OVERNIGHT MARKETS AND NEWS
March E-mini S&Ps (ESH15 -0.15%) this morning are down -0.11% and European stocks are down -0.26% as the market consolidates Tuesday’s rally that pushed the S&P 500 up to a record high and European stocks up to a 6-1/2 year high. Losses were negligible after a gauge of Chinese manufacturing activity unexpectedly expanded at the fastest pace in 4 months. Global bond markets rallied as the 10-year government bond yields in Spain, Italy, Portugal and Ireland all fell to record lows after Fed Chair Yellen yesterday made it clear that no Fed interest rate increase was imminent. Germany sold 3.28 billion euros of 5-year notes at an average yield of negative -0.08%, the lowest yield ever for 5-year debt in the Eurozone. Asian stocks closed mixed: Japan -0.10%, Hong Kong +0.11%, China -1.24%, Taiwan +0.73%, Australia +0.30%, Singapore +0.09%, South Korea +0.67%, India +0.01%. Commodity prices are mixed. Apr crude oil (CLJ15 +0.57%) is up +0.39% and Apr gasoline (RBJ15 +0.18%) is down -0.12%. Apr gold (GCJ15 +0.98%) is up +0.94%. Mar copper (HGH15 -0.08%) is down -0.13%. Agriculture prices are weaker. The dollar index (DXY00 -0.24%) is down-0.19%. EUR/USD (^EURUSD) is up +0.04%. USD/JPY (^USDJPY) is down -0.12%. GBP/USD is up +0.23% at a 1-3/4 month high against the dollar after BOE policy maker Weale said interest rate may need to rise earlier than markets expect. Mar T-note prices (ZNH15 +0.05%) are up +1.5 ticks at a 2-week high.
The China Feb HSBC flash manufacturing PMI unexpectedly rose +0.4 to 50.1, stronger than expectations of -0.2 to 49.5 and the fastest pace of expansion in 4 months.
U.S. STOCK PREVIEW
Fed Chair Yellen today will present her semi-annual testimony before the House Financial Services Committee. Today’s Jan new home sales report is expected to show a small decline of -2.3% to 470,000, settling back after the +11.6% surge to the 6-1/2 year high of 481,000 seen in December. The Treasury today will sell $35 billion of 5-year T-notes and $13 billion of 2-year floating rate notes. There are 12 of the S&P 500 companies that report earnings today with notable reports including: Lowe’s (consensus $0.44), Dollar Tree (1.14), Target (1.46), TJX (0.90), Transocean (0.75), and L Brands (1.80).
