Barchart.com
U.S. Morning Call for Thursday, April 30, 2009
Overnight Developments
- Global
stocks are all rallying today on growing
speculation the worst of the worldwide recession
is over. The European DJ Stoxx 50 this morning is
up +2.29% and June S&Ps are up +13.80 points
(+1.59%), both at 3-1/2 month highs. The
Asia-Pacific stock markets today closed higher
with Japan (+3.94%), Hong Kong (+3.77%), China
(+0.67%), Taiwan (+6.74%), Australia (+2.31%),
Singapore (+3.82%), South Korea (+2.28%). More
than half of 129 companies in the Stoxx 600 that
reported earnings since Apr 7 have beaten
expectations, compared with 43% in the previous
quarter. BASF, the world's biggest chemical
company, is trading 8% higher after reporting Q1
net income of 375 million euros ($501 million),
handily beating the 124 million-euro estimate,
while MAN AG, Europe's third-largest truckmaker,
is up almost 6% after it reported Q1 net income of
179 million euros ($239 million), easily beating
analysts' estimates of 47.5 million euros. The ECB
will be under increased pressur e for further
action to revive Europe's economy after the Mar
Euro-Zone unemployment rate rose to a 3-1/2 year
high of 8.9% while the Mar Euro-Zone CPI estimate
held at +0.6% y/y, the lowest since data were
first compiled in 1996. In Asia, Japan's Mar
industrial production rose +1.6% m/m, twice the
pace predicted and the first increase in the last
six months, indicating the economy may resume
expanding as soon as this quarter. In its
semiannual outlook released today, the Bank of
Japan (BOJ) revised lower its prediction for the
Japanese economy saying it will contract -3.1%
this year, steeper than the -2.0% estimate it made
in Jan and that the economy will expand +1.2% in
the year starting Apr 2010, compared with its Jan
estimate of a +1.5% gain. The BOJ stated the
global economy is showing a "leveling
out" and Japan will "recover at a
moderate pace" from the latter half of this
fiscal year. Honda, Japan's second-largest
automaker, rallied over 9% after saying it expects
an operaing profit of 10 billion yen ($103
million) this fiscal year on optimism the US car
market may recover. Taiwan's Taiex Index surged
+6.7%, the biggest gain since Aug 1991, after the
country allowed Chinese investments for the first
time since a civil war ended six decades ago. Far
EasTone Telecommunictions, Taiwan's third-biggest
phone company, surged by the 7% daily limit after
China Mobile agreed to buy a 12% stake in the
company while Taiwan Semiconductor Manufacturing
and Cathay Financial Holding also advanced the
maximum limit on speculation more Chinese
companies will invest in Taiwan businesses
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 up +13.80 points on
speculation the worst of the global recession is
over. The US stock market yesterday rallied up to
its high after the post-FOMC meeting statement and
then shed some gains into the close and finished
higher (Dow +2.11%, S&P 500 +2.16%, Nasdaq
Composite +2.28%). The S&P 500 INdex posted a
3-1/2 month high.
- Bullish
factors for stock prices yesterday included (1) a
rally in bank stocks after after Fox-Pitt Cochran
Caronia Waller raised their recommendation on bank
stocks for the first time since 2004 to "marketweight"
from "underweight," saying
non-performing assets will peak at the end of this
year, (2) the big $103.7 billion drop in US
inventories in Q1, the largest drop since records
began in 1947, which means that smaller stockpiles
could set the stage for a recovery earlier than
previously thought, (3) the Fed's post-FOMC policy
statement that the "economic outlook has
improved modestly" since March, (4)
better-than-expected Q1 earnings as 68% of the
S&P 500 companies that released first-quarter
results have beaten estimates, the most since
September, and (5) comments from Paul Volcker, one
of President Obama's top economic advisors and
former Fed Chairman, that the US economy is
"leveling off at a low level" and
doesn't need a second fiscal stimulus package.
