Barchart.com
U.S. Morning Call for Tuesday, April 28, 2009
Overnight Developments
- The
European DJ Stoxx 50 this morning is down -1.60%
and June S&Ps are down -14.80 points (-1.73%).
The Asia-Pacific stock markets today closed mostly
lower with Japan (-2.67%), Hong Kong (-1.92%),
China (+0.21%), Taiwan (-1.90%), Australia
(-0.62%), Singapore (-0.56%), South Korea
(-2.84%), India (-3.25%). Stock markets around the
world are undercut for a second day on fears the
swine flu outbreak will dampen the global economic
recovery. The World Health Organization raised its
global pandemic alert to 4 from 3, the highest
since the system was adopted in 2005, and closer
to the stage 6 pandemic level, stating the swine
flu was no longer containable. Also adding
pressure to the equity markets is the weakness in
global bank stocks after the report from the WSJ
that the US government's examination of lenders
shows Bank of America, Citigroup, Wells Fargo,
Fifth Third Bancorp and Regions Financial may all
need more capital. Mining companies and steel
makers are weake r today as copper prices plunged
to a 3-week low and as US Steel reported a
wider-than-expected Q1 loss. Daimler AG, the
world's second-biggest luxury car maker, is
trading down 5.4% after reporting a Q1 loss of 1.3
billion euros ($1.7 billion), wider than an
expected 790 million euro loss, and its first
back-to-back quarterly losses in at least 10 years
as the recession decimated sales of Mercedes-Benz
cars and trucks. Japanese exporters were weaker
today after the yen rose to a 5-week high against
the dollar, while Chugai Pharmaceutical gained
almost 2% on speculation the swine flu outbreak
will boost sales of its Tamiflu antiviral drug.
Japan's Trade Ministry cut its assessment of
retail sales, saying for the first time that they
are "decreasing" compared with "on
a decreasing trend" a month earlier after Mar
Japan retail sales tumbled -3.9% y/y, the seventh
consecutive monthly y/y decline
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,
thus helping a trader to know better how to react when
a report is released.
Overnight U.S. Stock News
- June
S&Ps this morning are down -14.80 points as
the WSJ reports early results of the government's
stress tests show that some banks may need
additional capital. The US stock market yesterday
recovered from early sharp losses to close just
modestly lower (Dow -0.64%, S&P 500 -1.01%,
Nasdaq Composite -0.88%).
- Bearish
factors for stock prices yesterday included (1)
the slump in airlines, hotel and travel companies
on concern the swine flu outbreak will hurt
travel, (2) comments from the director of the
White House National Economic Council that the US
economy will keep contracting "for some
time," (3) weakness in meat producers and
pork processors on speculation that meat demand
will shrink with the global spread of swine flu in
humans, (4) concerns that the World Health
Organization may raise its pandemic alert to an
unprecedented level due to the swine flu outbreak
which may constrict global trade and further
hinder world economies that are already struggling
to recover from recession, and (5) the downgrade
of US stocks by Credit Suisse to
"benchmark" from "overweight,"
saying "the relative performance of the US
deteriorates as lead indicators turn up."
- Bullish
factors for stock prices yesterday included (1) a
rally in biotechnology companies that make flu
vaccines, (2) the prediction from JPMorgan Chase
that stocks that get battered from the swine flu
outbreak may represent bargains for long-term
investors and that the S&P 500 Index will
climb to 1,100 by year-end, (3) the 21% surge in
General Motors after the automaker attempting to
stave off bankrutcy stepped up dealer shutdowns
and job cuts and offered equity to bondholders
under a plan to reduce liabilities by $44 billion,
and (4) the prediction from Bank of America that
US stocks may have entered a sustained rally where
pullbacks are likely to be limited as an
improvement in market internals indicate a
broadening out of the current rally.
- US
Steel (X) fell 6.5% in after-hours trading
yesterday and is down 11% in European trading
after reporting a Q1 loss of -$3.84 a share versus
analysts' estmates of -$1.67 a share, its first
quarterly loss in five years as demand and prices
plunged. US Steel also reduced its quarterly
dividend to 5 cents a share from 30 cents and
Moody's INvestors Service downgraded about $1.6
billion of US Steel's debt to junk status.
- Bank
of America (BAC) and Citicroup (C) both dropped
over 8% while Wells Fargo (WFC) and Fifth Third
Bancorp (FITB) retreated over 3% in pre-market
trading after the WSJ reported that the US
government's stress tests on the nation's 19
largest lenders will show that banks may need more
capital.
