- European stocks are little changed this morning with the European Stocks 50 up 0.12%. Sep S&Ps are slightly lower by 0.80 points. Some long liquidation pressures have emerged after the week-long rally. In addition, the market remains concerned about weak economic growth. An oil tanker owned by Mitsui O.S.K Lines Ltd suffered an explosion that "may have been caused by an external attack" near the Straights of Hormuz, a key area through which 40% of all the world's transported oil passes. The focus was on a possible pirate attack although pirates have not attacked in that area before. There was no indication that Iran may have been involved, although Iran is being closely watched as UN members progressively implement the new round of sanctions.
- The Asian markets today closed higher nearly across the board: Japan +2.70%, Hong Kong +0.56%, China +2.43%, Taiwan +0.47%, Australia +0.72%, Singapore +0.20%, South Korea +0.19%, Bombay -0.67%. Canon rallied 5.7% after a better-than-expected earnings report and an upgrade to "overweight" from JPMorgan Chase. Chinese industrial companies were boosted today by the report from China's statistics bureau of a 72% surge in first-half earnings for Chinese industrial companies.
- Sep S&Ps this morning are trading slightly lower by -0.80 points on some long liquidation pressure. The stock market yesterday ran out of steam after Monday's rally and closed mixed (Dow +0.12%, S&P 500 -0.10%, Nasdaq Composite -0.36%). Bearish factors included (1) the weaker-than-expected US consumer confidence index, which fell 2.5 points to 50.4 versus expectations for a 1.9 point drop to 51.0, thus sparking weakness in retailer stocks such as Amazon and Lowe's, (2) yesterday's 13-tick sell-off in the 10-year T-note market, and (3) some long liquidation pressure after the sharp 3-week rally. Bullish factors included (1) the smaller-than-expected 7 point decline in the Richmond Fed manufacturing index to 16 versus expectations for an 11 point decline to 12, (2) strength in European bank stocks after UBS and Deutsche Bank released favorable earnings reports, and (3) underlying optimism about the Q2 earnings season with 82% of S&P 500 companies reporting stronger-than-expected earnings.
- September 10-year T-notes this morning are trading +2 ticks going into today's 5-year T-note auction. Sep 10-year T-note prices yesterday closed 13 ticks lower. Bearish factors included (1) supply overhang after weak foreign central bank participation in Tuesday's 2-year T-note auction and ahead of today's sale of $37 billion in 5-year T-notes, (2) a continued decline in safe-haven demand for Treasury securities as the stock market held most of its gains and as worries about the European debt crisis continued to recede, and (3) the smaller-than-expected decline in the Richmond Fed index. The main bullish factor was the larger-than-expected decline in the US consumer confidence report.
- The dollar index this morning is trading slightly lower by -0.04 points with the dollar/yen down -0.12 yen and the euro/dollar up 0.03 cents. The dollar index yesterday posted a new 3-month low but then recovered to close slightly higher. Bullish factors for the dollar yesterday included some short-covering after the sharp 7-week decline and the small improvement in US interest rate differentials. Bearish factors included the decline in US consumer confidence and the continued decline in safe-haven demand for the dollar.
- September crude oil prices this morning are trading -30 cents and September gasoline is down -0.87 cents per gallon. Sep crude oil prices yesterday fell sharply by $1.48 per barrel and Sep gasoline prices fell 4.23 cents per gallon. Bearish factors included (1) long liquidation pressure after the solid 3-week rally, (2) the decline in US consumer confidence, which may translate into weaker fuel demand. Bullish factors included (1) expectations for today's DOE report to show a decline in crude oil inventories to a 4-month, although that will be mainly because of storm distortions, and (2) a forecast by Goldman Sachs that crude oil prices are "significantly" below the level warranted by fundamentals and that the supply/demand balance will tighten in the second half of 2010.
