- European stocks are trading mildly lower with the European Stoxx 50 down -0.28%. Sep S&Ps are down 4.80 points (-0.44%). S&Ps are on edge ahead of this morning's Q2 GDP report (expected +2.6%). There is also some caution ahead of Sunday's expected release of China's purchasing managers index due to talk of a sharply weaker figure. The market consensus is for a moderate 0.7 point decline to 51.4 from 52.1 in June. The Eurozone July CPI rose to a 20-month high of +1.7% y/y from +1.4% y/y in June, which was in line with market expectations. However, the core CPI rose to only +0.9% y/y from +0.8% y/y in June. Meanwhile, the Eurozone June unmeployment rate remained at 10%, the highest level in almost 12 years. The IMF said today that US banks may need as much as $76 billion more in capital. A senior executive from Moody's said that Spain, already on review for a possible downgrade, will probably lose its Aaa rating. Spain has already lost its triple-A rating from S&P and Fitch. The Moody's executive also said that the U.S. needs a "clear plan" for tackling its deficit.
- The Asian markets today closed lower across the board: Japan -1.64%, Hong Kong -0.30%, China -0.32%, Taiwan -0.49%, Australia -0.68%, Singapore -0.33%, South Korea -0.83%, Bombay -0.69%. Asian markets were undercut by the report that Japan's June unemployment rate rose to a 7-month high of 5.3%, which was higher than the consensus of 5.2%. In addition, Japan's factory output fell 1.5% m/m versus the consensus for a +0.2% rise.
- Sep S&Ps this morning are down -4.8 points due to concern that today's Q2 GDP report may be weaker than the consensus expectation of +2.6%. The stock market yesterday extended the 3-session slide and closed mildly (Dow -0.29%, S&P 500 -0.42, Nasdaq Composite -0.57%). Bearish factors included (1) Treasury Secretary Geithner's campaign this week to convince Congress to let the Bush tax cuts expire for couples earning more than $250,000, which would raise the capital gains tax and dividend tax and likely result in some tax-related stock selling, (2) some earnings disappointments in the technology (Akamai Technologies, Nvidia, Symantec) and consumer (Colgate-Palmolive) sectors, (3) some nervousness ahead of Friday's Q2 GDP report (expected +2.6%), and (4) technical long liquidation pressure. Bullish factors included (1) a rise in the European Commission's consumer and business confidence index to a 2-year high and a decline in German unemployment, which bolstered hopes for the European economy, (2) news from the IMF after consultations with Chinese officials that CHina sees little need for an imminent increase in interest rates, and (3) underlying support from the fact that more than 70% of S&P companies have reported earnings that were above market expectations.
- September 10-year T-notes this morning are trading sharply higher by +18.5 ticks on speculation about a weaker-than-expected GDP report. The T-note market is also seeing some relief following this week's T-note auctions. Sep 10-year T-note prices yesterday closed up up 7.5 ticks, adding to Wednesday's rally of 17 ticks. Bullish factors included (1) the continued decline in stock prices, (2) the conclusion of this week's Treasury coupon auctions without any disasters, (3) the comment by Dallas Fed President Richard Fisher that the US economy faces a "slow slog," and (4) the comment by St. Louis Fed President James Bullard that the Fed should resume a quantitative easing program if the economy slows and prices fall.
- The dollar index this morning is trading mildly higher by +0.19 points with the dollar/yen down -0.45 yen and the euro/dollar down -0.65 cents. The dollar index yesterday fell fairly sharply by 0.50 points and posted a new 3-month low. The euro posted a new 3-month high and the dollar/yen consolidated above the recent 8-month low. The dollar continued to sink on technical selling and the continued decline in safe-haven for dollars with bank risk and sovereign risk falling. The euro received a boost from a 2-year high in the European Commission's consumer and business confidence index and from news that Germany unemployment fell for the 13th consecutive month.
- September crude oil prices this morning are trading -52 cents per barrel and September gasoline is down 0.7 cents per gallon. The main bearish factor is stock market weakness and questions about economic growth. Sep crude oil yesterday closed $1.37 higher and Sep gasoline closed up 3.63 cents. The main bullish factor yesterday was weakness in the dollar. Crude oil prices were able to overcome wednesday's news of a sharp increase in inventories, partially because that increase in inventories was due to disruptions from Tropical Storm Bonnie and from imports tied to the drawdown of floating storage.
