Entering text into the input field will update the search result below

Barchart Morning Call 5/4

May 04, 2011 8:36 AM ET
Jim Van Meerten profile picture
Jim Van Meerten's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

 Barchart Morning Call

Barchart.com - 24 mins ago
Overnight Developments
  • Global stocks are mostly lower with the European Euro Stoxx 50 down -0.54% and June S&Ps down -1.70 points. Treasuries are mixed while the dollar and commodities are weaker, as copper fell to a 3-week low on concerns China may further tighten its monetary policy. The euro rose against the dollar when Portugal's government announced an agreement on a 78 billion-euro ($116 billion) 3-year loan package. The yield on the 10-year Portuguese bond fell 18 bp and the difference in yield versus bunds narrowed to 610 bp, the least since April 21. Portugal last month became the third Euro-Zone country to request EU aid after Greece and Ireland. European stocks were undercut after Mar Euro-Zone retail sales fell -1.0% m/m, more than expectations of a -0.1% m/m fall and the biggest drop in 11 months.
  • The Asian stock markets today closed mostly lower with Japan closed for holiday, Hong Kong down -1.35%, China -2.56%, Taiwan +0.01%, Australia -0.93%, Singapore -1.26%, South Korea -1.09%, India -0.35%. China's Shanghai Stock Index tumbled to a 1-1/2 month low on concern that further interest rate hikes may cut profits and growth when the PBOC said in its Q1 monetary policy report that stabilizing prices and managing inflation expectations are "critical," and that the economy faces "increasing pressure from imported inflation." The China Securities Journal said the PBOC may boost banks' reserve requirements this month, while the Shanghai Securities News said that government officials may expand controls on the property market to more cities. Most Asia-Pacific stock markets closed lower, led by declines in raw-material and energy producers, as metals and crude oil fell.
Overnight U.S. Stock News
  • June S&Ps this morning are trading down -1.70 points. The US stock market yesterday settled lower on profit taking along with weakness in retailers and energy and raw-material producers: Dow Jones 0.00%, S&P 500 -0.34%, Nasdaq Composite -0.78%. Bearish factors included (1) profit-taking after the S&P 500 had climbed to a 2-3/4 year high and was up over 8% this year through Monday, (2) weakness in retailers after Sears Holdings slumped when it reported declines in sales of apparel, appliances and consumer electronics, and (3) the drop in energy and raw-material producers after crude oil and gold retreated.
  • Bullish factors for stocks included (1) the larger-than-expected increase in Mar factory orders along with the unexpected upward revision to Feb (Mar +3.0% versus expectations of +2.0% and Feb revised up to +0.7% from the originally reported -0.1%), and (2) reduced interest rate concerns as the yield on the 10-year T-note fell to a 1-1/2 month low of 3.246%.
  • Green Mountain Coffee Roasters (GMCR) surged 17% in European trading after the company raised its full-year profit forecast to as much as $1.50 a share, exceeding analysts' estimates of $1.23.
  • Las Vegas Sands (LVS) tumbled 8.9% in pre-market trading after the company late yesterday reported Q1 adjusted profit of 37 cents a share, below analysts' estimates of 44 cents a share.
Today's Market Focus
  • June 10-year T-notes this morning are down -2.5 ticks. T-note prices yesterday finished higher after the stock market fell and after the Fed bought Treasuries for its asset-purchase program: TYM11 +6.5, FVM11 +3.2, EDU11 +0.5. The 10-year T-note yield fell to a 1-1/2 month low of 3.246%. Bullish factors included (1) increased safe-haven demand for Treasuries as the stock market weakened, and (2) the Fed's action to purchase $7.678 billion of Treasuries as part of its QE2 asset-purchase program. Bearish factors included (1) the larger-than-expected increase in Mar factory orders along with the unexpected upward revision to Feb (Mar +3.0% versus expectations of +2.0% and Feb revised up to +0.7% from the originally reported -0.1%), and (2) hawkish comments from Kansas City Fed President Hoenig who said there is a "pretty high" likelihood that the US economy will keep expanding after growth in Q1 was weaker than expected and that the Fed should begin withdrawing its monetary stimulus as part of efforts to "calm" concerns about inflation in the US.
  • The dollar index this morning is lower with the dollar/yen +0.22 yen and the euro/dollar +0.32 cents. The dollar index yesterday settled slightly higher after Mar US factory orders rose more than expected: Dollar Index +0.189, USDJPY -0.296, EURUSD -0.00044. Bullish factors included (1) the larger-than-expected increase in Mar US factory orders and the unexpected upward revision to Feb factory orders, which signals economic strength and is dollar supportive, and (2) comments from Kansas City Fed President Hoenig who said there is a "pretty high" likelihood that the US economy will keep expanding after growth in Q1 was weaker than expected and that the Fed should begin withdrawing its monetary stimulus as part of efforts to "calm" concerns about inflation in the US. Bearish factors included (1) strength in the euro after Mar Euro-Zone producer prices accelerated more than expected to their fastest pace in 2-1/2 years, which bolsters the outlook for further ECB interest rate hikes, and (2) the prediction from Credit Suisse Group AG that the dollar will weaken to $1.50 per euro in the next 12 months on interest rate differentials and low volatility.
  • June crude oil prices this morning are trading down -36 cents a barrel and June gasoline is -1.20 cents per gallon. Crude oil and gasoline prices yesterday closed lower on long liquidation due to equity market weakness and expectations of increased supply when the weekly DOE inventory figures are released on Wed: CLM11 -$2.47, RBM11 -1.85. Bearish factors included (1) long liquidation prompted by weakness in the stock market which reduces confidence in the economic outlook and energy demand, (2) the slump in UK manufacturing activity in Apr to its lowest level in 7 months, which indicates reduced energy demand and consumption, and (3) the outlook for increased crude supplies when the DOE releases its weekly inventory numbers on Wed. Bullish factors included (1) hedge fund buying of crude after the NYMEX reported that open interest in crude oil futures traded on the New York Mercantile Exchange rose to a record 1.63 million contracts on Monday, and (2) the stronger than expected Mar US factory orders and the upward revision to Feb factory orders, which signals strength in fuel consumption. Expectations for Wednesday's weekly inventories from the DOE are for crude supplies to rise +1.9 million bbl, gasoline stockpiles to remain unchanged, distillate inventories to gain +500,000 bbl and the refinery utilization rate to rise +0.5 to 83.2%.
Today's U.S. Earnings Reports

