MORNING CALL 5/11

Barchart Morning Call

Barchart.com - Thu May 11, 6:39AM CDT

OVERNIGHT MARKETS AND NEWS

Jun E-mini S&Ps (ESM17 -0.14%) this morning are down -0.16% and European stocks are down -0.19% as the BOE cut its UK GDP estimate and raised its UK CPI forecast. The BOE, as expected, kept its benchmark interest rate unchanged at 0.25% and maintained its asset purchase target at 435 billion pounds, but cut its 2017 UK GDP forecast to 1.9% from 2.0% and raised its 2017 CPI forecast to 2.7% from 2.4%. Losses in equities were contained on strength in energy producing stocks and mining companies as Jun WTI crude oil (CLM17 +1.33%) rose +1.52% and Jul COMEX copper (HGN17 +1.92%) climbed +1.88%, both at 1-week highs. Asian stocks settled higher: Japan +0.31%, Hong Kong +0.44%, China +0.29%, Taiwan +0.33%, Australia +0.05%, Singapore +0.65%, South Korea +1.20%, India +0.01%. Stock markets in India and South Korea climbed to record highs, while Japan's Nikkei Stock index rose to a 17-month high and China's Shanghai Composite recovered from a 7-month low and closed higher on speculation the government intervened to prop up stocks late in the session.

The dollar index (DXY00 -0.03%) is down -0.04%. EUR/USD (^EURUSD) is up +0.05% after the European Commission raised its 2017 Eurozone GDP forecast. USD/JPY (^USDJPY) is down -0.22%.

Jun 10-year T-note prices (ZNM17 +0.05%) are up +3 ticks.

The European Commission raised its Eurozone 2017 GDP forecast to 1.7%, up from a forecast of +1.6% in Feb, and said risks to Eurozone growth are more balanced, though they remain tilted to the downside.

New York Fed President Dudley (voter) said that the U.S. economic recovery continues apace and that the Fed expects to gradually raise interest rates. He added that later this year or in 2018 the Fed is likely to start shrinking its balance sheet, although it won't shrink back to its pre-crisis size.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) NY Fed President William Dudley gives speech entitled “Benefits and Challenges of Globalization” in Mumbai, (2) weekly initial unemployment claims (expected +7,000 to 245,000, previous -19,000 to 238,000) and continuing claims (expected +16,000 to 1.980 million, previous -23,000 to 1.964 million), (3) Apr PPI final demand (expected +0.2% m/m and +2.2% y/y, Mar -0.1% m/m and +2.3% y/y) and Apr PPI ex food & energy (expected +0.2% m/m and +1.6% y/y, Mar unch m/m and +1.6% y/y), (4) Treasury auctions $15 billion of 30-year T-bonds, (5) USDA weekly Export Sales.

Notable S&P 500 earnings reports today include: Macy's (consensus $0.35), Kohl's (0.29), Nordstrom (0.28), CA (0.49).

U.S. IPO's scheduled to price today: Solaris Oilfield Infrastructure (SOI), Gardner Denver Holdings (GDI), ASV LLC (ASV).

Equity conferences: 11th Annual Barrington Research Spring Investment Conference on Thu, Citi Boston Energy Conference on Thu, Deutsche Bank AutoTech Conference on Thu.

OVERNIGHT U.S. STOCK MOVERS

Snap (SNAP -1.46%) sank over 20% in pre-market trading after it reported Q1 revenue of $149.6 million, below consensus of $158.6 million.

O'Reilly Automotive (ORLY +0.68%) gained 1% in after-hours trading after it said it added $1 billion to its share buyback program for a total of $8.75 billion.

Symantec (SYMC +2.38%) dropped 7% in in after-hours trading after it said it sees Q1 adjusted EPS of 28 cents-32 cents, weaker than consensus of 38 cents, and then said it sees full-year adjusted revenue of $5.10 billion-$5.20 billion, below consensus of $5.21 billion.