- Bearish
factors for stock prices yesterday included (1)
the sharper-than-expected contraction in US Q1 GDP
(-6.1% versus expectations of -4.7%) and when
taken with the Q4 contraction of -6.3% is the
weakest six month stretch in the US economy since
1957-58, and (2) speculation that President Obama
will announce plans to put Chrysler LLC into
bankruptcy as soon as today.
- Dow
Chemical (DOW) is trading 6.4% higher in
pre-market trading after the largest US chemical
maker reported a Q1 EPS gain of 12 cents a share,
well above amalysts' estimates of a loss of 19
cents.
- First
Solar (FSLR) jumped 13% in pre-market trading
after the world's largest manufacturer of
thin-film solar power modules reported Q1 net
income of $1.99 a share, beating analysts'
estimates of $1.50 a share, as production costs
fell and utilities increased demand for renewable
energy.
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Today's U.S. Market Focus
- June
10-year T-notes this morning are down -11.5 ticks
as rising global equity markets saps demand for
Treasuries. June T-note prices yesterday traded
higher into early afternoon but then plunged
following the post-FOMC meeting statement and
closed down -17.5 ticks. Bearish factors for
T-note prices yesterday included (1)
disappointment that the post FOMC statement didn't
include any mention of the Fed increasing the size
of its purchase programs for Treasury or mortgage
securities, (2) the Fed's statement that "The
economy has continued to contract, though the pace
of contraction appears to be somewhat
slower." indicating the Fed thinks the
economy is beginning to show some signs of
stability which may reduced safe-haven demand for
Treasuries, (3) increased supply pressures with
the Treasury increasing its 30-year T-bond
auctions to 12 a year from 8 and boosting the May
quarterly refunding to $71 billion, a record for a
quarterly refunding, and (4) the rise in the re al
yield, or the difference between the yield on the
10-year T-note and the inflation rate to 3.43%,
the highest since July 2002 and a sign that bond
investors are concerned about the re-emergence of
inflation. A bullish factor was the
larger-than-expected contraction in US Q1 GDP
(-6.1% versus expectations of -4.7%), which when
combined with the Q4 contraction of -6.3%, is the
weakest six month stretch in the US economy since
1957-58.
- The
dollar index is slightly higher this morning with
the dollar/yen +0.58 yen and the euro/dollar +0.04
cent. The dollar index slumped for a second
straight day yesterday and closed at a 3-week low.
Bearish factors for the dollar yesterday included
(1) reduced demand for dollars after the stock
market rallied sharply, (2) the predction from
Citigroup that the dollar will decline as US
10-year T-note yields rise as last year's
"trade of choice" of buying the dollar
and Treasuries unravels this year, and (3) the
rally in the euro to a 2-week high against the
dollar after ECB Executive Board member Gertrude
Tumpel-Gugerell said the ECB sees no deflation
risk in the Euro-Zone and that conditions
"are in place for an economic recovery,"
signaling she favors no additional ECB rate cuts
or a move to quantitative easing. Bullish factors
for the dollar included (1) comments from ECB
Governing Council member Sramko that the ECB may
have to revise down its growth forecast for the
Euro-Zone, and (2) the prediction from Commerzbank
AG that the euro is likely to weaken as investors
"look through" the current recession and
conclude that the US is more likely to recover
faster than the Euro-Zone.
- June
crude oil prices this morning are up +80 cents a
barrel and June gasoline is +1.56 cents a gallon.
