OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ15 +0.41%) are up +0.55% and European stocks are up +0.20% as prices recover from Monday’s rout. Gains in crude oil and copper helped boost energy and basic-resource producers, while an unexpected increase in Eurozone Sep economic confidence to a 4-year high underpinned European stocks. Asian stocks settled mostly lower: Japan -4.05%, Hong Kong -2.97%, China -2.02%, Taiwan and South Korea closed for holiday, Australia -3.81%, Singapore -0.14%, India +0.63%. China’s Shanghai Composite fell to a 1-week low on economic concerns after the China Aug leading index fell to a 6-1/2 year low. Japan’s Nikkei Stock Index tumbled more than 4% to an 8-1/4 month low, led by a sell-off in shipping companies, after Daiichi Chuo KK said it filed for bankruptcy protection. Also, Kobe Steel plunged 11% after it cut its net income forecast for the year to Mar 2016 to 25 billion yen, 58% lower than its Jul outlook of 60 billion yen, due to falling sales from its construction machinery unit because of the slowdown in China. Emerging stocks closed higher as commodity prices recovered, and India’s BSE Sensex Stock Index climbed 0.63% after India’s central bank cut interest rates more than expected.
The dollar index (DXY00 -0.01%) is down -0.02%. EUR/USD (^EURUSD) is down -0.09%. USD/JPY (^USDJPY) is unchanged.
Dec T-note prices (ZNZ15 -0.07%) are down -2 ticks.
The China Aug leading index fell -0.17 to 98.23, the lowest in 6-1/2 years.
Eurozone Sep economic confidence unexpectedly rose +1.5 to 105.6, stronger than expectations of -0.1 to 104.1 and the highest in 4 years. The Sep business climate indicator rose +0.14 to 0.34, stronger than expectations of unch at 0.21.
The Reserve Bank of India (RBI) cut the benchmark repurchase rate by 50 bp to 6.75%, more than expectations of a 25 bp cut to 7.00%.
U.S. STOCK PREVIEW
Key U.S. news today includes: (1) July S&P CaseShiller composite-20 home price index (expected +0.10% m/m and +5.15% y/y, Jun -0.12% m/m and +4.97% y/y), and (2) Sep consumer confidence (Conference Board) (expected -5.5 to 96.0, Aug +10.5 to 101.5).
