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Tuesday, June 18th, 2013
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OVERNIGHT MARKETS AND NEWS
September E-mini S&Ps (ESU13 +0.05%) this morning are up +0.18% and European stocks are up +0.08%. Asian stocks closed mixed: Japan -0.20%, Hong Kong unch, China +0.62%, Taiwan +0.23%, Australia -0.24%, Singapore +1.45%, South Korea +0.96%, India -0.53%. Stocks received a lift from a stronger-than-expected German June ZEW economic sentiment along with the statement from the G-8 summit in Northern Ireland that said the worst has passed for the global economy. Commodity prices are mostly lower. July WTI crude oil (CLN13 -0.26%) is down -0.21%. July gasoline (RBN13 -0.04%) is down -0.03%, July natural gas (NGN13 +0.49%) is up +0.54%, Aug gold (GCQ13 -0.69%) is down -0.51% and July copper (HGN13 -1.08%) is down -0.77%. Agriculture prices are higher. The dollar index ({=DXY00= is down -0.09%. EUR/USD (^EURUSD) is up +0.07% at a 3-3/4 month high as the stronger-than-expected German ZEW survey of economic sentiment boosted the euro. USD/JPY (^USDJPY) is up +0.87%. September 10-year T-note futures prices (ZNU13 -0.07%) this morning are down -5.5 ticks ahead of the 2-day FOMC meeting that begins today. German June ZEW survey of economic sentiment rose +2.1 to 38.5, stronger than expectations of +1.7 to 38.2, although the June ZEW current situation survey unexpectedly fell -0.3 to 8.6, weaker than expectations of +0.6 to 9.5. Eurozone May new car registrations fell -5.9% to 1.08 million vehicles, the lowest in 20-years and have now declined in 20 of the last 21 months. ECB President Draghi said the ECB has an "open mind" on non-standard monetary policy tools and will deploy them if circumstances warrant. In a statement released from the G-8 summit in Northern Ireland, leaders said "Global economic prospects remain weak, though downside risks have reduced thanks in part to significant policy actions taken in the U.S., euro area and Japan." UK May PPI input prices fell -0.3% m/m and rose +2.2% y/y, smaller increases than expectations of unch m/m and +2.5% y/y, although May CPI rose +0.2% m/m and +2.7% y/y, faster increases than expectations of +0.1% m/m and +2.6% y/y. The May core CPI rose +2.2% y/y, higher than expectations of +2.1% y/y. China May foreign direct investment rose +0.3% y/y, the least in 4-months, and a sign that China's economic slowdown is deepening. China May property prices rose at the fastest pace in more than 2-years in major cities, and 69 of 70 cities tracked by the government showed increases. Japan Apr industrial production was revised lower to +0.9% m/m and -3.4% y/y, weaker than the originally reported +1.7% m/m and -2.3% y/y. U.S. STOCK PREVIEW
The FOMC at its 2-day meeting that begins today is not expected to make any major policy changes but the markets will be carefully listening to Fed Chairman Bernanke's press conference on Wednesday for any hints on when the Fed may start to taper QE3. On a year-on-year basis, the May CPI is expected to increase to +1.4% y/y from +1.1% in April. The core CPI is expected to be unchanged at +1.7% y/y. Today’s May housing starts report is expected to recover by +11.4% to 950,000 after the -16.5% plunge to 853,000 seen in April. There are three of the Russell 1000 companies that report earnings today: John Wiley & Sons (consensus $0.84), FactSet Research Systems ($1.22), and Adobe Systems (0.34). Equity conferences during the remainder of this week include Bloomberg-The Next Big Thing Summit on Mon-Tue, Wall Street Journal CFO Network Annual Meeting on Mon-Tue, CommunicAsia 2013 on Mon-Thu, BIO World Congress on Industrial Biotechnology on Mon-Tue, Goldman Sachs European Chemicals Vision Conference on Tue, Wells Fargo Health Care Conference on Tue-Wed, Jefferies Global Consumer Conference on Tue-Wed, 4th Annual Global Wind Power Finance & Risk on Wed, 9th Annual Commercial Contracts and Chargeback Management on Wed-Thu, 3rd Next Generation Sequencing on Thu, St. Petersburg International Economic Forum (SPIEF 2013) on Thu-Fri. OVERNIGHT U.S. STOCK MOVERS
