OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ14 -0.12%) this morning are down -0.22% and European stocks are down -0.37%% as energy producing stocks sank after OPEC refrained from reducing output and kept its production ceiling of 30 million bpd. The inaction by OPEC prompted a plunge in crude prices to a 4-1/2 year low and drove down the outlook for inflation which sent the yields on government bonds dropping worldwide. The yield on the German 10-year bund tumbled to a record low of 0.694% on speculation the ECB will expand stimulus after the Eurozone Nov CPI increased at the slowest pace in 5 years and after ECB President Draghi said the central bank "is unanimous in its commitment to using additional unconventional instruments to address the risks of too prolonged a period of low inflation." Asian stocks closed mostly higher: Japan +1.23%, Hong Kong -0.07%, China +1.97%, Taiwan +0.24%, Australia -1.63%, Singapore +0.29%, South Korea +0.16%, India +0.90%. China's Shanghai Stock Index soared to a 3-1/4 year high on expectations for additional stimulus along with the plunge in crude oil prices, which will reduce energy costs and boosts profits for Chinese manufacturing and consumption industries as China is biggest importer of crude oil in the world. Commodity prices are lower. Jan crude oil (CLF15 -6.12%) is down -6.45% at a 4-1/2 year low after OPEC took no action at its meeting yesterday to lower its crude output levels. Jan gasoline (RBF15 -6.10%) is down -6.29% at a 4-year low. Dec gold (GCZ14 -1.29%) is down -1.25% at a 1-week low. Dec copper (HGZ14 -1.45%) is down -1.64% at a 4-1/3 year low after LME copper inventories climbed to a 5-1/2 month high. Agriculture prices are unch. The dollar index (DXY00 +0.45%) is up +0.46%. EUR/USD (^EURUSD) is up +0.10%. USD/JPY (^USDJPY) is up +0.45%. Dec T-note prices (ZNZ14 +0.16%) are up +6.5 ticks at a 1-month high on positive carry-over from a rally in German bunds to an all-t-me high. Also, the plunged in crude oil prices to a 4-1/2 year low sent the U.S. break-even rate, a gauge of inflation expectations, down to the lowest in 3 years.
The Eurozone Nov CPI estimate rose +0.3% y/y, right on expectations and matched the slowest pace of increase in 5 years. The Nov core CPI rose +0.7% y/y, right on expectations and matched the slowest pace of increase since the data series began in 1997.
The Eurozone Oct unemployment rate was unchanged at 11.5%, right on expectations.
German Oct retail sales +1.9% m/m, stronger than expectations of +1.5% m/m and matched the largest increase in 3-1/3 years. On an annual basis Oct retail sales rose +1.7% y/y, right on expectations.
The Japan Oct jobless rate unexpectedly fell -0.1 to 3.5%, better than expectations of unch at 3.6% and matched the lowest in 17 years. The Oct job-to-applicant ratio rose +0.01 to 1.10, better than expectations of unch at 1.09 and matched the highest in 22 years.
Japan Oct industrial production rose +0.2% m/m and fell -1.0% y/y, better than expectations of -0.6% m/m and -1.7% y/y.
Japan Oct national CPI rose +2.9% y/y, less than expectations of +3.0% y/y and the smallest pace of increase in 7 months. The Oct national CPI ex=fresh food rose +2.9% y/y right on expectations, and the Oct national CPI ex food & energy rose 2.2% y/y, right on expectations.
Japan Oct retail sales fell -1.4% m/m, a larger decline than expectations of -0.5% m/m and the biggest drop in 6 months. On an annual basis Oct retail sales rose +1.4% y/y, right on expectations.
Japan Oct overall household spending fell -4.0% y/y, a smaller decline than expectations of -5.0% y/y but still the ninth consecutive month that spending has declined.
U.S. STOCK PREVIEW
The markets today will focus mainly on the strength of Black Friday shopping sales. There are no major earnings reports today. There are no equity conferences today.