The market consensus for today's weekly DOE inventory report is for crude oil inventories to fall 1.7 million bbl to a 4-month low, gasoline inventories to rise 300,000, and distillates to rise 2 mln bbl. The weekly inventory data will be distorted by Tropical Storm Bonnie, which temporarily idled about 52% of U.S. Gulf oil output.
Earnings reports (confirmed releases, sorted by mkt cap) COP-ConnocoPhillips (BEST earnings consensus $1.56), V-Visa (0.93), CMCSA-Comcast (0.32), BA-Boeing (1.01), SO-Southern Co (0.59), GLW-Corning (0.53), NEM-Newmont Mining (0.87), PX-Praxair (1.14), D-Dominion Res (0.67), GD-General Dynamics (1.61), ESRX-Express Script (0.59), WLP-Wellpoint (1.56), HES-Hess Corp (1.12), LVS-Las Vegas Sands (0.09), S-Sprint Nextel (-0.17), CCE-Coca-Cola (0.69), EQR-Equity Residential (0.10), SYMC-Synmantec (0.35), CCI-Crown Castle (0.01), IP-International Paper (0.41), AMP-Ameriprise (0.77), HSP-Hospira (0.80).
Global Financial Calendar
| Wednesday 7/28/10 | |
|---|---|
| United States | |
| 0700 ET | Weekly MBA mortgage applications for the week ended Jul 23, previous +7.6% with purchase sub-index +3.4% and refinancing sub-index +8.6%. |
| 0830 ET | Jun durable goods orders expected +1.0% and +0.4% ex transportation, May -0.6% and +1.6% ex transportation. |
| 1300 ET | Treasury auctions $37 billion 5-year T-notes. |
| 1400 ET | Fed's Beige Book. |
| Euro-Zone | |
| 0400 ET | ECB publishes bank lending survey. |
| United Kingdom | |
| 0445 ET | |
| Germany | |
| n/a | Jul German CPI (EU harmonized) expected +0.2% m/m and +1.1% y/y, Jun unchanged m/m and +0.8% y/y. |
| Japan | |
| 1950 ET | Jun Japan retail trade expected +0.4% m/m and +3.2% y/y, May -2.0% m/m and +2.8% y/y. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures | ||||
|---|---|---|---|---|
| S&P (Globex) (U0) | 1110.10 | -0.80 | -0.07% | 07:09:05 |
| DJIA (CBOT) (U0) | 10484 | -10 | -0.10% | 07:09:04 |
| European Stocks | ||||
| Europe DJ Stoxx 50 | 2504.10 | 3.04 | 0.12% | 07:05:00 |
| London UK FTSE Index | 5345.20 | -20.47 | -0.38% | 07:05:05 |
| German Dax Index | 6178.40 | -28.91 | -0.47% | 07:05:04 |
| French CAC 40 Index | 3674.14 | 7.74 | 0.21% | 07:05:00 |
| Asian-Pacific Stocks | ||||
| Japan Nikkei Index | 9753 | 256 | 2.70% | 02:29:01 |
| Hong Kong Hang Seng | 21091 | 118 | 0.56% | 04:01:30 |
| China CSI 300 Index | 2864 | 68 | 2.43% | 03:01:28 |
| Taiwan TAIEX Index | 7785 | 37 | 0.47% | 01:46:00 |
| Australian S&P 200 | 4529.9 | 32.5 | 0.72% | 02:36:06 |
| Singapore Str. Times | 2985.38 | 6 | 0.20% | 05:10:01 |
