Daily Market Report

Thu, 28 Jun 2012 07:00:00 -0500

Overnight Developments

• Sep E-mini S&Ps are down -0.47% on today’s -0.97% sell-off in European stocks, Germany’s mildly disappointing unemployment report, and nervousness ahead of the 2-day EU summit that begins today.  Commodity prices are mixed this morning with crude oil down -0.31%, gold down -0.65%, copper down -0.57%, and agricultural prices mixed.  The dollar index is up +0.15% while EUR/USD is down -0.31%.  Sep 10-year T-note prices are up 7.5 ticks.
• Asian stocks closed mixed today as a better-than-expected Japan retail sales report was offset by nervousness ahead of the EU summit:  Japan +1.65%, Hong Kong -0.79%, China -0.88%, Taiwan -0.19%, Australia +0.04%, Singapore +0.18%, South Korea +0.05%, India +0.14%, Turkey -0.52%.
• JP Morgan is down almost 5% in European trading this morning after the New York Times reported that the bank’s loss from its credit derivatives trade may be as much as $9 billion, more than four times higher than the bank’s initial announcement of a $2 billion loss.  The report said JP Morgan has closed out about half the trade so far.
• Peripheral European bond yields this morning are higher on the poor German unemployment report and on trepidation ahead of the 2-day EU summit that begins today.  The Spanish 10-year bond yield today briefly breached the 7.0% mark and hit an intraday high of 7.013% but has since fallen back to 6.985%, which is up 6 bp from Wednesday’s close.  The Italian 10-year yield is up 2.5 bp at 6.20%.  Italy today sold 5.42 billion euros of 5 and 10 year bonds, which was close to its target of 5.5 billion euros.
• The 2-day EU summit begins today with low expectations since Ms. Merkel in recent days has reiterated her strong  opposition to measures such as joint euro bonds, using the ESM to buy sovereign bonds, allowing the ESM to provide bailout funds directly to banks, or joint liability on a pan-European deposit insurance scheme.  Ms. Merkel Friday night needs to return quickly to Berlin for a vote in the Bundestag to approve the ESM and the fiscal pact.  One question that is still open is whether the bailout loan to Spain’s banks will have a senior claim compared with private bond holders of Spain’s debt.  The markets will be pleased if the bailout fund does not have a senior claim.
• Germany’s June unemployment rate of 6.8% was higher than market expectations of 6.7% and was unchanged from May’s revised 6.8% (preliminary was 6.7%).  The unemployment change was +7,000, slightly worse than expectations of +3,000.
• Europe’s confidence indicators this morning were slightly worse than expected on balance.  The June business climate indicator fell to -0.94 from a revised -0.79 in May and was weaker than market expectations of -0.87.  June Eurozone consumer confidence fell to -19.8 from -19.6 in May and was weaker than market expectations of unchanged.  June Eurozone confidence fell to 89.9 from May’s revised 90.5 and was slightly better than expectations of 89.6.
• UK June nationwide house prices fell -0.6% m/m and -1.5% y/y, which was worse than market expectations of +0.1% m/m and -0.6% y/y.
• Japan’s May retail trade report of +0.7% m/m and +3.6% y/y was stronger than market expectations of +0.2% m/m and +2.9% y/y.  May large retailer sales fell -0.9%, which was slightly better than market expectations for a drop of -1.0%.Market Comments
  • Sep E-mini S&Ps this morning are trading down -6.25 points (-0.47%) on today’s disappointing German unemployment and Eurozone confidence reports and on nervousness ahead of the 2-day EU Summit that begins today.  The US stock market on Wednesday closed solidly higher:  S&P 500 +0.90%, Dow Jones +0.74%, Nasdaq 100 +0.62%.  Stocks rose on Wednesday on improved sentiment about the U.S. economy after May pending home sales rose sharply by 5.9% and May durable goods showed an increase of +1.1% that was stronger than market expectations of +0.5%.  The market was also boosted by two Chinese newspaper reports that speculated that further growth measures will be forthcoming from the Chinese government.
  • Sep 10-year T-notes this morning are up 7.5 ticks ahead of the EU Summit.  The T-note market is looking ahead to today’s sale of $29 billion in 7-year T-notes to wrap up this week’s $99 billion T-note package.  Sep 10-year T-note prices on Wednesday closed slightly higher:  TYU2 +3.5, FVU2 +1.5.  T-note prices closed higher on some last-minute safe-haven demand ahead of the 2-day EU summit that begins today and shook-off the bearish factors of strong U.S. economic data and supply overhang with this week’s $99 billion T-note package.
  • The dollar index this morning is up +0.12 points (+0.15%) ahead of today’s EU Summit.  EUR/USD is down -0.00039 (-0.31%) on the disappointing German unemployment and Eurozone confidence reports and on low expectations for the 2-day EU Summit that begins today.  USD/JPY is down -0.32 (-0.40%) this morning with the yen seeing some strength due to the stronger-than-expected Japanese retail sales report.  The dollar index on Wednesday closed mildly higher:   Dollar Index +0.25 (+0.30%), EUR/USD -0.0023 (-0.18%), USD/JPY +0.20 (+0.25%).  The dollar index moved mildly higher on Wednesday on the stronger than expected U.S. economic data and on some safe-haven demand ahead of the 2-day EU summit that begins today.  Market expectations are very low for the summit, although Eurozone leaders may at least try to salvage the meeting by announcing some longer-term plan to move toward fiscal and banking union.
  • Aug WTI crude oil prices this morning are down -0.25 (-0.31%) and Aug gasoline is down -0.0109 (-0.44%) due to lower U.S. and European stocks and nervousness about the EU Summit.  Crude oil and gasoline prices on Wednesday closed higher:  CLQ2 +0.85 (+1.07%), RBQ2 -0.0240 (-0.95%).  Bullish factors on Wednesday included (1) the stronger-than-expected U.S. pending home sales report and durable goods report, and (2) the fourth day of an oil worker strike on Norwegian oil platforms in the North Sea that has cut production by about 240,000 barrels per day.  The market was able to shake off bearish factors including (1) the quick ramp-up in Gulf of Mexico production back to near-normal levels after Tropical Storm Debby earlier reduced about one-quarter of Gulf production, and (2) the weekly DOE report that was bearish for crude oil and gasoline.  The weekly DOE report showed that crude oil inventories fell -133,000 bbl (vs expectations of -1.0 mln), gasoline inventories rose +2.078 mln bbls (versus expectations of +1.0 mln), and distillate inventories fell -2.279 mln bbls (vs expectations of +1.25 mln.  The refinery utilization rate soared to a new 5-year high of 92.6%.
  • Today’s U.S. Earnings ReportsEarnings reports (sorted by mkt cap):  NKE-Nike (consensus $1.37), ACN-Accenture (0.99), FDO-Family Dollar (1.07), TIBX-Tibco Software 0.23).

    Global Financial Calendar

    Thursday 6/28/12
    United States
    0830 ET	Weekly initial unemployment claims expected -2,000 to 385,000, previous -2,000 to 387,000.  Weekly continuing claims expected -21,000 to 3.278 mln, previous unchanged at 3.299 mln.
    0830 ET	Q1 GDP expected unrevised at +1.9%.  Q1 personal consumption expected unrevised at +2.7%.  Q1 GDP price index expected unrevised at +1.7%.  Q1 core PCE expected unrevised at +2.1%.
    0830 ET	USDA weekly exports.
    1030 ET	DOE natural gas storage.
    1100 ET	June Kansas City Fed manufacturing index expected 4, May 9.
    1130 ET	Fed’s Pianalto speaks in Cleveland.
    1300 ET	Treasury sells $29 billion in 7-year T-notes.
    1630 ET	Weekly money supply report and Fed balance sheet.
    Euro-Zone
    n/a	2-day EU Summit begins to discuss further integration measures.
    0500 ET	June Eurozone June business climate indicator expected -0.87, May -0.77.  June Eurozone economic confidence expected 89.6, May 90.6.  June Eurozone industrial confidence expected -12, May -11.3.  June Eurozone services confidence expected -6, May -4.9.
    Germany
    0355 ET	German Jun unemployment rate expected unchanged at 6.7%, May 6.7%.  June unemployment change expected +3,000, May unchanged.
    United Kingdom
    0200 ET	UK Jun nationwide house prices expected +0.1% m/m and -0.6% y/y, May +0.3% m/m and -0.7% y/y.
    0430 ET	UK final Q1 GDP expected unrevised from -0.3% q/q and -0.1% y/y.
    0430 ET	UK current account balance expected -9.0 bln pounds, previous -8.5 bln pounds.
    0430 ET	UK final Q1 total business investment expected +3.6% q/q and +14.2% y/y, previous +10.8% q/q and +22.2% y/y.
    1901 ET	UK June GfK consumer confidence survey, May -29.
    Japan
    1930 ET	Japan May jobless rate expected 4.5%, Apr 4.6%.  May job-to-applicant ratio expected 0.80, Apr 0.79.
    1930 ET	Japan May overall household spending expected +2.5% y/y, Apr +2.6% y/y.
    1930 ET	Japan May national CPI expected +0.2% y/y, Apr +0.4% y/y.  May national CPI ex-fresh food expected unchanged y/y, Apr +0.2% y/y.  May national CPI ex food and energy expected -0.6% y/y, Apr -0.3% y/y.
    1930 ET	June Tokyo CPI expected -0.5% y/y, May -0.5% y/y.     June Tokyo CPI ex-fresh food expected -0.7% y/y, May -0.8% y/y.  June Tokyo ex-food and energy expected -1.2% y/y, May -1.3% y/y.
    1950 ET	Japan May industrial production expected -2.8% m/m and +6.6% y/y, Apr -0.2% m/m and +12.9% y/y.
    CHI
    2130 ET	China May industrial profits, Apr -1.6% y/y.
    2135 ET	China MNI June business condition survey.

