    1300 ET	Treasury auction of $32 billion in 3-year T-notes.
    1500 ET	Nov consumer credit expected +$12.75 bln, Oct +$14.2 bln.
    1500 ET	Richmond Fed President Jeffrey Lacker speaks on the U.S. economic outlook at South Carolina Business & Industry Political Education Committee's 27th annual meeting.
    1630 ET	API weekly U.S. oil statistics.
    Germany
    0200 ET	German Nov trade balance expected 15.8 bln euros, Oct 15.8 bln euros. German Nov exports expected -0.3% m/m, Oct +0.2% m/m. German Nov imports expected +0.5% m/m, Oct +2.5% m/m. Nov current account expected 16.0 bln euros, Oct 13.6 bln euros.
    0600 ET	German Nov factory orders, Oct +3.9% m/m and -2.4% y/y.
    Euro-Zone
    0500 ET	Eurozone final Dec consumer confidence expected unrevised at -26.6.
    0500 ET	Eurozone Dec business climate indicator expected -1.09, Nov -1.19. Dec Eurozone economic confidence expected 86.3, Nov 85.7. Dec industrial confidence expected -14.5, Nov -15.1. Dec services confidence expected -11.5, Nov -11.9.
    0500 ET	Eurozone Nov retail sales expected +0.3% m/m and -2.1% y/y, Oct -1.2% m/m and -3.6% y/y.
    0500 ET	Eurozone Nov unemployment rate expected 11.8%, Oct 11.7%.
    0600 ET	German Nov factory orders expected -1.4% m/m and -0.3% y/y, Oct +3.9% m/m and -2.4% y/y.
    United Kingdom
    1901 ET	UK Dec BRC shop price index expected +1.7% y/y, Nov +1.5% y/y.

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

Barchart Morning Call 3/28

Barchart Morning Call

Barchart.com - 42 mins ago

Overnight Developments

• Global stocks this morning are mixed with the Euro Stoxx 50 down -0.21% and Jun S&Ps up +2.80 points. The dollar and Treasuries are little changed, while commodities and European stocks weakened after the French and British economies grew less than expected last quarter. Q4 French GDP was revised down to +1.3% annualized from +1.4% y/y and Q4 U.K. GDP was revised down to -0.3% q/q and +0.5% y/y, weaker than the previously reported -0.2% q/q and +0.7% y/y. European and U.S. stocks were also pressured after a transcript of an interview with ABC News anchor Diane Sawyer revealed that Fed Chairman Bernanke said the U.S. recovery isn't assured and "it's far too early to declare victory." The euro rose against the dollar after Italian Prime Minister Monti said during a visit to Tokyo that the Euro-Zone's debt woes are "almost over" after a slow initial response by policy makers. Natural gas prices posted another fresh 10-year nearest-futures low in overnight trade and metals prices weakened after Goldman Sachs Group cut its 3-month outlook on commodities to neutral from overweight.
• Asian stocks today closed mostly lower with Japan down -0.71%, China -2.84%, Australia +0.98%, South Korea -0.40%, India -0.79%. Asian stocks fell after Chinese companies reported slumping profits and Societe Generale said consensus earnings expectations for some Chinese companies are "far too optimistic." China's Shanghai Stock Index tumbled to a 1-1/2 month low led by a 21% plunge in Gome Electrical Appliances Holdings Ltd. after China's second-largest electronics retailer said net income last year dropped to 1.84 billion yuan, weaker than analysts' estimates of 2.42 billion yuan. Chinese metal producers also fell as Jiangxi Copper, China's biggest copper producer by market value, fell 2.4% after it reported an 18% fall in profit and Angang Steel dropped 2.2% after reporting a wider-than-expected loss.