Merck & Co (MRK +1.03%) rose 3% in after-hours trading after it won FDA approval for using its Keytruda drug and chemotherapy for treatment of metastatic non-squamous non-small cell lung cancer.

Twenty-First Century Fox (FOXA -1.17%) fell 2% in after-hours trading after it reported Q3 revenue of $7.56 billion, less than consensus of $7.64 billion.

Bright Horizons Family Solutions (BFAM -0.19%) lost 1% in after-hours trading after it announced a secondary offering of 4.15 million shares of common stock by selling shareholders.

Pegasystems (PEGA +3.15%) jumped 9% in after-hours trading after it reported Q1 adjusted EPS of 39 cents, well above consensus of 23 cents.

Intrexon (XON +0.62%) climbed over 4% in after-hours trading after it reported Q1 revenue of $53.7 million, higher than consensus of $49.1 million.

Aviat Networks ({=AVNW =}) plunged over 25% in after-hours trading after it reported Q3 revenue of $58.7 million, down -2.9% y/y.

U.S. Steel (X +0.87%) gained 1% in after-hours trading after CEO Mario Longhi stepped down and COO David Burritt replaced him.

Omeros (OMER +0.62%) lost almost 2% in after-hours trading after it reported Q1 revenue of $12.3 million, weaker than consensus of $13.3 million.

Arbor Realty Trust (ABR +0.46%) slid over 5% in after-hours trading after it announced plans to make a public offering of 9.5 million shares of its common stock.

MARKET COMMENTS

June E-mini S&Ps (ESM17 -0.14%) this morning are down -3.75 points (-0.16%). Wednesday's closes: S&P 500 +0.11%, Dow Jones -0.16%, Nasdaq +0.06%. The S&P 500 on Wednesday closed higher on strength in energy producer stocks after crude oil prices jumped +3.16% and on strength in technology stocks led by a +17% surge in shares of Nvidia after it reported stronger-than-expected Q1 earnings. Gains were limited by political uncertainty after President Trump fired FBI Director Comey.

June 10-year T-notes (ZNM17 +0.05%) this morning are up +3 ticks. Wednesday's closes: TYM7 -0.50, FVM7 -0.25. Jun 10-year T-notes on Wednesday closed little changed. T-notes were boosted by political uncertainty in Washington after President Trump fired FBI Director Comey and by some flight to safety after North Korea's UK ambassador said his country will proceed with nuclear tests. T-notes gave up their advance on weaker-than-expected demand for the Treasury’s $23 billion of 10-year T-notes that had a bid-to-cover of 2.33, below the 12-auction average of 2.47.

The dollar index (DXY00 -0.03%) this morning is down -0.036 (-0.04%). EUR/USD (^EURUSD) is +0.0005 (+0.05%) and USD/JPY (^USDJPY) is -0.25 (-0.22%). Wednesday's closes: Dollar index +0.011 (+0.01%), EUR/USD -0.0006 (-0.06%), USD/JPY +0.05 (+0.04%). The dollar index on Wednesday closed slightly higher on the stronger-than-expected U.S. Apr import price index report, which bolsters the case for additional Fed rate hikes. There was also weakness in EUR/USD which fell to a 1-week low after ECB President Draghi said, "underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend," which bolsters speculation the ECB is not yet ready to taper QE.

June WTI crude oil prices (CLM17 +1.33%) this morning are up +72 cents (+1.52%) at a 1-week high and June gasoline (RBM17 +1.50%) is +0.0250 (+1.62%) at a 1-1/2 week high. Wednesday's closes: Jun crude +1.45 (+3.16%), Jun gasoline +0.0501 (+3.36%). Jun crude oil and gasoline on Wednesday closed sharply higher on the -5.247 million bbl decline in EIA crude inventories (versus expectations of -2.0 million bbl) and the unexpected -150,000 bbl decline in EIA gasoline inventories (vs expectations of +300,000 bbl). On the bearish side, U.S. crude production in the week of May 5 rose +0.2% to 9.314 million bpd, a 1-1/2 year high.

