Barchart.com
U.S. Morning Call for Monday, April 27, 2009
Overnight Developments
- Global
stock markets are lower today as the swine flu
outbreak spreads, raising concern the outbreak
will curb efforts to revive the global economy.
The European DJ Stoxx 50 this morning is down
-1.04% and June S&Ps are down -16.70 points
(-1.93%). The Asia-Pacific stock markets today
closed mostly lower with Japan (+0.21%), Hong Kong
(-2.74%), China (-2.32%), Taiwan (-2.99%),
Australia (+0.52%), Singapore (-1.85%), South
Korea (-1.15%), India (+0.38%). Global airline
stocks are sharply lower today on concern the
swine flu outbreak will reduce travel. The World
Health Organization declared a state of emergency
after the flu outbreak spread from Mexico to as
far away as New Zealand with UBS AG downgrading
Mexican stocks to "underweight" from
"top pick," saying economic growth in
Mexico will worsen as the government tries to stop
the spread of the lethal swine flu virus which
will affect its trade and tourism industries.
Roche Holding AG, the maker of the Tamiflu tre
atment that can reduce swine flu symptoms, jumped
nearly 4% in European trading on expectations of a
surge in sales in its medicine. Further
undercutting US stock prices today were comments
Sunday from Lawrence Summers, director of the
White House Economic Council, that the US economy
will experience "sharp declines in employment
for quite some time this year" and the
downgrade of US stocks by Credit Suisse AG to
"benchmark" from "overweight,"
saying "the relative performance of the US
deteriorates as lead indicators turn up."
Inflation pressures in Europe continue to be scant
after Mar German import prices fell a
larger-than-expected -0.4% m/m, their eighth
straight monthly decline, while the -7.1% y/y fall
in import prices is the biggest annual decline in
22 years. After last Friday's meeting in
Washington D.C., G-7 officials said they expected
a "weak" economic recovery in coming
months and warned that the world economy could
still take another turn for the worse, depe nding
on their abilities to clean up banks' toxic assets
The
"U.S. Economic Preview" report, which is
sent each evening and provides analysis for the next
day's key events and economic reports is now
exclusively available through CRB Trader.
The U.S. Economic Preview provides a trader with
perspective on events before they occur the next day,
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a report is released.
Overnight U.S. Stock News
- June
S&Ps this morning are down sharply by -16.70
points as the swine flu outbreak threatens growth
in the global economy. The US stock market last
Friday traded in positive territory the entire day
and closed just under its high (Dow +1.50%,
S&P 500 +1.68%, Nasdaq Composite +2.55%).
- Bullish
factors for stock prices last Friday included (1)
strength in energy and raw-materials producers as
crude oil rallied for the fourth straight day
while gold and silver jumped to 3-week highs, (2)
a rally in homebuilders after US March new home
sales were stronger-than-expected, (3) a continued
thaw in interbank lending markets after the
3-month dollar Libor rate tumbled to a 5-3/4 year
low of 1.07%, (4) gains in technology stocks that
were led by Microsoft which climbed 11% after the
world's biggest software maker reported Q3 profit
in line with analysts' expectations and was
upgraded by Morgan Stanley to
"overweight" from "equal
weight," citing an "accelerating growth
story," and (5) the prediction from Brown
Brothers Harriman that US Q1 GDP will be
stronger-than expected, with a contraction of
-2.0% compared with market expectations of -5.0%,
citing a narrowing US trade deficit and the end of
a "freefall" in business sales.
- Bearish
factors for stock prices last Friday included (1)
concerns that banks may continue to post more
credit losses, (2) the jump in 10 year T-note
yields to a 5-week high, and (3) trepidation ahead
of the release of the results of the government's
"stress tests" on the nation's biggest
banks, which may show that some banks need to
raise additional capital, especially after after
the Fed stated Friday that capital at some major
banks is "substantially reduced" due to
market turbulence and the recession.
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Today's U.S. Market Focus
- June
10-year T-notes this morning are higher by +16
ticks as the fall in global equity markets causes
a flight-to-safety into Treasuries. June T-note
prices last Friday traded in negative territory
the entire day and closed down -17 ticks at a
5-week low. Bearish factors included (1) reduced
safe-haven demand for Treasuries after the stock
market rallied, (2) signs that the housing market
may be stabilizing after US Mar new home sales
were reported at 356,000 units, higher than
expectations of 337,000, and (3) supply pressures
ahead of this week's $101 billion in T-note
auctions and ahead of next week's Treasury
quarterly refunding operation. Bullish factors for
T-note prices last Friday included (1) the
prediction from Daiwa Securities that investors
should continue to buy US Treasuries as the US
housing market is still in a downtrend and will
continue to deteriorate, and (2) the Fed's
quantitative easing campaign with Fed purchases of
Treasuries expected for today and Thursday.
