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Barchart Morning Call 10/24


Barchart Morning Call

BC - 44 mins ago

Overnight Developments

  • Dec E-mini S&Ps are mildly higher by +0.27% on support from a +0.42% rally in European stocks and the better than expected Chinese manufacturing PMI report. European and U.S. stock indexes were nevertheless undercut by today's weaker than expected German IFO October confidence report and German and Eurozone October PMI reports. Hong Kong stocks closed +0.31% today but the rest of the major Asian stock markets closed lower with Japan down -0.67% and China down -0.19%. Commodity prices are unchanged today on average with Dec crude oil slightly lower by -0.06%, Dec gold up +0.06%, Dec copper up +0.06%, grains and livestock higher, and softs mostly lower. The dollar index is slightly higher by +0.11% while EUR/USD is down -0.41% on today's weak German and Eurozone economic data. Dec 10-year T-notes are down 3.5 ticks.
  • ECB President Draghi today appears before a joint session of three German parliamentary committees as he tries to minimize criticism of the ECB's bond-buying "Outright Monetary Transactions" (OMT) bailout program.
  • The FHFA U.S. home price index, which was originally scheduled for release today, was released yesterday. The report of +0.7% m/m was stronger than market expectations of +0.3%. The index hit a new 2-year high and has now risen by 4.2% so far this year.
  • Germany's Oct manufacturing PMI fell by 0.3 points to 45.7 from 46.1 in September and was weaker than market expectations for a 0.4 point increase to 46.5. The German Oct services PMI fell by 0.4 points to 49.3 from 49.7 in September and was weaker than market expectations for a 0.3 point increase to 50.0.
  • The German Oct IFO business climate index fell by 1.4 points to a 2-1/2 year low of 100.00 from 101.4 in September, which was weaker than market expectations of +0.2 to 101.6. The IFO expectations index was unchanged at 93.2 and was weaker than market expectations for a 0.4 point increase to 93.6.
  • The Eurozone Oct manufacturing PMI fell by 0.8 points to 45.3 from 46.1 in September and was weaker than market expectations for a 0.4 point increase to 46.5. The Oct services PMI rose by 0.1 point to 46.2 from 46.1 in September and was weaker than expectations for 0.3 point increase to 46.3.
  • China's Oct HSBC flash manufacturing PMI index rose by 1.2 points to a 3-month high of 49.1 from 47.9 in September. The report has now been below the expansion-contraction level of 50.0 for twelve consecutive months, although the index has at least improved for the last two months in September and October. Market Comments
    • Dec E-mini S&Ps this morning are up 3.75 points (+0.27%) on some bargain-hunting after yesterday's sharp sell-off and on today's better-than-expected Chinese manufacturing PMI report. The S&P 500 index on Tuesday closed sharply lower: S&P 500 -1.44%, Dow Jones -1.82%, Nasdaq 100 -1.06%. Bearish factors included (1) the continued string of weak earnings reports, which have also shown weak revenue growth due to flat world economic growth, (2) the 11 point drop in the Richmond Fed manufacturing index to -7 from 4 in September (versus expectations of +1 to 5), (3) the sharp sell-off in commodity prices that greased the skids for mining and energy companies, and (4) the sharp 2.10% sell-off in the Euro Stoxx 50 index.
    • Dec 10-year T-notes this morning are down 3.5 ticks on today's higher trade in U.S. and European stocks. Dec 10-year T-note prices on Tuesday settled mildly higher: TYZ2 +8.5, FVZ2 +3.25. T-note prices rallied on the weak Richmond Fed index, concerns about weak global growth, and the sharp sell-off in U.S. and European stocks.
    • The dollar index this morning is slightly higher by +0.09 points (+0.11%) since EUR/USD is down -0.0051 (-0.41%) on today's weak German and Eurozone economic data. USD/JPY is down -0.06 points (-0.08%). The dollar index on Tuesday closed moderately higher: Dollar index +0.32 (+0.41%), EUR/USD -0.0073 (-0.56%), USD/JPY -0.09 (-0.11%). The dollar index rallied on increased safe-haven demand with the sharp sell-off in global stocks. In addition, EUR/USD was undercut by Moody's downgrade of five Spanish regions and by news that Greek Prime Minister Samaras again failed to receive approval from his coalition members for the austerity package that must be approved to qualify for the next tranche of aid.
    • Dec WTI crude oil prices this morning are down -0.05 (-0.06%) while Dec gasoline is up +0.0134 (+0.52%). Dec crude oil and gasoline prices on Tuesday closed sharply lower: CLZ2 -1.98 (-2.23%), RBZ2 -0.0437 (-1.66%). Bearish factors included (1) continued worries about weak global growth, (2) carry-over bearishness from Monday's news of the restart of the Keystone pipeline, and (3) expectations the third week of rising U.S. crude oil inventories and a possible new 17-1/2 year high in U.S. crude oil production. The market consensus for Wednesday's weekly DOE report is for a 1.8 million barrel rise in crude oil inventories, a 500,000 barrel rise in gasoline inventories, a 1.5 million barrel drop in distillate inventories, and a 0.5 point rise in the refinery utilization rate to 87.9%. The Keystone pipeline shut-down that began last Wednesday should not affect today's DOE report. API on Tuesday reported that crude oil inventories rose +313,000 barrels, gasoline inventories rose +181,000 barrels, and distillate inventories fell 890,000 barrels.
    • 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): AT&T (Consensus:$0.60), LLY-Eli Lilly (0.83), BMY-Bristol-Myer Squibb (0.42), BA-Boeing (1.12), EMC-EMC Corp (0.42), KMB-Kimerly-Clark (1.32), PX-Praxair (1.39), NEE-Nextera Energy (1.40), LMT-Lockheed Martin (1.85), GD-General Dynamics (1.78), AEP-American Electric (1.03), TMO-Thermo Fisher (1.16), GLW-Corning (0.32), ALXN-Alexion Pharm (0.47), CCI-Crown Castle (0.16), NOC-Northrop Grumman (1.69), EQR-Equity Residential (0.27), TROW-T Rowe Price (0.84), LO-Lorillard (2.23), REGN-Regeneron Pharm (1.11), MSI-Motorola Solutions (0.73), ABV-Avalonbay Community (0.78), AMP-Ameriprise Financial (1.19), SYMC-Symantec (0.38), CIXS-Citrix (0.65), WYNN-Wynn Resorts (1.34), RRC-Range Resources (0.18), DTE-DTE Energy (1.13), ORLY-O'Reilly Automotive (1.27), DPS-Dr Pepper Snapple (0.77), DAL-Delta Air (0.91), SRCL-Stericycle (0.82), WYN-Wyndham (1.10), FFIV-F5 Networks (1.18), SLG-SL Green Realty (0.23), TSCO-Tractor Supply (0.67), AKAM-Akamai Technology (0.41), NYB-NY Community Bancorp (0.29), CLF-Cliffs Natural (1.06), EFX-Equifax (0.73), RE-Everest Re Group (3.51), WLL-Whiting Petroleum (0.78).

