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20 menit menuju US trading hour*...**
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*Overnight Developments*
- Global stocks are trading mostly higher with the European Euro Stoxx 50
up +0.55% and Sep S&Ps up +2.70 points. Greek, Irish and Spanish bonds
rallied sharply after European officials agreed to a $229 billion bailout to
contain the debt crisis. Credit-default swaps to insure the government debts
of most Euro-Zone nations plunged, with those insuring Greek debt tumbling
219 bp to a 5-week low of 1,781. The euro fell back from a 2-week high
against the dollar after Fitch Ratings said Greece faces "restricted
default" after Euro-Zone leaders agreed on a new bailout for Greece that
would involve contributions from bondholders. European bank stocks climbed
and led the overall market higher with National Bank of Greece SA up 7.6%
and Banco Comercial Portugues SA up 4.1%. Also helping to boost stocks was
the larger-than-expected increase in the May Euro-Zone industrial new orders
which climbed +3.6% m/m and +15.5% y/y, stronger than expectations of +0.8%
m/m and +10.3% y/y. Limiting stock gains was the -5 point drop in the Jul
French business confidence indicator to a 7-month low of 105, a bigger
decline than the -2 point drop to 107 that was expected, while the Jul
German IFO business climate slipped -1.6 points to a 9-month low o 112.9, a
larger decrease than the expected -0.9 point drop to 113.6.
- The Asian stock markets today closed higher: Japan +1.22%, China
+0.29%, Australia +1.03%, South Korea +1.21%, India +1.55%. Asian stocks
advanced, with Japan's Nikkei 225 Stock Average posting a 2-week high, as
the bailout plan for Greece eased concern that Europe's debt crisis will
spread, which reduces uncertainty over earnings at financial companies and
exporters. Gains in Chinese stocks were limited after the China Daily
reported that the director general of the Ministry of Commerce's mechanical,
electronic and high-tech industries department said China's export growth
will "decelerate" in coming months, which may cause some factories to close,
while the South China Morning Post reported that the All China Federation of
Industry and Commerce said China's small and medium-sized businesses face
collapse if the government doesn't take steps to assist them.
*Overnight U.S. Stock News*
- September S&Ps this morning are trading up +2.70 points. The US stock
market yesterday rallied throughout the day and closed higher on reduced
European debt concerns, strong economic data and a New York Times report
that US lawmakers were close to major budget deal: Dow Jones +1.21%, S&P 500
+1.35%, Nasdaq Composite +0.72%. The Dow and Nasdaq rallied to 2-week highs
and the S&P 500 posted a 1-1/2 week high. Bullish factors included (1)
carry-over support from a rally in European stocks after European leaders
discussed easing the terms of bailouts to cash-strapped nations and helping
countries recapitalize banks, which reduced European sovereign-debt
concerns, (2) the stronger-than-expected Jun leading indicators (+0.3%
versus expectations of +0.2%), (3) the stronger-than-expected Jul
Philadelphia Fed manufacturing index (+10.9 to 3.2 versus expectations of
+9.7 to 2.0), and (4) a report from the New York Times that said US
lawmakers were close to a &qu ot;major budget deal," which initially sent
stock prices higher but they fell back after the White House denied the
report.
- Bearish factors included (1) the larger-than-expected increase in
weekly initial unemployment claims (+10,000 to 418,000 versus expectations
of +5,000 to 410,000), (2) the reiteration by Standard & Poor’s that there’s
a 50% chance of a US rating cut within 3 months, and (3) comments from Fed
Chairman Bernanke who said the recovery in the US and elsewhere is "far from
complete."
- Advanced Micro Devices (AMD) jumped 6.2% in European trading after the
company said sales in the current period may be as much as $1.76 billion,
greater than analysts' estimates of $1.7 billion.
*Today's Market Focus*
- September 10-year T-notes this morning are trading up +4 ticks. T-note
prices yesterday slipped to a 1-1/2 week low on the stronger-than-expected
Jul Philadelphia Fed manufacturing index along with reduced safe-haven
demand amid speculation European governments may guarantee Greek bonds:
TYU11 -19, FVU11 -11, EDZ11 +2.5. Bearish factors included (1) reduced
safe-haven demand for Treasuries on speculation the European Financial
Stability Facility may guarantee Greek bonds to make it easier for the ECB
to accept a default, (2) the stronger-than-expected Jun leading indicators
(+0.3% versus expectations of +0.2%), (3) the stronger-than-expected Jul
Philadelphia Fed manufacturing index (+10.9 to 3.2 versus expectations of
+9.7 to 2.0), and (4) the reiteration by Standard & Poor’s that there’s a
50% chance of a US rating cut within 3 months. Bullish factors included (1)
the larger-than-expected increase in weekly initial unemployment claims
(+10,000 to 418,000 v ersus expectations of +5,000 to 410,000) and (2)
comments from Fed Chairman Bernanke who said the recovery in the US and
elsewhere is "far from complete," which suggests the Fed may keep its record
stimulus measures in place.