Gold Prices Edge Higher On Possible ECB Rate Cut

 

NEW YORK–Gold prices briefly shot higher Wednesday on comments by a European Central Bank executive board member that hinted at potential interest rate cuts by the bank.

Peter Praet, the chief economist and a leading member of the ECB’s executive board, said that “there is no doctrine that the main interest rate can’t be under 1%,” in an excerpt of an interview with Germany’s Financial Times Deutschland.

The central bank aims for consumer price inflation of just below 2% over the medium term. Recent inflation data from Germany released Wednesday showed inflation easing, potentially opening the door for the central bank to cut its main rate below the record low of 1%, at the upcoming meeting July 5.

Gold prices erased their losses, climbing to a high of $1,584.60 a troy ounce on the ECB news. Periods of low interest rates favor gold, which doesn’t earn interest, over interest-bearing assets like government bonds, whose return in diminished.

The comments caught gold traders by surprise, said Charles Nedoss, a senior market strategist with Olympus Futures.

“I don’t think that people were looking for Europe to lower rates,” Mr. Nedoss said, adding that moves to cut interest rates would be seen as inflationary and thus beneficial to gold prices.

Gold is widely considered a store of value and a hedge against inflation.

The bounce didn’t last, however, with gold futures slipping back to near unchanged soon after the news amid low trading volumes.

Gold for August delivery, the most actively traded contract, was recently down $2.10, or 0.1%, at $1,572.80 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold futures trading activity has been especially quiet ahead of the two-day European Union summit, which begins in Brussels on Thursday, as some investors opt to sit out the uncertainty.

“Continued disagreements among eurozone members over fiscal and banking union issues continue to set the tone of trading alongside German Chancellor Merkel’s opposition to joint liabilities in Europe,” said Barclays analyst Suki Cooper in a note to clients.

A weaker euro, which slipped against the dollar, added to pressure on gold. The single European currency has wavered around the $1.25 level as uncertainty about Europe’s economic outlook continues to damp investor interest.

Gold futures are traded in dollars and appear more expensive to investors who use other currencies, damping their appetite for the contracts.

Daily Market Report 6-19-12

Overnight Developments

• Sep E-mini S&Ps are trading slightly higher with support from today’s mild drop in Spanish bond yields, the fact that the Greek political parties are on track to form a government, and hopes that the FOMC at its 2-day meeting that begins today will announce new easing measures such as an extension of the Operation Twist program.  Commodity prices are trading higher on balance.  Crude oil is down -0.20% and copper is down -0.19%, but gold is up +0.23% and agricultural prices are trading higher across the board. Sep 10-year T-notes are slightly higher by +1.5 tick.  The dollar index is down -0.17 (-0.21%) and EUR/USD is up +0.0038 (+0.30%).
• The Euro Stoxx 50 index is trading slightly higher by +0.18% this morning.  Asian stocks today closed mostly lower after giving back part of Monday’s gains:  Japan -0.75%, Hong Kong -0.06%, China -0.88%, Taiwan -0.11%, Australia -0.33%, Singapore +0.64%, South Korea -0.02%, India +0.92%, Turkey +0.57%.
• The markets are hoping that New Democracy leader Samaras, who won Sunday’s Greek election, will be able to announce the formation of a coalition government today.  Mr. Samaras on Monday received a commitment from Pasok to join a coalition government, which provides enough seats to form a majority.  However, Mr. Samaras is also trying to bring the Democratic Left into the government, which is today’s project.  Those three parties together would have 179 seats of the 300-member Greek parliament.
• Spain today successfully sold 2.4 billion of 12-month bills with a bid cover ratio of 2.16 times the number of bids submitted as accepted, although the Greek government had to pay 5.074%, which was 210 bp more than the 2.985% rate the government paid on May 14.  Spain also sold 639 million euros of 18-month debt with a bid cover ratio of 4.42 times versus 3.23 in the last auction.  The yield on the 18-month debt was 5.107% compared with 3.302% in May.  Spain was able to sell its intended allotment of securities, which was not surprising given the short-term maturity horizon, but had to pay a relatively steep price to get the securities sold.  Spain will face a tougher test this Thursday when it sells 2 billion euros worth of bonds.
• Spain’s 10-year bond yield this morning is down 4 bp at 7.08% after reaching an intra-day euro-era record of 7.29% on Monday.  Spanish credit default swap prices (the price of insuring against a Spanish sovereign default) fell by 6 bp to 618 bp today after posting a record high of 633 bp on Monday.
• The German June ZEW investor and analyst expectations index plunged to -16.9 from 10.8 in May, much weaker than expectations for a drop to 2.3 and the biggest drop since 1998.  Meanwhile, the Eurozone June ZEW investor expectations index fell to -20.1 from -2.4 in May.  The ZEW indexes indicate how badly the Greek and Spanish situations have hurt confidence among investors and institutional equity analysts.
• The UK May CPI dropped to a 2-1/2 year low of +2.8% y/y from +3.0% in April, but the May core CPI rose slightly to +2.2% from +2.1% y/y in April.  The decline in headline inflation is good news for the UK, which has been constrained in providing further stimulus due to high inflation.
• The IMF announced an increase in its resources in conjunction the G-20 meeting with China contributing another $43 billion and new contributions of $10 billion each from Brazil, Mexico, India and Russia.  Other countries will provide smaller capital contributions such as South Africa, Colombia, Malaysia, New Zealand, and the Philippines.  The IMF has now raised funding commitments to $456 billion from $430 billion in May.  These contributions will add to the $380 billion the IMF currently has on hand to provide backstops to troubled countries.
• Eurozone Apr construction output fell to -5.0% y/y from a revised -2.6% y/y in March (preliminary -3.8% y/y). 

  Market Comments

  • Sep E-mini S&Ps this morning are trading up +1.50 points (+0.11%) on the decline in Spanish bond yields and hopes for additional stimulus at the 2-day FOMC meeting that begins today.  The market is also getting a boost from Oracle, which is up 3.1% this morning in European trading after reporting better-than-expected fiscal Q4 results.  The stock market on Monday closed narrowly mixed:  S&P 500 +0.14%, Dow Jones -0.20%, Nasdaq 100 +0.83%.  The stock market received support from the fact that the Greek pro-bailout parties won the Greek election and that the June NAHB market index rose by 1 point to a new 5-year high of 29, indicating U.S. home builder optimism.  However, the stock market was undercut by the surge in the Spanish 10-year bond yield by 28 bp to 7.12%, a new euro-era high.  The surge in the Spanish bond yield increases the chance that Spain will need a full 350-450 billion euro bailout rather than just a 100 billion euro bailout for its banking system.
  • Sep 10-year T-notes this morning are trading +1.5 ticks as confidence remains thin.  Sep 10-year T-note prices on Monday closed slightly lower:  TYU2 -1.5, FVU2 -0.125.  The T-note market was undercut by the stable close in stocks and positive outcome of the Greek election.
  • The dollar index this morning is down -0.171 (-0.21%) on some reduced safe-haven demand with the mild decline in Spanish yields today.  EUR/USD is up +0.0038 (+0.30%), while USD/JPY is down -0.21 (-0.27%).  The dollar index on Monday closed moderately higher:  Dollar Index +0.318 (+0.39%), EUR/USD -0.0062 (-0.49%), USD/JPY +0.38 (+.48%).  The dollar index closed higher on increased concern about Spain and Italy after the Spanish 10-year bond yield soared above 7%, the threshold for bailouts in other countries.
  • Aug WTI crude oil prices this morning are down -0.17 (-0.20%) and Aug gasoline is down -0.0142 (-0.55%) on today’s weak European confidence indexes and continued concern about European economic growth and fuel demand.  There is no news yet out of the second day of talks between the world powers and Iran in Moscow over its nuclear program.  Crude oil and gasoline prices on Monday closed lower:  CLQ2 -0.73 (-0.87%), RBQ2 -0.0392 (-1.49%). The main bearish factor was concern about Europe with the surge in the Spanish bond yield.  The first day of the 2-day Iranian nuclear talks produced little news and had little market impact.  The market seems to expect a series of largest fruitless meetings with the Iranians, followed by a show-down early next year.  Europe said yesterday that it will go ahead with its ban on insurance companies providing insurance for tankers carrying Iranian oil, which precludes some 95% of world tankers from carrying Iranian oil. That will significantly add to the impact of the sanctions and European embargo on Iranian oil that start on July 1.
  • Today’s U.S. Earnings ReportsEarnings reports (sorted by mkt cap):  FDX-FedEx (consensus $1.94), DFS-Discover Financial (1.00), ADBE-Adobe (0.59), JBL-Jabil Circuit (0.64), JEF-Jefferies (0.28), JW/A-Wiley (0.73), BKS-Barnes & Noble (-0.91), LZB-LA-Z-BOY Inc (0.26).