      Global Financial Calendar

      Wednesday 10/24/12
      United States
      0700 ET Weekly MBA mortgage applications, previous -4.2% with purchase sub-index +0.9% and refi sub-index -5.3%.
      1000 ET Sep new home sales expected +3.2% to 385,000, Aug -0.3% to 373,000.
      1000 ET Aug FHFA house price index expected +0.3%, July +0.2% m/m.
      1030 ET DOE Weekly Petroleum Status Report.
      1300 ET Treasury auction of $35 billion in 5-year T-notes.
      1415 ET 2-day FOMC meeting concludes with post-meeting statement (funds rate target range expected unchanged at zero to 0.25%).
      0330 ET German Oct manufacturing PMI expected +0.6 to 48.0, Sep 47.4. Oct services PMI expected +0.3 to 50.0, Sep 49.7.
      0400 ET German Oct IFO business climate index expected +0.2 to 101.6, Sep 101.4. Oct current assessment index expected -0.3 to 110.0, Sep 110.3. Oct expectations index expected +0.4 to 93.6, Sep 93.2.
      0745 ET ECB President Draghi briefs German lawmakers in Berlin on the debt crisis.
      0400 ET Eurozone Oct manufacturing PMI expected +0.4 to 46.5, Sep 46.1 Oct services PMI expected +0.3 to 46.4, Sep 46.1. Oct composite PMI expected +0.4 to 46.5, Sep 46.1.
      United Kingdom
      0600 ET UK Oct CBI trends total orders expected -6, Sep -8. UK Oct CBI trends selling prices expected 6, Sep 3. UK Oct CBI business optimism expected -2, Sep -6.
      1950 ET Japan Sep corporate service price index expected -0.5% y/y, Aug -0.3% y/y.
      2200 ET China Sep leading economic indicator from the Conference Board. provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.