- The dollar index this morning is higher with the dollar/yen +0.18 yen
and the euro/dollar -0.02 cents. The dollar index yesterday slid to a 1-1/4
month low after Standard & Poor's reiterated the chance of a US ratings cut
along with strength in the euro which rallied to a 2-week high against the
dollar on speculation the European Financial Stability Facility may
guarantee Greek bonds: Dollar Index -0.777, USDJPY -0.476, EURUSD +0.02094.
Bearish factors included (1) Standard & Poor’s reiteration that there’s a
50% chance of a US rating cut within 3 months, (2) strength in the euro on
speculation the European Financial Stability Facility may guarantee Greek
bonds to make it easier for the ECB to accept a default, and (3) reduced
safe-haven demand as the stock market rallied. Bullish factors included (1)
the stronger-than-expected Jun US leading indicators and Jul Philadelphia
Fed manufacturing index, which signals economic strength and is dollar
bullish and (2) the larger-than-expected decline in the Jul Euro-Zone PMI
composite to a 23-month low, which is euro negative.
- Sep crude oil prices this morning are up +24 cents a barrel and Sep
gasoline is +1.80 cents per gallon. Sep crude oil and gasoline prices
yesterday settled mixed as reports that European officials have come up with
a plan for the region's debt crisis supported crude although weak Chinese
and European manufacturing data undercut gasoline: CLU11 +$0.73, RBU11
-3.79. Sep crude posted a 5-week high. Bullish factors included (1) the
slump in the dollar index to a 1-1/4 month low, which encourages investment
demand in commodities, (2) the stronger-than-expected Jun US leading
indicators and Jul Philadelphia Fed manufacturing index, which signals
economic strength that is beneficial for energy demand and consumption, (3)
a report that European leaders may accept a temporary Greek default and ease
the terms on bailouts to cash-strapped nations, and (4) the statement from
the IEA that it won't extend a release of emergency stockpiles. Bearish
factors included (1) concern the Chinese economy may be slowing after the
Jul China HSBC flash manufacturing PMI fell below the 50.0 level, which
signals Chinese manufacturing activity may contract for the first time in a
year and (2) the larger-than-expected decline in the Jul Euro-Zone PMI
composite to a 23-month low, which signals economic weakness and reduced
fuel demand.
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*Today's U.S. Earnings Reports*
Earnings reports (confirmed releases, sorted by mkt cap): GE-General
Electric (BEST earnings consensus $0.33), SLB-Schlumberger Ltd. (0.85),
VZ-Verizon Communications (0.55), MCD-McDonalds (1.28), CAT-Caterpillar
(1.74), HON-Honeywell Intrenational (0.98), RAI-Reynolds American (0.71),
APD-Air Products & Chemicals (1.46), XRX-Xerox (0.24), STI-SunTrust Banks
(0.31), DOV-Dover (1.14), COL-Rockwell Collins (1.04), IDXX-IDEXX
Laboratories (0.72), FLIR-FLIR Systems (0.32), CPX-Complete Production
Services. (0.63), USG-USG Corp. (-0.62).
*Global Financial Calendar*
Friday 7/22/11 United States n/aNo government reports or speaking events are
scheduled. France 0245 ETJul French business confidence indicator expected
-2 to 107, Jun +3 to 109. Germany 0400 ETJul German IFO business climate
expected -0.8 to 113.7, Jun +0.3 to 114.5. Jul IFO current assessment
expected -1.0 to 12.3, Jun +1.8 to 123.3. Jul IFO expectations expected -1.2
to 105.1, Jun -1.1 to 106.3. Euro-Zone 0500 ETMay Euro-Zone industrial new
orders expected +0.8% m/m and +10.3% y/y, Apr +0.8% m/m and +9.0% y/y.
Canada 0700 ETJun Canada CPI expected -0.2% m/m and +3.5% y/y, May +0.7% m/m
and +3.7% y/y. 0700 ETJun Bank of Canada core CPI expected +0.1% m/m and
+2.0% y/y, May +0.5% m/m and +1.8% y/y. 0830 ETMay Canada retail sales
expected -0.3% and +0.4% less autos, Apr +0.3% and unchanged less autos.