    Global Financial Calendar

    Tuesday 6/19/12
    United States
    0745 ET	ICSC (Int’l Council of Shopping Centers) weekly retailer sales.
    0830 ET	May housing starts expected +0.4% to 720,000, Apr +2.6% to 717,000.  May building permits expected +1.0% to 730,000, Apr -6.0% to 723,000.
    n/a	FOMC 2-day meeting begins.
    0855 ET	Redbook weekly retailer sales.
    1130 ET	Weekly 4-week T-bill auction.
    1630 ET	API weekly U.S. oil statistics.
    n/a	2-day G-20 Summit concludes in Los Cabos, Mexico.
    n/a	2-day Iran nuclear negotiations in Moscow conclude.
    Japan
    0100 ET	Japan Apr final coincident index, prelim 96.5.  Japan Apr leading index, prelim 95.1.
    1950 ET	Japan May adjusted merchandise trade balance expected -348 bln yen, Apr -480.2 bln yen.  May trade exports expected +9.7% y/y, Apr +7.9% y/y.  May trade imports expected +3.3% y/y, Apr +8.1% y/y.
    United Kingdom
    0430 ET	UK Apr ONS Housing Price index, Mar -0.4% y/y.
    0430 ET	UK May CPI expected +0.1% m/m and +3.0% y/y, Apr +0.6% m/m and +3.0% y/y.  May core CPI expected +2.3% y/y, Apr +2.1% y/y.  May retail price index expected +0.2% m/m and +3.3% y/y, Apr +0.7% m/m and +3.5% y/y.  May retail price index ex-mortgage interest payments expected +3.3% y/y, Apr +3.5% y/y.
    Euro-Zone
    0500 ET	Eurozone Apr construction output, Mar +12.4% m/m and -3.8% y/y.
    0500 ET	Eurozone Jun ZEW economic sentiment index, May -2.4.
    Germany
    0500 ET	German June ZEW current situation index expected 39, May 44.1.  June ZEW economic sentiment index expected 2.3, May 10.8.

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

Daily Market Report 5-14-2012

Mon, 14 May 2012 07:00:00 -0500

Overnight Developments

E-mini S&Ps this morning are down 12.50 points (-0.93%) on the lack of a Greek government and the poor showing of German Chancellor Merkel’s CDU party in Sunday’s state elections.  Commodity prices are generally trading sharply lower with crude oil down 2.05%, gold down 1.40%, copper down 2.23%, and agricultural commodities mostly lower.  The dollar index is up 0.30% on safe-haven demand and EUR/USD is down 0.35%.  June 10-year T-note prices are up 12 ticks this morning on safe-haven demand.European stocks are trading sharply lower with the Euro Stoxx 50 down 1.87%.  The Greek stock market this morning is sharply lower by 4.92%.  Greek President Papoulias will try again today to broker a coalition but there does not appear to be much hope after his efforts failed over the weekend.  If there is no government, then an interim government will be appointed and Greek voters will go back to the polls in June.  That means that the markets will have to wait a month for a new attempt at forming a government, at which time the anti-bailout forces are likely to have even more seats in the Parliament.  ECB Governing Council member Patrick Honohan said on Saturday that Greek withdrawal from the Eurozone “is not necessarily fatal, but it is not attractive.”  Eurozone officials are now starting to admit the possibility that Greece may be destined to leave the Eurozone.European stocks are also trading lower after German Chancellor Merkel’s Christian Democratic Union (CDU) in Sunday’s elections had its worst showing in post-war history in the German state of North Rhine-Westphalia.  That is likely make the European debt crisis even worse as Ms. Merkel becomes even less willing to provide concessions and bailouts to troubled European countries as she heads to federal elections in autumn 2013.  Adding to the bad European news, the Eurozone March industrial report this morning showed a decline of -0.3% m/m and -2.2% y/y, which was weaker than market expectations of +0.5% m/m and -1.8% y/y.European bond yields are sharply higher today with the Spanish 10-year bond yield rising by 28 bp to 6.28%.  Italy’s 10-year bond yield is up 23 bp to 5.74%.  Spanish 5-year credit default swaps this morning are up 21 bp at a record high of 538 bp.Asian stock markets today closed mostly lower:  Japan +0.23%, Hong Kong -1.15%, China -0.81%, Taiwan -0.33%, Australia +0.28%, Singapore -0.67%, South Korea +0.04%, India -0.47%.China’s central bank over the weekend cut its reserve requirement ratio for large banks by 50 bp to 20.0%.  That should free up $65-70 billion of bank lending.  India’s April wholesale inflation rate rose to +7.23% y/y from +6.89% y/y in March, reducing the scope of India’s central bank to cut rates in response to weaker economic growth.  The markets had been looking for a decline to +6.67%.

Overnight U.S. Stock News

June E-mini S&Ps this morning are trading -12.50 (-0.93%) on the sharp -1.82% sell-off in European stocks and the bad European news, which includes the lack of a Greek coalition government, the poor showing of Chancellor Merkel’s party in Sunday’s German state election, and the 0.3% decline in Eurozone industrial production.  US stocks on Friday closed mildly lower:  S&P 500 -0.34%, Dow Jones -0.27%, Nasdaq 100 -0.01%.  The U.S. stock market was undercut on Friday by weak bank stocks after JPMorgan late Thursday afternoon reported a $2 billion trading loss and subsequently received credit rating downgrades on Friday.  U.S. stocks were also undercut Friday by disappointing Chinese economic data.  China’s April industrial production eased to +9.3% y/y from +11.9% y/y in March and was weaker than the market consensus of +12.2% y/y.  China’s April retail sales eased to +14.1% y/y from +15.2% in March and was weaker than market expectations of +15.1%.  Stocks on Friday continued to see downward pressure from the ongoing Greek political turmoil as the parties by Friday’s U.S. stock market close had yet to find a way to form a coalition government.  On the positive side, the U.S. stock market on Friday was boosted by the 1.4 point rise in the U.S. consumer confidence index to a new 4-year high of 77.8, taking out the previous 4-year high of 77.4 posted in Feb 2011.

Today’s Market Focus

June 10-year T-notes this morning are trading +12 ticks on increased safe-haven demand with the sharp sell-off in global stocks and worries about Greece.  T-note prices on Friday closed higher:  TYM2 +9.5, FVM2 +3.5.  T-notes on Friday were boosted by continued safe-haven demand with lower stocks and on concern about JPMorgan’s $2 billion trading loss, which JPMorgan’s CEO said could get worse before it’s over.  The T-note market continued to see support from the Greek political situation, which could yet result in a Greek default and exit from the euro.The dollar index this morning is trading +0.24 points (+0.30%) on safe-haven demand with the sharp sell-off in European stocks.  EUR/USD is down -0.45 cents (-0.35%) and USD/JPY is down -0.04 yen.  The dollar index on Friday closed slightly higher:  Dollar Index +0.13, EUR/USD -0.0019, USD/JPY unch.  The dollar index on Friday extended the 2-week rally and posted a new 2-month high.  The dollar has rallied in the past two weeks mainly on the Greek political troubles and on the political austerity backlash in Europe, which may eventually produce an even more stimulative policy from the ECB and thereby further undercut the euro.  The European Commission last Friday reaffirmed its forecast that the Eurozone economy will decline -0.3% in 2012, and then recover mildly to show 1% growth in 2013.June crude oil prices this morning are sharply lower by -$1.98 (-2.05%) and July gasoline is down 1.91 cents (-1.71%).  Oil prices are lower on sharply lower stock prices and worries about global economic growth.  In addition, Saudi Oil Minister Ali al-Naimi on Sunday said that crude oil prices should fall because global supply is outweighing demand.  He said, “We want a lower price than where it is right now.  We need to get the price to a level of around $100 a barrel” for London Brent crude oil.  June Brent crude last Friday fell by 0.8% to $112.26, which means Mr. Naimi is calling for another 11% drop in oil prices from last Friday’s level.  Crude oil and gasoline prices on Friday closed mixed: CLM12 -0.95, RBM2 -0.0094.  Oil prices were undercut on Friday by the weaker-than-expected Chinese industrial production report (+9.3% y/y versus expectations of +12.2%), continued heavy hedge-fund selling of commodities, and ongoing concern about the global economy.  The International Energy Agency on Friday raised its estimate for 2012 world oil consumption by a “modest” 80,000 bpd.  The markets this week will be watching to see if there is another new 21-1/2 year high in U.S. oil inventories.  The Seaway Pipeline is scheduled to be reversed late this week, which should produce a slow drawdown in oil inventories at the Cushing, Oklahoma hub as the oil will start moving from Cushing to refineries on the coast of the Gulf of Mexico.  The process of transporting oil from North Dakota and Canada to the Gulf of Mexico will become much more efficient after the Seaway Pipeline reversal.