Overnight U.S. Stock News

• June S&Ps this morning are trading up +2.80 points. The U.S. stock market Tuesday fell back from an early rally and settled lower as profit-taking set in after the S&P 500 and the Nasdaq posted new yearly highs: Dow Jones -0.33%, S&P 500 -0.28%, Nasdaq Composite -0.07%. The S&P 500 posted a 3-3/4 year high, the Dow climbed to a 1-week high and the Nasdaq rallied up to an 11-year high, but they all gave up their gains and closed lower. Bearish factors Tuesday included (1) the larger-than-expected decline in the Mar Richmond Fed manufacturing index to its weakest level in 4 months (-13 to 7 versus expectations of -2 to 18), (2) concern over contagion of the European sovereign-debt crisis to Portugal after Fitch Ratings said Portuguese banks remain on "shaky ground," and (3) late afternoon comments from Fed Chairman Bernanke that prompted profit-taking and long liquidation when he said its "too early to declare victory" on the U.S. recovery as unemployment remains too high.
• Bullish factors Tuesday included (1) strength in homebuilders after a smaller-than-expected decline in Jan S&P/CaseShiller composite-20 home prices (unchanged m/m versus expectations of -0.3% m/m), (2) the stronger than expected Mar U.S. consumer confidence (-1.4 to 70.2 versus expectations of -0.7 to 70.1), and (3) comments from the first managing director of the IMF who said "We expect modest growth in the U.S., mild recession in Europe and a continuation of a comfortable level of growth in Asia with a soft landing in China."

Today's Market Focus

• June 10-year T-notes this morning are down -2.5 ticks. T-note prices Tuesday rallied up to a 1-1/2 week high and settled higher after the Fed bought long-term Treasuries as part of its Operation Twist program, the Mar Richmond Fed manufacturing index weakened more than expected and strong demand was seen for the Treasury's $35 billion auction of 2-year T-notes: TYM2 +17.0, FVM2 +9.5, EDU2 +2.0. Bullish factors Tuesday included (1) the Fed's purchase of $1.969 billion of Treasuries as part of its Operation Twist program to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries in an attempt to keep borrowing costs low, (2) the larger-than-expected decline in the Mar Richmond Fed manufacturing index to its weakest level in 4 months (-13 to 7 versus expectations of -2 to 18), (3) strong demand for the Treasury's $35 billion auction of 2-yer T-notes that had a bid-to-cover ratio of 3.69, higher than the 12-auction average of 3.46, and (4) dovish comments from Boston Fed President Rosengren who said "if real GDP does not grow more rapidly and unemployment remains at its current unacceptably high level, monetary policy may need to be more accommodative." Bearish factors included (1) the stronger-than-expected Jan S&P/CaseShiller composite-20 home prices (unchanged m/m versus expectations of -0.3% m/m), (2) the stronger than expected Mar U.S. consumer confidence (-1.4 to 70.2 versus expectations of -0.7 to 70.1), and (3) supply pressures ahead of the Treasury's $35 billion auction of 5-year T-notes on Wed.
• The dollar index this morning is lower with the dollar/yen -0.19 yen and the euro/dollar +0.43 cents. The dollar index Tuesday declined early to a 3-week low but erased its losses and settled higher after stronger than expected U.S. economic data reduced speculation the Fed will increase stimulus measures: Dollar Index +0.174, USD/JPY +0.327, EUR/USD -0.00426. Bullish factors included (1) the stronger-than-expected Mar U.S. consumer confidence and the smaller-than-expected decline in Jan S&P 500/CaseShiller home prices, which signals economic strength that reduces the chances of further Fed stimulus measures, and (2) weakness in the euro which fell back from a 3-1/2 week high against the dollar and closed lower on weak demand for European sovereign debt after Italy sold 3.82 billion euros of bonds, below the maximum target of 4 billion euros, and Spain sold 2.58 billion euros of debt, below its maximum target of 3 billion euros. Bearish factors included (1) the unexpected increase in the Mar French consumer confidence indicator which matched its highest level in 15 months (+5 to 87) and is euro positive, (2) comments from ECB Council member Makuch that reduced expectations of additional ECB stimulus measures when he said he sees no reason for further 3-year loans for now because "the central bank considers as sufficient what it has done so far," and (3) strength in the British pound against the dollar after the pound climbed to a 4-1/4 month high against the dollar after Mar U.K. CBI reported sales rose more than expected.
• May crude oil prices this morning are down -98 cents a barrel and May gasoline is -4.28 cents per gallon. Crude oil and gasoline prices Tuesday settled mixed after dollar strength and comments from DOE officials about a possible release of Strategic Petroleum Reserves offset the bullish aspects of stronger than expected U.S. economic data on Mar U.S. consumer confidence and Jan S&P/CaseShiller home prices: CLK12 +$0.30, RBK -1.23. Bearish factors included (1) the rebound in the dollar as the dollar index recovered from a 3-week low and settled higher, which diminishes investment demand in commodities, (2) comments from the acting assistant secretary for fossil energy at the DOE who said that a release of oil from the Strategic Petroleum Reserve is "being considered," and (3) the larger-than expected decline in the Mar Richmond Fed manufacturing index, which indicates reduced energy consumption. Bullish factors included (1) the stronger-than-expected Mar U.S. consumer confidence, which is positive for fuel demand and (2) the smaller than expected decline in the Jan S&P/CaseShiller composite-20 home prices, which signals economic strength and may lead to increased energy demand. Expectations for Wednesday's weekly DOE inventory report are for crude oil supplies to increase +2.7 million bbl, gasoline stockpiles to fall -1.55 million bbl, distillate inventories to drop -500,000 bbl and the refinery utilization rate to increase +0.3 to 82.5% of capacity.

