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Barchart Morning Call 12/4

|Includes: AutoZone, Inc (AZO), BIG, MTN, P, TOL

Barchart Morning Call

BC - 2 hrs 12 mins ago

Overnight Developments

  • Dec E-mini S&Ps this morning are trading slightly higher by +0.07% on support from today's +0.59% rally in European stocks. Asian stocks today closed mixed. Japanese stocks closed -0.27% today but Hong Kong was up +0.15% and China rallied by +1.07%. Commodity prices are down -0.29% this morning with Jan crude oil down -0.39%, Jan gasoline down -0.66%, March gold down -0.77%, March copper down -0.08%, and agriculture prices trading mostly higher. The dollar index is mildly lower by -0.19%. EUR/USD is up +0.21% on optimism about this week's ongoing Greek bond buyback program and as the market hopes for a Eurozone finance ministers agreement today on European banking supervision. March 10-year T-notes today are down 1 tick.
  • Eurozone finance ministers at their meeting today will focus on the plan for setting up a common Eurozone bank supervisor, which is a critical part of the plan for a unified and stronger Eurozone banking system. There are reports that Eurozone finance ministers are close to agreement on a plan that will get the common bank supervision program going by the start of 2013, which would be a positive development for EUR/USD.
  • Australia's central bank today cut its benchmark interest rate by 25 bp to 3.00%, thus matching the 5-decade low seen in the immediate aftermath of the 2008/09 global financial crisis. The rate cut was in line with market expectations. The Reserve Bank of Australia (NYSE:RBA) has now cut its benchmark rate by six times in the past 14 months. The latest cut was driven by a 2-1/2 year high in the unemployment rate and a desire to undercut the strength of the Australian dollar to help Australian exporters.
  • The UK Nov construction PMI fell by 1.6 points to 49.3 from 50.9 in Oct, which was weaker than market expectations for a 0.4 point drop to 50.5.
  • The Oct Eurozone PPI edged lower to 2.6% y/y from +2.7% in Sep, but was still a bit stronger than market expectations for a drop to +2.5% y/y.
  • Iran said that it captured a U.S. drone over the Persian Gulf that violated its airspace, but the U.S. denied that any of its drones are missing.
    Market Comments
    • Dec E-mini S&Ps this morning are trading mildly higher by +1.00 point (+0.07%) on support from this morning's +0.59% rally in European stocks and on today's Australian interest rate cut. U.S. stocks on Monday closed moderately lower on fiscal cliff concerns and the unexpectedly large drop in the ISM manufacturing index, although there was support from the stronger-than-expected U.S. total vehicle sales report and the weekend gains in the Chinese PMI reports. Closes: S&P 500 -0.47%, Dow Jones -0.46%, Nasdaq -0.23%. The U.S. ISM manufacturing index fell sharply by -2.2 points to 49.5, which was much weaker than market expectations of -0.2% to 52.5. Nov U.S. total vehicle sales rose sharply to 15.46 million units from 14.22 mln units in Oct and were much stronger than market expectations of 15.00 mln.
    • March 10-year T-notes this morning are down 1 tick. March 10-year T-note prices on Monday closed lower on some long liquidation pressure after last week's rally and failed to get much support from the lower close in stocks or the weak ISM report. Closes: TYH3 -5.5, FVH3 -2.5.
    • The dollar index this morning is down -0.15 (0.19%) on today's generally higher trade in global stocks. EUR/USD is up +0.0027 (+0.21%) on optimism ahead of today's Eurozone finance ministers meeting. USD/JPY is down -0.28 (-0.34%). The dollar index on Monday closed mildly lower on technical weakness with the new 1-month low and on the weak ISM manufacturing report, which illustrated the negative impact on the U.S. economy from the fiscal cliff. Meanwhile, EUR/USD gained some support as Greece went ahead with its bond buyback program, which is designed to reduce its overall debt load. Closes: Dollar index -0.27 (-0.34%), EUR/USD +0.0068 (+0.52%), USD/JPY -0.23 (-0.28%).
    • Jan WTI crude oil prices this morning are down -0.35 (-0.39%) and Jan gasoline down -0.0181 (-0.66%). Products are seeing some weakness on expectations for an inventory build in today's API report and tomorrow's DOE report due to the high refinery operating rate. Jan crude oil and gasoline prices on Monday settled mixed, undercut by the weak U.S. ISM index and fiscal cliff concerns but supported by the lower dollar index and the rise in China's manufacturing PMI. Closes: CLF3 +0.18 (+0.20%), RBF3 -0.0038 (-0.14%). The market consensus for Wed's DOE report is for a 500,000 bbl decline in crude oil inventories, 1.8 mln bbl rise in gasoline inventories, a 750,000 bbl rise in distillate inventories, and a +0.5 point rise in refinery utilization rate to 89.1%
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      Today's U.S. Earnings Reports Earnings reports (ranked by market cap): AZO-Autozone (Consensus:$5.39), TOL-Toll Brothers (0.24), MTN-Vail Resorts (-1.58), BIG-Big Lots (-0.26), p-Pandora Media (0.01).
      Global Financial Calendar
      Tuesday 12/4/12
      United States
      0745 ET ICSC (Int'l Council of Shopping Centers) weekly retailer sales.
      0855 ET Redbook weekly retailer sales.
      0945 ET Nov ISM New York, Oct 45.9.
      1045 ET Fed Governor Daniel Tarullo delivers keynote address Brookings Institution conference on "Structuring the financial industry to enhance economic growth and stability."
      1130 ET Weekly 4-week T-bill auction.
      1630 ET API weekly U.S. oil statistics.
      United Kingdom
      0430 ET U.K. Nov PMI construction expected -0.4 to 50.5, Oct 50.9.
      1901 ET U.K. Nov BRC shop price index, Oct 1.5% y/y.
      0500 ET Eurozone Oct PPI expected unchanged m/m and +2.5% y/y, Sep +0.2% m/m and +2.7% y/y.
      2045 ET China Nov HSBC services PMI, Oct 53.5. provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.