OVERNIGHT U.S. STOCK MOVERS
Ctrip.com (CTRP -8.48%) was downgraded to 'Neutral' from 'Overweight' at JPMorgan Chase.
Vodafone (VOD +1.02%) was upgraded to 'Key Call Buy' from 'Buy' at UBS.
Piper Jaffray keeps on 'Overweight' rating on Amazon.com (AMZN -0.44%) and raises its price target on the stock to $400 from $350.
Total (TOT unch) was downgraded to 'Neutral' from 'Buy' at Nomura.
Lufthansa (DLAKY +0.48%) was upgraded to 'Buy' from 'Neutral' at UBS.
Barclays (BCS +0.20%) was upgraded to 'Buy' from 'Neutral' at Goldman Sachs.
HSBC (HSBC +0.32%) was downgraded to 'Neutral' from 'Buy' at Goldman Sachs.
Gabelli reported a 8.16% stake in Telephone and Data (TDS -0.44%) .
Gabelli reported a 9.52% stake in U.S. Cellular (USM +1.44%) .
Castle Creek reported a 9.9% stake in Summit Financial Group (SMMF -1.31%) .
Dec E-mini S&Ps (ESZ14 -0.12%) are down -4.50 points (-0.22%). The S&P 500 index on Wednesday climbed to a new record high: S&P 500 +0.28%, Dow Jones +0.07%, Nasdaq +0.69%. Bullish factors included (1) a rally in chipmakers after Analog Devices rose 5% after reporting Q4 profit and sales that exceeded expectations, and (2) carry-over support from a rally in European equities after comments from ECB Vice President Constancio bolstered the outlook for additional ECB stimulus when he said the ECB may consider buying sovereign debt next quarter if current stimulus proves insufficient.
Dec 10-year T-notes (ZNZ14 +0.16%) this morning are up +6.5 ticks at a 1-month high. Dec 10-year T-note futures prices on Wednesday climbed to a 1-month high and closed higher: TYZ4 +7.50, FVZ4 +4.50. Bullish factors included (1) smaller-than-expected increases in U.S. Oct personal income and spending, (2) the larger-than-expected drop in the Nov Chicago PMI, and (2) increased foreign demand for U.S. government debt after indirect bidders, a category of investors that includes foreign banks, bought 50% of the Treasury’s $29 billion 7-year T-note auction, substantially more than the 12-auction average of 44%.
The dollar index (DXY00 +0.45%) this morning is up +0.400 (+0.46%). EUR/USD (^EURUSD) is up +0.0012 (+0.10%). USD/JPY (^USDJPY) is up +0.53 (+0.45%). The dollar index on Wednesday closed lower. Closes: Dollar index -0.313 (-0.36%), EUR/USD +0.00317 (+0.25%), USD/JPY -0.242 (-0.21%). Bearish factors included (1) the unexpected +21,000 increase in weekly U.S. jobless claims, and (2) the unexpected decline in the final-Nov U.S. consumer confidence index.
Jan WTI crude oil (CLF15 -6.12%) this morning is down -$4.75 a barrel (-6.45%) at a 4-1/2 year low and Jan gasoline (RBF15 -6.10%) is down -0.1266 (-6.29%) at a 4-year low. Jan crude and Dec gasoline on Wednesday posted 1-week lows and closed lower. Closes: CLF5 -0.40 (-0.54%), RBF5 -0.0114 (-0.57%). Negative factors included (1) speculation that OPEC will refrain from cutting output at Thursday’s meeting after Saudi Arabian Oil Minister Ali Al-Naimi said the “market will stabilize itself,” (2) the +1.95 million bbl increase in weekly EIA crude supplies, more than expectations of +250,000 bbl, and (3) the +1.33 million bbl increase in crude supplies at Cushing, OK, the delivery point of WTI futures, to a 6-3/4 month high.
GLOBAL EVENT CALENDAR11/28/2014