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Today's U.S. Market Focus
- June
10-year T-notes this morning are up +2.5 ticks.
June T-note prices yesterday traded in positive
territory the entire day and closed up +24 ticks.
Bullish factors included (1) increased safe-haven
demand for Treasuries after global stock markets
tumbled on fears the swine flu outbreak will hurt
the world economy, (2) the Fed's purchases of
$7.025 billion in Treasuries as part of its
quantitative easing campaign, (3) the
better-than-expected demand seen at the Treasuries
$40 billion 2-year T-note auction, and (4)
comments from Lawrence Summers, the director of
the White House National Economic Council, that
the US economy will experience "sharp
declines in employment for quite some time this
year." Bearish factors for T-note prices
yesterday included (1) the stronger-than-expected
Apr Dallas Fed manufacturing activity (+17.4 to
-31.6% versus expectations of +7.0 to -42.0%), and
the prediction from former Fed Chairman Greenspan
that the Obama administration's long- term budget
program cannot be financed without an increase in
real interest rates.
- The
dollar index is higher this morning with the
dollar/yen -0.40 yen at a 5-week low and the
euro/dollar -0.19 cents. The yen rallied to a
5-week high against the dollar today on an
increase in the safe-haven demand for the yen as
global stock markets fall on swine flu concerns
and worries global banks may need additional
capital. The dollar index yesterday remained well
supported throughout the day and closed higher.
Bullish factors for the dollar yesterday included
(1) increased safe-haven demand for dollars after
global stock markets tumbled on fears the swine
flu outbreak will cause the global economic slump
to deepen, and (2) comments from ECB Council
member Guy Quaden that the ECB will probably
reduce its main benchmark rate by a
"moderate" amount at its May 7 meeting
and enact more "non-conventional
measures," suggesting he may be in favor of
some sort of quantitative easing. Bearish factors
for the dollar included (1) Lawrence Summer's
comment that the US e conomy will continue to
contract "for some time," and (2) the
decline in the 3-month dollar Libor rate to a
5-3/4 year low, which undercut the dollar's
interest rate differentials.
- June
crude oil prices this morning are down -$1.31 a
barrel and June gasoline is -3.03 cents a gallon.
June crude oil prices yesterday sold off sharply
but ended above the day's low and closed -$1.41 a
barrel. June gasoline closed down -3.88 cents a
gallon. Bearish factors for crude oil prices
yesterday included (1) the stronger dollar, (2)
speculation that the swine flu outbreak will keep
overall worldwide energy demand weak as it hinders
the recovery in the global economy, (3) concerns
that energy demand in the US, the world's largest
oil consumer, will remain constrained after the
director of the White House National Economic
Council said the US economy will contract
"for some time," and (4) the prediction
from Merrill Lynch that there may be "no
strong rebound in energy prices" until 2011
because of the slow pace of economic recovery
among developed nations. Bullish factors for crude
oil prices yesterday included (1) the prediction
from JBC Energy that OPEC will consider a
reduction in crude oil output of around 1.0
million bpd when it meets next month as
inventories in the world's most developed nations
are too high, and (2) comments from the OPEC
Secretary-General that crude prices need to be at
$70 a barrel to ensure continued investment in the
industry. Expectations for tomorrow's weekly DOE
inventories are for crude oil inventories to rise
+1.95 million bbl, gasoline stockpiles to fall
-100,000 bbl, distillates to rise +750,000 bbl,
and the refinery capacity rate to rise +0.1 to
83.5%
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Today's U.S. Earnings Reports
Earnings
reports (confirmed releases for companies with market
caps above $5.0 bln listed by mkt cap) PFE-Pfizer
(BEST earnings consensus $0.49 per share), BMY-Bristol-Myers
Squibb ($0.47), FPL-FPL Group ($0.78), BDX-Becton
Dickinson ($1.17), AVE-Ace Ltd ($1.98), BEN-Franklin
Resources ($0.61), PCAR-Paccar ($0.05), SWN-Southwestern
Energy ($0.31), VLO-Valero Energy ($0.51), MHP-McGraw-Hill
Companies ($0.18), ECL-Ecolab ($0.33), CCE-Coca-Cola
Enterprises ($0.05), JAVA-Sun Microsystems (-$0.16),
RRC-Range Resources ($0.21), COL-Rockwell Collins
($0.98), JEC-Jacobs Engineering Group ($0.89), HCP-HCP
($0.19), MJN-Mead Johnson ($0.57), HSP-Hosppira
($0.54)
Global Financial Calendar
|
Tuesday 4/28/2009
|
|
|
|
United States
|
|
0745 ET
|
ICSC (Int’l Council of
Shopping Centers) weekly retailer sales,
previous –0.4% w/w and –0.1% weekly y/y.