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): MOS-Mosaic (BEST earnings consensus $0.69), PAYX-Paychex (0.37), RHT-Red Hat (0.27), FDO-Family Dollar Stores (1.13), HII-Huntington Ingalls Industries (0.94), CMC-Commercial Metals (0.09), FUL-HB Fuller (0.37), PRGS-Progress Software (0.25), UNF-Unifirst (0.88), VRNT-Verint Systems (0.68), TXI-Texas Industries (-0.82), LNN-Lindsay (0.82), TEA-Teavana Holdings (0.31), NGL-NGL Energy Partners LP (0.68), RECN-Resources Connection (0.08).
Global Financial Calendar

Wednesday 3/28/12
United States
0700 ET	Weekly MBA mortgage applications, previous -7.4% with purchase mortgage sub-index -1.0% and refinancing sub-index -9.3%.
0830 ET	Feb durable goods orders expected +3.0% and +1.7% ex transportation, Jan -3.7% and -3.0% ex transportation.
1300 ET	Treasury auctions $35 billion 5-year T-notes.
France
0130 ET	Revised Q4 French GDP expected no change at +0.2% q/q and +1.4% y/y.
Euro-Zone
0400 ET	Feb Euro-Zone M3 money supply (seasonally adjusted) expected +2.2% 3-mo avg and +2.4% y/y, Jan +2.0% 3-mo avg and +2.5% y/y.
United Kingdom
0430 ET	Revised Q4 U.K. GDP expected no change at -0.2% q/q and +0.7% y/y.
0430 ET	Revised Q4 U.K. total business investment expected -5.6% q/q and -1.9% y/y, previous -5.6% q/q and -2.0% y/y.
Germany
0800 ET	Mar German CPI (EU harmonized) expected +0.4% m/m and +2.3% y/y, Feb +0.9% m/m and +2.5% y/y
Canada
0900 ET	Jan Canada Teranet/National Bank home price index, Dec -0.2% m/m and +6.8% y/y.
Japan
1950 ET	Feb Japan retail trade expected unchanged m/m and +1.4% y/y, Jan +3.1% m/m and +1.8% y/y.

