Barchart.com U.S. Morning Call for Monday, November 14, 2011
Barchart.com Morning Call for Monday, November 14, 2011
Overnight Developments
Global stocks this morning are mixed with the Euro Stoxx 50 down -1.19% and Dec S&Ps down -7.00 points. European and U.S. stocks erased early gains and turned lower after the euro fell on a report from Spiegel magazine that said German lawmakers are preparing for Greece's departure from the euro if the country's new government doesn't commit to reforms. A report from Moody's Investors Service also pressured stocks as it said weak demand and "investors' cold reception" of a European Financial Stability Facility debt sale last week shows the limits of the fund's ability to support the region's government bond markets. Italy auctioned 3 billion euros of 5-year notes at 6.29%, the highest since 1997, and while the bid-to-cover at 1.47 was better than the 1.34 from last month's sale, the higher yield suggests Italy's new government will struggle to contain the country's debt crisis. Sep Euro-Zone industrial production fell -2.0% m/m, slightly better than expectations of -2.3% m/m, although still the steepest monthly decline in 2-1/2 years.
Asian stocks today closed mostly higher with Japan up +1.05%, China +2.05%, Australia +0.19%, South Korea +2.17%, India -0.43%. Japanese stocks gained after its economy expanded for the first time in four quarters as Q3 Japan GDP grew +6.0% annualized, the fastest pace in 1-1/2 years and slightly stronger than expectations of +5.9% annualized. Gains were limited though, after the yen climbed to a 2-week high against the dollar. Chinese stocks rose, led by gains in banks, after an increase in bank loans to their highest level since June shows the government may be relaxing lending curbs. A drop in food prices also lifted stocks after marbled pork meat dropped -2.5% between Nov 1 to 10 as compared with the previous ten days, which fueled speculation that lower prices will give policymakers more leeway to ease monetary policy. India's Sensex 30 Stock Index closed lower after the Oct Indian wholesale-price index rose +9.73% y/y, stronger than expectations of +9.65% y/y and the ninth consecutive month prices have exceeded 9.00%, which dampens speculation the RBI will be able to cut interest rates anytime soon.
Overnight U.S. Stock News
December S&Ps this morning are trading down -7.00 points. The US stock market last Friday settled higher as U.S. consumer confidence improved and Europe took steps to address its debt crisis: Dow Jones +2.19%, S&P 500 +1.95%, Nasdaq Composite +2.04%. Bullish factors included (1) reduced European debt concerns after Italy's Senate approved a debt-cutting bill and as former ECB Vice President Papademos was prepared to be sworn in as Greece's next Prime Minister, (2) the larger-than-expected increase in the Nov U.S. University of Michigan consumer confidence which rose to a 5-month high (+3.3 to 64.2 versus expectations of +0.6 to 61.5) and strength in energy producers after crude oil rallied to a 3-1/4 month high.
Bearish factors included (1) comments from ECB Executive Board member Stark who said there's spillover to the real economy from the debt crisis and that we must prepare for "very weak" Q4 growth and (2) comments from Fed Vice Chairman Yellen who said that "further intensification of financial disruptions in Europe could lead to a deterioration of financial conditions in the U.S."
Boeing (BA) climbed 1.3% in European trading after the company signed a $26 billion agreement with the Emirates for as many as 70 of its 777 aircraft, the biggest order in Boeing's history.