Today’s U.S. Earnings Reports

Earnings reports (sorted by mkt cap): A-Agilent (consensus $0.73), GRPN-Groupon (0.01), IOC-Interoil (0.05).

Global Financial Calendar

Monday 5/14/12
United States
1100 ET	USDA weekly grain export inspections.
1130 ET	Weekly 3-mo and 6-mo T-bill auctions.
1600 ET	USDA Crop Progress
GE
0200 ET	German Apr wholesale price index, Mar +0.9% m/m and +2.2% y/y.
Euro-Zone
0500 ET	Eurozone Mar industrial production expected +0.4% m/m and -1.4% y/y, Feb +0.8% m/m and -1.5% y/y.

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

Daily Market Report 5-9-12

Wed, 9 May 2012 07:00:00 -0500

Overnight Developments

E-mini S&Ps are down 11.25 points (-0.83%) this morning and commodity prices are mostly lower as the markets wait to see if the anti-bailout Greek Radical Left Syriza party will be able to form a government.  Gold is down $19.50 this morning, copper is down 1.07%, and crude oil is down 79 cents.  Grains are lower while meats and softs are mixed.  The dollar index is up 0.32% this morning and EUR/USD is down 0.24% on the Greek uncertainty.European stocks are trading lower with the Euro Stoxx 50 down 1.03%.  Syriza Radical Left leader Alexis Tsipras will meet later today with other Greek party leaders in an attempt to form a government.  Mr. Tsipras is scheduled to meet with Pasok leader Venizelos at 11 AT ET and New Democracy leader Samaras at Noon ET.  Mr. Samaras yesterday refused to agree to Mr. Tsipras’ demand that he send a letter to Eurozone officials renouncing the written promises he made earlier to uphold the terms of the bailout agreement.  Mr. Samaras said he was being asked “to put my signature to the destruction of Greece,” which indicates that he is not amenable to participating in a coalition government with Syriza.  If a coalition government cannot be formed, then new Greek elections will have to be held in June.  The Greek finance ministry has said the country may run out of cash by the end of June if a new government is not in place to meet the conditions for the next Eurozone bailout payment.The Greek situation is raising the risks for other troubled European countries.  The 10-year Spanish bond yield today rose by 17 bp and the Italian yield rose by 10 bp.  5-year credit default swaps on Spanish debt rose by 8 bp to 506 bp, just below the recent record high of 510.5 bp on April 16.In some good news for Europe, Germany today reported that its March trade surplus of 17.4 billion euros was larger than expectations of 14.3 billion euros and that March exports rose +0.9% m/m, much stronger than expectations of -0.5% m/m.Asian stock markets today closed lower across the board on the European travails: Japan -1.49%, Hong Kong -0.75%, China -1.91%, Taiwan -0.93%, Australia -0.91%, Singapore -1.06%, South Korea -0.89%, India -0.40%.  Japan reported its March leading index at 96.6, which was weaker than the consensus of 96.9 but was up from Feb’s revised 96.0 (preliminary 96.3).  The coincident index rose to 96.5 from 95.2 in Feb and was stronger than the consensus of 96.2.In some good economic news for China, April passenger-vehicle sales rose by 13% to 1.28 million units, which was stronger than the market consensus of +11.3%.  An official of the China Association of Automobile Manufacturers said that the association sees “signs of recovery” after the Chinese vehicle sales in Jan-Feb had their worst 2-month start to the year since 2005.China today announced a 3.5% cut in maximum retail gasoline and diesel prices effective tomorrow.  That was the first fuel price cut since last October and will be welcome by Chinese businesses and consumers.

Overnight U.S. Stock News

June E-mini S&Ps this morning are down -11.25 points (-0.83%) on the 1.03% sell-off in European stocks.  There are earnings reports today from CSCO-Cisco (consensus $0.47), NWSA-News Corp (0.31), and PCLN-Priceline.com (3.90), among others.  US stocks on Tuesday closed moderately lower:  S&P 500 -0.43%, Dow Jones -0.59%, Nasdaq 100 -0.36%.  The U.S. stock market fell on the Greek political uncertainty combined with the 2.06% decline seen in the Euro Stoxx 50 on Tuesday.  The hard line being taken by the Greek Radical Left Syriza party in trying to forge a coalition government caused fresh market worries since the Syriza party leader is explicitly saying his government would default on Greek debt, nationalize banks, and renege on austerity and reform measures.

Today’s Market Focus

June 10-year T-notes this morning are up 5 ticks on increased safe-haven demand with the global sell-off in stocks on the Greek political uncertainty.  The Treasury today continues its $72 billion coupon package with the sale of $24 billion in 10-year T-notes.  T-note prices on Tuesday closed higher:  TYM2 +9, FVM2 +3.5.  T-note prices saw strength from continued safe-haven demand with the moderately lower close in U.S. stocks, the 2% sell-off in European stocks, and the rout in commodity prices.The dollar index this morning is trading mildly higher by 0.25 points (+0.32%) with EUR/USD down 0.31 cents (-0.24%) and USD/JPY down -0.25 yen (-0.31%).  The dollar index is getting a safe-haven boost again today from the European turmoil.  The dollar index on Tuesday closed mildly higher:  Dollar Index +0.135, EUR/USD -0.0015, USD/JPY +0.01.  The dollar index continues to see support from the political uncertainty in Europe and the threat of a downward spiral in events if hardliners gain control of the government in Greece.  The euro at least received some underlying support from the report that German March industrial production rose +2.8% m/m and +1.6% y/y, which was substantially stronger than the market consensus of +0.8% m/m and -1.2% y/y.  The German Economy Ministry said that Germany “industrial activity is gathering pace and the outlook has improved markedly.”June crude oil prices this morning are down -0.79 cents (-0.81%) and June gasoline is down 0.66 cents (-0.22%) on the European political uncertainty and the general sell-off in stocks and commodities.  Crude oil is also lower ahead of today’s weekly DOE report.  Crude oil and gasoline prices on Tuesday closed mixed: CLM12 -0.93, RBM2 +0.0203.  Crude oil prices were hurt by continued doubts about global growth, expectations for a new 21-1/2 year high in today’s weekly DOE report, and the Saudi Oil Minister’s comment that oil prices are “still a bit too high.”  Gasoline prices were boosted by the DOE’s hike in its forecast for U.S. gasoline demand this year to 8.67 million bpd, although that would be down by 0.8% from 8.74 million bpd in 2011.  The market consensus for Wednesday’s weekly DOE report is that crude oil inventories will increase by another 1.9 million bbls to a new 21-1/2 year high, gasoline inventories will increase by +250,000 bbls, distillate inventories will increase by +750,00 bbls, and the refinery utilization rate will rise by 0.5 point to 86.5%.  The Seaway pipeline between the key oil hub at Cushing, Oklahoma and the Gulf coast is scheduled to be reversed late next week, which should lead to a gradual drawdown in crude oil inventories at Cushing.

Today’s U.S. Earnings Reports

Earnings reports (sorted by mkt cap): CSCO-Cisco (consensus $0.47), NWSA-News Corp (0.31), PCLN-Priceline.com (3.90), EOG-EOG Resources (1.16), CTL-Centurylink (0.58), M-Macy’s (0.40), ATVI-Activision (0.04), MNST-Monster Beverage (0.38), MPEL-Melco Crown (0.16), BMC-BMC Software (0.80).

Global Financial Calendar

Wednesday, May 9
United States
0700 ET	Weekly MBA mortgage applications, previous +0.1%, purchase sub-index +2.9%, refinancing sub-index -0.7%.
1000 ET	Mar wholesale inventories expected +0.6%, Feb +0.9%.
1000 ET	Minneapolis Fed President Narayana Kocherlakota speaks to the Economic Club of Minnesota in a speech titled “Toward a More Transparent Monetary Policy.”
1030 ET	DOE Weekly Petroleum Status Report.
1045 ET	Cleveland Fed President Sandra Pianalto speaks on leadership in Lexington KY.
1200 ET	Philadelphia Fed President Charles Plosser speaks in Philadelphia on community development.
1300 ET	Treasury auctions $24 billion in 10-year T-notes.
Germany
0200 ET	German Mar trade balance expected 14.3 billion euros, Feb 14.7 billion euros.  Mar current account balance expected 18.0 billion euros, Feb 11.1 billion euros.  Mar exports expected -0.5% m/m, Feb +1.5% m/m.  Mar imports expected +1.0% m/m, Feb +3.9% m/m.
Japan
0100 ET	Japan Mar leading index expected 96.9, Feb 96.3.  Mar coincident index expected 96.2, Feb 95.0.
1950 ET	Japan Apr bank lending including trusts, Mar +0.8% y/y (+0.9% y/y ex-trusts).
1950 ET	Japan Mar adjusted current account balance expected 650 billion yen, Feb 854.1 billion yen.  Mar current account balance BOP basis expected -42.8 billion yen, Feb 102.1 billion yen.
2200 ET	Japan Apr Tokyo average office vacancies, Mar 9.04%.
CHI
n/a	China Apr trade balance expected $9.9 billion, Mar $5.35 billion.  Apr exports expected +8.5% y/y, Mar +8.9% y/y.  Apr imports expected +10.9% y/y, Mar +5.3% y/y.

