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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and attended... More
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  • Barchart Morning Call 12/10 0 comments
    Dec 10, 2012 9:39 AM | about stocks: JW.A, GEF, CASY, FGP, ABM

    Barchart Morning Call

    BC - 1 hr 36 mins ago

    Overnight Developments

    • Dec E-mini S&Ps this morning are mildly lower by -0.18%. The market received some encouragement about the fiscal cliff after President Obama and House Speaker Boehner met over the weekend. In addition, there was positive Chinese economic news over the weekend. However, bearish factors this morning include a -0.98% sell-off in European stocks, a 31 bp surge in Italian 10-year bond yields on Italian Prime Minister Monti's resignation announcement, a weak Chinese export figure of +2.9% y/y, and a -20.7% drop in Japanese machine tool orders. Asian stocks today closed mostly higher with Japan up +0.07%, Hong Kong up +0.39%, and China up +1.09%. Commodity prices this morning are little changed on average. Jan crude oil is up +0.59%, Jan gasoline is up +1.16%, Feb gold is up +0.46%, March copper is up +1.17%, and agricultural prices are trading mostly lower. The dollar index is little changed. EUR/USD is down -0.16% on the Monti resignation news. March 10-year T-note prices are up 6.5 ticks.
    • President Obama and House Speaker Boehner met at the White House over the weekend for a one-on-one session on the fiscal cliff. There were no public details about the content of the meeting. Washington only has this week and next week to reach a compromise before Congress intends to recess for the Christmas break next Friday (Dec 21).
    • Greece has extended the deadline for last week's bond buyback from last Friday until this Tuesday at noon London time. Prime Minister Samaras said the buyback went "very well," but apparently the transaction is short of its target and more time is needed for Greece to twist some arms of bond holders. Greece's state-run NET TV reported that the buyback attracted offers totaling 27 billion euros in face value, which would be about 3 billion short of the 30 billion euro target. The buyback must meet its target or Greek and Eurozone officials will have to find another way to finish plugging the long-term Greek debt target. The bond buyback needs to be successfully wrapped up before Eurozone finance ministers can approve the revised Greek bailout plan and release up to 44 billion euros of withheld Greek aid through Q1.
    • Italian Prime Minister Monti over the weekend announced that he will resign as soon as the Italian parliament approves the 2013 budget law. That means there will be an Italian election by February, two months earlier than previous expectations of April. The market is nervous about the return of the control of the Italian government to politicians from the technocratic government of Prime Minister Monti. Former Prime Minister Berlusconi forced Mr. Monti's resignation by withdrawing his party's support from the Monti coalition and said he is aiming to become Prime Minister again after the election. Italy's 10-year bond yield jumped sharply by 31 bp to 4.83% today on the Monti resignation news and the attempted comeback of Mr. Berlusconi, whose poor stewardship of Italy's response to the debt crisis led to the Monti government in the first place.
    • Germany's Oct exports rose +0.3% m/m, which was slightly better than market expectations of -0.3% m/m and an improvement from -2.4% m/m in Sep. Oct imports rose by +2.5% m/m, which was stronger than market expectations of +0.4% m/m. Germany's trade balance of 15.8 billion euros was slightly higher than market expectations of 15.5 billion euros.
    • The Chinese retail sales and industrial production data released on Saturday was stronger than expected and confirmed the market consensus that the Chinese economy is rebounding higher from the 3-1/2 year low GDP rate of +7.4% seen in Q3. Chinese Nov industrial production rose +10.1% y/y, which was stronger than market expectations of +9.8% and October's +9.6%. Meanwhile, Nov retail sales rose by +14.9% y/y, stronger than market expectations of +14.6% and October's +14.5%. Meanwhile, China's Nov CPI report on Friday rose to only +2.0% y/y from +1.7% in October, which was below market expectations of +2.1% y/y and give's the government some flexibility for stimulus measures.
    • China's Nov exports rose only +2.9% y/y, which was much weaker than market expectations of +9.0% and was down from Oct's +11.6% y/y. Nov imports were unchanged versus expectations of +2.0% y/y and Oct's +2.4% y/y. The Chinese Nov trade surplus of $19.63 billion was substantially below expectations of $26.9 billion and was down from Oct's revised $32.1 billion.
