بسم الله الرحمن الرحيم
متابعة السوق الأمريكي ليوم الثلاثاء 25 / 1 / 2011 م
European and US srocks slide after the UK economy unexpectedly contracts in Q4; Mar S&Ps down -4.40; Feb gold down -$18.30 an ounce to a 2-3/4 month low.
Global stocks are trading lower with the European Euro Stoxx 50 index down -0.61% and March S&Ps down -4.40 points. Treasuries advanced and most commodities fell as crude oil slid to a 1-3/4 month low after the UK economy unexpectedly contracted in Q4. The British pound declined to a 1-1/2 week low against the dollar and stock prices were pressured after Q4 UK GDP fell -0.5% q/q, mostly due to the adverse weather in Dec that hampered services and retailing, although the statistics office said growth would have been "flattish" without the weather's impact. Another negative factor for the market is concern that Spanish banks may need more capital after Spain's Finance Minister said his country's banks will probably need no more than 20 billion euros ($27 billion) of capital. Bankinter SA led a sell off in Spanish banks as it fell 4.8%, while Santander SA, Spain's biggest bank, fell 2.8%. Limiting declines in stocks was the unexpected +0.2 increase in the Feb German GfK consumer confidence survey which rose to a 3-year high of 5.7 along with the action by the IMF to raise their forecast for global economic growth this year to 4.4%, up from an Oct forecast of 4.2%. Despite its upward revision to global growth, the IMF warned that risks to its projections remain "elevated" and that Euro-Zone governments should build a comprehensive plan to prevent sovereign-debt "financial stresses" from spreading to other countries.
The Asian stock markets today closed mixed with Japan up +1.15%, Hong Kong -0.05%, China -0.53%, Taiwan +0.49%, Australia +0.46%, Singapore -0.14%, South Korea +0.25%, India -0.95%. Japanese stocks rallied after the BOJ raised its growth forecasts for the year to March to 3.3% from 2.1% and BOJ Governor Shirakawa said "The economy will probably emerge from its slump soon and return to a moderate recovery path." Japanese bonds fell as the BOJ also predicted faster inflation as they raised their forecast for consumer prices to increase +0.3% in the year starting April, up from an Oct prediction of +0.1%, citing strength in overseas demand that will bolster exports and push up commodity prices. Stock prices in India closed lower after India's central bank (RBI) lifted the repurchase rate by 25 bp to a 2-year high of 6.50% and the RBI hiked its inflation outlook to 7.0% by March 31, more than its earlier prediction of 5.5%. RBI Governor Subbarao also warned of further interest rate hikes saying "current growth and inflation trends warrant persistence with the anti-inflationary monetary stance."
Overnight U.S. Stock News
March S&Ps this morning are trading down -4.40 points. The US stock market yesterday finished higher on increased M&A activity and overall economic optimism: Dow +0.92%, S&P 500 +0.58%, Nasdaq Composite +1.04%. The Dow rallied to a 2-1/2 year high. Bullish factors for stocks included (1) carry-over support from a rally in European stock markets after the Jan Euro-Zone PMI composite index unexpectedly expanded by its fastest pace in 6 months, (2) a survey from the NABE that showed the percentage of businesses expecting to increase payrolls in the next 6 months exceeded the share projecting more firings by 35 points, the most since the survey bean in 1998, (3) a rally in technology stocks after Intel gained when it said it will add $10 billion to its stock buyback plan, (4) a rally in paper and pulp producers after Rock-Tenn Co. agreed to buy Smurfit-Stone Container for $3.5 billion, and (5) strong overall M&A activity as Bloomberg data shows global M&A volume increased to $660.8 billion in Q4, the highest since Q3 2008.
Bearish factors included (1) weakness in energy producers after crude oil fell when Saudi Arabia's Oil Minister signaled that OPEC may increase supply to meet rising demand, and (2) weakness in bond insurers after a proposal from Standard & Poor's to the way it grades bond insurers might prompt them to cut the ratings of existing bond insurers with investment-grade ratings by one or more rating grades unless the insurers raise capital or reduce risk.
Texas Instruments (TXN) fell 2.6% in European trading after the company late yesterday said that stockpiles of unsold chips had increased in Q4 and it reported that ****** orders had slipped.
American Express (AXP) lost 1.7% in European trading after the credit-card issuer reported a Q4 charge of $74 million, or 6 cents a share because of job cuts, and that excluding the charge, it would have earned 94 cents a share, below analysts' estimates of 96 cents.