*Morning Quote Board*
Morning Quotes (ET)Last Chg%chgUpdated US Stock Futures S&P (Globex) (U1)
1345.202.70 0.20%7:09:17 AM DJIA (CBOT) (U1)1273444 0.35%7:09:41 AM European
Stocks Europe DJ Stoxx 502567.5014.17 0.55%7:04:45 AM London UK FTSE Index
5951.5951.70 0.88%7:04:54 AM German Dax Index7334.3944.25 0.61%7:04:54
AM French
CAC 40 Index3852.1135.36 0.93%7:04:45 AM Asian-Pacific Stocks Japan Nikkei
Index10132122 1.22%2:28:01 AM Hong Kong Hang Seng22445458 2.08%4:01:30 AM China
CSI 300 Index30689 0.29%3:01:37 AM Taiwan TAIEX Index876548
0.55%1:46:00 AM Australian
S&P 2004602.946.9 1.03%2:37:45 AM Singapore Str. Times3182.9544.44 1.42%5:10:00
AM South Korea KOSPI 200282.593.39 1.21%5:05:23 AM Bombay Sensex 3018722
286.11 1.55%7:19:54 AM Karachi KSE-100 1249015 0.12%6:59:44 AM US Interest
Rates 10yr T-notes (CBT)(U1)123.7200.040 0.10%7:09:51 AM Cash 10yr T-note
Price101.0200.040 0.12%7:19:53 AM Cash 10yr T-note Yield2.999-0.015
-0.49%7:19:53
AM 5yr T-note (CBT)(U1)120.1400.000 0.09%7:09:48 AM Cash 5yr T-note Price
99.2800.035 0.10%7:19:48 AM Cash 5yr T-note Yield1.526-0.021 -1.38%7:19:48
AM 30-yr T-bond (CBT)(U1)124.780.070 0.17%7:09:42 AM Cash 30yr T-bond Price
101.1150.100 0.31%7:19:54 AM Cash 30yr T-bond Yield4.293-0.019 -0.43%7:19:54
AM Eurodollars (CME)(U1)99.6550.015 0.02%7:07:37 AM Eurodollars (CME)(Z1)
99.5650.025 0.03%7:08:00 AM Asian & European Rates 10-yr JGBs (TSE) (U1)
141.42-0.10 -0.07%2:00:00 AM EuroyenTibor(SGX)(U1)99.660-0.003 0.00%3:28:05
AM Bunds (Eurex) (U1)126.93-0.08 -0.06%7:04:55 AM Euribor (Eurex) (U1)98.31
-0.01 -0.01%5:49:08 AM UK Gilts (Liffe) (U1)122.04-0.05 -0.04%7:04:55 AM Short
Stlg (Liffe) (U1)99.130.01 0.01%7:03:05 AM Forex U.S. Dollar Index74.0710
0.0730 0.10%7:09:50 AM US Dollar-Japanese Yen78.48000.1800
0.23%7:19:55 AM EuroFX-US
Dollar1.4405-0.0020 -0.14%7:19:55 AM US Dollar-Swiss Franc0.82080.0056
0.69%7:19:55
AM British Pound-US$1.6319-0.0012 -0.07%7:19:55 AM US$-Canadian Dlr0.9485
0.0052 0.55%7:19:55 AM Yen (Globex) (U1)1.27530.0003 0.02%7:09:54 AM Euro FX
(Globex) (U1)1.4380-0.0010 -0.07%7:09:50 AM SwissFranc (Globex)(U1)1.2192
-0.0064 -0.52%7:09:42 AM British Pound(Glbx)(U1)1.63070.0003
0.02%7:09:43 AM Canadian$
(Globex)(U1)1.0517-0.0059 -0.56%7:09:50 AM Commodities Gold (Comex) (Q1)
1597.110.1 0.64%7:09:28 AM Silver (Comex) (U1)39.6250.678 1.74%7:09:30
AM Copper
(Comex) (U1)441.12.7 0.62%7:09:44 AM Crude Oil (Nymex) (U1)99.370.24
0.24%7:09:50
AM Gasoline (Nymex) (U1)307.471.80 0.59%7:05:01 AM Heating Oil(Nymex) (U1)
312.91.61 0.52%7:09:34 AM NaturalGas(Nymex)(U1)4.3950.033 0.76%7:09:52 AM Corn
(CBOT) (Z1)674.001.00 0.15%7:09:29 AM Soybeans (CBOT) (X1)1389.751.75
0.13%7:09:50
AM Wheat (CBOT) (U1)679.502.25 0.33%7:09:30 AM