|
|
0855 ET
|
Redbook weekly retailer
sales, previous +1.5% month-to-date m/m and
+0.5% month-to-date y/y.
|
|
0900 ET
|
Feb S&P/CaseShiller
composite-20 home price index expected –18.7%
y/y, Jan –19.0% y/y.
|
|
1000 ET
|
Apr U.S. consumer
confidence expected +4.0 to 30.0, Mar +0.7 to
26.0.
|
|
1000 ET
|
Apr Richmond Fed
manufacturing index expected +3 to -17, Mar +31
to –20.
|
|
1130 ET
|
Weekly 4-week T-bill
auction.
|
|
1300 ET
|
Treasury auctions $35
billion 5-year T-notes.
|
|
1300 ET
|
FOMC begins 2-day policy
meeting.
|
|
1700 ET
|
ABC U.S. weekly consumer
confidence, previous +4 to -47.
|
|
Japan
|
|
0200 ET
|
Bank of Japan publishes
semi-annual economic report with forecasts of
economic growth and prices.
|
|
France
|
|
0245 ET
|
Apr French consumer
confidence indicator expected unchanged at
–43, Mar unchanged at –43.
|
|
0245 ET
|
Mar French housing
starts, Feb -22.1% 3-mo/year over year. Mar
housing permits, Feb -14.8% 3-mo/year over year.
|
|
Germany
|
|
n/a
|
Apr German consumer price
index (CPI) expected (EU harmonized) +0.1% m/m
and +0.8% y/y, Mar –0.2% m/m and +0.4% y/y.
|
|
Euro-Zone
|
|
1230 ET
|
ECB Executive Board
member Lorenzo Bini Smaghi speaks at a
conference in Geneva on “Conventional and
non-conventional monetary policy.”
|
Morning Quote Board
|
Morning Quotes (ET)
|
Last
|
Chg
|
%chg
|
Updated
|
|
US Stock Futures
|
|
S&P (Globex) (M9)
|
842.00
|
-14.80
|
-1.73%
|
07:12:50
|
|
DJIA (CBOT) (M9)
|
7887
|
-115
|
-1.44%
|
07:10:51
|
|
|
|
|
|
|
European Stocks
|
|
Europe DJ Stoxx 50
|
1961.44
|
-31.89
|
-1.60%
|
07:07:45
|
|
London UK FTSE Index
|
4087.66
|
-79.35
|
-1.90%
|
07:07:45
|
|
German Dax Index
|
4581.51
|
-112.56
|
-2.40%
|
07:07:54
|
|
French CAC 40 Index
|
3037.07
|
-65.36
|
-2.11%
|
07:07:45
|
|
|
|
|
|
|
Asian-Pacific Stocks
|
|
Japan Nikkei Index
|
8494
|
-233
|
-2.67%
|
03:00:14
|
|
Hong Kong Hang Seng
|
14555
|
-285
|
-1.92%
|
04:01:30
|
|
China CSI 300 Index
|
2519
|
5
|
0.21%
|
03:00:59
|
|
Taiwan TAIEX Index
|
5597
|
-108
|
-1.90%
|
01:46:00
|
|
Australian S&P 200
|
3708.4
|
-23.2
|
-0.62%
|
02:47:03
|
|
Singapore Str. Times
|
1808.41
|
-10.2
|
-0.56%
|
05:10:00
|
|
South Korea KOSPI 200
|
167.24
|
-4.89
|
-2.84%
|
05:04:04
|
|
Bombay Sensex 30
|
11002
|
-370.1
|
-3.25%
|
06:28:11
|
|
Karachi KSE-100
|
7430
|
85
|
1.16%
|
05:43:36
|
|
|
|
|
|
|
US Interest Rates
|
|
