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Barchart.com
U.S. Morning Call for Friday, May 1, 2009
Overnight Developments
- June
S&Ps are up +3.90 points (+0.45%) while the UK
FTSE Index is down (-0.06%). The European and most
Asian markets were closed for the Labour Day
Hoiiday. Japan closed (+1.69%) and Australia
(-0.29%). The Fed is postponing the release of
stress tests on the biggest US banks until the end
of next week, instead of their originally
scheduled release May 4, as bank executives debate
preliminary findings with examiners. At least six
of the 19 largest US banks require additional
capital, according to preliminary results of the
tests. UK manufacturing contracted at the slowest
pace in eight months after the Apr UK PMI
manufacturing index rose a larger-than-expected
+3.4 to 42.9, showing the British economy is
pulling out of its downward spiral that saw its Q1
GDP contract by the most since 1979. The Japanese
yen fell to a 2-week low against the dollar after
Japan's unemployment rate in Mar jumped +0.4 to
4.8%, a four-year high and the biggest one-month
increase since 1 967. Japan's job prospects are
also getting worse as the job-to-applicant ratio
in Mar plunged to 0.52 from 0.59, the lowest in
seven years. Mar Japan household spendng fell
-0.4% m/m, a record thirteenth consecutive monthly
decline, while wages plunged -3.7% y/y, the
fastest drop in more than six years, indicating
any recovery in the world's second-largest economy
is likely to be weak. The Apr China purchasing
manager's index climbed +1.1 to 53.5, the second
straight month that China's manufacturing has
expanded, as government stimulus spending fuels a
recovery in the world's third-biggest economy.
India's exports plunged a record 33% in Mar y/y,
the largest monthly decline since data began in
1995, and the sixth consecutive monthly drop as
the global recession hurts demand for India's
products
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Overnight U.S. Stock News
- June
S&Ps this morning are up +3.90 points. The US
stock market yesterday rallied sharply early but
failed to maintain its gains and finished mixed
(Dow -0.22%, S&P 500 -0.10%, Nasdaq Composite
+0.31%). The S&P 500 Index posted a 3-1/2
month high before closing lower.
- Bearish
factors for stock prices yesterday included (1)
the bankruptcy filing by Chrysler after the
third-biggest US automaker failed to restructure
debts will all of its creditors, (2) the
weaker-than-expected US Mar personal income and
spending reports, (3) the rise in US weekly
continuing unemployment claims to a record high
for the thirteenth consecutive week, (4) weakness
in energy producers which were dragged lower as
Exxon fell -2.6% after posting its biggest profit
drop since 2002, and (5) the jump in the 10-year
T-note yield to a 5-month high of 3.16%.
- Bullish
factors for stock prices yesterday included (1)
the larger-than-expected rise in the Apr Chicago
purchasing managers' index to a 7-month high, (2)
speculation that the FDIC may offer investors
financing to buy distressed US bank assets without
requiring them to share an equity stake with the
Treasury, (3) the prediction from Fidelity
International that low valuations indicate stock
advances that began in March are the start of a
bull market and that financial shares are poised
to drive recent gains higher, and (4) a rally in
solar stocks led by First Solar which surged 23%
after reporting its Q1 profit more than tripled as
production costs fell and utilities increased
demand for renewable energy.
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.
Today's U.S. Market Focus
- June
10-year T-notes this morning are down -3.5 ticks.
June T-note prices yesterday declined for the
third consecutive day and closed down -6 ticks.
The 10-year T-note yield rose to a 5-month high of
3.16%. Bearish factors for T-note prices yesterday
included (1) the unexpected fall in US weekly
unemployment claims (-14,000 to 631,000 versus
expectations of unchanged at 640,000), (2) the
larger-than-expected increase in the Apr Chicago
purchasing managers' index (+8.7 to a 7-month high
of 40.1 versus expectations of +3.6 to 35.0), (3)
reduced safe-haven demand for Treasuries as
interbank lending markets improved with the TED
spread (Eurodollar rates minus T-bills) narrowing
to a 10-1/2 month low of 89 bp, and (4) continued
disappointment that the Fed didn't expand its
program of purchasing Treasuries and mortgage
securities after Wednesday's FOMC meeting. Bullish
factors included (1) the larger-than-expected
climb in US weekly continuing unemployment claims
to a re cord for the thirteenth consecutive week
(+133,000 to 6.271 million versus expectations of
+63,000 to 6.200 million), (2) the
smaller-than-expected gain in the Q1 employment
cost index which rose by the smallest amount since
the data series began in Q4 1996 (+0.3% versus
expectations of +0.5%), and (3) the
larger-than-expected declines in US Mar personal
income and spending (income -0.3% versus
expectatons of -0.2% and spending -0.2% versus
expectations of -0.1%).