Today's Market Focus
December 10-year T-notes this morning are up +13.5 ticks. T-note prices last Friday moved lower for a second day on reduced safe-haven demand as stocks rallied over optimism Europe was taking the necessary steps to stem the region's debt crisis along with the stronger-than-expected Nov U.S. University of Michigan consumer confidence: TYZ11 -18, FVZ11 -8.5, EDH12 unchanged. Bearish factors included (1) the larger-than-expected increase in the Nov U.S. University of Michigan consumer confidence which rose to a 5-month high (+3.3 to 64.2 versus expectations of +0.6 to 61.5) and (2) reduced safe-haven demand for Treasuries on optimism Europe was taking the necessary steps to stem the region's debt crisis after Italy's Senate approved a debt-cutting bill and as former ECB Vice President Papademos was prepared to be sworn in as Greece's next Prime Minister. Bullish factors included (1) comments from ECB Executive Board member Stark who said there's spillover to the real economy from the debt crisis and that we must prepare for "very weak" Q4 growth and (2) comments from Fed Vice Chairman Yellen who said that "further intensification of financial disruptions in Europe could lead to a deterioration of financial conditions in the U.S.".
The dollar index this morning is stronger with the dollar/yen -0.21 yen and the euro/dollar -0.93 cents. The dollar index last Friday settled lower as the euro rallied on optimism European leaders are taking the necessary steps to contain the region's sovereign-debt crisis: Dollar Index -0.832, USDJPY -0.469, EURUSD +0.01374. Bearish factors included (1) strength in the euro on reduced European debt concerns after Italy's Senate approved a debt-cutting bill and as former ECB Vice President Papademos was prepared to be sworn in as Greece's next Prime Minister, and (2) reduced safe-haven demand for the dollar as the stock market rallied. Bullish factors included (1) euro negative comments from ECB Council member Nowotny who said the ECB could act "more decisively" if the European economy is going into a slump and (2) the stronger-than-expected Nov U.S. University of Michigan consumer confidence which rise to a 5-month high and is dollar supportive.
Dec crude oil prices this morning are down -$1.09 a barrel and Dec gasoline is -2.87 cents per gallon. Crude oil and gasoline prices last Friday settled mixed as crude rallied on speculation that U.S. economic growth and Europe's efforts to contain its debt crisis will boost fuel demand: CLZ11 +$1.21, RBZ11 -3.30. Dec crude posted 3-1/4 month high. Bullish factors included (1) the weaker dollar, which increases investment demand for commodities, (2) the larger-than-expected increase in the Nov U.S. University of Michigan consumer confidence to a 5-month high, and (3) reduced European debt concerns after Italy's Senate approved a deficit-reduction package and Greece formed a unity government. The main bearish factor was concern that the ongoing European sovereign debt crisis will start to slow the global economy and fuel demand.
United States
1130 ET Weekly 3-mo and 6-mo T-bill auctions. Euro-Zone
