Fri, 20 Apr 2012 07:00:00 -0500
- 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.
- 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.
- 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 Wednesdays 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. |
United States Capital Trust LLC. 