- The
dollar index is weaker this morning with the
dollar/yen +0.68 yen and the euro/dollar +0.61
cents. The jump in the Mar Japanese unemployment
rate to a four-year high of 4.8% is undercutting
the yen which fell to a 2-week low against the
dollar today. The dollar index yesterday overcame
a 3-week low and closed higher. Bullish factors
for the dollar yesterday included (1) the drop in
the yen to a 1-week low against the dollar as the
surge in global equity markets encouraged the yen
carry trade, (2) the smallest gain in the US Q1
employment cost index since the series began in
1996, and (3) the greater-than-expected increase
in the Mar Euro-Zone unemployment rate which rose
+0.2 to a 3-1/2 year high of 8.9% and put more
pressure on the ECB to cut rates or initiate a
quantitative easing at its policy meeting next
week. Bearish factors for the dollar included (1)
reduced demand for the safety of the dollar as the
upward momentum in the stock market continued, and
(2) comments from ECB Council member Ewald Nowotny
that he sees "green shoots" in the
Euro-Zone economy and doesn't expect any major
negative effects from the swine flu outbreak.
- June
crude oil prices this morning are down -6 cents a
barrel and June gasoline is -0.85 cent a gallon.
June crude oil prices yesterday gyrated on both
sides of unchanged and finally closed up +$0.15 a
barrel. June gasoline closed up +1.95 cents a
gallon. Bullish factors for crude oil prices
yesterday included (1) the surge in the S&P
500 Index to a 3-1/2 month high on optimism the
worst of the recession may be over, which may
increase energy demand, and (2) the prediction
from tanker tracker Oil Movements that OPEC will
cut crude oil shipments by -0.9% in the four weeks
ending May 16, reflecting seasonal weakening of
crude oil demand as well as falling production.
Bearish factors for crude oil prices yesterday
included (1) the stronger dollar, (2) the
prediction from oil analyst Stephen Schork that
crude oil prices may stay below $55 a barrel this
year and trade in a $45-$55 a barrel range as
"the world is swimming in oil and the global
recession persists," and (3) fears that
global energy demand will drop if the World Health
Organization declares the swine-flu outbreak a
pandemic
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Today's U.S. Earnings Reports
Earnings
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caps above $5.0 bln listed by mkt cap) CVX-Chevron
(BEST earnings consensus $0.81 per share), MA-Mastercard
($2.61), AGN-Allergan ($0.54), SPG-Simon Property
Group ($0.25), AOC-Aon Corp. ($0.88), PPL-PPL Corp.
($0.47), ED-Consolidated Edison ($0.85), RSG-Republic
Services ($0.30), CLX-Clorox ($0.92), FO-Fortune
Brands ($0.28)
Global Financial Calendar
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Friday 5/1/2009
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United States
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0945 ET
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St. Louis Fed President
James Bullard speaks at the annual meeting of
the Arkansas Bankers Association.
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1000 ET
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Final-Apr U.S. University
of Michigan consumer confidence expected
unchanged at 61.9, early-April +4.6 to 61.9.
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1000 ET
|
Mar factory orders
expected –0.6%, Feb +1.8%.
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1000 ET
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Apr ISM manufacturing
index expected +2.1 to 38.4, Mar +0.5 to 36.3.
Apr ISM prices paid expected +3.0 to 34.0, Mar
+2.0 to 31.0.
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n/a
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Apr U.S. total vehicle
sales expected 9.7 million, Mar 9.9 million. Apr
US domestic vehicle sales expected 7.1 million,
Mar 7.1 million.
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Japan
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0100 ET
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Apr Japan vehicle sales,
Mar –31.5% y/y.
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United Kingdom
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0430 ET
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Mar UK net consumer
credit expected +0.1 billion pounds, Feb –0.2
billion pounds.
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0430 ET
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Mar UK mortgage approvals
expected +40,000, Feb +38,000.
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0430 ET
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Revised Mar UK M4 money
supply, previous unchanged m/m and +17.6% y/y.
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0430 ET
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Apr UK PMI manufacturing
expected +0.9 to 40.0, Mar +4.4 to 39.1.
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Germany
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n/a
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German markets closed for
Labour Day.
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France
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n/a
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French markets closed for
Labour Day.