- The
dollar index is higher this morning with the
dollar/yen -0.62 yen and the euro/dollar -1.04
cents. The dollar index last Friday sold off to a
2-week low and closed lower. Bearish factors for
the dollar included (1) the rally in the euro to a
1-1/2 week high after Mar French consumer spending
and the Apr German IFO business climate index both
rose more than expected, (2) the rally in the yen
to a 3-1/2 week high after the Nikkei English News
reported Japan's Financial Services Agency decided
to limit the leverage on currency margin trading
to between 20 and 30 times principal from the
typical level of 100 to 600 times, and (3)
concerns that General Motors and Chrysler are on
the verge of filing for bankruptcy. Bullish
factors for the dollar last Friday included (1)
the stronger-than-expected US Mar duarable goods
orders and Mar new home sales, and (2) weakness in
the pound after Q1 UK GDP contracted
more-than-expected along with speculation the UK
may lose its AAA credit rating after Moody's
Investors Service said the UK's finances are
"deteriorating rapidly."
- June
crude oil prices this morning are down sharply by
-$2.70 a barrel and June gasoline is -5.05 cents a
gallon. June crude oil prices last Friday rallied
throughout the day and closed up +$1.93 a barrel.
June gasoline closed up +4.60 cents a gallon.
Bullish factors for crude oil prices last Friday
included (1) the fall in the dollar index to a
2-week low, (2) the rally in the equity market,
fueling optimism that energy demand will increase
as the economy improves, and (3) strength in
gasolne prices after the report from the US
Federal Highway Administration showed that US
motorists increased their average daily driving by
+2.7% in February, the first increase in the last
15 months. Bearish factors for crude oil prices
last Friday included (1) the overall lack of
energy demand in the US economy with crude oil
inventories at an 18-1/2 year high, and (2)
comments from the OPEC Secretary-General that he
wants the cartel to fully implement supply cuts
agreed to in Dece mber before it discusses any
further reductions.
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Technologies ($0.42)
Global Financial Calendar
|
Monday 4/27/2009
|
|
|
|
United States
|
|
1030 ET
|
Apr Dallas Fed
manufacturing activity expected +7.0 to
–42.0%, Mar +8.3 to –49.0%.
|
|
1130 ET
|
Weekly 3-mo and 6-mo
T-bill auctions.
|
|
1300 ET
|
Treasury auctions $40
billion 2-year T-notes.
|
|
n/a
|
ECB President Jean-Claude
Trichet speaks at a lunchtime conference in New
York on “Strategic Trends in Global
Finance.”
|
|
Germany
|
|
0200 ET
|
Mar German import price
index expected –0.1% m/m and –6.5% y/y, Feb
–0.1% m/m and –6.4% y/y.
|
|
0210 ET
|
May German GfK consumer
confidence survey expected –0.1 to 2.3.
|
|
France
|
|
1200 ET
|
Mar French total
jobseekers, Feb 2,384,800. Mar jobseekers net
change, Feb +79,900.
|
|
Japan
|
|
1950 ET
|
Mar Japan retail trade
expected –0.4% m/m and –4.9% y/y, Feb
–0.2% m/m and –5.7% y/y.
|
Morning Quote Board
|
Morning Quotes (ET)
|
Last
|
Chg
|
%chg
|
Updated
|
|
US Stock Futures
|
|
S&P (Globex) (M9)
|
849.80
|
-16.70
|
-1.93%
|
07:15:02
|
|
DJIA (CBOT) (M9)
|
7916
|
-140
|
-1.74%
|
07:14:58
|
|
|