Daily Market Report 5-8-12

Tue, 8 May 2012 07:00:00

Overnight Developments

E-mini S&Ps are down 8.00 points this morning (-0.59%), undercut by lower European stocks.  The dollar index is mildly higher this morning while commodity prices are mostly lower.  Gold is down $11.90 and crude oil is down $1.02.  Oil prices were undercut after the Saudi Oil Minister Ali al-Naimi said that oil prices are still too high.  Mr. Al-Naimi has been consistently saying in recent weeks that the oil market is well supplied and that prices are too high.European stocks are trading moderately lower this morning with the Euro Stoxx 50 down -0.58%.  European stocks are being weighed down by the drawn out process in Greece of trying to put together a coalition government.  However, European stocks received a boost from today’s German March industrial production report of +2.8% m/m and +1.6% y/y, which was substantially stronger than the market consensus of +0.8% m/m and -1.2% y/y.  In addition, Feb was revised higher to -0.3% m/m and unch y/y from -1.3% m/m and -1.0% y/y.  The German Economy Ministry said that Germany “industrial activity is gathering pace and the outlook has improved markedly.”  Strength in the German economy is necessary to make sure that the current recession in the overall Eurozone is shallow and relatively short.In Greece, Syriza (Coalition of the Radical Left) today will try to form a coalition government in talks with other parties.  Syriza is not expected to find enough support to form a government.  The winner of Sunday’s election, New Democracy, was unable to form a government and gave up yesterday after 6 hours of talks.  If Syriza cannot form a government, then Socialist Pasok will have a turn.  The odds still favor a coalition with New Democracy and Pasok, along with one or more smaller parties.  If no coalition can be formed, then new elections can be called.  If New Democracy and Pasok can form a coalition, then the markets will be satisfied that the Greek political situation has been stabilized for the time being and that the Greek bailout and Greece’s position in the Eurozone is safe for the time being.   However, if Syriza somehow forms a government, or if no government can be formed, then concern will rapidly grow about the increased chances of Greece eventually defaulting completely on its debt and exiting the Eurozone.  The Greek ASE Stock index today is down 0.5% after falling 6.7% on Monday.  Greece today was able to sell 1.3 billion euros of 26-week bills with a yield of 4.69% and a bid cover ratio of 2.6 times.In Israel, Prime Minister Netanyahu canceled his proposed early election for September after the Kadima party agreed to join Likud’s coalition government.  There had been some speculation that Mr. Netanyahu may have called the early election to strengthen his hand for an attack on Iran late in the year as well as to take advantage of his current popularity in the polls.  Now that the election has been canceled, Mr. Netanyahu will have a freer hand to deal with Iran.  Israel is not likely to attack Iran while talks with Iran are ongoing. The second round of talks with Iran is scheduled for two weeks on May 23.Stock markets in Asia today closed mostly higher as market participants were encouraged by Monday’s rally in the Euro Stoxx 50 and by the slightly higher close in the S&P 500 index.  Japan +0.69%, Hong Kong -0.25%, China -0.32%, Taiwan +0.10%, Australia +0.30%, Singapore +0.24%, South Korea +0.54%, India -2.17%.  Chinese and Hong Kong stocks were undercut by news that residential and land sales dropped 92% in major Chinese cities.

Overnight U.S. Stock News

June E-mini S&Ps this morning are down -8.00 points (-0.59%) mainly because European stocks are down -0.58%. There are earnings reports today from Disney, DirecTV, Discovery Communications and others.  US stocks yesterday closed narrowly mixed after recovering from early losses:  S&P 500 +0.04%, Dow Jones -0.23%, Nasdaq 100 +0.05%.  Stocks on Monday opened on a weak note on the European election results and continued overhang from last Friday’s disappointing payroll report of +115,000.  However, the U.S. stock market was able to recover to close mostly higher on the recovery in European stocks and short-covering after last week’s sharp sell-off.  U.S. bank stocks received a boost yesterday after Warren Buffett said at his annual meeting that American banks are in “fine shape.”  He said that U.S. banks have “liquidity coming out of their ears.”

Today’s Market Focus

June 10-year T-notes this morning are up 9 ticks on the lower trade in U.S. and European stocks.  The Treasury today kicks off its $72 billion coupon package by selling $32 billion in 3-year T-notes.  T-note prices on Monday closed little changed:  TYM2 unch, FVM2 +0.25.  T-notes initially traded higher on the European election results but then faded as the stock market recovered.  A bearish factor was the $21.4 billion surge in March consumer credit, which illustrated some consumer confidence.  The recent surge in consumer credit will eventually become worrisome to the Fed if it continues and indicates that interest rates are too low.  Most of the loans have been for education and autos.The dollar index this morning is trading is trading mildly higher by 0.13 (+0.16%) with EUR/USD down 0.24 cents and USD/JPY down 0.18 yen.  The euro is seeing some weakness tied to the Greek political uncertainty.  The dollar index on Monday closed mildly higher:  Dollar Index +0.105, EUR/USD -0.0019, USD/JPY +0.19.  The euro was undercut by the European election results and the dollar index was boosted by increased safe-haven demand.June crude oil prices this morning are down $1.02 and June gasoline is down 0.53 cents on Saudi Oil Minister al-Naimi’s comment that oil prices are still too high.  Crude oil and gasoline prices on Monday closed lower again to add to the sharp losses seen last week:  CLM12 -0.55, RBM2 -0.0017.  Crude oil prices fell on the European election results and continued bearish overhang from last Friday’s weak payroll report and rise in crude oil inventories to a new 21-1/2 year high.  In addition, the market is looking for another inventory increase tomorrow.  The market consensus for Wednesday’s weekly DOE report is that crude oil inventories will increase by another 1.9 million bbls to a new 21-1/2 year high, gasoline inventories will increase by +250,000 bbls, distillate inventories will increase by +750,00 bbls, and the refinery utilization rate will rise by 0.5 point to 86.5%.  The Seaway pipeline between Cushing and the Gulf coast is scheduled to be reversed next Thursday (May 17), which should start to produce a decline in Cushing inventories in June and beyond.

Today’s U.S. Earnings Reports

Earnings reports (sorted by mkt cap): DIS-Disney (consensus $0.55), DTV-DirecTV (1.05), DISCA-Discovery Communications (0.60), HCN-Health Care REIT (0.24), ETE-Energy Transfer (0.38), LINTA-Liberty (0.16), PRGO-Perrigo (1.21), FOSL-Fossil (0.92), TAP-Molson Coors (0.43).

Global Financial Calendar

Tuesday, May 8
United States
0745 ET	ICSC (Int’l Council of Shopping Centers) weekly retailer sales.
0855 ET	Redbook weekly retailer sales.
0945 ET	Richmond Fed President Jeffrey Lacker holds roundtable discussion with Guildford Technical Community College students.
1000 ET	May IBD/TIPP economic optimism, Apr +1.8 to 49.3.
1130 ET	Weekly 4-week T-bill auction.
1245 ET	Dallas Fed President Richard Fisher speaks on panel at “Growing DFW: Strengthening Our Economy” in Dallas.
1300 ET	Treasury auctions $32 billion in 3-year T-notes.
1630 ET	API weekly U.S. oil statistics.
Germany
0600 ET	German Mar industrial production expected +0.8% m/m and -1.2% y/y, Feb -1.3% m/m and -1.0% y/y.

Daily Market Report 5-7-12

Mon, 7 May 2012 07:00:00 -0500

Overnight Developments

E-mini S&Ps are down -6.75 points (-0.50%), which is better than 1% losses last night.  The E-mini is lower on the European election results and continued overhang from last Friday’s poor U.S. payroll report.  Commodity prices are generally lower with crude oil down another 72 cents, gold down $3.5, copper down -0.3 cents, and grain prices trading lower.European stocks are trading mildly lower with the Euro Stoxx 50 down -0.03%, the German Dax down -0.66%, and the French CAC40 down -0.11%.  The UK markets are closed today for a holiday.  The Greek stock market today is down sharply by 7.5%.  In France, Socialist party leader Francois Hollande won the presidential election over Nicolas Sarkozy, which was in line with market expectations but could nevertheless cause problems with Germany.  In Germany, Chancellor Merkel’s party had a poor showing in state elections in the German state of Schleswig-Holstein, which may make Ms. Merkel even less inclined to compromise on bailout terms to troubled Eurozone countries.In Greece, there was a surprise with the anti-bailout Syriza party (which means Coalition of the Radical Left) winning a projected 16% of the vote, coming in second ahead of the socialist Pasok party, which had 13%.  The New Democrats won the election but received only 20% of the vote.  The question is whether the New Democrats can cobble together a coalition government with Pasok and other smaller parties, thus excluding the Syriza party from the government.  Syriza is not expected to be able to form a coalition government.  If Syriza unexpectedly gained power with like-minded Greek coalition parties, that government would likely try to renegotiate the Greek bailout and assuming Germany refuses, could end up putting the country into full bankruptcy and possibly an exit from the Eurozone.In other European news, the May Eurozone Sentix investor confidence index fell to -24.5 from -14.7% in April, which as weaker than the market consensus of -15.3.  However, German March factory orders were reported at +2.2% m/m and -1.3% y/y, which was stronger than the market consensus of +0.5% m/m and -1.5% y/y and an improvement after Feb’s revised +0.6% m/m and -6.0% y/y.  In the European bond markets today, the German 10-year bund yield fell 1 bp, the Greek 10-year bond yield rose by 220 bp to 22.77%, the Spanish bond yield rose 8 bp, and the Italian bond yield rose by 9 bp.Stock markets in Asia closed mostly lower in reaction to last Friday’s weak U.S. payroll report:  Japan -2.78%, Hong Kong -2.61%, China +0.07%, Taiwan -2.11%, Australia -2.16%, Singapore -2.19%, South Korea -1.77%, and India +0.48%.  The Japanese stock market was also hurt by last Friday’s strength in the yen.

