OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 +0.46%) are up +0.46% at a 2-month high and European stocks are up +0.65% on positive carryover from a rally in Japan's Nikkei Stock Index which climbed to a 6-week high on speculation the BOJ may need to expand QE after Japan exports last month grew at the slowest pace in over a year. Increased M&A activity also gave equities a boost after Lam Research agreed to buy KLA-Tencor Corp. for $10.6 billion. Strength in European stocks was limited as Credit Suisse fell over 5% after it said will sell 6.05 billion francs ($6.3 billion) in stock to boost capital and meet regulatory requirements. Asian stocks settled mixed: Japan +1.91%, Hong Kong closed for holiday, China -3.06%, Taiwan -0.51%, Australia +0.24%, Singapore +0.22%, South Korea +0.29%, India -0.07%. China's Shanghai Composite fell back from a 2-month high and closed down over 3% on speculation the recent rally was overdone.
The dollar index (DXY00 -0.05%) is down -0.09%. EUR/USD (^EURUSD) is up +0.12%. USD/JPY (^USDJPY) is up +0.13% at a 1-week high as speculation the BOJ may need to expand QE undercut the yen.
Dec T-note prices (ZNZ15 +0.10%) are up +5.5 ticks.
The Japan Sep trade balance was in deficit by -114.5 billion yen, when expectations were for a surplus of +87.0 billion yen. Sep exports rose +0.6% y/y, less than expectations of +3.8 % y/y and the smallest increase in 13 months. Sep imports fell -11.1% y/y, a smaller decline than expectations of -12.0% y/y, but still the biggest drop in 6 months.
u.s. STOCK PREVIEW
Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -27.6% with purchase mortgage sub-index -34.1% and refi sub-index -22.5%), (2) Fed Governor Jerome Powell as moderator for a panel on “Repo Markets, Liquidity, and the U.S. Treasury Market” in an event hosted by the New York Fed.
There are 31 of the S&P 500 companies that report earnings today with notable reports including: GM (consensus $1.19), AMEX (1.31), Abbott Labs (0.53), Boeing (2.20), Coca-Cola (0.50), Northern Trust (0.96), Citrix (0.84), Texas Instruments (0.67), eBay (0.40), Kinder Morgan (0.18), Motorola Solutions (0.73).