|
|
|
|
European Stocks
|
|
Europe DJ Stoxx 50
|
1961.61
|
-20.61
|
-1.04%
|
07:10:15
|
|
London UK FTSE Index
|
4125.05
|
-30.94
|
-0.74%
|
07:10:15
|
|
German Dax Index
|
4617.86
|
-56.46
|
-1.21%
|
07:10:27
|
|
French CAC 40 Index
|
3061.36
|
-41.49
|
-1.34%
|
07:10:15
|
|
|
|
|
|
|
Asian-Pacific Stocks
|
|
Japan Nikkei Index
|
8726
|
18
|
0.21%
|
03:00:14
|
|
Hong Kong Hang Seng
|
14840
|
-418
|
-2.74%
|
04:01:30
|
|
China CSI 300 Index
|
2513
|
-60
|
-2.32%
|
03:01:08
|
|
Taiwan TAIEX Index
|
5705
|
-176
|
-2.99%
|
01:46:00
|
|
Australian S&P 200
|
3731.6
|
19.3
|
0.52%
|
02:47:03
|
|
Singapore Str. Times
|
1818.61
|
-34.24
|
-1.85%
|
05:10:00
|
|
South Korea KOSPI 200
|
172.13
|
-2
|
-1.15%
|
05:04:05
|
|
Bombay Sensex 30
|
11372
|
42.8
|
0.38%
|
06:28:13
|
|
Karachi KSE-100
|
7345
|
-276
|
-3.62%
|
05:42:43
|
|
|
|
|
|
|
US Interest Rates
|
|
10yr T-notes (CBT)(M9)
|
122.015
|
0.160
|
0.41%
|
07:15:13
|
|
Cash 10yr T-note Price
|
98.110
|
0.120
|
0.38%
|
07:25:01
|
|
Cash 10yr T-note Yield
|
2.946
|
-0.045
|
-1.50%
|
07:24
|
|
5yr T-note (CBT)(M9)
|
117.175
|
0.085
|
0.23%
|
07:15:08
|
|
Cash 5yr T-note Price
|
99.105
|
0.065
|
0.20%
|
07:21:01
|
|
Cash 5yr T-note Yield
|
1.893
|
-0.044
|
-2.25%
|
07:20
|
|
30-yr T-bond (CBT)(M9)
|
124.28
|
0.21
|
0.52%
|
07:15:24
|
|
Cash 30yr T-bond Price
|
94.005
|
0.230
|
0.77%
|
07:23:01
|
|
Cash 30yr T-bond Yield
|
3.839
|
-0.043
|
-1.10%
|
07:22
|
|
Eurodollars (CME)(M9)
|
99.000
|
0.025
|
0.03%
|
07:15:08
|
|
Eurodollars (CME)(U9)
|
98.935
|
0.030
|
0.03%
|
07:09:53
|
|
|
|
|
|
|
Asian & European
Rates
|
|
10-yr JGBs (TSE) (M9)
|
136.67
|
-0.48
|
-0.35%
|
02:00:00
|
|
EuroyenTibor(SGX)(U9)
|
99.515
|
0.030
|
0.03%
|
02:56:36
|
|
Bunds (Eurex) (M9)
|
122.94
|
0.48
|
0.39%
|
07:10:26
|
|
Euribor (Eurex) (U9)
|
98.69
|
0.07
|
0.07%
|
05:35:22
|
|
UK Gilts (Liffe) (M9)
|
121.04
|
0.38
|
0.31%
|
07:10:27
|
|
Short Stlg (Liffe) (U9)
|
98.65
|
0.02
|
0.02%
|
07:10:02
|
|
|
|
|
|
|
Forex
|
|
US Dollar-Japanese Yen
|
96.55
|
-0.62
|
-0.64%
|
07:25:28
|
|
EuroFX-US Dollar
|
1.3138
|
-0.0104
|
-1.04%
|
07:25:28
|
|
US Dollar-Swiss Franc
|
1.1468
|
0.0082
|
0.82%
|
07:25:28
|
|
British Pound-US$
|
1.4558
|
-0.0120
|
-1.20%
|
07:25:28
|
|
US$-Canadian Dlr
|
1.2160
|
0.0064
|
0.64%
|
07:25:28
|
|
Yen (Globex) (M9)
|
1.0362
|
0.005
|
0.50%
|
07:14:58
|
|
Euro FX (Globex) (M9)
|
1.3136
|
-0.0107
|
-0.81%
|
07:15:22
|
|
SwissFranc (Globex)(M9)
|
0.8728
|
-0.0057
|
-0.65%
|
07:15:19
|
|
British Pound(Glbx)(M9)
|
1.4583
|
-0.0086
|
-0.59%
|
07:15:19
|
|
Canadian$ (Globex)(M9)
|
0.8223
|
-0.0059
|
-0.71%
|
07:15:12
|
|
|
|
|
|
|
Commodities
|
|
Gold (Comex) (M9)
|
914.3
|
0.2
|
0.02%
|
06:55:26
|
|
Silver (Comex) (K9)
|
13.000
|
0.080
|
0.62%
|
06:55:23
|
|
Copper (Comex) (K9)
|
199.0
|
-6.1
|
-2.95%
|
06:55:25
|
|
Crude Oil (Nymex) (M9)
|
48.85
|
-2.70
|
-5.24%
|
06:55:27
|
|
Gasoline (Nymex) (M9)
|
139.7
|
-5.05
|
-3.49%
|
06:54:51
|
|
Heating Oil(Nymex)(M9)
|
132.7
|
-5.88
|
-4.24%
|
06:53:51
|
|
NaturalGas(Nymex)(M9)
|
3.305
|
-0.097
|
-2.85%
|
06:54:27
|
|
Corn (CBOT) (K9)
|
364.25
|
-12.75
|
-3.38%
|
07:06:01
|
|
Soybeans (CBOT) (K9)
|
996.50
|
-43.75
|
-4.21%
|
07:03:16
|
|
Wheat (CBOT) (K9)
|
515.75
|
-16.50
|
-3.10%
|
07:01:16
|
|