Overnight U.S. Stock News

June E-mini S&Ps this morning are down -6.75 points (-0.50%), which is an improvement from the 1% losses seen last night on the first reaction to the European election results.  Today is a fairly big earnings today with reports from CTSH-Cognizant SYY-Sysco, VNO-Vornado Realty, DISH-Dish Network, WYNN-Wynn Resorts, and others.  The U.S. stock market on Friday sold off fairly sharply: S&P 500 -1.61%, Dow Jones -1.27%, Nasdaq 100 -2.47%.  Bearish factors included the much weaker than expected April payroll report of +115,000, which added to last Thursday’s weak ISM non-manufacturing report to create worries about a softening U.S. economy.  There was also nervousness last Friday ahead of Sunday’s European elections.

Today’s Market Focus

June 10-year T-notes this morning are up 4 ticks this morning on fresh safe-haven demand after Sunday’s European election results and on this morning’s sell-off in global stocks.  T-note prices on Friday closed higher:  TYM2 +14.5, FVM2 +0.5.  T-note prices on Friday rallied on the weak payroll report, which suggested weaker economic growth and inflation and also sparked increased safe-haven demand with the sharp sell-off in stocks.The dollar index this morning is trading is trading mildly higher by +0.18 points (+0.23%) with EUR/USD down 0.0055 (-0.42%) and USD/JPY slightly lower by -0.03 yen (-0.04%).  The euro is being hurt by the European election results, which makes a return of the European debt crisis more likely.  The dollar index on Friday closed mildly higher:  Dollar Index +0.277, USD/JPY -0.48, EUR/USD -0.0082.  The dollar index closed higher last Friday and the euro closed weaker on the weak U.S. payroll report and increased safe-haven demand.  The euro was also weaker ahead of Sunday’s elections in France and Greece.  However, USD/JPY closed lower as the weak payroll report undercut the dollar relative to the yen.Jun crude oil prices this morning are trading lower with CLM12 down -0.72 cents (-0.73%) and RBM2 slightly lower by -0.05 cents (-0.02%).  Crude oil and gasoline prices are seeing weakness from the European election results and weak global stock markets.  Crude oil and gasoline prices on Friday plunged for third straight session:  CLM12 -4.05, RBM2 -0.0742.  June crude oil prices fell to a new 5-month low and gasoline posted a new 3-1/2 month low.  Bearish factors included (1) the weak payroll report, (2) heavy technical selling with the downside breakout, and (3) continued overhang from last Wednesday’s DOE report that showed a new 21-1/2 year high in crude oil prices.

Today’s U.S. Earnings Reports

Earnings reports (sorted by mkt cap): CTSH-Cognizant (consensus $0.85), SYY-Sysco (0.43), VNO-Vornado Realty (0.83), DISH-Dish Network (0.70), PAA-Plains (1.51), WYNN-Wynn Resorts (1.41), TAX-Rackspace Hosting (0.17), TSN-Tyson Foods (0.39), FRI-Fed Realty Investors (0.51), HFC-Hollyfrontier (1.21), BIP-Brookfield Infrastructure (0.30), EA-Electronic Arts (0.16), TW-Towers Watson (1.35), DOS-Kosmos Energy (0.02), FTR-Frontier Communication (0.06), DNB-Dun & Bradstreet (1.32).

Global Financial Calendar

Monday, May 7
United States
1100 ET	USDA weekly grain export inspections.
1130 ET	Weekly 3-mo and 6-mo T-bill auctions.
1500 ET	Mar consumer credit expected +$9.7 billion, Feb +$8.735 billion.
1600 ET	USDA Crop Progress
1915 ET	Richmond Fed President Jeffrey Lacker speaks on “Technology, Unemployment and Workforce Development” at in event in Greensboro, NC.
Euro-Zone
0430 ET	Eurozone May Sentix Investor Confidence expected -15.3, Apr -14.7.
Germany
0600 ET	German March factory orders expected +0.5% m/m and -2.8% y/y, Feb +0.3% m/m and -6.1% y/y.
0700 ET	German Chancellor Angela Merkel holds post-election press conference in Berlin.
United Kingdom
1901 ET	UK Apr BRC Shop Price index expected +1.6% y/y, Mar +1.5% y/y.
1901 ET	UK Apr Lloyds Employment Confidence, Mar -58.
1901 ET	UK Apr RICS House Price Balance expected -11%, Mar -10%.

Daily Commodities Brief 4-24-12

The Standard & Poor’s GSCI gauge of 24 commodities rose 0.3 percent to 676.26 at 5 p.m. in London. The UBS Bloomberg CMCI index of 26 raw materials was up 0.6 percent at 1,566.814.

BASE METALS:

Copper rose for the second time in three sessions as reports showed the housing market is mending in the U.S., the world’s top metals consumer after China.

Copper futures for July delivery advanced 1.1 percent to $3.6755 a pound on the Comex in New York.

On the London Metal Exchange, copper for delivery in three months rose 0.9 percent to $8,115.50 a metric ton ($3.68 a pound).

Aluminum, zinc and tin also climbed in London. Nickel fell, and lead was little changed.

CRUDE OIL:

Oil rose in New York after home prices in 20 U.S. cities dropped at a slower pace in February, bolstering optimism that economic expansion will accelerate in the world’s biggest crude-consuming country.

Crude oil for June delivery climbed 71 cents, or 0.7 percent, to $103.82 a barrel on the New York Mercantile Exchange. Earlier, futures touched $104.10.

Brent crude for June settlement declined 16 cents to $118.55 a barrel on London-based ICE Futures Europe.

PRECIOUS METALS

Gold advanced for the third time in four sessions as a weaker dollar increased the appeal of the precious metal as an alternative investment.

Gold futures for June delivery rose 0.9 percent to $1,647.80 an ounce on the Comex in New York.

Silver futures for July delivery gained 1.7 percent to $31.12 an ounce on the Comex.

OIL PRODUCTS

Gasoline dropped as concerns eased that Northeastern supplies may tighten during the summer driving season afterSunoco Inc. (SUN) (SUN) said it would operate its Philadelphia refinery through July.

Gasoline for May delivery slid 3.8 cents, or 1.2 percent, to $3.1493 a gallon in New York. Prices have fallen 26.73 cents since reaching a high this year of $3.4166 on March 26.

GRAINS, OILSEEDS

Corn rose for a second straight day on speculation that China, the world’s biggest grower after the U.S., is increasing purchases to build state reserves. Soybeans also advanced.

Corn futures for July delivery gained 0.7 percent to $6.1675 a bushel on the Chicago Board of Trade.

Soybean futures for July delivery rose 0.9 percent to $14.5375 a bushel, gaining for the third time in four sessions.

LIVESTOCK

Cattle futures rebounded from a seven-month low on signs of increasing demand for U.S. beef. Hog prices were little changed.

Cattle futures for June delivery rose 0.1 percent to $1.147 a pound on the Chicago Mercantile Exchange.

Hog futures for June settlement climbed 0.2 percent to 87.95 cents a pound on the CME.

Feeder-cattle futures for August settlement fell 0.2 percent to $1.5395 a pound in Chicago.

SOFT COMMODITIES

Cocoa futures rose the most in a week, on speculation demand may rebound after the price tumbled the most since late March the previous day. Coffee, sugar, orange juice also advanced, while cotton dropped.

Cocoa for July delivery climbed 2.6 percent to $2,261 a metric ton on ICE Futures U.S. in New York.

Also in New York, Arabica-coffee futures for July delivery jumped 2.3 percent to $1.83 a pound on ICE, while raw-sugar futures for July delivery added 0.7 percent to 21.69 cents a pound, heading for the first gain in five sessions.

Orange-juice futures for July delivery advanced 1.2 percent to $1.435 a pound on ICE.

Cotton futures for July delivery dropped 0.7 percent to 91.87 cents a pound in New York, heading for the first decline since April 16.

