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Barchart Morning Call 11/8

|Includes: AAP, CFN, CG, The Walt Disney Company (DIS), DUK, FE, JWN, KSS, MCHP, NVDA, PPL, PSA, VMC, WIN

Barchart Morning Call

BC - 15 mins ago

Overnight Developments

  • Dec E-mini S&Ps this morning are mildly higher by +0.18% after yesterday's drubbing. The Euro Stoxx 50 index is up +0.81% this morning. Asian stocks closed lower today on the impact from yesterday's sharp sell-off in U.S. stocks. Commodity prices this morning are slightly higher by +0.11%. Dec crude oil is up +0.99%, Dec gasoline is up +1.00%, Dec gold is up +0.20%, Dec copper is up +0.29%, grain prices are mildly higher, and livestock and softs are mostly lower. The dollar index is mildly higher by +0.14%. Dec 10-year T-notes are up 0.5 tick.
  • The ECB at its meeting today left its refinancing rate unchanged at 0.75%, which was fully in line with market expectations. The ECB is in a holding pattern at present, enjoying the lull in the Eurozone debt crisis and hoping that the Eurozone economy will stabilize and start to improve next year.
  • The Bank of England today left the base rate unchanged at 0.50%. The BOE also left its asset purchase plan at 375 billion pounds, which was disappointing to some market participants who had been hoping for an extension of the BOE's quantitative easing program. The BOE halted its QE program for the time being since UK inflation of +2.2% is above the BOE's target of 2% and since some BOE members had doubts about QE's effectiveness.
  • German Finance Minister Schaeuble said today that he does not think Eurozone officials will be able to make a final decision on the Greek bailout package next week. Greece took a big step forward yesterday when its parliament approved the necessary austerity package. The Greek parliament plans to vote on Sunday on the 2013 budget.
  • Spain today successfully sold 4.76 billion euros of debt securities, which was above its 4.5 billion euro target. As part of today's package, Spain was able to sell 731 million euros of 20-year bonds at 6.328%, which was the longest-dated bond sold since May 2011 when Spain sold 30-year bonds.
  • German Sep exports fell -2.5% m/m, which was weaker than market expectations of -1.5% and more than reversed the revised +2.3% m/m gain seen in August. Meanwhile, Sep imports were also weak at -1.6% m/m versus expectations of -0.4% m/m. Germany's Sep trade surplus of 16.9 billion euros was larger than market expectations of 15.5 billion euros.
  • The Greek unemployment rate in August rose to 25.4% from 24.8% in July. The unemployment rate for young people between the ages of 15 and 24 was 58%. The European Commission is forecasting that Greek GDP will fall 6% this year and by 4.2% in 2013 for a total GDP decline of 20%, which qualifies as a depression. The European Commission is forecasting that Greek GDP will finally show growth of +0.6% in 2014.
  • Japan's Sep machine orders report of -4.3% m/m and -7.8% y/y was substantially weaker than market expectations of -2.1% m/m and -4.9% y/y.
  • Japan reported a Sep adjusted current account balance of a 142 billion yen versus expectations for a 206 billion yen surplus. Japan's Sep trade deficit of -471 billion yen was moderately wider than market expectations of -414 billion yen. The trade report was mildly bearish for the yen.
  • Japan's Oct Eco Watcher's outlook index of 41.7 was weaker than market expectations of 42.7 and was down from Sep's report of 43.5. The Eco Watcher's Oct current index of 39.0 was weaker than market expectations of 40.5 and was down from Sep's report of 41.2.
  • China's central bank governor Zhou Xiaochuan said today that the Chinese economy stabilized in October and some economic indicators are rebounding. The market consensus at present is that China's GDP in Q4 will improve to 7.7% y/y from the 3-year low of +7.4% seen in Q3. Market Comments
    • Dec E-mini S&Ps this morning are up +2.50 (+0.18%) on some short-covering after yesterday's sharp sell-off and on today's 0.81% rally in European stocks. U.S. stocks on Wednesday closed sharply lower as the market braced for a tough fight over the year-end fiscal cliff and the possibility that the lack of an agreement would cause a recession in the first half of 2013: S&P 500 -2.37%, Dow Jones -2.36%, Nasdaq -2.55%. The stock market was also hit with heavy technical selling with the S&P 500 index falling to a new 3-month low.
    • Dec 10-year T-notes this morning are slightly higher by +0.5 tick. Dec 10-year T-note prices on Wednesday closed sharply higher on safe-haven demand with the sharp sell-off in stocks combined with the fact that President Obama's victory likely paves the way for a dovish bond-buying policy to continue if necessary even after Mr. Bernanke's term ends in January 2014: TYZ2 +28, FVZ2 +13.75.
    • The dollar index this morning is slightly higher by +0.12 points (+0.14%). EUR/USD is down -0.0030 (-0.23%) and USD/JPY is down -0.13 (-0.16%). The dollar index on Wednesday closed mildly higher on some safe-haven demand with the sharp sell-off in stocks: Dollar index +0.14 (+0.18%), EUR/USD -0.0043 (-0.34%), USD/JPY -0.35 (-0.44%).
    • Dec WTI crude oil prices this morning are up +0.84 (+0.99%) and Dec gasoline is up +0.0258 (+1.00%) on some short-covering after yesterday's plunge and on today's mildly higher trade in E-mini S&Ps. Dec crude oil and gasoline prices on Wednesday plunged on heavy technical selling, the bearish weekly DOE report, and talk that President Obama may offer Iran an aggressive last-ditch compromise on its nuclear program: CLZ2 -4.27 (-4.81%), RBZ2 -0.1100 (-4.08%). The weekly DOE report showed a 1.8 million barrel increase in crude oil inventories, a 2.875 million barrel increase in gasoline inventories, a 131,000 barrel increase in distillate inventories, and a sharp -6.1% drop in gasoline demand due to Hurricane Sandy. In addition, U.S. weekly crude oil production edged higher by +0.1% to a new 17-3/4 year high of 6.677 million barrels per day.
    • 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): DIS-Walt Disney (Consensus:$0.68), DUK-Duke Energy (1.44), PSA-Public Storage (1.07), FE-FirstEnergy (1.06), PPL-PPL Corp (0.67), KSS-Kohl's (0.88), JWN-Norstrom (0.72), NVDA-Nvidia (0.36), CG-Carlyle Group (0.67), MCHP-Microchip Tech (0.48), CFN-Carefusion (0.41), VMC-Vulcan Materials (0.16), AAP-Advance Auto (1.21), WIN-Windstream (0.12).