GLOBAL EVENT CALENDAR05/11/2017

		Thursday, May 11
US	0625 ET	NY Fed President William Dudley gives speech entitled Benefits and Challenges of Globalization in Mumbai.
	0830 ET	Weekly initial unemployment claims expected +7,000 to 245,000, previous -19,000 to 238,000. Weekly continuing claims expected +16,000 to 1.980 million, previous -23,000 to 1.964 million.
	0830 ET	Apr PPI final demand expected +0.2% m/m and +2.2% y/y, Mar -0.1% m/m and +2.3% y/y. Apr PPI ex food & energy expected +0.2% m/m and +1.6% y/y, Mar unch m/m and +1.6% y/y.
	0830 ET	USDA weekly Export Sales.
	1100 ET	Treasury announces amount of 10-year TIPS to be auctioned May 18 (previous $11 billion).
	1300 ET	Treasury auctions $15 billion of 30-year T-bonds
		Friday, May 12
US	0830 ET	Apr CPI expected +0.2% m/m and +2.3% y/y, Mar -0.3% m/m and +2.4% y/y. Apr CPI ex food & energy expected +0.2% m/m and +2.0% y/y, Mar -0.1% m/m and +2.0% y/y.
	0830 ET	Apr retail sales expected +0.6% and +0.5% ex autos, Mar -0.2% and unch ex autos.
	0830 ET	Apr real avg weekly earnings, Mar -0.1% y/y.
	0900 ET	Chicago Fed President Charles Evans discusses economic conditions and monetary policy on a panel at the ACI Financial Markets Association World Conference in Dublin.
	1000 ET	Preliminary-May University of Michigan U.S. consumer sentiment index expected unch at 97.0, Apr +0.1 to 97.0.
	1000 ET	Mar business inventories expected +0.1%, Feb +0.3%.
	1230 ET	Philadelphia Fed President Patrick Harker (voter) delivers speech on U.S. economic outlook at Drexel University.

U.S. STOCK CALENDAR05/11/2017

Company	Ticker	Time	Event Description	Period	Estimate
Macy's Inc	M US	Bef-mkt	Q1 2018 Earnings Release	Q1 18	0.346
Kohl's Corp	KSS US	07:00	Q1 2018 Earnings Release	Q1 18	0.29
Williams Cos Inc/The	WMB US	08:00	Analyst Day
Kohl's Corp	KSS US	08:30	Q1 2018 Earnings Call	Q1 18
Ford Motor Co	F US	08:30	Annual General Meeting
E*TRADE Financial Corp	ETFC US	08:30	Annual General Meeting
Delta Air Lines Inc	DAL US	08:30	Analyst Meeting
Laboratory Corp of America Holdings	LH US	09:00	Annual General Meeting
Macy's Inc	M US	10:00	Q1 2018 Earnings Call	Q1 18
Principal Financial Group Inc	PFG US	10:00	Roadshow
Zoetis Inc	ZTS US	10:00	Annual General Meeting
Dow Chemical Co/The	DOW US	10:00	Annual General Meeting
Discover Financial Services	DFS US	10:00	Annual General Meeting
Nucor Corp	NUE US	10:00	Annual General Meeting
Wells Fargo & Co	WFC US	10:30	Investor Day
Apache Corp	APA US	11:00	Annual General Meeting
UDR Inc	UDR US		Annual General Meeting
Express Scripts Holding Co	ESRX US		Annual General Meeting
Equifax Inc	EFX US		Investors Meeting
Equifax Inc	EFX US		Investor Meeting
Equifax Inc	EFX US		Investor Meeting
Western Union Co/The	WU US		Annual General Meeting
Host Hotels & Resorts Inc	HST US		Annual General Meeting
CH Robinson Worldwide Inc	CHRW US		Annual General Meeting
Union Pacific Corp	UNP US	12:00	Annual General Meeting
Norfolk Southern Corp	NSC US		Annual General Meeting
Assurant Inc	AIZ US		Annual General Meeting
Cimarex Energy Co	XEC US		Annual General Meeting
Edwards Lifesciences Corp	EW US	13:00	Annual General Meeting
Transocean Ltd	RIG US	13:30	Annual General Meeting
Invesco Ltd	IVZ US	14:00	Annual General Meeting
Nordstrom Inc	JWN US	Aft-mkt	Q1 2018 Earnings Release	Q1 18	0.277
CA Inc	CA US	Aft-mkt	Q4 2017 Earnings Release	Q4 17	0.492
Nordstrom Inc	JWN US	16:45	Q1 2018 Earnings Call	Q1 18
CA Inc	CA US	17:00	Q4 2017 Earnings Call	Q4 17
Boston Scientific Corp	BSX US	17:00	Investor Conference