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

Barchart Morning Call 12/21

Barchart Morning Call

Wed, 21 Dec 2011 07:00:00 -0600

Overnight Developments

• Global stocks this morning are mostly higher with the Euro Stoxx 50 up +0.22% and Mar S&Ps up +2.80 points. Treasuries and the dollar fell on reduced safe-haven demand after stocks and commodities rallied when the ECB lent Euro-Zone banks a record amount for 3 years in an effort to avert a liquidity squeeze during the ongoing debt crisis. The ECB awarded 489 billion euros in 1,134 day loans, the most ever in a single operation and more than estimates of 293 billion euros to a total of 523 Euro-Zone lenders. That helped push the cost of credit default swaps to insure European government debt down 6 bp to a 2-week low of 355.5 bp. Limiting gains in stocks is weakness in technology shares led by a 7.5% drop in Oracle when it reported late yesterday that its fiscal Q2 profit than ended Nov 30 was 54 cents a share on revenue excluding certain items of $8.81 billion, weaker than analysts' estimates of profit of 57 cents a share on sales of $9.23 billion. The British pound rallied to a 3-week high against the dollar after the Nov U.K. budget deficit narrowed more than expected as net borrowing excluding support for banks was 18.1 billion pounds, smaller than expectations of 19.1 billion pounds.
• Asian stocks today closed mostly higher with Japan up +1.48%, China -1.60%, Australia +2.13%, South Korea +3.28%, India +3.36%. Asian stocks finished mostly higher as better-than-expected U.S. data on housing starts and the unexpected increase in German business optimism reduces the chances of the global economy falling into recession and boosts the earnings prospects of Asian exporters. Gains in Japanese stocks were limited after Nov Japan exports fell -4.5% y/y, weaker than expectations of -4.3% y/y and after the BOJ downgraded its assessment of the economy following its policy meeting when it said the Japanese economy will "remain more or less flat for the time being." Chinese stocks closed lower as a cash crunch weighed on equities after the 7-day repurchase rate, a gauge of funding available in the financial system, rose 36 bp to a 2-1/2 week high of 3.60% as banks hoard cash to meet year-end reserve-ratio requirements.

Overnight U.S. Stock News

• March S&Ps this morning are trading up +2.80 points. The US stock market yesterday rallied right from the opening and settled sharply higher as European debt concerns eased and recession fears abated after strong Nov U.S. housing starts bolstered speculation the U.S. economy may weather the European debt crisis: Dow Jones +2.87%, S&P 500 +2.98%, Nasdaq Composite +3.19%. Bullish factors included (1) carry-over strength from a rally in European equity markets as the region's debt concerns eased after strong demand was seen at an auction of Spanish government debt and after Dec German Ifo business sentiment unexpectedly improved, (2) a rally in homebuilders after Nov U.S. housing starts rose to a 19-month high (+9.3% to 685,000) and Nov U.S. building permits unexpected surged to a 20-month high (+5.7% to 681,000 versus expectations of -1.4% to 635,000), (3) data from the U.S. Labor Department that showed payrolls increased in 29 states in Nov and the jobless rate declined in 43 states, a sign the labor market is recovering across much of the U.S., and (4) comments from Minneapolis Fed President Kocherlakota who said recent government data have made him "more upbeat" on the outlook for the U.S. economy.
• Bearish factors included (1) comments from European Commission President Barroso who said the sovereign-debt crisis is "worsening" conditions in the European labor market and (2) concern the European debt crisis may worsen after Fitch Ratings said the risk of downgrading the EFSF bail-out fund had increased and that the fund's AAA rating depends on France remaining AAA.
• Research in Motion (RIMM) surged 13% in pre-market trrading after the WSJ reported that Microsaft and Nokia Oyj have "flirted" with the idea of making a joint bid for the company.
• Oracle (ORCL) fell 7.5% in pre-market trading after the company reported late yesterday that its fiscal Q2 profit than ended Nov 30 was 54 cents a share on revenue excluding certain items of $8.81 billion, weaker than analysts' estimates of profit of 57 cents a share on sales of $9.23 billion.