Today's Market Focus
March 10-year T-notes this morning are up +5.5 ticks. T-note prices yesterday strengthened as the yield curve flattened: TYH11 +2.5, FVH11 +0.7, EDM11 +1.0. Bullish factors included (1) a narrowing of the 2-year/30-year yield spread as bond dealers purchase the long end of the yield curve (i.e., 10-year T-notes and 30-year T-bonds) and sell the short-end of the curve (i.e., 2-year T-notes and 5-year T-notes) ahead of $99 billion of Treasury auctions of T-notes this week, (2) increased safe-haven demand for Treasuries after a suicide bomber blew himself up at Russia's busiest airport, and (3) the action by the Fed to purchase $8.869 billion of Treasuries as part of its QE2 asset-purchase program. Bearish factors included (1) reduced safe-haven demand for Treasuries as the stock market rallied, and (2) supply pressures ahead of the Treasury's $35 billion 2-year T-note auction on Tue.
The dollar index this morning is stronger with the dollar/yen -0.09 yen and the euro/dollar -0.12 cents. The dollar index yesterday fell to a 2-1/4 month low and closed lower on reduced safe-haven demand for the dollar as the stock market rallied: Dollar Index -0.195, USDJPY -0.051, EURUSD +0.00234. Bearish factors included (1) a rally in the euro to a 2-month high against the dollar after the unexpected increase in the Jan Euro-Zone PMI composite index which expanded at its fastest level in 6 months, and (2) reduced safe-haven demand for the dollar after the equity market rallied. Bullish factors for the dollar included (1) dovish comments from ECB Council member Stark who said "I could imagine" the European Financial Stability Facility "recapitalizing banks or buying sovereign-debt," which would be negative for the euro, and (2) comments from ECB President Trichet who said the ECB wouldn’t react to a temporary jump in inflation caused by higher c ommodity prices as long as it doesn’t fuel wage increases, or so-called "second-round effects," which signals no near-term interest rate hike by the ECB despite any uptick in inflation.
March crude oil prices this morning are trading down -$1.30 a barrel at a 1-3/4 month low and March gasoline is -3.20 cents per gallon as a stronger dollar and the unexpected contraction in the UK economy uncercuts commodity prices. Crude oil and gasoline prices slipped yesterday after Saudi Arabia's Oil Minister hinted at OPEC increasing crude output: CLH11 -1.24, RBH11 -4.06. Mar crude fell to a 3-week low. Bearish factors included (1) comments from Saudi Arabian Oil Minister Ali al-Naimi who said OPEC might boost oil supply this year to meet growing demand in China and India, and (2) weakness in gasoline as forecasts for a cold snap in the US Northeast signal less driving and reduced gasoline demand. Bullish factors included (1) the fall in the dollar index to a 2-1/4 month low, which boosts investment demand for commodities, (2) the unexpected increase in the Jan Euro-Zone PMI composite index which expanded at its fastest level in 6 months and signals increased e nergy consumption in Europe, and (3) the prediction from Saudi Arabian Oil Minister Ali al-Naimi that global oil demand may increase in 2011 by as much as 1.8 million barrels a day, or 2%.
Today's U.S. Earnings Reports
Earnings reports (confirmed releases, sorted by mkt cap) JNJ-Johnson & Johnson (BEST earnings consensus $1.03), VZ-Verizon Communicatons (0.55), MMM-3M Co. (1.27), EMC-EMC Corp. (0.41), DD-EI du Pont de Nemours (0.32), BLK-Blackrock (2.89), GILD-Gilead Sciences (0.94), GLW-Corning (0.47), KMB-Kimberly-Clark (1.15), BHI-Baker Hughes (0.65), TRV-Travelers (1.66), NSC-Norfolk Southern (1.05), SYK-Stryker (0.91), NEE-NextEra Energy (0.89), YHOO-Yahoo! (0.22), JNPR-Juniper Networks (0.37), WFT=Weathford International Ltd. (0.23), BTU-Peabody Energy (0.75).
Global Financial Calendar
ICSC (Int’l Council of Shopping Centers) weekly retailer sales.
Redbook weekly retailer sales.
Nov S&P/CaseShiller composite-20 home price index expected –0.8% m/m and –1.6% y/y, Oct –1.0% m/m and –0.8% y/y.
Jan U.S. consumer confidence expected +1.5 to 54.0, Dec –1.8 to 52.5.
Nov FHFA house price index purchase only expected unchanged m/m, Oct +0.7% m/m.
Jan Richmond Fed manufacturing index expected –3 to 22, Dec +16 to 25.
Weekly 4-week T-bill auction.
FOMC begins 2-day policy meeting.
Treasury auctions $35 billion 2-year T-notes.
API weekly energy inventory report.
ABC U.S. weekly consumer confidence, previous -3 to -43.