OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH16Â -2.17%) are down sharply by -2.24% at a 3-month low and European stocks are down -3.10% at a 3-1/4 month low after China’s stock exchanges closed less than half an hour after opening when they fell 7% and triggered a halt to trading for the second time this week. Chinese stocks tumbled as the PBOC cut its reference rate for the yuan for an eighth straight day, which sent the yuan plunging to a 4-3/4 year low against the dollar as China is attempting to spur economic growth through a weaker yuan. Freeport-McMoRan and Alcoa are both down more than 4% in pre-market trading as the price of copper (HGH16Â -2.83%) dropped -3.04% to a 1-1/2 month low, and energy producers are lower as the price of crude oil (CLG16Â -3.62%) plummeted -3.15% to a 12-year low. Another negative for stocks was the action by the World Bank to lower its 2016 global growth estimate to 2.9% from a 3.3% estimate in Jun. Asian stocks settled sharply lower: Japan -2.33%, Hong Kong -3.09%, China -7.04%, Taiwan-1.73%, Australia -2.20%, Singapore -2.65%, South Korea -1.14%, India -2.18%.
The dollar index (DXY00Â -0.39%) is down -0.47%. EUR/USD (^EURUSD) is up +0.69%. USD/JPY (^USDJPY) is down -0.86% to a 4-1/2 month low.
Mar T-note prices (ZNH16Â +0.21%) are up +9.5 ticks at a 2-month high on a flight-to-safety with the plunge in global equity markets.
The PBOC reported that China’s foreign exchange reserves shrank by a record $108 billion in Dec, which cut its total foreign-exchange reserves to a 3-year low of $3.33 trillion as the PBOC has burnt through its reserves in an attempt to prop up the yuan.
The World Bank cut its 2016 global growth estimate to 2.9% from a 3.3% estimate in Jun, citing a weaker outlook for the U.S., China, Japan and Russia. The World Bank also cut its 2016 China growth outlook to 6.7% from a 7.0% estimate in Jun.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) Dec challenger job cuts (Nov -13.9% y/y), (2) weekly initial unemployment claims (expected -12,000 to 275,000, previous +20,000 to 287,000) and continuing claims (expected +2,000 to 2.200 million, previous +3,000 to 2.198 million), (3) Richmond Fed President Jeffrey Lacker’s speech on the 2016 economic outlook at an event hosted by the Great Raleigh Chamber of Commerce, (4) Chicago Fed President Charles Evans’ speech on the economic outlook and monetary policy at the Wisconsin Economic Forecast Luncheon.
There are 3 of the Russell 3000 companies that report earnings today: Walgreens Boots Alliance (consensus $0.96), Constellation Brands (1.30), Bed Bath & Beyond (1.09).
U.S. IPO’s scheduled to price today: none.
Equity conferences this week: Citi Global Internet, Media & Telecommunications Conference on Wed-Thu.