Earnings reports (confirmed releases, sorted by mkt cap) MET-MetLife (BEST earnings consensus $1.26), NWSA-News Corp. (0.27), TWX-Time Warner (0.56), DVN-Devon Energy (1.31), PRU-Prudential Financial (1.47), AGN-Allergan (0.74), RIG-Transocean Ltd. (0.78), ACE-ACE Ltd. (0.63), K-Kellogg (1.04), HCA-HCA Holdings (0.75), MMC-Marsh & McLennan (0.56), WPZ-Williams Partners LP (0.89), MUR-Murphy Oil (0.98), KKR-KKR & Co. LP (0.56), CLR-Continental Resources (0.54), ETP-Energy Transfer Partners LP (1.06), EXPD-Expeditors International (0.37).

Global Financial Calendar

Wednesday 5/4/11
United States
0700 ET Weekly MBA mortgage applications, last market index -5.6% with purchase mortgage sub-index -13.6% and refinancing sub-index -0.6%..
0730 ET Apr Challenger job cuts, Mar -38.6% y/y.
0800 ET Boston Fed President Eric Rosengren speaks at a real estate conference in Boston.
0815 ET Apr ADP employment change expected +195,000, Mar +201,000.
0900 ET Treasury announces amounts of 3-year T-notes (previous $32 billion), 10-year T-notes (previous $21 billion) and 30-year T-bonds (previous $13 billion to be auctioned at the May quarterly refunding May 10-12.
1000 ET Apr ISM non-manufacturing index expected +0.2 to 57.5, Mar ?2.4 to 57.3.
1530 ET San Francisco Fed President Jon Williams delivers his first policy speech as Fed President when he speaks on the topic ?Maintaining Price Stability in a Global Economy? to a Town Hall meeting in Los Angeles.
1600 ET Dallas Fed President Richard Fisher speaks on the economy at New Mexico State University.
1900 ET Atlanta Fed President Dennis Lockhart speaks at the National Funding Association?s annual conference in Atlanta, GA.
United Kingdom
0200 ET Apr UK nationwide house prices expected +0.1% m/m and -0.7% y/y, Mar +0.5% m/m and +0.1% y/y.
0430 ET Apr UK PMI construction expected -0.5 to 55.9, Mar -0.1 to 56.4.
0430 ET Mar UK net consumer credit expected +0.6 billion pounds, Feb +0.8 billion pounds.
0430 ET Mar UK mortgage approvals expected +48,000, Feb +47,000.
0430 ET Mar UK M4 money supply, Feb -0.3% m/m and -1.5% y/y.
0245 ET  
0315 ET Revised Apr French PMI services expected no change at 63.4.
0355 ET Revised Apr PMI services expected no change at 57.7.
0400 ET Revised Apr Euro-Zone PMI composite expected no change at 57.8.
0500 ET Mar Euro-Zone retail sales expected -0.1% m/m and unchanged y/y, Feb -0.1% m/m and +0.3% y/y.
n/a Japanese markets closed for Greenery Day.


Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.