Barchart Morning Call 2/23

Barchart Morning Call

Barchart.com

- 1 hr 9 mins ago

Overnight Developments

• Global stocks this morning are mixed with the Euro Stoxx 50 down -0.03% and Mar S&Ps up +0.30 of a point. Stocks and commodities gained, Treasuries weakened and the dollar index slipped to a 1-1/2 week low after German business confidence climbed more than forecast, but stocks gave up their advance and turned lower when the European Commission predicted the Euro-Zone economy will contract this year. The euro rose to a 2-1/4 month high against the dollar after the Feb German IFO business climate rose +1.3 to 109.6, greater than expectations of +0.5 to 108.8 and its best level in 7 months. The euro fell back from its best level and stocks retreated after the European Commission cut its 2012 Euro-Zone GDP forecast to contraction of -0.3% from a Nov forecast of +0.5% growth, mainly due to projected contractions of -1.3% in Italy and -1.0% in Spain with EU Economic and Monetary Commissioner Rehn saying "The euro are has entered a mild recession." The commission also raised its 2012 Euro-Zone inflation forecast to 2.1% from a Nov estimate of 1.7%, which may potentially limit the ECB's scope for further interest rate cuts. The British pound rebounded from Wednesday's 1-week low against the dollar after the Feb U.K. CBI index of total factory orders rose +13 to -3, better than expectations of +3 to -13 and its best level in 6 months.
• Asian stocks today closed mixed with Japan up +0.44%, China +0.34%, Australia -0.16%, South Korea -1.14%, India -0.37%. Japan's Nikkei 225 Stock Average climbed to a 6-1/2 month high as the yen's plunge to a 7-1/4 month low against the dollar boosted the earnings outlook for exporters. Japan's TSE Second Section Price Index, a measure of smaller companies on the Tokyo stock exchange, posted gains for the 28th consecutive day, its longest series of advances since Bloomberg data began in 1961 as Japan's $250 billion in spending to rebuild after last year's record earthquake is helping to fuel the rally in smaller stocks. China's Shanghai Stock Index posted a 2-1/2 month high as property developers and builders rallied on speculation more local governments are challenging real-estate restrictions after the National Business Daily reported that a county in Zhejiang province canceled restrictions on buying homes from this year. Falling home prices in China has fueled attempts by some of the country's smaller cities to release tightening on property policies.