| South Korea KOSPI 200 | 231.56 | 0.43 | 0.19% | 05:03:31 |
| Bombay Sensex 30 | 17957 | -120.24 | -0.67% | 06:30:02 |
| Karachi KSE-100 | 10457 | 71 | 0.68% | 06:10:28 |
| US Interest Rates | ||||
| 10yr T-notes (CBT)(U0) | 122.125 | 0.020 | 0.05% | 07:10:01 |
| Cash 10yr T-note Price | 103.285 | 0.030 | 0.09% | 07:19:00 |
| Cash 10yr T-note Yield | 3.037 | -0.011 | -0.36% | 07:18 |
| 5yr T-note (CBT)(U0) | 118.235 | 0.010 | 0.02% | 07:10:01 |
| Cash 5yr T-note Price | 100.140 | 0.010 | 0.03% | 07:13:01 |
| Cash 5yr T-note Yield | 1.782 | -0.007 | -0.37% | 07:12 |
| 30-yr T-bond (CBT)(U0) | 126.17 | 0.06 | 0.15% | 07:10:01 |
| Cash 30yr T-bond Price | 105.050 | 0.025 | 0.07% | 07:18:00 |
| Cash 30yr T-bond Yield | 4.074 | -0.004 | -0.11% | 07:17 |
| Eurodollars (CME)(U0) | 99.565 | 0.020 | 0.02% | 07:09:39 |
| Eurodollars (CME)(Z0) | 99.515 | 0.025 | 0.03% | 07:05:29 |
| Asian & European Rates | ||||
| 10-yr JGBs (TSE) (U0) | 141.55 | -0.31 | -0.22% | 02:00:00 |
| EuroyenTibor(SGX)(U0) | 99.655 | 0.000 | 0.00% | 07:05:21 |
| Bunds (Eurex) (U0) | 127.80 | 0.11 | 0.09% | 07:05:04 |
| Euribor (Eurex) (U0) | 99.02 | 0.00 | 0.00% | 05:02:26 |
| UK Gilts (Liffe) (U0) | 119.99 | 0.26 | 0.22% | 07:05:04 |
| Short Stlg (Liffe) U0) | 99.24 | 0.02 | 0.02% | 07:05:03 |
| Forex | ||||
| U.S. Dollar Index | 82.12 | -0.04 | -0.04% | 07:09:56 |
| US Dollar-Japanese Yen | 87.78 | -0.12 | -0.14% | 07:20:05 |
| EuroFX-US Dollar | 1.3000 | 0.0003 | 0.03% | 07:20:04 |
| US Dollar-Swiss Franc | 1.0586 | -0.0020 | -0.20% | 07:20:05 |
| British Pound-US$ | 1.5592 | -0.0002 | -0.02% | 07:20:05 |
| US$-Canadian Dlr | 1.0318 | -0.0036 | -0.36% | 07:20:05 |
| Yen (Globex) (U0) | 1.1409 | 0.0022 | 0.22% | 07:10:01 |
| Euro FX (Globex) (U0) | 1.2992 | 0.0004 | 0.03% | 07:10:02 |
| SwissFranc (Globex)(U0) | 0.9449 | 0.0009 | 0.10% | 07:10:01 |
| British Pound(Glbx)(U0) | 1.5579 | -0.0006 | -0.04% | 07:09:56 |
| Canadian$ (Globex)(U0) | 0.9686 | 0.0043 | 0.45% | 07:10:01 |
| Commodities | ||||
| Gold (Comex) (Q0) | 1161.9 | 3.9 | 0.34% | 07:09:45 |
| Silver (Comex) (U0) | 17.610 | -0.016 | -0.09% | 07:09:32 |
| Copper (Comex) (U0) | 324.1 | 3.5 | 1.08% | 07:10:05 |
| Crude Oil (Nymex) (U0) | 77.20 | -0.30 | -0.39% | 07:10:04 |
| Gasoline (Nymex) (U0) | 205.54 | -0.87 | -0.42% | 07:09:53 |
| Heating Oil(Nymex) (U0) | 202.79 | -0.15 | -0.07% | 07:10:01 |
| NaturalGas(Nymex)(U0) | 4.668 | 0.022 | 0.47% | 07:07:09 |
| Corn (CBOT) (Z0) | 382.50 | 5.50 | 1.46% | 07:09:13 |
| Soybeans (CBOT) (X0) | 971.25 | 5.75 | 0.60% | 07:09:09 |
| Wheat (CBOT) (Z0) | 639.00 | 12.00 | 1.91% | 07:09:50 |
