OVERNIGHT MARKETS AND NEWS
Sep E-mini S&Ps (ESU15 -0.20%) this morning are trading slightly lower by -2.50 points (-0.12%) on negative carry-over from this morning's slightly lower trade in European stocks with the EuroStoxx 50 index down -0.08%. In addition, the Shanghai Composite index today closed -1.13% and lower commodity prices are hurting commodity producer stocks. The markets remain worried about China and a Fed rate hike later this year. On the more positive side, the MSCI Emerging Markets Index is up +0.3% this morning.
Asian stocks today closed mostly higher: Japan +0.30%, Hong Kong +0.56%, China -1.13%, Taiwan +0.16%, Australia +0.52%, Singapore -1.45%, South Korea +0.28%, India +1.48%, Turkey +0.92%.
The dollar index (DXY00 -0.21%) this morning is down -0.291 (-0.30%) while EUR/USD (^EURUSD) is up +0.0041 (+0.38%) and USD/JPY (^USDJPY) is up +0.13 (+0.10%). Sep 10-year T-note prices (ZNU15 -0.05%) this morning are down -2.5 ticks since global stocks are generally stable this morning.
Commodity prices this morning are down by -0.33% on average. Sep crude oil (CLU15 -1.77%) this morning is down -0.91 (-1.88%) and Sep gasoline (RBU15 +0.06%) is down -0.0027 (-0.15%) as bearish sentiment prevails. Metals prices this morning are trading lower with Aug gold (GCQ15 -0.74%) down -8.5 (-0.78%), Sep silver (SIU15 -1.16%) down -0.161 (-1.10%), and Sep copper (HGU15 -0.63%) down -0.016 (-0.65%). Grains are steady to higher. Softs are mixed.
The Russian central bank today cut its key rate by 50 bp to 11.0%, in line with most market forecasts. Today's rate cut was the fifth this year. The Russian bank was able to slowly cut the rate this year, which was raised sharply late last year to as high as 17% when U.S. and European sanctions over Ukraine caused the ruble to plunge. The market consensus is that the Russian economy this year will fall by -3.5% but then recover to +0.5% in 2016 and +1.3% in 2017.
Greek Prime Minister Tsipras managed to delay a Syriza party congress until September, which should come after his government signs off on a 3-year bailout program some time in August. Members in his Syriza party who are opposed to the bailout had hoped to hold a party congress as early as this weekend, which could have led to a split in the party and could have forced new elections. The outcome is favorable for the markets since it suggests that Ms. Tsipras should be able to push the 3-year bailout through the Greek parliament before new elections are held, likely this autumn.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Key U.S. reports today include: (1) Q2 employment cost index (expected +0.6% after Q1's +0.7%), (2) Jul Milwaukee ISM (expected +3.45 to 50.00, Jun -1.15 to 46.55), (3) Jul Chicago PMI (expected +1.4 to 50.8, Jun +3.2 to 49.4), and (4) final-July U.S. consumer sentiment from the University of Michigan (expected +0.7 to 94.0, prelim-Jul -2.8 to 93.3).
There are 13 of the S&P 500 companies that report earnings today with notable reports including: Exxon Mobil (consensus $1.11), Chevron (1.16), Phillips 66 (1.81), Bershire Hathaway (3038), Aon (1.30), Tyco (0.55), Royal Caribbean (0.72).
U.S. IPO's scheduled to price today include: Ardelyx (ARDX), Accelerize (ACLZ), NovaBay Pharma (NBY).
Equity conferences this week: none.
Sep E-mini S&Ps this morning are trading slightly lower by -2.50 points (-0.12%) on negative carry-over from this morning's slightly lower -0.08% trade in European stocks and today's -1.13% sell-off in Chinese stocks. Thursday's closes: S&P 500 unchanged, Dow Jones -0.03%, Nasdaq +0.33%. The S&P 500 on Thursday closed little changed, finding support from general optimism about Q2 earnings as about three-quarters of reporting SPX companies have surprised to the upside, and from relief that the Chinese stock market appears to be holding and has not fallen below Monday’s lows. However, factors causing downward pressure yesterday included the slightly weaker-than-expected U.S. Q2 GDP report of +2.3% (vs expectations of +2.5%) and a -4% decline in Procter & Gamble and -1.8% decline in Facebook on negative earnings news.
OVERNIGHT U.S. STOCK MOVERS
Sep 10-year T-note prices this morning are down -2.5 ticks since global stocks are generally stable this morning. Thursday's closes: TYU5 +1, FVU5 -2.50. Sep 10-year T-notes on Thursday closed slightly higher on the sluggish stock market and on the slightly weaker-than-expected Q2 GDP report of +2.3%, which did not create any fresh pressure on the Fed to begin its rate-hike regime. T-notes continued to see some downward pressure from supply overhang as the Treasury sold 7-year T-notes to conclude this week’s $105 billion T-note package.
The dollar index this morning is down -0.291 (-0.30%) while EUR/USD is up +0.0041 (+0.38%) and USD/JPY is up +0.13 (+0.10%). Thursday's closes: Dollar Index +0.58 (+0.60%), EUR/USD -0.0052 (-0.47%), USD/JPY +0.20 (+0.16%). The dollar index on Thursday closed moderately higher on technical buying, continued ideas that the Fed will tighten by year-end, and weakness in EUR/USD as the IMF said it will not join a Greek bailout unless the Eurozone provides debt relief and assurance of long-term debt sustainability.
GLOBAL EVENT CALENDAR07/31/2015
U.S. STOCK CALENDAR07/31/2015