Earnings reports (confirmed releases, sorted by mkt cap) CVX-Chevron (BEST earnings consensus $2.43), MRK-Merck (0.82), SPG-Simon Property (0.46), AEP-American Electric (0.69), MCK-McKesson (1.07), PEG-Public Service Enterprises (0.64), AON-AON Corp (0.75), ITT-ITT Corp (1.07), UPL-Ultra Petroleum (0.50), FO-Fortune Brands (0.76), CPN-Calpine Corp (0.06), BWA-BorgWarner (0.67), NWL-Newll Rubbermaid, ACI-Arch Coal (0.25), WY-Weyerhauser (0.13), WTM-White Mountains (4.73).
Global Financial Calendar
| Friday 7/30/10 | |
|---|---|
| United States | |
| 0830 ET | Preliminary Q2 GDP expected +2.6% annualized, Q1 +2.7% annualized. Q2 personal consumption expected +2.4%, Q1 +3.0%. Q2 GDP price index expected +1.1%, Q1 +1.1%. Q2 core PCE deflator expected +1.0% q/q, Q1 +0.7% q/q. |
| 0830 ET | Q2 employment cost index expected +0.5%, Q1 +0.6%. |
| 0945 ET | Jul Chicago purchasing managers index expected -3.1 to 56.0, Jun -0.6 to 59.1. |
| 0955 ET | Final Jul U.S. University of Michigan consumer confidence expected +0.5 to 67.0, previous -9.5 to 66.5. |
| Japan | |
| 0000 ET | Jun Japan vehicle production, May +30.6% y/y. |
| 0100 ET | Jun Japan housing starts expected +1.8% y/y, May -4.6% y/y. |
| 0100 ET | Jun Japan construction orders, May +9.2% y/y. |
| Germany | |
| 0200 ET | Jun German retail sales expected -0.2% m/m and +1.0% y/y, May +3.0% m/m and -2.4% y/y. |
| Euro-Zone | |
| 0500 ET | Jun Euro-Zone unemployment rate expected unchanged at 10.0%, May unchanged at 10.0%. |
| 0500 ET | Jul Euro-Zone CPI estimate expected +1.7% y/y, Jun +1.4% y/y. |
| Canada | |
| 0830 ET | May Canadian GDP expected +0.2% m/m, Apr unchanged m/m. |
Morning Quote Board
| Morning Quotes (ET) | Last | Chg | %chg | Updated |
| US Stock Futures | ||||
|---|---|---|---|---|
| S&P (Globex) (U0) | 1092.20 | -4.80 | -0.44% | 07:07:37 |
| DJIA (CBOT) (U0) | 10375 | -34 | -0.33% | 07:07:37 |
| European Stocks | ||||
| Europe DJ Stoxx 50 | 2479.94 | -6.85 | -0.28% | 07:03:15 |
| London UK FTSE Index | 5290.73 | -23.22 | -0.44% | 07:03:19 |
| German Dax Index | 6104.30 | -30.40 | -0.50% | 07:03:19 |
| French CAC 40 Index | 3636.73 | -15.18 | -0.42% | 07:03:15 |
| Asian-Pacific Stocks | ||||
| Japan Nikkei Index | 9537 | -159 | -1.64% | 02:29:01 |
| Hong Kong Hang Seng | 21030 | -64 | -0.30% | 04:01:30 |
| China CSI 300 Index | 2869 | -9 | -0.32% | 03:01:26 |
| Taiwan TAIEX Index | 7761 | -38 | -0.49% | 01:46:01 |
| Australian S&P 200 | 4493.5 | -30.6 | -0.68% | 02:36:39 |
| Singapore Str. Times | 2987.7 | -9.95 | -0.33% | 05:10:01 |