In London futures trading, cocoa, robusta coffee and refined sugar also climbed on NYSE Liffe.

NATURAL GAS

U.K. natural gas for next month fell to its lowest for seven weeks as weather was predicted to normalize and demand stayed below seasonal averages. Electricity for May also declined.

Gas for delivery in May retreated to as low as 57 pence a therm, the least since March 6, and was at 57.25 pence London time. That’s equivalent to $9.24 per million British thermal units and compares with $2.003 per million Btu for next-month U.S. gas. Day-ahead U.K. gas fell 0.8 percent to 59.35 pence a therm.

Next-month electricity dropped 0.9 percent to 44.45 pounds ($71.70) per megawatt-hour. Day-ahead power slid as much as 4 percent, the biggest decline since March 26.

Daily Market Report

Fri, 20 Apr 2012 07:00:00 -0500

Overnight Developments

• Global stock and commodity prices are mostly higher with June E-mini S&Ps up +6.50 points and the Euro Stoxx 50 up +0.70%.  The euro and stocks gained while Treasuries and the dollar fell after German business confidence unexpectedly improved and added to evidence that Europe’s largest economy can weather the debt crisis.  The Apr German IFO business climate rose +0.1 to 109.9, stronger than expectations of -0.3 to 109.5 and its best level in 9-months.  Another positive for stocks was strength in British retail sales after Mar U.K. retail sales with auto fuel accelerated +1.8% m/m, its fastest pace in 14-months, which also helped push the British pound up to a 5-1/4 month high against the dollar.  Italian and Spanish bond yields rose after a draft statement released by G-20 finance chiefs who are meeting in Washington said that Europe’s debt crisis still poses a threat to global growth.  That helped push the cost of credit-default swaps to insure Spanish government debt up to a record high 503 bp and increased the cost of insuring Italian debt up to 474 bp, a 3-month high.
• Asian stocks today closed mixed with Japan down -0.28%, China +1.19%, Australia +0.09%, South Korea -1.41% and India -0.74%.  Japanese stocks closed lower, despite the fall in the yen to a 1-1/2 week low against the dollar, as disappointing U.S. economic data on existing home sales and manufacturing activity raised concern the recovery is slowing in the U.S.  Chinese stocks finished higher as the Shanghai Stock Index climbed to a 1-month high on speculation the government will ease monetary policy and increase fiscal spending on infrastructure to bolster economic growth.  Chinese railcar makers jumped after the China Securities Journal reported railway spending may exceed government targets, while Chinese bank and financial stocks rose as the same newspaper reported that a cut in banks’ reserve-requirement ratios may be the first option as he PBOC loosens monetary policy.

Overnight U.S. Stock News

• June E-mini S&Ps this morning are trading up +6.50 points as Microsoft beat earnings estimates and after German business sentiment unexpectedly rose to a 9-month high.The U.S. stock market on Thursday traded on both sides on unchanged and finally finished lower as weaker than expected U.S. economic data offset reduced European sovereign-debt concerns and solid Q1 reported company earnings results:  Dow Jones -0.53%, S&P 500 -0.59%, Nasdaq Composite -0.79%.  Stocks moved lower after weekly initial U.S. unemployment claims were higher than expected, Mar existing home sales unexpectedly fell and after Apr Philadelphia Fed manufacturing data declined more than expected.  European debt concerns eased after though, after Spain and France reached their maximum targets on debt sales, while stocks found support on better-than-expected Mar leading indicators (+0.3%) and on decent Q1 company earnings results as 84% of the 83 companies that have reported earnings since Apr 10 have exceeded analysts’ projections.
• Microsoft (MSFT) rallied 3.2% in European trading after the company late yesterday reported fiscal Q3 profit of 60 cents a share, better than analysts’ estimates of 57 cents.

Today’s Market Focus

• June 10-year T-notes this morning are down -6 ticks.  T-note prices Thursday traded with modest gains the entire day and settled higher on weaker-than-expected U.S. economic data along with concern the European debt crisis is far from over:  TYM2 +6.5, FVM2 +2.0.  An unexpected decline in Mar U.S. existing home sales (-2.6% to 4.48 million) and the weaker-than-expected Apr Philadelphia Fed manufacturing index (-4.0 to 8.5) kept a bid in Treasuries the entire day, although gains were limited on reduced safe-haven demand after Spain and France had successful debt auctions and after Mar U.S. leading indicators rose more than expected (+0.3%).  Another positive for T-note prices was the Fed’s purchase of $1.668 billion in Treasuries as part of its Operation Twist program to replace $400 billion in short-term debt with longer-term Treasuries in an attempt to keep borrowing costs down.
• The dollar index this morning is weaker with USD/JPY +0.13 yen and EUR/USD +0.52 cents.  The dollar index Thursday swung between slight gains and losses and finally finished slightly higher after the yen fell to a 1-week low against the dollar when BOJ Governor Shirakawa said the Japanese economy “stagnated” and that he’s “committed” to continue monetary easing:  Dollar Index +0.023, USD/JPY +0.339, EUR/USD +0.00146.  Another positive for the dollar was weakness in the euro after Apr Euro-Zone consumer confidence unexpectedly declined (-0.7 to -19.8).  Dollar gains were limited however, as safe-haven demand for the greenback was reduced when Spain and France met their maximum targets in debt sales, and after weaker-than-expected U.S. economic data on Mar existing home sales and Apr Philadelphia manufacturing boosted the case for additional Fed easing.  Another dollar negative was the surge in the British pound to a 5-month high against the dollar as Wednesday’s minutes of the Apr 4-5 BOE policy meeting reduced expectations of additional BOE asset purchases.
• May crude oil prices this morning are trading up +70 cents a barrel and May gasoline is +0.51 of a cent per gallon.  Crude oil and gasoline prices on Thursday fluctuated between gains and losses and settled lower as uneven global economic data gyrated prices:  CLK12 -0.40, RBK2 -4.86.  Undercutting crude prices were comments from BOJ Governor Shirakawa who said that growth in developed economies remains “anemic,” along with the unexpected decline in Mar U.S, existing home sales (-2.6% to 4.48 million) and the deeper-than-expected pullback in the Apr Philadelphia Fed manufacturing index (-4.0 to 8.5).  Bullish factors included the larger-than-expected increase in Mar U.S. leading indicators (+0.3%) which gained for a sixth month, the +5.9% y/y increase in Mar Japan exports, the strongest gain in 13-months, and after a bi-annual report from Germany’s leading economic institutes that raised their 2012 German GDP estimate to +0.9% annualized from an earlier projection of +0.8% annualized.

Today’s U.S. Earnings Reports

Earnings reports (sorted by mkt cap): GE-General Electric (consensus $0.33), MCD-McDonald’s (1.23), SLB-Schlumberger Ltd. (0.97), HON-Honeywell International (0.99), KMB-Kimberly-Clark (1.17), JCI-Johnson Controls (0.53), AEP-American Electric Power (0.79), IR-Ingersoll-Rand PLC (0.25), RCL-Royal Caribbean Cruises Ltd. (0.15), UA-Under Armour (0.24), IDXX-IDEXX Laboratories (0.71), NVR-NVR Inc. (4.35), TNB-Thomas & Betts (0.87), HCBK-Hudson City Bancorp (0.15), MAN-Manpower (0.35).

Global Financial Calendar

Friday 4/20/12
United States
0900 ET	G-20 finance ministers and central bankers meet in Washington D.C.
Germany
0200 ET	Mar German producer prices expected +0.4% m/m and +3.1% y/y, Feb +0.4% m/m and +3.2% y/y.
0400 ET	Apr German IFO business climate expected -0.3 to 109.5, Mar +0.1 to 109.8.  Apr IFO current assessment expected -0.4 to 117.0, Mar unchanged at 117.4.  Apr IFO expectations expected -0.4 to 102.3, Mar +0.3 to 102.7.
United Kingdom
0430 ET	Mar U.K. retail sales ex auto fuel expected +0.4% m/m and +1.3% y/y, Feb -0.8% m/m and +1.0% y/y.  Mar retail sales with auto fuel expected +0.5% m/m and +1.5% y/y, Feb -0.8% m/m and +1.0% y/y.
Canada
0830 ET	Mar Canada leading indicators expected +0.5%, Feb +0.6% m/m.
0830 ET	Mar Canada CPI expected +0.5% m/m and +2.0% y/y, Feb +0.4% m/m and +2.6% y/y.
0830 ET	Mar BOC core CPI expected +0.3% m/m and +1.9% y/y, Feb +0.4% m/m and +2.3% y/y.