0500 ET Sep Euro-Zone industrial production expected -2.3% m/m and +3.5% y/y, Aug +1.4% m/m and +6.0% y/y.
Morning Quote Board
Morning Quotes (ET) Last Chg %chg Updated
US Stock Futures
S&P (Globex) (Z1) 1254.60 -7.00 -0.55% 7:10:33 AM
DJIA (CBOT) (Z1) 12073 -39 -0.32% 7:10:33 AM European Stocks
Europe DJ Stoxx 50 2263.95 -27.24 -1.19% 7:06:45 AM
London UK FTSE Index 5493.17 -52.21 -0.94% 7:06:50 AM
German Dax Index 5975.48 -81.55 -1.35% 7:06:50 AM
French CAC 40 Index 3097.17 -52.21 -1.66% 7:06:45 AM Asian-Pacific Stocks
Japan Nikkei Index 8604 89 1.05% 1:28:01 AM
Hong Kong Hang Seng 19508 371 1.94% 3:01:15 AM
China CSI 300 Index 2750 55 2.05% 2:01:33 AM
Taiwan TAIEX Index 7526 158 2.15% 12:46:01 AM
Australian S&P 200 4304.6 8.1 0.19% 12:41:26 AM
Singapore Str. Times 2830.14 39.2 1.40% 4:10:01 AM
South Korea KOSPI 200 248.27 5.28 2.17% 4:05:19 AM
Bombay Sensex 30 17119 -74.08 -0.43% 7:21:47 AM
Karachi KSE-100 12008 -11 -0.09% 7:01:48 AM US Interest Rates
10yr T-notes (CBT)(Z1) 130.065 0.135 0.33% 7:11:08 AM
Cash 10yr T-note Price 99.090 -0.070 -0.21% 7:21:14 AM
Cash 10yr T-note Yield 2.080 0.024 1.15% 7:21:14 AM
5yr T-note (CBT)(Z1) 123.000 0.070 0.18% 7:11:44 AM
Cash 5yr T-note Price 100.130 -0.020 -0.05% 7:21:20 AM
Cash 5yr T-note Yield 0.918 0.011 1.24% 7:21:20 AM
30-yr T-bond (CBT)(Z1) 141.09 0.270 0.60% 7:11:26 AM
Cash 30yr T-bond Price 99.200 -0.090 -0.28% 7:21:35 AM
Cash 30yr T-bond Yield 3.144 0.014 0.46% 7:21:35 AM
Eurodollars (CME)(Z1) 99.428 0.008 0.01% 7:08:17 AM
Eurodollars (CME)(H2) 99.335 0.015 0.02% 7:09:11 AM Asian & European Rates
10-yr JGBs (TSE) (Z1) 142.80 -0.07 -0.05% 1:00:00 AM
EuroyenTibor(SGX)(Z1) 99.675 0.000 0.00% 11/14/2011
Bunds (Eurex) (Z1) 138.18 0.92 0.67% 7:06:48 AM
Euribor (Eurex) (Z1) 98.69 0.00 0.00% 11/11/2011
UK Gilts (Liffe) (Z1) 130.62 0.68 0.52% 7:06:44 AM
Short Stlg (Liffe) (Z1) 98.89 0.03 0.03% 7:06:30 AM Forex
U.S. Dollar Index 77.3290 0.3840 0.50% 7:11:50 AM
US Dollar-Japanese Yen 76.9900 -0.2100 -0.27% 7:21:51 AM
EuroFX-US Dollar 1.3657 -0.0093 -0.68% 7:21:51 AM
US Dollar-Swiss Franc 0.9042 0.0047 0.52% 7:21:50 AM
British Pound-US$ 1.5934 -0.0131 -0.82% 7:21:51 AM
US$-Canadian Dlr 1.0181 0.0077 0.76% 7:21:51 AM
Yen (Globex) (Z1) 1.3001 0.0037 0.29% 7:11:06 AM
Euro FX (Globex) (Z1) 1.3658 -0.0089 -0.65% 7:11:47 AM
SwissFranc (Globex)(Z1) 1.1069 -0.0033 -0.30% 7:11:02 AM
British Pound(Glbx)(Z1) 1.5933 -0.0122 -0.76% 7:11:37 AM
Canadian$ (Globex)(Z1) 0.9813 -0.0056 -0.57% 7:11:49 AM Commodities
Gold (Comex) (Z1) 1777.9 -10.2 -0.57% 7:10:54 AM
Silver (Comex) (Z1) 34.370 -0.312 -0.90% 7:11:44 AM
Copper (Comex) (Z1) 351.1 4.8 1.37% 7:11:50 AM
Crude Oil (Nymex) (Z1) 97.90 -1.09 -1.10% 7:11:36 AM
Gasoline (Nymex) (Z1) 257.51 -2.87 -1.10% 7:11:48 AM
Heating Oil(Nymex) (Z1) 317.26 0.1 0.03% 7:11:48 AM
NaturalGas(Nymex)(Z1) 3.517 -0.067 -1.87% 7:10:00 AM
Corn (CBOT) (Z1) 636.50 -2.00 -0.31% 7:11:44 AM
Soybeans (CBOT) (F2) 1182.50 7.00 0.60% 7:11:21 AM
Wheat (CBOT) (Z1) 613.50 -3.25 -0.53% 7:10:18 AM
Barchart.com U.S. Morning Call for Monday, November 14, 2011
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