Overnight U.S. Stock News

• March S&Ps this morning are trading up +0.30 of a point. The US stock market Wednesday finished lower as global economic concerns along with weaker than expected Jan U.S. existing home sales undercut support for stock prices: Dow Jones -0.21%, S&P 500 -0.33%, Nasdaq Composite -0.51%. Bearish factors Wednesday included (1) global economic growth concerns after the Feb China HSBC flash manufacturing PMI showed China's manufacturing activity may have contracted for a fourth month (+0.9 to 49.7) along with the unexpected contraction in the Feb Euro-Zone PMI composite index (-0.7 to 49.7 versus expectations of +0.1 to 50.5), (2) a slump in homebuilders after the weaker than expected Jan U.S. existing home sales (+4,3% to 4.57 million versus expectations of +1.1% to 4.66 million, and (3) heightened European sovereign-debt concerns after Fitch Ratings cut Greece's credit rating 2 levels to C from CCC and said a default is "highly likely in the near term."
• Bullish factors included (1) overall improvement in the housing market despite the weaker-than-expected Jan U.S. existing home sales which climbed to 4.57 million, the most in 20 months and (2) reduced funding concerns for European banks as the 3-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, fell to 68 bp below the euro interbank offered rate, a 6-1/2 month low.
• Hewlett-Packard (HPQ) slipped 1.4% in European trading after the company said profit before some items in the 3 months through April will be 88 cents to 91 cents a share, below analysts' estimates of 95 cents.

Today's Market Focus

• March 10-year T-notes this morning are down -4 ticks. T-note prices Wednesday settled higher on increased safe-haven demand over Greek default concerns along with decent demand for the Treasury's $35 billion 5-year T-note auction: TYH2 +13.0, FVH2 +6.2, EDM2 -0.5. Bullish factors included (1) increased safe-haven demand for Treasuries after Fitch Ratings cut Greece's credit rating 2 levels to C from CCC and said a default is "highly likely in the near term," (2) the Fed's purchase of $1.84 billion of long-term Treasuries as it replaces the short-term debt in its portfolio with longer-term Treasuries as part of its Operation Twist program to keep borrowing costs low, and (3) decent demand for the Treasury's $35 billion auction of 5-year T-notes that had a bid-to-cover ratio of 2.89, stronger than the 12-auction average of 2.87. Bearish factors Tuesday included (1) the increase in Jan existing U.S. home sales to their best level in 20-months (+4.3% to 4.57 million), and (2) supply pressures ahead of the Treasury's $29 billion auction of 7-year T-notes on Thu.
• The dollar index this morning is weaker and at a 1-1/2 week low with the dollar/yen -0.14 yen and the euro/dollar +0.43 cents. The dollar index Wednesday settled slightly higher after the Feb Euro-Zone PMI composite unexpectedly contracted along with the slump in the yen to a 7-1/4 month low against the dollar: Dollar Index +0.167, USDJPY +0.552, EURUSD +0.00151. Bullish factors included (1) the slide in the yen as the BOJ's actions to boost its asset purchases weakens the yen's interest rate differentials, (2) weakness in the British pound which fell to a 1-week low against the dollar after the minutes of the Feb 8-9 BOE policy meeting showed 2 policy makers wanted the BOE to increase its asset purchases by 75 billion pounds, more than the 50 billion pound increase supported by the other 7 policy makers, (3) the action by Fitch Ratings to cut Greece's credit rating 2 levels to C from CCC, saying a default is "highly likely in the near term," and (4) the unexpected contraction in the Feb Euro-Zone PMI composite, which is euro negative.
• Apr crude oil prices this morning are up +7 cents a barrel and Apr gasoline is +0.85 of a cent per gallon. Crude oil and gasoline prices Wednesday fluctuated on both sides of unchanged and finally finished slightly higher as geopolitical risks from Iran outweighed global energy demand concerns: CLJ12 +$0.03, RBJ +1.45. Bullish factors included (1) heightened geopolitical concerns after officials from the IAEA said they were denied access to an Iranian military base and that talks over Iran's nuclear program "couldn't find a way forward," and (2) the prediction from Goldman's head of energy research that "stronger-than-expected demand against limited inventory and scarce excess production capacity leaves the market vulnerable to price spikes in the near-to-medium term." Bearish factors included (1) strength in the dollar, (2) the unexpected contraction in the Feb Euro-Zone PMI composite index, which signals weakened fuel demand, and (3) concern over Chinese fuel demand after the Feb China HSBC flash manufacturing PMI shows China's manufacturing activity may have contracted for a fourth month. Expectations for Thursday's weekly DOE inventory report (released 1-day late due to Monday's holiday) are for crude oil supplies to increase 1.5 million bbl, gasoline stockpiles to fall -250,000 bbl, distillate inventories to decline -1.38 million bbl and the refinery utilization rate to fall -0.5 to 83.5% of capacity.