      Global Financial Calendar

      Thursday 11/8/12
      United States
      0830 ET Weekly initial unemployment claims expected +2,000 to 365,000, previous -9,000 to 363,000. Weekly continuing claims expected -3,000 to 3.260 mln, previous +4,000 to 3.263 mln.
      0830 ET Sep trade deficit expected -$45.0 bln, Aug -$44.2 billion.
      0830 ET USDA Export Sales.
      1300 ET Treasury auctions $16 billion in 30-year T-bonds.
      1630 ET Weekly money supply report and Fed balance sheet.
      2000 ET St. Louis Fed President James Bullard speaks on the U.S. economy and monetary policy at Washington University.
      0200 ET German Sep trade balance expected 15.5 bln euros, Aug 16.3 bln euros. Sep exports expected -1.5% m/m, Aug +2.5% m/m. Sep imports expected -0.4% m/m, Aug +0.4% m/m. Sep current account balance expected 10.8 bln euros, Aug 11.1 bln euros.
      United Kingdom
      0700 ET BOE policy meeting outcome (base rate expected unchanged at 0.50%, asset purchase target expected unchanged at 375 bln pounds).
      0745 ET ECB meeting outcome (refinancing rate expected unchanged at 0.75%).
      n/a China's 18th National Congress of the Communist Party of China begins to decide on once-a-decade leadership changes.
      2030 ET China Oct CPI expected +1.9% y/y, Sep +1.9% y/y. Oct PPI expected -2.8% y/y, Sep -3.6% y/y.
      0000 ET Japan Oct eco watchers current index expected 40.5, Sep 41.2. Oct eco watchers outlook, Sep 43.5.
      1850 ET Japan Oct M2 expected +2.4% y/y, Sep +2.4% y/y. Oct M3 expected +3.0% y/y, Sep +2.0% y/y. provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.