| South Korea KOSPI 200 | 229.25 | -1.91 | -0.83% | 05:03:27 |
| Bombay Sensex 30 | 17868 | -123.71 | -0.69% | 06:30:01 |
| Karachi KSE-100 | 10501 | 73 | 0.70% | 06:58:08 |
| US Interest Rates | ||||
| 10yr T-notes (CBT)(U0) | 123.215 | 0.185 | 0.47% | 07:08:13 |
| Cash 10yr T-note Price | 104.230 | 0.105 | 0.31% | 07:17:31 |
| Cash 10yr T-note Yield | 2.941 | -0.038 | -1.28% | 07:17 |
| 5yr T-note (CBT)(U0) | 119.230 | 0.110 | 0.29% | 07:08:16 |
| Cash 5yr T-note Price | 100.185 | 0.045 | 0.14% | 07:18:00 |
| Cash 5yr T-note Yield | 1.629 | -0.029 | -1.77% | 07:17 |
| 30-yr T-bond (CBT)(U0) | 127.21 | 0.25 | 0.62% | 07:08:19 |
| Cash 30yr T-bond Price | 105.280 | 0.250 | 0.74% | 07:18:00 |
| Cash 30yr T-bond Yield | 4.034 | -0.044 | -1.07% | 07:17 |
| Eurodollars (CME)(U0) | 99.600 | 0.015 | 0.02% | 07:07:52 |
| Eurodollars (CME)(Z0) | 99.570 | 0.030 | 0.03% | 07:07:52 |
| Asian & European Rates | ||||
| 10-yr JGBs (TSE) (U0) | 141.84 | 0.12 | 0.08% | 02:00:00 |
| EuroyenTibor(SGX)(U0) | 99.655 | 0.005 | 0.01% | 07:05:19 |
| Bunds (Eurex) (U0) | 128.41 | 0.35 | 0.27% | 07:03:19 |
| Euribor (Eurex) (U0) | 99.06 | 0.03 | 0.03% | 05:37:06 |
| UK Gilts (Liffe) (U0) | 121.39 | 0.80 | 0.66% | 07:03:09 |
| Short Stlg (Liffe) U0) | 99.23 | 0.00 | 0.00% | 07:02:05 |
| Forex | ||||
| U.S. Dollar Index | 81.81 | 0.19 | 0.23% | 07:08:16 |
| US Dollar-Japanese Yen | 86.34 | -0.45 | -0.52% | 07:18:18 |
| EuroFX-US Dollar | 1.3014 | -0.0065 | -0.65% | 07:18:19 |
| US Dollar-Swiss Franc | 1.0389 | -0.0022 | -0.22% | 07:18:19 |
| British Pound-US$ | 1.5585 | -0.0028 | -0.28% | 07:18:19 |
| US$-Canadian Dlr | 1.0324 | -0.0048 | -0.48% | 07:18:19 |
| Yen (Globex) (U0) | 1.1584 | 0.0078 | 0.78% | 07:08:14 |
| Euro FX (Globex) (U0) | 1.3008 | -0.0068 | -0.52% | 07:08:17 |
| SwissFranc (Globex)(U0) | 0.9627 | 0.0032 | 0.33% | 07:07:44 |
| British Pound(Glbx)(U0) | 1.5581 | -0.0034 | -0.22% | 07:08:19 |
| Canadian$ (Globex)(U0) | 0.9687 | 0.0038 | 0.39% | 07:08:11 |
| Commodities | ||||
| Gold (Comex) (Q0) | 1171.0 | 2.6 | 0.22% | 07:08:08 |
| Silver (Comex) (U0) | 17.660 | 0.043 | 0.24% | 07:07:49 |
| Copper (Comex) (U0) | 327.7 | -1.4 | -0.41% | 07:08:13 |
| Crude Oil (Nymex) (U0) | 77.84 | -0.52 | -0.66% | 07:08:15 |
| Gasoline (Nymex) (U0) | 209.4 | -0.70 | -0.33% | 07:05:32 |
| Heating Oil(Nymex) (U0) | 205.76 | -1.2 | -0.58% | 07:05:55 |
| NaturalGas(Nymex)(U0) | 4.84 | 0.013 | 0.27% | 07:07:57 |
| Corn (CBOT) (Z0) | 396.75 | 3.00 | 0.76% | 07:07:46 |
| Soybeans (CBOT) (X0) | 993.00 | 5.00 | 0.51% | 07:05:16 |
| Wheat (CBOT) (Z0) | 668.75 | 9.25 | 1.40% | 07:06:06 |