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): AIG-American International Group (BEST earnings consensus $0.56), TGT-Target (1.39), AMT-American Tower (0.29), PSA-Public Storage (0.96), CRM-Salesforce.com (0.40), PEG-Public Service Enterprise Group (0.48), VNO-Vornado Realty Trust (0.42), KSS-Kohls (1.80), DISH-Dish Network (0.61), ESV-Ensco PLC (0.95), GPS-The Gap (0.40), LINTA-Liberty Interactive (0.38), LMCA-Liberty Media (0.40), MNST-Monster Beverage (0.37), MRVL-Marvell Technology Group Ltd. (0.17), ADSK-Autodexk (0.45), HRL-Hormel Foods (0.48).
Global Financial Calendar

Thursday 2/23/12
United States
0830 ET	Weekly initial unemployment claims expected +7,000 to 355,000, previous -13,000 to 348,000. Weekly continuing claims expected +34,000 to 3.460 million, previous 100,000 to 3.426 million.
1000 ET	Dec FHFA house price index purchase only expected +0.1% m/m, Nov +1.0% m/m. Q4 FHFA house price index purchase only expected +0.2% q/q, Q3 +0.2% q/q.
1300 ET	Treasury auctions $29 billion 7-year T-notes.
1630 ET	Weekly money supply report and Fed balance sheet.
Germany
0400 ET	Feb German IFO business climate expected +0.5 to 108.8, Jan +1.0 to 108.3. Feb IFO current assessment expected +0.2 to 116.5, Jan 0.4 to 116.3. Feb IFO expectations expected +1.1 to 102.0, Jan +2.3 to 100.9.
Euro-Zone
0515 ET	European Commission issues interim economic forecasts.
United Kingdom
0600 ET	Feb U.K. CBI total orders expected +3 to -13, Jan +7 to -16.
Japan
1850 ET	Jan Japan corporate service price index expected +0.1% y/y, Dec +0.1% y/y.
CHI
2100 ET	Jan China Conference Board leading economic index.

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Barchart Morning Call 11/1

Barchart Morning Call

Barchart.com - 39 mins ago

Overnight Developments

• Global stocks this morning are sliding with the Euro Stoxx 50 down -2.88% and Dec S&Ps down -23.20 points. Treasuries and the dollar rallied, while commodities tumbled after Greek Prime Minister Papandreou pledged to hold a referendum on Europe's bailout plan for Greece, which risks pushing the country into default if voter's reject the EU's financial accord. The euro fell to a 1-1/2 week low against the dollar, credit default swaps to insure European government debt rose and bank stocks plummeted on the news. Another negative for stocks is concern that global economic growth is retreating after the Oct China PMI manufacturing index unexpectedly declined to its lowest level in 2-1/2 years, while the Oct U.K. PMI manufacturing index fell -3.4 to 47.4, a larger than expected -1.1 point decline to 50.1 and its biggest rate of contraction in 2-1/3 years. On the positive side, the U.K. economy grew faster than expected in the third quarter after Q3 U.K. GDP rose +0.5% q/q and +0.5% y/y, stronger than expectations of +0.3% q/q and 0.4% y/y.
• Asian stocks today closed mixed with Japan down -1.70%, China +0.08%, Australia -1.52%, South Korea +0.02%, India -1.27%. The Oct China PMI manufacturing index unexpectedly declined -0.8 to 50.4, weaker than expectations of a +0.6 point increase to 51.8 and its slowest pace of growth in 2-1/2 years. Australia's central bank unexpectedly cut interest rates for the first time since 2009 after the RBA reduced its benchmark lending rate by 25 bp to 4.50%, with RBA Governor Stevens saying trade "is starting to see some effects of a significant slowing in economic activity in Europe and it is likely to be some time yet before concerns about the European situation can definitively be laid to rest." The Japanese government signaled it is prepared for sustained intervention to curb the yen's strength when Prime Minister Azumi said he will "continue to intervene until I am satisfied," after yen sales yesterday that Credit Suisse Group AG estimates may have exceeded $50 billion.