    • Venezuelan President Hugo Chavez over the weekend named the country's Vice President Nicolas Maduro to lead the nation in the event that he is unable to carry on his duties. Chavez is headed to Cuba for another round of cancer surgery.
    • Japan's Q3 final GDP was revised to -0.9% q/q and -3.5% q/q annualized from -0.8% q/q and -3.3% q/q annualized.
    • Japan's Nov machine tool orders report of -20.7% y/y was substantially weaker than market expectations of -6.7% y/y. Market Comments
      • Dec E-mini S&Ps this morning are mildly lower by -0.18% on the -0.98% sell-off in European stocks and the 31 bp surge in the Italian 10-year bond yield on the Monti resignation news. The S&P 500 index on Friday opened higher after Nov non-farm payrolls rose more than expected (+146,000) and the unemployment rate unexpectedly fell -0.2 to a 3-3/4 year low of 7.7%, but stocks fell back and settled mixed after U.S. consumer confidence fell more than expected and as the stalemate continues in U.S. budget talks. Closes: S&P 500 +0.29%, Dow Jones +0.62%, Nasdaq -0.59%. The Nasdaq closed lower as computer stocks fell, led by a -2.6% drop in Apple. The overall market retreated from its best levels after the Dec University of Michigan consumer confidence fell sharply by -8.2 points to a 4-month low of 74.5, and after House Speaker Boehner said no progress had been made in talks to avert the fiscal cliff.
      • March 10-year T-notes this morning are up 6.5 ticks on some increased safe haven demand with the sell-off in U.S. and European stocks and today's 31 bp surge in the Italian bond yield. March 10-year T-note prices on Friday slumped after stocks rose on the stronger-than-expected U.S. Nov payrolls report, but prices recovered from their worst levels and closed modestly lower after U.S. Dec University of Michigan consumer confidence fell more than expected to a 4-month low. Closes: TYH3 -10, FVH3 -2.7. Another negative for T-note prices was an increase in supply pressures ahead of the $66 billion in Treasuries that the Treasury will begin selling on Tuesday.
      • The dollar index this morning is little changed. EUR/USD is down -00021 (-0.16%) on the Monti resignation news and fears that Italy may soon begin losing the trust of the markets again once politicians retake control of its government. USD/JPY is down -0.30%. The dollar index on Friday posted a 2-week high and closed higher on the stronger-than-expected U.S. Nov payrolls report, while dovish comments from ECB Governing Council member Makuch boosted expectations for further ECB easing and sent EUR/USD to a 2-week low. Closes: Dollar index +0.169 (+0.21%), EUR/USD -0.00412 (-0.32%), USD/JPY +0.89 (+0.11%). Other negatives for EUR/USD were the weaker-than-expected German Oct industrial production along with the action by the Bundesbank to cut its 2012 and 2013 German GDP forecasts.
      • Jan WTI crude oil prices this morning are up +0.51 (+0.59%) and Jan gasoline is up +0.0300 (+1.16%) on the +0.3% increase in German exports and news of a 6-month high in Chinese Nov crude oil imports. Jan crude oil and gasoline prices on Friday settled mixed as a rally in the dollar index to a 2-week high undercut most commodities but an unexpected fall in the U.S. Nov unemployment rate to a nearly 4-year low of 7.7% boosted gasoline. Closes: CLF3 -0.33 (-0.38%), RBF3 +0.0005 (+0.02%). Other negatives included the bigger-than-expected decline in the U.S. Dec University of Michigan consumer confidence to a 4-month low and the weaker-than-expected industrial production reports from Germany and the U.K.
      • 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): JW/A-John Wiley & Sons (Consensus:$0.82), GEF-Greif (0.55), CASY-Casey's General (0.85), FGP-FerrellGas (-0.23), ABM-ABM Industries (0.40).

        Global Financial Calendar

        Monday 12/10/12
        United States
        1100 ETUSDA weekly grain export inspections.
        Japan
        0000 ETJapan Nov consumer confidence, Oct 39.7.
        0100 ETJapan Nov eco watchers survey current index, Oct 39.0. Nov eco watchers survey outlook index, Oct 41.7.
        1850 ETJapan Nov M2 expected +2.3% y/y, Oct +2.3% y/y. Nov M3 expected +1.9% y/y, Oct +1.9% y/y.
        Germany
        0200 ETGerman Oct trade balance expected 15.5 bln euros, Sep 16.9 bln euros. Oct imports are expected +0.4% m/m, Sep -1.6% m/m. Oct exports expected -0.3% m/m, Sep -2.4% m/m. Oct current account expected 13.5 bln euros, Sep 16.3 bln euros.
        Euro-Zone
        0430 ETEurozone Dec Sentix investor confidence index expected -16.9, Nov -18.8.
        United Kingdom
        1901 ETUK Nov RICS house price balance, Oct -7%.

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

    Stocks: JW.A, GEF, CASY, FGP, ABM
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