BC - Wed Jan 23, 7:00AM CST
- March E-mini S&Ps this morning are trading slightly lower by -0.07% as the market looks ahead to today's House vote on a 4-month debt limit suspension and today's U.S. home price report. European stocks are trading slightly lower by -0.14%. Asian stocks closed mixed today with Japan down -2.08%, Hong Kong down -0.10%, and China up +0.41%. Commodity prices are unchanged this morning on average. March crude oil is up +0.13%, March gasoline is up +0.38%, Feb gold is up +0.03%, March copper is up +0.07%, grains are slightly higher, livestock is lower, and softs are mixed. The dollar index is down -0.20% on the reduced risk environment while EUR/USD is up +0.21%. USD/JPY is down -0.16%. March 10-year T-notes are down 1 tick.
- UK Prime Minister Cameron today delivered his speech on EU participation that was delayed from last week due to the hostage crisis at the Algerian gas plant. He pledged to give UK voters the opportunity to vote by the end of 2017 on a referendum deciding whether the UK is in or out of the EU. He said he wants to negotiate a return of powers to the UK and then he said he would support the UK remaining in the EU.
- Spain's Q4 GDP fell by -0.6% q/q (-2.4% q/q annualized), which was in line with market expectations. The GDP decline was twice the decline of -0.3% q/q (-1.2% q/q annualized) seen in Q3 and was the sixth consecutive quarterly decline. The ongoing Spanish recession is making it all the more difficult for the government to carry-out its goal of reducing the government budget deficit and restructuring the banking system.
- The UK labor data showed a small improvement in the UK labor market. Dec jobless claims fell -12,100, which added to November's decline of -8,900 and was better than market expectations for an increase of +500. The Dec claimant count rate of 4.8% was unchanged from Nov and was in line with market expectations. The Nov UK ILO unemployment rate (3 months) fell to 7.7% from 7.8% in Oct and was better than market expectations of 7.8%.
- China's Dec leading index from the Conference Board rose by +0.4% m/m to 251.1, which was weaker than the +1.1% increase seen in November. The weaker report was due to a decline in real estate activity, a drop in export orders, and weak consumer confidence, according to the Conference Board. The report supported the view that China's economy is not likely to improve much more in early 2013 from the Q4 GDP rate of +7.9%.
- China's refined copper production in December surged by +22% y/y to 580,000 MT, which was a record level of production.
- March E-mini S&Ps this morning are slightly lower by -1.00 point (-0.07%). The S&P 500 index on Tuesday rallied to another new 5-year high on optimism about a debt ceiling extension, positive U.S. earnings reports, and the much better than expected German and Eurozone ZEW confidence indexes. Closes: S&P 500 +0.44%, Dow Jones +0.46%, Nasdaq +0.11%. U.S. Dec existing home sales fell by -1.0% to 4.94 mln units, which was weaker than market expectations for a +1.2% increase to 5.10 mln. Nov was revised lower to +4.8% to 4.99 mln from +5.9% to 5.04 mln. The German Jan ZEW investor confidence index rose sharply to a 2-1/2 year high of 31.5 from 6.9 in December, which was much stronger than market expectations for an increase to 12. The ZEW current situation index rose to 7.1 from 5.7 in Dec, which was stronger than market expectations of 6.2. The Eurozone Jan ZEW investor confidence index rose sharply to 31.2 from 7.6 in December, marking a strong showing like the German ZEW index.
- March 10-year T-notes this morning are up 1 tick. March 10-year T-note prices on Tuesday closed slightly higher on the weaker-than-expected existing home sales report. Closes: TYH3 +4, FVH3 +2.25.
- The dollar index this morning is down -0.16 (-0.20%) due to the reduced risk environment. EUR/USD is up +0.0028 (+0.21%) and USD/JPY is down -0.14 yen (-0.16%). The dollar index on Tuesday closed slightly lower on reduced safe-haven demand, while EUR/USD saw support from the stronger-than-expected German and Eurozone ZEW confidence indexes. Closes: Dollar index -0.04 (-0.04%), EUR/US +0.0005 (+0.04%), USD/JPY -0.06 (-0.07%).
- March WTI crude oil this morning is slightly higher by +0.13 (+0.13%) and March gasoline is up +0.0108 (+0.38%). Feb crude oil and gasoline prices closed higher on Tuesday on increased optimism about the U.S. economy with the temporary debt ceiling hike and on the stronger-than-expected German and Eurozone ZEW confidence indexes. Gasoline prices received a boost from refinery disruptions and planned shut-downs for repairs. CLH3 +0.64 (+0.67%), RBH3 +0.0298 (+1.06%).
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Today's U.S. Earnings ReportsEarnings reports (ranked by market cap): AAPL-Apple (consensus $13.50), MCD-McDonalds (1.33), UTX-United Technology (1.03), AMGN-Amgen (1.39), ABBV-Abbvie (0.99), ABT-Abbott Labs (0.46), PX-Praxair (1.38), GD-General Dynamics (1.89), SYK-Stryker (1.12), CCI-Crown Castle (0.13), BHI-Baker Hughes (0.61), WLP-Wellpoint (0.94), APD-Air Products (1.29), COH-Coach (1.28), TEL-TE Connectivity (0.64), MSI-Motorola Solutions (1.02), SYMC-Synamtec .38), STJ-St Jude Medical (0.89), SNDK-Sandisk (0.76), WDC-Western Digital (1.82), ALTR-Altera (0.39), NE-Nobel (0.61), CHKP-Check Point Software (0.88), DGX-Quest Diagnostic (1.04), VAR-Varian Medical (0.87), TXT-Textron (0.56), FFIV-F5 Networks (1.15).
Global Financial Calendar
Wednesday 1/23/13 United States 0700 ET Weekly MBA mortgage applications, previous +15.2% with purchase sub-index +12.9% and refinancing sub-index +15.3%. 0900 ET Nov FHFA house price index expected +0.7%, Oct +0.5% m/m. 0945 ET Chicago PMI revision. 1000 ET IMF released World Economic Outlook. 1630 ET API weekly U.S. oil statistics. Euro-Zone 1000 ET Eurozone Jan consumer confidence expected -26.0, Dec -26.5. United Kingdom 0430 ET BOE minutes of the Jan 10 monetary policy meeting. 0430 ET UK Dec jobless claims change expected +500, Nov -3,000. Dec claimant count rate expected unchanged at 4.8%, Nov 4.8%. 0430 ET UK Nov ILO unemployment rate (3-months) expected unch at 7.8%, Oct 7.8%. 0430 ET UK Nov avg weekly earnings 3-mo/year-over-year expected +1.6%, Oct +1.8%. Nov weekly earnings ex bonus 3-mo/year-over-year expected +1.5%, Oct +1.7%. Japan 0000 ET BOJ Jan monthly economic report. 1850 ET Dec Japan merchandise trade balance total expected -522 bln yen, Nov -954.8 bln yen. Dec adjusted merchandise trade balance expected -761 bln yen, Nov 868.5 bln yen. Dec merchandise trade exports expected -4.2% y/y, Nov -4.1% y/y. Dec merchandise trade imports expected +1.7% y/y, Nov +0.9% y/y. CHI 2045 ET China Jan HSBC flash manufacturing PMI expected +0.3 to 51.8, Dec +1.0 to 51.5.
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