Overnight U.S. Stock News

• December S&Ps this morning are trading down by -23.20 points. The US stock market yesterday settled sharply lower on concern European leaders will struggle to raise funds to contain the region's debt crisis along weaker-than-expected U.S. manufacturing data: Dow Jones -2.26%, S&P 500 -2.47%, Nasdaq Composite -1.93%. Bearish factors included (1) carry-over weakness from a slide in European stocks on concern indebted nations will struggle to raise funds to help stem the debt crisis after yields on Italy's 5-year bonds rose to a 14-year high, (2) concern that Chinese support for European debt may be less than expected after the Xinhau news agency reported that policy makers said that China can't play the role of "savior" in Europe's debt crisis, (3) the action by the OECD to cut its growth projections for the U.S. and Europe for this year and next, and (4) the larger-than-expected decline in the Oct Chicago purchasing managers index (-2.0 to 58.4 versus expectations of -1.4 o 59.0).
• Bullish factors included (1) a possible pick-up in the U.S. labor market after the employment sub-index of the Oct Chicago purchasing managers index rose +1.7 to 62.3, the highest in 6 months and (2) strong profits that should limit stock declines as American companies have beaten Wall Street profit estimates in Q3 for the 11th straight quarter.
• Bank of America (BAC) fell 3.4% in pre-market trading as the biggest U.S. debit-card issuer may face pressure to scrap plans to impose a monthly fee on some card users after its largest competitors abaondoned the strategy amid a consumer revolt.

Today's Market Focus

• December 10-year T-notes this morning are up +27 ticks. T-note prices yesterday stayed firm the entire day and settled sharply higher on increased safe-haven demand as stocks plummeted and as Japan intervened in the currency market to sell yen, which fueled speculation Japan may take its dollar proceeds from the yen sales and buy Treasuries: TYZ11 +31, FVZ11 +17.5, EDH12 -0.5. Bullish factors included (1) increased safe-haven demand for Treasuries after global stock markets fell on renewed European debt concerns when the 10-year Italian bond yield surged 17 bp to a 14-year high of 5.92% along with concerns that more firms may succumb to the European debt crisis after MF Global Holdings Ltd. filed for bankruptcy after making wrong-way bets on European sovereign debt, (2) speculation that Japan will buy Treasuries with the dollar proceeds from its sales of yen in the foreign-exchange market, (3) the larger-than-expected decline in the Oct Chicago purchasing managers index (-2.0 to 58.4 versus expectations of -1.4 o 59.0), and (4) the action by the OECD to cut its growth projections for the U.S. and Europe for this year and next.
• The dollar index this morning is stronger and at a 1-1/2 week high with the dollar/yen +0.03 yen and the euro/dollar -1.37 cents. The dollar index yesterday settled sharply higher on renewed European debt concerns along with the action by Japan to sell the yen in foreign-exchange markets in an attempt to curb its strength: Dollar Index +1.099, USDJPY +2.371, EURUSD -0.02891. The yen rose to a record high of 75.34 against the dollar and then plunged to a 2-3/4 month low against the dollar and finished sharply lower. Bullish factors included (1) the action by Japan to intervene in foreign-exchange markets and sell yen for the third time this year in an attempt to weaken it against the dollar after Japanese Finance Minister Azumi said the move was carried out to combat "one-sided speculative moves that don't reflect the economic fundamentals of our economy," (2) increased safe-haven demand for the dollar as European and U.S. stock markets tumbled on renewed European debt concerns after the yield on Italian 5-year notes surged 17 bp to 5.92%, the highest in 14 years, and (3) weaker-than-expected European economic data on Sep German retail sales and the Sep Euro-Zone unemployment rate which rose to a 13-year high and is euro negative. Bearish factors included (1) the unexpected increase in the Oct Euro-Zone CPI estimate to a 3-year high of 3.0%, which may keep the ECB from providing additional stimulus measures and (2) the larger-than-expected decline in the Oct Chicago purchasing managers index, which may prompt the Fed into additional stimulus measures to support the economy at the expense of the dollar.
• Dec crude oil prices this morning are doen -$2.56 a barrel and Dec gasoline is -2.99 cents per gallon. Crude oil and gasoline prices yesterday closed lower as the dollar rallied, the stock market tumbled and OPEC production rose: CLZ11 -$0.13, RBZ11 -4.04. Dec gasoline posted a 3-week low. Bearish factors included (1) the rally in the dollar, which reduces investment demand for commodities, (2) the slide in global equity markets, which reduces confidence in the economic outlook and energy demand, (3) Bloomberg data that shows OPEC oil production in Oct rose +125,000 barrels a day to average 30.14 million barrels a day, the highest in nearly 3 years, (4) the action by the OECD to cut its 2011 and 2012 GDP forecasts for Europe and the U.S., which signals reduced energy consumption, and (5) comments from the U.A.E. energy minister who said it's "too early" to say if OPEC should cut production as Libyan production resumes.