10yr T-notes (CBT)(M9)
|
122.120
|
0.025
|
0.06%
|
07:12:52
|
|
Cash 10yr T-note Price
|
98.225
|
0.015
|
0.05%
|
07:20:00
|
|
Cash 10yr T-note Yield
|
2.903
|
-0.006
|
-0.19%
|
07:19
|
|
5yr T-note (CBT)(M9)
|
117.275
|
0.015
|
0.03%
|
07:12:54
|
|
Cash 5yr T-note Price
|
99.185
|
0.005
|
0.02%
|
07:15:01
|
|
Cash 5yr T-note Yield
|
1.840
|
-0.003
|
-0.18%
|
07:14
|
|
30-yr T-bond (CBT)(M9)
|
125.07
|
0.06
|
0.14%
|
07:12:48
|
|
Cash 30yr T-bond Price
|
94.075
|
0.020
|
0.07%
|
07:17:30
|
|
Cash 30yr T-bond Yield
|
3.826
|
-0.004
|
-0.10%
|
07:17
|
|
Eurodollars (CME)(M9)
|
99.010
|
0.000
|
0.00%
|
07:12:48
|
|
Eurodollars (CME)(U9)
|
98.965
|
0.000
|
0.00%
|
07:12:40
|
|
|
|
|
|
|
Asian & European
Rates
|
|
10-yr JGBs (TSE) (M9)
|
137.30
|
0.63
|
0.46%
|
02:00:00
|
|
EuroyenTibor(SGX)(U9)
|
99.520
|
0.005
|
0.01%
|
06:43:04
|
|
Bunds (Eurex) (M9)
|
123.16
|
0.38
|
0.31%
|
07:07:52
|
|
Euribor (Eurex) (U9)
|
98.71
|
0.02
|
0.02%
|
06:44:13
|
|
UK Gilts (Liffe) (M9)
|
121.26
|
0.48
|
0.40%
|
07:07:51
|
|
Short Stlg (Liffe) (U9)
|
98.62
|
-0.03
|
-0.03%
|
07:07:26
|
|
|
|
|
|
|
Forex
|
|
US Dollar-Japanese Yen
|
96.37
|
-0.40
|
-0.42%
|
07:22:55
|
|
EuroFX-US Dollar
|
1.3017
|
-0.0019
|
-0.19%
|
07:22:55
|
|
US Dollar-Swiss Franc
|
1.1558
|
-0.0001
|
-0.01%
|
07:22:55
|
|
British Pound-US$
|
1.4602
|
-0.0043
|
-0.43%
|
07:22:55
|
|
US$-Canadian Dlr
|
1.2235
|
0.0027
|
0.27%
|
07:22:54
|
|
Yen (Globex) (M9)
|
1.0389
|
0.0043
|
0.43%
|
07:12:34
|
|
Euro FX (Globex) (M9)
|
1.3008
|
-0.001
|
-0.08%
|
07:12:53
|
|
SwissFranc (Globex)(M9)
|
0.8653
|
-1E-04
|
-0.01%
|
07:12:38
|
|
British Pound(Glbx)(M9)
|
1.4589
|
-0.0047
|
-0.32%
|
07:12:38
|
|
Canadian$ (Globex)(M9)
|
0.8173
|
-0.0028
|
-0.34%
|
07:12:34
|
|
|
|
|
|
|
Commodities
|
|
Gold (Comex) (M9)
|
898.4
|
-9.8
|
-1.08%
|
06:52:53
|
|
Silver (Comex) (K9)
|
12.580
|
-0.375
|
-2.89%
|
06:52:51
|
|
Copper (Comex) (K9)
|
192.2
|
-6.5
|
-3.25%
|
06:51:20
|
|
Crude Oil (Nymex) (M9)
|
48.83
|
-1.31
|
-2.61%
|
06:52:52
|
|
Gasoline (Nymex) (M9)
|
137.8
|
-3.03
|
-2.15%
|
06:51:57
|
|
Heating Oil(Nymex)(M9)
|
131.47
|
-2.65
|
-1.98%
|
06:50:38
|
|
NaturalGas(Nymex)(M9)
|
3.34
|
-0.022
|
-0.65%
|
06:52:03
|
|
Corn (CBOT) (K9)
|
369.50
|
-2.75
|
-0.74%
|
06:59:04
|
|
Soybeans (CBOT) (K9)
|
1013.25
|
8.50
|
0.85%
|
07:08:46
|
|
Wheat (CBOT) (K9)
|
511.75
|
3.75
|
0.74%
|
07:10:46
|
|