Today's Market Focus

• March 10-year T-notes this morning are up +1 tick. T-note prices yesterday retreated on reduced safe-haven demand as equity markets rallied sharply after German business confidence unexpectedly improved and as Nov U.S. housing starts surged to a 19-month high: TYH2 -22.5, FVH2 -8.0, EDM2 +0.5. Bearish factors included (1) carry-over weakness from a slide in German bund prices after European debt concerns eased when the Dec German Ifo business climate unexpectedly improved and after strong demand was seen at a Spanish auction of government debt, (2) the larger-than-expected increase in Nov U.S. housing starts which rose to a 19-month high (+9.3% to 685,000 versus expectations of +1.1% to 635,000), (3) the unexpected surge in Nov U.S. building permits to their best level in 20 months (+5.7% to 681,000 versus expectations of -1.4% to 635,000), (4) comments from Minneapolis Fed President Kocherlakota who said recent government data have made him "more upbeat" on the outlook for the U.S. economy, and (5) supply pressures ahead of the Treasury's $29 billion auction of 7-year T-notes on Wed. Bullish factors included (1) strong demand for the Treasury's $35 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.86, slightly above the 12-auction average of 2.84 and strong foreign demand after indirect bidders took 50.6% of the auction, above the 12-auction average of 41.8%, and (2) the statement from Fitch Ratings that said the risk of downgrading the EFSF bail-out fund had increased and that the fund's AAA rating depends on France remaining AAA.
• The dollar index this morning is lower with the dollar/yen -0.07 yen and the euro/dollar +0.05 cents. The dollar index yesterday settled lower as the euro rallied when German business sentiment unexpectedly improved and strong demand was seen at a sale of Spanish government debt: Dollar Index -0.405, USDJPY -0.156, EURUSD +0.00835. Bearish factors included (1) the unexpected increase in the Dec German Ifo business climate, which is euro supportive, (2) the action by Spain to sell 5.64 billion euros of 3-month and 6-month Treasury bills, more than the maximum target of 4.5 billion euros and a sign of strong demand, and (3) strength in the British pound which rose to a 1-week high against the dollar after Nov U.K. nationwide consumer confidence unexpectedly rose and Dec U.K. CBI reported that sales unexpectedly surged to a 7-month high. Bullish factors for the dollar included (1) ongoing European debt crisis concerns which boosts the safe-haven demand for the dollar after European Commission President Barroso said the sovereign-debt crisis is "worsening" conditions in the European labor market and (2) dollar supportive comments from Minneapolis Fed President Kocherlakota who said recent government data have made him "more upbeat" on the outlook for the U.S. economy.
• Feb crude oil prices this morning are up +34 cents a barrel and Feb gasoline is +0.01 of a cent per gallon. Crude oil and gasoline prices yesterday closed higher for a second day as the dollar weakened, European debt concerns eased and after Nov U.S. housing starts surged: CLG12 +$3.19, RBG12 +8.68. Bullish factors included (1) the weaker dollar, which encourages investment demand in commodities, (2) the surge in Nov U.S. housing starts to their best level in 19 months, which lifts confidence in the economy and energy demand, and (3) reduced European debt concerns after the Dec German Ifo business climate unexpectedly gained. Bearish factors included (1) comments from European Commission President Barroso who said the sovereign-debt crisis is "worsening" conditions in the European labor market, which may slow economic growth and fuel demand and (2) concern that U.S. legislators will fail to extend the expiring U.S. payroll tax cut, which may reduce economic growth and fuel demand. Expectations for Wednesday's weekly inventory report from the DOE are for crude oil stockpiles to fall -2.12 million bbl, gasoline supplies to increase +1.5 million bbl, distillate inventories to fall -750,000 bbl and the refinery capacity rate to rise +0.4 to 85.5%.

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): WAG-Walgreen (BEST earnings consensus $0.67), BBBY-Bed Bath & Beyond (0.88), KMX-CarMax (0.38), MU-Micron Technology (-0.10), TIBX-TIBCO Software (0.35), SHAW-Shaw Group (0.44), ATU-Actuant (0.43), FINL-Finish Line (0.11), SCS-Steelcase (0.19), INXN-InterXion Holding NV (0.11), LNN-Lindsay (0.43), KBH-KB Home (0.04), PKE-Park Electrochemical (0.33).
Global Financial Calendar

Wednesday 12/21/11
United States
0700 ET	Weekly MBA mortgage applications, previous +4.1% with purchase mortgage sub-index -8.2% and refinancing sub-index +9.3%.
1000 ET	Nov existing home sales expected +2.0% to 5.07 million.
1300 ET	Treasury auctions $29 billion 7-year T-notes.
Germany
0200 ET	Nov German import price index expected +5.3% y/y, Oct -0.3% m/m and +6.8% y/y.
United Kingdom
0430 ET	Minutes of the Dec 8 BOE policy meeting.
0430 ET	Nov U.K. public sector net borrowing expected +16.6 billion pounds, Oct +3.4 billion pounds.
Canada
0830 ET	Oct Canada retail sales expected +0.4% and +0.2% less autos, Sep +1.0% m/m and +0.5% less autos.
Euro-Zone
1000 ET	Dec Euro-Zone consumer confidence expected -0.6 to -21.0, Nov -0.5 to -20.4.
1800 ET	European Systemic Risk Board (ESRB) meets in Frankfurt.
Japan
n/a	BOJ announces interest rate decision (expected no change to the 0.00% to 0.10% benchmark rate).

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