Today's U.S. Earnings Reports Earnings reports (confirmed releases, sorted by mkt cap): PFE-Pfizer (BEST earnings consensus $0.56), EMR-Emerson Electric (0.96), BHI-Baker Hughes (1.22), AMT-American Tower (0.25), ADM-Archer-Daniels-Midland (0.66), MRO-Marathon Oil (0.83), FE-FirstEnergy (1.23), CME-CME Group (4.69), WMB-Williams Cos. (0.42), DISCA-Discovery Communications (0.55), WPZ-Williams Partners LP (0.88), PEG-Public Service Enterprise Group (0.81), ED-Consolidated Edison (1.33), VLO-Valero Energy (1.95), MPC-Marathon Petroleum (2.56), CF-CF Industries Holdings (4.93).
Global Financial Calendar

Tuesday 11/1/11
United States
0745 ET	ICSC (Int?l Council of Shopping Centers) weekly retailer sales.
0855 ET	Redbook weekly retailer sales.
1000 ET	Sep construction spending expected +0.3%, Aug +1.4%.
1000 ET	Oct ISM manufacturing index expected +0.4 to 52.0, Sep +1.0 to 51.6. Oct ISM prices paid expected -1.0 to 55.0, Sep +0.5 to 56.0.
1130 ET	Weekly 4-week T-bill auction.
1200 ET	FOMC begins 2-day policy meeting.
1700 ET	Oct total vehicle sales expected 13.20 million, Sep 13.04 million. Oct domestic vehicle sales expected 10.30 million, Sep 10.17 million.
Japan
0100 ET	Oct Japan vehicle sales, Sep +1.7% y/y.
United Kingdom
0300 ET	Oct U.K. nationwide house prices expected unchanged m/m and +0.5% y/y, Sep +0.1% m/m and -0.3% y/y.
0530 ET	Oct U.K. PMI manufacturing expected -1.1to 50.1, Sep +1.7 to 51.1.
0530 ET	Q3 U.K. GDP expected +0.3% q/q and +0.4% y/y, Q2 +0.1% q/q and +0.6% y/y.
0530 ET	Aug U.K. index of services expected unchanged /m and +0.5% 3-mo/3-mo, Jul +0.2% m/m and +0.9% 3-mo/3-mo.

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