Daily Market Brief 4-17-12

Tue, 17 Apr 2012 07:00:00

Overnight Developments

• Global stock and commodity prices are mostly higher with June E-mini S&Ps up +7.00 points and the Euro Stoxx 50 up +1.14%.  The dollar and Treasuries fell while stocks and commodities gained after yields on Spanish government debt fell and after German investor confidence unexpectedly rose for a fifth month.  The yield on the Spanish 10-year bond tumbled 15 bp to 5.87% after Spain sold 3.18 billion euros of bills, higher than the maximum target of 3 billion euros.  Stocks extended their gains after the Apr German ZEW economic sentiment survey unexpectedly rose +1.1 to 23.4, better than expectations of a -2.8 decline to 19.5 and its strongest pace in 22 months.  U.S. stocks also received a boost and Treasuries were undercut by comments made late Monday from St. Louis Fed President Bullard who said the economy is “on track” and Fed “policy can stay on hold for now.”  Bullard added that U.S. economic growth will quicken from a range of 2.5% to 2.7% during Q1 of 2012 to 3.0% for the entire year and that the Fed will probably need to tighten policy during the “last part of 2013.”  Limiting gains in the euro and stocks was the faster than expected increase in European consumer prices after the Mar Euro-Zone CPI climbed +1.3% m/m and +2.7%, stronger than expectations of +1.2% m/m and +2.6% y/y.
• Asian stocks today closed mostly lower with Japan down -0.06%, China -1.25%, Australia -0.31%, South Korea -0.44%, India +1.21%.  Japanese stocks finished lower after Feb Japan industrial production was revised down to a -1.6% m/m decline from the originally reported -1.2% m/m fall, while Chinese stocks closed lower after foreign direct investment into China dropped for a fifth month.  Although Mar China foreign direct investment fell -6.1% y/y, it was better than expectations of -13.6% m/m.  Australian stocks finished slightly lower after the minutes of the RBA’s Apr 3 monetary policy meeting showed that central bank members lowered their assessment of economic growth.  Stocks in India rallied and settled higher after India’s central bank cut interest rates more than expected when the RBI lowered the repurchase rate 50 bp to 8.0%, greater than expectations of a 25 bp cut to 8.25%.

Overnight U.S. Stock News

• June E-mini S&Ps this morning are trading up +7.00 points as Spanish government bonds rallied and after German investor confidence unexpectedly improved.The U.S. stock market on Monday settled mixed as heightened European debt concerns and weakness in technology stocks overshadowed optimism about the U.S. economy after Mar retail sales rose more than expected:  Dow Jones +0.56%, S&P 500 -0.05%, Nasdaq Composite -0.76%.  The Nasdaq fell to a 1-month low.  Bearish factors included the rise in credit-default swaps to insure Spanish government debt to an all-time high, which fuels concern the European sovereign-debt crisis may worsen, along with weakness in technology stocks after Apple settled lower for a fifth consecutive session.  Apple accounts for 19% of the Nasdaq’s value and therefore influences its moves more than any other stock.  Stocks were also pressured after the Apr Empire manufacturing index fell more than expected to its weakest level in 5 months (-13.6 to 6.6) and after the unexpected decline in the Apr NAHB housing market index (-3 to 25).  Bullish factors for stocks centered on the stronger-than-expected Mar U.S. retail sales which gained +0.8% and +0.8% less autos, better than expectations of 0.4% and +0.6% less autos and increased M&A activity which gave stock prices an early lift.

Today’s Market Focus

• June 10-year T-notes this morning are trading down -6.5 ticks.  T-note prices Monday rallied up to a 2-1/2 month high and settled higher on increased safe-haven demand over concern the European sovereign-debt crisis may was intensify:  TYM2 +5.0, FVM2 +2.0.  Bullish factors included concern Spain may be the next Euro-Zone nation that needs a bailout after its 10-year bond yield soared to a 4-month high along with weaker-than-expected U.S. economic data on Apr Empire manufacturing which slowed to its weakest pace in 5 months (-13.6 to 6.6) and after the Apr NAHB housing market index unexpectedly fell (-3 to 25).  T-note prices climbed even higher and 10-year yields fell further below 2% after Treasury data showed China and Japan, the biggest and second-biggest holders of U.S. Treasuries, respectively, increased their U.S. debt holdings in Feb.  A bearish factor was the stronger-than-expected Mar U.S. retail sales which gained +0.8% and +0.8% less autos, better than expectations of 0.4% and +0.6% less autos.
• The dollar index this morning is lower with USD/JPY +0.25 yen and EUR/USD -0.02 cents.  The dollar index Tuesday posted a 1-week high on increased safe-haven demand after the euro tumbled to a 2-month low against the dollar on concern the European debt crisis was spreading when credit-default swaps to insure Spanish government debt rose to an all-time high, but gains in the dollar evaporated and the index closed lower after the Feb net long-term TIC data showed reduced foreign demand for dollar assets:  Dollar Index -0.333, USD/JPY -0.518, EUR/USD +0.00649.  Bullish factors for the dollar were concern over contagion of the European sovereign-debt crisis to Spain after the price of credit-default swaps to insure Spanish government debt surged to a record 511.5 bp, according to CMA prices, when Spain’s deputy finance minister said the ECB should “step up purchases of bonds” along with the strong Mar U.S. retail sales data, which reduces the chances of additional easing measures by the Fed.  Negative factors for the dollar that caused the dollar to shed its gains were the smaller-than-expected increase in the Feb net long-term TIC flows (+$10.1 billion versus expectations of +$40.0 billion), a sign of weakened foreign demand for U.S. dollar assets, and the weaker than expected Apr Empire manufacturing and Apr NAHB housing market indexes, which bolsters speculation the Fed will maintain its overly easy monetary policies.
• May crude oil prices this morning are trading up +71 cents a barrel and May gasoline is  -0.69 of a cent per gallon.  Crude oil prices on Monday settled mixed after strong Mar U.S. retail sales offset “constructive” talks between Iran and the UN Security Council and after Endbridge pushed up the date for the reversal of flow on the Seaway crude pipeline:  CLM12 +0.10, RBM2 -7.91.  The main bearish factors were the action by the UN Security Council and Iran to agree to reconvene May 23 in Baghdad, which suggests progress on a solution to Iran’s nuclear program and reduces tensions in the Middle East, along with the statement from Enbridge that they would start moving crude oil via the Seaway pipeline from Cushing, Oklahoma to refineries on the Gulf Coast in mid-May, 2-weeks ahead of schedule.  Crude gained after Mar U.S. retail sales rose more than expected and after Nigeria’s main rebel group, MEND, threatened to mount “sustained strikes on all pipelines and facilities remotely related to Nigerian oil industry,” which may reduce oil production in Africa’s biggest oil producing country.

Today’s U.S. Earnings Reports

Earnings reports (sorted by mkt cap): IBM-International Business Machines (consensus $2.65), JNJ-Johnson & Johnson (1.35), KO-Coca-Cola (0.87), INTC-Intel (0.53), GS-Goldman Sachs Group (3.55), USB-US Bancorp (0.64), CSX-CSX Corp. (0.38), ISRG-Intuitive Surgical (3.12), STT-State Street Corp. (0.87), SYK-Stryker (0.99), YHOO-Yahoo! (0.18), GWW-WW Grainger (2.52), OMC-Omnicon Group (0.69), STX-Seagate Technology PLC (2.12), NTRS-Northern Trust (0.65), AMTD-TD Ameritrade Holding (0.25).

Global Financial Calendar

Tuesday 4/17/12
United States
0745 ET	ICSC (Int’l Council of Shopping Centers) weekly retailer sales.
0830 ET	Mar housing starts expected +1.0% to 705,000, Feb -1.1% to 698,000.  Mar building permits expected -0.7% to 710,000, Feb +4.8% to 715,000.
0855 ET	Redbook weekly retailer sales.
0915 ET	Mar industrial production expected +0.3%, Feb unchanged.  Mar capacity utilization expected +0.1 to 78.5%, Feb unchanged at 78.4%.
1130 ET	Weekly 4-week T-bill auction.
Japan
0030 ET	Revised Feb Japan industrial production, previous -1.2% m/m and +1.5% y/y.  Revised Feb capacity utilization, previous +3.4% y/y.
0100 ET
Mar Japan consumer confidence expected +0.5 to 40.0, Feb -0.5 to 39.5.
United Kingdom
0430 ET	Feb U.K. DCLG house prices, Jan +0.2% y/y.
0430 ET	Mar U.K. CPI expected +0.3% m/m and +3.4% y/y, Feb +0.6% m/m and +3.4% y/y.  Mar core CPI expected +2.3% y/y, Feb +2.4% y/y.
0430 ET	Mar U.K. RPI expected +0.4% m/m and +3.6% y/y.  Mar RPI ex-mortgage interest payments expected +3.7% y/y, Feb +3.8% y/y.
Germany
0500 ET	Apr German ZEW economic sentiment survey expected -2.8 to 19.5, Mar +16.9 to 22.3.  Apr ZEW current situation expected -2.6 to 35.0, Mar -2.7 to 37.6.
Euro-Zone
0500 ET	Mar Euro-Zone CPI expected +1.2% m/m and +2.6% y/y.  Mar core CPI expected +1.5% y/y, Feb +1.5% y/y.
Canada
0830 ET	Feb Canada manufacturing sales expected -0.1% m/m, Jan -0.9% m/m.
0900 ET	BOC announces interest rate decision, (expected no change to the 1.00% benchmark rate).
CHI
2130 ET	Mar China property prices.