Citing data from NPD, Bloomberg said U.S. retail sales of video game hardware, software and accessories tumbled 25% to $386.3 million this past May, with overall hardware sales down 31% from last year to $96 million. Walter Energy (WLT -3.54%) has almost 200% upside, says Morgan Stanley. AllThingsD reported that Yahoo (YHOO +0.99%) will acquire startup Xobni for $30 to $40 million. Bombardier Aerospace (BDRBF -0.43%) announced that it has received firm orders for 12 Global 8000 business jets from an undisclosed customer valued at approximately $804 million. Covance (CVD +3.87%) was downgraded to "Underweight" from "Equal Weight" at Barclays. STMicroelectronics (STM +2.21%) announced that it has signed a comprehensive agreement with Rambus (RMBS -0.92%) that expands existing licenses between the two companies, settles all outstanding claims, and commits both organizations to explore additional opportunities for collaboration. New data from the NPD Group showed May marked the 29th consecutive month that the Microsaft (MSFT +1.74%) Xbox 360 was the best-selling console in the U.S. Total retail spend on the Xbox 360 platform in May reached $149.8 million, the most for any console in the U.S. Boeing (BA +1.18%) was awarded a firm-fixed-price, multi-year contract with the U.S. Army worth $3.41 billion for the production of remanufactured and new-built CH-47F cargo helicopters. Bloomberg reported that Tyco's (TYC +0.24%) $13.1 million settlement with the SEC was approved by a federal judge. Standard & Poor's Ratings Services said it lowered the ratings, including the corporate credit rating, on United States Steel (X -2.29%) to 'BB-' from 'BB'. The outlook is stable.
MARKET COMMENTS
September E-mini S&Ps (ESU13 +0.05%) this morning are up +3.00 points (+0.18%). The S&P 500 index on Monday closed higher on stronger-than-expected U.S. manufacturing and housing confidence data, along with speculation the Fed will take its time in reducing its QE stimulus measures. The June Empire manufacturing index jumped to 7.84 from -1.43 in May, stronger than expectations of unchanged, while the June NAHB housing market index surged by +8 points to a 7-year high of 52, stronger than expectations of +1 point to 45. Closes: S&P 500 +0.76%, Dow Jones +0.73%, Nasdaq 100 +0.93%. September 10-year T-notes (ZNU13 -0.07%) this morning are down -5.5 ticks. Sep 10-year T-note futures prices on Monday closed lower. Stronger-than-expected economic data from the Jun Empire manufacturing and the Jun NAHB housing market index reports offset speculation the Fed will take its time in tapering QE3. Also, strong stocks curbed the safe-haven demand for Treasuries. Closes: TYU3 -9.5, FVU3 -3.25. July WTI crude oil (CLN13 -0.26%) this morning is down -21 cents (-0.21%) and July gasoline (RBN13 -0.04%) is -0.0009 (-0.03%). July crude oil and gasoline Monday closed lower. July crude posted a 9-month nearest-futures high early in the session on concerns the Syrian civil war may escalate and after the stronger-than-expected Jun Empire manufacturing index and Jun NAHB housing market index bolstered confidence in the economic outlook and energy demand. Prices gave up their gains and closed lower, however, after the dollar rallied. Closes: CLN3 -0.08 (-0.08%), RBN3 -0.0406 (-1.40%). GLOBAL EVENT CALENDAR06/18/2013
U.S. STOCK CALENDAR06/18/2013
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