June crude oil prices yesterday moved higher and
closed up +$1.05 a barrel. June gasoline closed up
+4.68 cents a gallon. Bullish factors for crude
oil prices yesterday included (1) the drop in the
dollar index to a 3-week low, (2) the unexpected
sharp decline in weekly DOE gasoline inventories
(-4.70 million bbl versus expectations of a
+200,000 bbl build), (3) comments from Libya's top
oil official that it is concerned the
"overhang" in crude oil supplies may
weigh on prices, signaling Libya may be in favor
of a production cut by OPEC at its meeting next
month, and (4) the rally in the equity market,
signaling an improved economic outlook which may
boost energy demand. Bearish factors for crude oil
prices yesterday included (1) the
larger-than-expected increase in weekly DOE crude
oil inventories (+4.05 million bbl to an 18-1/2
year high of 374.7 million bbl ver sus
expectations of a gain of +1.5 million bbl), and
(2) continued slack demand as total daily US fuel
demand averaged 18.4 million bpd in the four weeks
ended Apr 24, down -6.8% from a year earlier
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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) XOM-Exxon Mobil
(BEST earnings consensus $0.95 per share), PG-Proctor
& Gamble ($0.82), CMCSA-Comcast ($0.23),
CL-Colgate-Palmolive ($0.97), TRV-Travelers Companies
($1.31), APA-Apache ($0.35), MET-MetLife ($0.35), MRO-Marathon
Oil ($0.40), NEM-Newmont Mining ($0.41), CELG-Celgene
($0.43), D-Dominion Resources ($0.87), COV-Covidien
Ltd. ($0.86), K-Kellogg ($0.79), MOT-Motorola
(-$0.10), CAH-Cardinal Health ($0.95), DOW-Dow
Chemical (-$0.19), VIA-Viacom ($0.25), TYC-Tyco
International Ltd. ($0.41), NBL-Noble Energy ($0.47),
SWY-Safeway ($0.40), XEL-Xcel Energy ($0.38), WMB-Williams
Companies ($0.19), NYX-NYSE Euronext ($0.39), CI-Cigna
($0.91)
Global Financial Calendar
|
Thursday 4/30/2009
|
|
|
|
United States
|
|
0830 ET
|
Weekly unemployment
claims expected unchanged at 640,000, previous
+27,000 to 640,000. Weekly continuing claims
expected +63,000 to 6.200 million, previous
+93,000 to 6.137 million.
|
|
0830 ET
|
Mar personal spending
expected -0.1%, Feb +0.2%. Mar personal income
expected -0.2%, Feb -0.2%. Mar PCE deflator
expected +0.7% y/y, Feb +1.0% y/y. Mar PCE core
expected +0.2% m/m and +1.8% y/y, Feb +0.2% m/m
and +1.8% y/y.
|
|
0830 ET
|
Q1 employment cost index
expected +0.5%, Q4 +0.5%.
|
|
0945 ET
|
Apr Chicago purchasing
manager’s index expected +3.6 to 35.0, Mar
–2.8 to 31.4.
|
|
Japan
|
|
0000 ET
|
Mar Japan vehicle
production, Feb –56.2% y/y.
|
|
0100 ET
|
Mar Japan housing starts
expected –22.6% y/y, Feb –24.9% y/y.
|
|
0100 ET
|
Mar Japan construction
orders, Feb –24.9% y/y.
|
|
1930 ET
|
Mar Japan jobless rate
expected +0.1 to 4.5%, Feb +0.3 to 4.4%. Mar
job-to-applicant ratio expected 0.55, Feb 0.59.
|
|
1930 ET
|
Mar Japan household
spending expected –2.7% y/y, Feb –3.5% y/y.
|
|
1930 ET
|
Apr Tokyo CPI expected
+0.1% y/y, Mar +0.2% y/y. Apr Tokyo CPI ex-fresh
food expected +0.2% y/y, Mar +0.4% y/y. Apr
Tokyo CPI ex food and energy expected –0.5%
y/y, Mar –0.4% y/y.
|
|
1930 ET
|
Mar Japan national CPI
expected –0.3% y/y, Feb –0.1% y/y. Mar
national CPI ex-fresh food expected –0.2% y/y,
Feb unchanged y/y. Mar national CPI ex food and
energy expected –0.2% y/y, Feb –0.1% y/y.
