Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Barchart Morning Call 10/5

|Includes: RBN, Constellation Brands, Inc. (STZ)

Barchart Morning Call

BC - Fri Oct 05, 7:00AM CDT

Overnight Developments

  • Dec E-mini S&Ps are trading slightly higher ahead of this morning's Sep unemployment report, which is expected to show a +115,000 increase in payrolls and a 0.1 point increase in the unemployment rate to 8.2%. European stocks are up 1.07% on continued optimism over ECB President Draghi's strong support yesterday for the euro and for the ECB' bond-buying program. Asian stocks today closed mostly higher. Commodity prices are moderately lower today by -0.32% with Nov crude oil down -0.98%, Dec gold down -0.26%, Dec copper down -0.08%, and agriculture prices mostly lower. The dollar index is slightly higher after yesterday's losses. EUR/USD is down -0.07% and USD/JPY is unchanged. Dec 10-year T-notes are down 3 ticks.
  • India's S&P CNX Nifty index today closed -0.8% lower after recovering from a 16% slide caused by erroneous trades.
  • The Bank of Japan today left its asset purchase target unchanged at 55 trillion yen ($700 billion) after its 2-day policy meeting, which was in line with market expectations. The BOJ just boosted its stimulus program last month. The BOJ is facing increased political pressure to further boost its quantitative easing program as Economy Minister Seiji Maehara attended today's BOJ meeting, the first time in 9 years that a minister has attended a BOJ policy meeting. The BOJ today left unchanged its interest rate target of zero to 0.10% and its monthly bond purchase target of 1.8 trillion yen.
  • The German Aug factory orders report of -1.3% m/m and -4.8% y/y was weaker than market expectations of -0.5% m/m and -4.3% y/y.
  • Japan's Aug leading index of 93.6 was up from 93.0 in July and was 0.1 point stronger than market expectations of 93.5. The Aug coincident index of 93.6 was down -0.2 points from July and was in line with market expectations. Market Comments
    • Dec E-mini S&Ps this morning are slightly higher by +1.50 points (+0.10%) as the market gets support from the 1.07% rally in the Euro Stoxx 50 index this morning and from hopes for a decent U.S. payroll report this morning. The S&P 500 index on Thursday closed with fairly sharp gains: S&P 500 +0.72%, Dow Jones +0.60%, Nasdaq 100 +0.35%. Bullish factors included stronger than expected U.S. economic data and ECB President Draghi's comments in strong support of the euro and keeping the Eurozone intact. U.S. initial unemployment claims rose +4,000 to 367,000, which showed a slightly stronger labor market than market expectations for a report of 370,000. U.S. Aug factory orders fell -5.2%, which was a little stronger than market expectations of -5.9%.
    • Dec 10-year T-notes this morning are down 3 ticks. Dec 10-year T-note prices on Thursday closed lower: TYZ2 -10, FVZ2 -3.25. T-note prices closed lower on the stronger-than-expected initial claims report, some nervousness that Friday's payroll report may be stronger than expected after Wednesday's ADP report of +162,000, and reduced safe-haven demand with the rally in the stock market and ECB President Draghi's comments in support of the euro.
    • The dollar index this morning is slightly higher by +0.04 points (+0.05%), seeing some stabilization after yesterday's sharp sell-off. EUR/USD is down -0.0009 (-0.07%) and USD/JPY is unchanged. The dollar index on Thursday closed sharply lower: Dollar index -0.63 (-0.78%), EUR/USD +0.113 (+0.88%), USD/JPY -0.01 (-0.01%). EUR/USD received a sharp boost on Thursday after the ECB at its meeting left rates unchanged against hopes by some market participants for a rate cut to 0.50%. In addition, ECB President Draghi voiced strong support for the euro and said that the ECB is ready to engage in its bond-buying bailout program as soon as Spain makes a formal request and all the conditions are in place. The ECB has agreed to purchase an uncapped amount of 1-3 year bonds in the secondary market of troubled countries under its "Outright Monetary Transactions" program.
    • Nov WTI crude oil prices this morning are down 0.90 (-0.98%) and Nov gasoline is down -0.0140 (-0.48%) on ideas yesterday's rally was overdone. Nov crude oil and gasoline on Thursday closed sharply higher: CLX2 +3.39 (+3.85%), RBV2 +0.1334 (+4.77%). Bullish factors included the sharp sell-off in the dollar index, Turkish-Syrian shelling, and continued worries about tight gasoline inventories on the east and west coasts. Gasoline prices continue to get a boost from refinery outages that have caused tight gasoline inventories in the Northeastern U.S. and particularly in California. Some gas stations in the Los Angeles area are actually running out of gasoline to sell because of refinery problems. Exxon's Torrance refinery is just getting back into operation the loss of power on Oct 1, Phillips 66 is scheduled to perform maintenance on its two California refineries this week, and a pipeline delivering crude oil to refineries in northern California was shut down last month due to high levels of chloride in the oil. Turkey's parliament on Thursday approved a 1-year mandate allowing the Turkish military to launch military operations outside Turkey. That could result in more of the cross-border shelling seen this week. Moreover, Syria's shelling of a Turkish village this week was effectively an attack on NATO as a whole since Turkey is a member of NATO. Fighting in the area could disrupt the Kirkuk-Ceyhan pipeline that Iraq uses to export oil and that runs through southern Turkey near the Syrian border.
    • 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 Today's U.S. Earnings Reports

      Earnings reports (ranked by market cap): STZ-Constellation (Consensus:$0.54), RBN-Robbins & Myers (0.96).

      Global Financial Calendar

      Friday 10/5/12
      United States
      0830 ET Sep non-farm payrolls expected +115,000, Aug +96,000. Sep private payrolls expected +128,000, Aug +103,000. Sep manufacturing payrolls expected unch, Aug was -15,000. Sep unemployment rate expected +0.1 to 8.2%, Aug -0.2 to 8.1%.
      0830 ET Sep average hourly earnings expected +0.2% m/m and +1.8% y/y, Aug unch m/m and +1.7% y/y. Sep average weekly hours expected 34.4 hours, Aug 34.4.
      1000 ET NY Fed President William Dudley delivers welcoming remarks at distressed real estate conference at the NY Fed.
      1300 ET Fed Governor Elizabeth Duke speaks on neighborhood stabilization at NY Fed.
      1500 ET Aug consumer credit expected +$7.25 bln, July -$3.276 bln.
      n/a BOJ policy decision after 2-day meeting.
      0100 ET Japan Aug coincident index expected 93.6, July 93.8. Aug leading index expected 93.5, July 93.0.
      0600 ET German Aug factory orders expected -0.5% m/m and -4.3% y/y, July -0.5% m/m and -4.5% y/y.
      n/a Chinese markets closed for Golden Week. provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.