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Morning Quote Board
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Morning Quotes (ET)
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Last
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Chg
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%chg
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Updated
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US Stock Futures
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|
S&P (Globex) (M9)
|
873.90
|
3.90
|
0.45%
|
07:15:46
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|
DJIA (CBOT) (M9)
|
8158
|
32
|
0.39%
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07:08:49
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|
|
|
|
|
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European Stocks
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Europe DJ Stoxx 50
|
2026.97
|
0.00
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0.00%
|
4/30/2009
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London UK FTSE Index
|
4241.30
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-2.41
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-0.06%
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07:11:15
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German Dax Index
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4769.45
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0.00
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0.00%
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4/30/2009
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|
French CAC 40 Index
|
3159.85
|
0.00
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0.00%
|
4/30/2009
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|
|
|
|
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Asian-Pacific Stocks
|
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Japan Nikkei Index
|
8977
|
149
|
1.69%
|
03:00:15
|
|
Hong Kong Hang Seng
|
15521
|
0
|
0.00%
|
4/30/2009
|
|
China CSI 300 Index
|
2623
|
0
|
0.00%
|
4/30/2009
|
|
Taiwan TAIEX Index
|
5993
|
0
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0.00%
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4/30/2009
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Australian S&P 200
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3769.6
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-10.9
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-0.29%
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02:47:03
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Singapore Str. Times
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1920.28
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0
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0.00%
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4/30/2009
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South Korea KOSPI 200
|
176
|
0
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0.00%
|
4/30/2009
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|
Bombay Sensex 30
|
11403
|
0
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0.00%
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4/29/2009
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Karachi KSE-100
|
7199
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0
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0.00%
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4/30/2009
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US Interest Rates
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10yr T-notes (CBT)(M9)
|
120.265
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-0.035
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-0.09%
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07:15:55
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|
Cash 10yr T-note Price
|
96.240
|
-0.050
|
-0.16%
|
07:24:30
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|
Cash 10yr T-note Yield
|
3.138
|
0.019
|
0.62%
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07:24
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5yr T-note (CBT)(M9)
|
117.020
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-0.030
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-0.07%
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07:16:14
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Cash 5yr T-note Price
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99.090
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-0.025
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-0.08%
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07:25:30
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Cash 5yr T-note Yield
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2.027
|
0.017
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0.84%
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07:25
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30-yr T-bond (CBT)(M9)
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122.11
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-0.08
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-0.19%
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07:15:55
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Cash 30yr T-bond Price
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90.110
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-0.150
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-0.52%
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07:25:01
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Cash 30yr T-bond Yield
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4.062
|
0.029
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0.72%
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07:24
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Eurodollars (CME)(M9)
|
99.055
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0.000
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0.00%
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07:14:07
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Eurodollars (CME)(U9)
|
99.010
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0.005
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0.01%
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07:14:02
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|
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Asian & European
Rates
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10-yr JGBs (TSE) (M9)
|
137.47
|
0.48
|
0.35%
|
02:00:00
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EuroyenTibor(SGX)(U9)
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99.515
|
0.000
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0.00%
|
07:05:00
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|
Bunds (Eurex) (M9)
|
122.53
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0.00
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0.00%
|
4/30/2009
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|
Euribor (Eurex) (U9)
|
98.72
|
0.00
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0.00%
|
4/30/2009
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|
UK Gilts (Liffe) (M9)
|
120.84
|
0.24
|
0.20%
|
07:11:20
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Short Stlg (Liffe) (U9)
|
98.66
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0.01
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0.01%
|
07:01:01
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|
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Forex
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US Dollar-Japanese Yen
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99.31
|
0.68
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0.69%
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07:26:21
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EuroFX-US Dollar
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1.3291
|
0.0061
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0.61%
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07:26:21
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US Dollar-Swiss Franc
|
1.1364
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-0.0041
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-0.41%
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07:26:21
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British Pound-US$
|
1.4917
|
0.0127
|
1.27%
|
07:26:21
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US$-Canadian Dlr
|
1.1865
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-0.0060
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-0.60%
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07:26:21
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Yen (Globex) (M9)
|
1.0078
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-0.0059
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-0.59%
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07:15:53
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Euro FX (Globex) (M9)
|
1.3276
|
0.0015
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0.11%
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07:16:17
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SwissFranc (Globex)(M9)
|
0.8797
|
0.0014
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0.16%
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07:15:54
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British Pound(Glbx)(M9)
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1.489
|
0.007
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0.47%
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07:16:17
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Canadian$ (Globex)(M9)
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0.8425
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0.0041
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0.49%
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07:16:20
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Commodities
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Gold (Comex) (M9)
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884.2
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-7.0
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-0.79%
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06:55:54
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Silver (Comex) (N9)
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12.240
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-0.085
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-0.69%
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06:56:11
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Copper (Comex) (N9)
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208.6
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3.9
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1.88%
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06:55:54
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Crude Oil (Nymex) (M9)
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51.06
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-0.06
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-0.12%
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06:56:21
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Gasoline (Nymex) (M9)
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145.73
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-0.85
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-0.58%
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06:52:31
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Heating Oil(Nymex)(M9)
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133.05
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-0.63
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-0.47%
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06:51:40
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NaturalGas(Nymex)(M9)
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3.42
|
0.047
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1.39%
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06:55:53
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Corn (CBOT) (N9)
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405.25
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1.75
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0.43%
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07:00:15
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Soybeans (CBOT) (N9)
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1055.00
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0.00
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0.00%
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06:59:50
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Wheat (CBOT) (N9)
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540.00
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3.50
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0.65%
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07:03:52
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