|
|
2130 ET
|
Mar Japan labor cash
earnings expected –2.8% y/y, Feb –2.4% y/y.
|
|
United Kingdom
|
|
n/a
|
Apr UK nationwide house
prices expected –1.2% m/m and –15.8% y/y,
Mar +0.9% m/m and –15.7% y/y.
|
|
France
|
|
0245 ET
|
Mar French producer
prices expected –0.4% m/m and –5.3% y/y, Feb
–0.6% m/m and –4.5% y/y.
|
|
Germany
|
|
0355 ET
|
Apr German unemployment
change expected +65,000, Mar +69,000. Apr
unemployment rate expected +0.1 to 8.2%, Mar
+0.2 to 8.1%.
|
|
Euro-Zone
|
|
0500 ET
|
Apr Euro-Zone CPI
estimate expected +0.7% y/y, Mar +0.6% y/y.
|
|
0500 ET
|
Mar Euro-Zone
unemployment rate expected +0.2 to 8.7%, Feb
+0.3 to 8.5%.
|
|
Canada
|
|
0830 ET
|
Mar Canadian industrial
product prices expected +0.5% m/m, Feb +0.4%
m/m.
|
|
0830 ET
|
Mar Canadian raw
materials price index expected +2.0% m/m, Feb
+1.7% m/m.
|
|
0830 ET
|
Feb Canadian GDP expected
–0.2% m/m, Jan –0.7% m/m.
|
Morning Quote Board
|
Morning Quotes (ET)
|
Last
|
Chg
|
%chg
|
Updated
|
|
US Stock Futures
|
|
S&P (Globex) (M9)
|
882.90
|
13.80
|
1.59%
|
07:13:59
|
|
DJIA (CBOT) (M9)
|
8245
|
120
|
1.48%
|
07:13:21
|
|
|
|
|
|
|
European Stocks
|
|
Europe DJ Stoxx 50
|
2043.29
|
45.79
|
2.29%
|
07:09:30
|
|
London UK FTSE Index
|
4277.31
|
87.72
|
2.09%
|
07:09:30
|
|
German Dax Index
|
4825.05
|
120.49
|
2.56%
|
07:09:43
|
|
French CAC 40 Index
|
3167.85
|
50.91
|
1.63%
|
07:09:30
|
|
|
|
|
|
|
Asian-Pacific Stocks
|
|
Japan Nikkei Index
|
8828
|
334
|
3.94%
|
03:00:13
|
|
Hong Kong Hang Seng
|
15521
|
564
|
3.77%
|
04:01:30
|
|
China CSI 300 Index
|
2623
|
18
|
0.67%
|
03:01:18
|
|
Taiwan TAIEX Index
|
5993
|
379
|
6.74%
|
01:46:01
|
|
Australian S&P 200
|
3780.5
|
85.2
|
2.31%
|
02:47:04
|
|
Singapore Str. Times
|
1920.28
|
70.71
|
3.82%
|
05:10:00
|
|
South Korea KOSPI 200
|
176
|
3.92
|
2.28%
|
05:04:06
|
|
Bombay Sensex 30
|
11403
|
0
|
0.00%
|
4/29/2009
|
|
Karachi KSE-100
|
7202
|
-69
|
-0.95%
|
05:43:41
|
|
|
|
|
|
|
US Interest Rates
|
|
10yr T-notes (CBT)(M9)
|
120.245
|
-0.115
|
-0.30%
|
07:14:31
|
|
Cash 10yr T-note Price
|
96.260
|
-0.060
|
-0.19%
|
07:24:30
|
|
Cash 10yr T-note Yield
|
3.130
|
0.023
|
0.74%
|
07:24
|
|
5yr T-note (CBT)(M9)
