Stocks rebound on good earnings
Stocks went higher in yesterday's US session on better than expected earnings from Microsoft, Xerox, Nokia and Lockheed Martin.
Overnight News Bullets
- SW PPI MoM/YoY (Dec) out at 0.0%/3.9% vs. 0.2%/4.1% expected. Prior at -0.1%/3.7%.
- GE IFO (Jan): Business Climate at 103.4 vs. 102.3 exp., Current Assessment at 107.9 vs. 107.4 exp., Expectations at 107.9 vs. 107.4 exp.
- UK BBA Loans for House Purchase (Dec) at 42088 vs. 43944 prior.
- US Initial/Cont. Claims (Weekly) out at 301K/2672K vs. 320K/2720K expected. Prior at 302K/2747K.
- US Existing Home Sales (Dec) out at 4.89M (-2.2%) vs. 4.95M (-1.0%) expected. Prior at 5.00M (0.4%).
- US DOE Inventories: Crude at 2297K vs. 1500K exp., Gasoline at 5085K vs. 1400K exp., Distillate at -1302K vs. 0K exp., Refinery at -0.60% vs. 0.00% exp.
- US EIA Natural Gas Storage Change at -155 vs. -159 expected. Prior at -59.
- AU Conference Board Leading Index (Nov) at 0.8% vs. 0.9% prior.
- JN Tokyo CPI headline (Jan) YoY out at 0.2% vs. 0.3% expected vs. 0.4% prior read.
- JN Tokyo CPI core (JAN) YoY out at 0% vs. -0.1% expected vs. -0.1% prior read.
- JN Natl CPI headline (Dec) YoY out at 0.7% vs. 0.7% expected vs. 0.6% prior read.
- JN Natl CPI core (DEC) YoY out at -0.1% vs. -0.1% expected vs. -0.1% prior read.
- GE Import Prices (DEC) MoM/YoY out at -0.1%/3.7% vs. 0%/3.8% expected vs. 0.7%/3.5% prior read.
Markets
- FX: Yen set for weekly drop against 16 most-active currencies on rising risk appetite with NZDJPY now above 83.00. Dollar well offered with EURUSD now at 1.4760 and cable rallies to 1.98 zone.
- Stocks: American and Asian stocks rally with Nasdaq closing 1.97% higher and Hang Seng up by nearly 7%.
- Fixed Income: Treasuries lower on rising equities. Bunds lower as well on reduced rate cut expectations. JGBs head for a sharpest drop in 19 months on rising equities.
- Commodities: Gold prices near record highs on weak dollar. February contract now at $915 an ounce. Crude prices also higher on rising positive sentiment. March contract now around $90 a barrel.
O/N Data Heat map:
| EU |
US |
JP |
UK |
SZ |
AU |
CA |
NZ |
NO |
SE |
GE |
| 0 |
- |
+ |
- |
0 |
- |
0 |
0 |
0 |
- |
+ |
Calendar
Today's Highlights:
-
| Time (GMT) |
Region |
Release |
Consensus |
| 08:30 |
SW |
Trade Balance (Dec) |
10.8B |
| 12:00 |
CA |
CPI MoM/YoY (Dec) |
0.1%/2.4% |
| 12:00 |
CA |
CPI – Core MoM/YoY (Dec) |
-0.1%/1.7% |
This and Next Week’s Highlights:
-
| Date |
Region |
Release |
| 28 Jan |
E-Z |
M3 |
| 28 Jan |
US |
New Home Sales |
| 28 Jan |
JN |
Jobless Rate, Retail Trade, Large Retailers Sales |
| 29 Jan |
SZ |
Trade Balance, UBS Consumption Indicator |
| 29 Jan |
SW |
Retail Sales |
| 29 Jan |
E-Z |
Current Account |
| 29 Jan |
US |
Durable Goods Orders, S&P/CS Home Prices, Consumer Confidence, FOMC Initiates 2-day Meeting, ABC Consumer Confidence |
| 29 Jan |
JN |
Industrial Production |
| 29 Jan |
NZ |
Building Permits |
| 30 Jan |
GE |
Retail Sales |
| 30 Jan |
NO |
Retail Sales |
| 30 Jan |
UK |
M4 Money Supply, M4 Sterling Lending, Net Consumer Credit, Mortgage Approvals |
| 30 JN |
PD |
Base Rate Announcement |
| 30 Jan |
US |
APD Report, GDP, Personal Consumption, Core PCE QoQ, FOMC Rate Decision |
| 30 Jan |
NZ |
Trade Balance |
What's going on?
- Speculation grows on whether the Monday’s large equity losses that also in part prompted the FOMC to deliver an emergency rate cut were largely due to Societe Generale’s ridding itself of positions built by the rogue trader.
- U.S. jobless claims yesterday fell to a 4-month low, alleviating fears of a US recession. Swift agreement on U.S. government’s stimulus package has also boosted confidence.
- Gold is again trading near record levels as weakening dollar has added to precious metal’s appeal.
FX
| EUR |
USD |
JPY |
GBP |
CHF |
AUD |
CAD |
NZD |
NOK |
SEK |
PLN |
| 0 |
- |
- |
0 |
- |
+ |
0 |
0 |
+ |
+ |
0 |
FX Trading Strategies
| Pair |
Supp. |
Resis. |
Comments |
| USDCAD |
0.9920 |
1.0270 |
Key event today is the release of the CA CPI at 12:00 GMT. We sell USDCAD at the break of 1.0035 offer and will add below 1.0012, targeting support at 0.9920, where the 100 day MA creeps in. Stop bid at 1.0070. |
Equities
| DAX |
UKX |
CAC |
OMX |
KFX |
OBX |
SMI |
NDX |
DJI |
SPX |
NKY |
| + |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
Equity Trading Strategies
| Instrument |
Entry |
Stop |
Target |
Comments |
| Buy Johnston Press (JPR:xlon) |
Break at 280 |
265 |
300 |
|
Index Technicals
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