|
116.300
|
-0.070
|
-0.19%
|
07:14:31
|
|
Cash 5yr T-note Price
|
99.050
|
-0.035
|
-0.11%
|
07:24:30
|
|
Cash 5yr T-note Yield
|
2.054
|
0.023
|
1.15%
|
07:24
|
|
30-yr T-bond (CBT)(M9)
|
122.15
|
-0.10
|
-0.24%
|
07:14:41
|
|
Cash 30yr T-bond Price
|
90.160
|
-0.125
|
-0.43%
|
07:24:00
|
|
Cash 30yr T-bond Yield
|
4.052
|
0.024
|
0.60%
|
07:23
|
|
Eurodollars (CME)(M9)
|
99.030
|
-0.010
|
-0.01%
|
07:14:31
|
|
Eurodollars (CME)(U9)
|
98.970
|
-0.015
|
-0.02%
|
07:14:31
|
|
|
|
|
|
|
Asian & European
Rates
|
|
10-yr JGBs (TSE) (M9)
|
136.99
|
-0.31
|
-0.23%
|
02:00:00
|
|
EuroyenTibor(SGX)(U9)
|
99.515
|
0.010
|
0.01%
|
06:13:21
|
|
Bunds (Eurex) (M9)
|
122.51
|
-0.57
|
-0.46%
|
07:09:41
|
|
Euribor (Eurex) (U9)
|
98.72
|
0.00
|
-0.01%
|
02:40:09
|
|
UK Gilts (Liffe) (M9)
|
120.45
|
-0.63
|
-0.52%
|
07:09:34
|
|
Short Stlg (Liffe) (U9)
|
98.62
|
-0.01
|
-0.01%
|
07:08:07
|
|
|
|
|
|
|
Forex
|
|
US Dollar-Japanese Yen
|
98.24
|
0.58
|
0.59%
|
07:24:43
|
|
EuroFX-US Dollar
|
1.3275
|
0.0004
|
0.04%
|
07:24:44
|
|
US Dollar-Swiss Franc
|
1.1368
|
0.0004
|
0.04%
|
07:24:44
|
|
British Pound-US$
|
1.4821
|
0.0049
|
0.49%
|
07:24:44
|
|
US$-Canadian Dlr
|
1.1906
|
-0.0119
|
-1.19%
|
07:24:44
|
|
Yen (Globex) (M9)
|
1.019
|
-0.0057
|
-0.57%
|
07:14:40
|
|
Euro FX (Globex) (M9)
|
1.3258
|
-0.003
|
-0.23%
|
07:14:42
|
|
SwissFranc (Globex)(M9)
|
0.8795
|
-0.0019
|
-0.22%
|
07:14:41
|
|
British Pound(Glbx)(M9)
|
1.4812
|
0.0045
|
0.30%
|
07:14:42
|
|
Canadian$ (Globex)(M9)
|
0.8386
|
0.0053
|
0.64%
|
07:14:27
|
|
|
|
|
|
|
Commodities
|
|
Gold (Comex) (M9)
|
889.3
|
-11.2
|
-1.24%
|
06:54:43
|
|
Silver (Comex) (N9)
|
12.570
|
-0.205
|
-1.60%
|
06:54:13
|
|
Copper (Comex) (N9)
|
205.5
|
5.0
|
2.49%
|
06:54:25
|
|
Crude Oil (Nymex) (M9)
|
51.77
|
0.80
|
1.57%
|
06:54:32
|
|
Gasoline (Nymex) (M9)
|
146.19
|
1.56
|
1.08%
|
06:44:20
|
|
Heating Oil(Nymex)(M9)
|
135.95
|
1.2
|
0.89%
|
06:38:08
|
|
NaturalGas(Nymex)(M9)
|
3.38
|
-0.023
|
-0.68%
|
06:43:02
|
|
Corn (CBOT) (N9)
|
403.25
|
2.00
|
0.50%
|
06:59:59
|
|
Soybeans (CBOT) (N9)
|
1038.50
|
13.50
|
1.32%
|
07:00:00
|
|
Wheat (CBOT) (N9)
|
535.50
|
3.50
|
0.66%
|
07:08:39
|
|
