September 25, 2012
I apologize for my unexplained absence the latter part of last week – it will not happen again. It has taken longer than expected to get my Bloomberg Terminal setup, but I will have it by Friday at the very latest.
Morning Commentary (Very difficult to write without proper market data)
S&P 500 futures are little changed following the longest losing streak for the index in seven weeks, as investors await a report that may show consumer confidence rose this month.
Today’s Economic Data Lineup (EST)
9:00am: S&P/Case-Shiller 20 City (M/m) SA, July, est. 0.8% (prior 0.94%)
S&P/CS Comp-20 (Y/y), July, est. 1.05% (prior 0.5%)
S&P/CS HPI, July, est. 143.7 (prior 142.21)
10:00am: Conference Board Consumer Confidence Index, Sept., est. 63.2 (prior 60.6)
10:00am: Richmond Fed Manuf. Index, Sept., est. -6 (prior -9)
10:00am: House Price Index (M/m), July, est. 0.6% (prior 0.7%)
11:00am: Fed to purchase $4.5b-$5.5b notes due 11/15/2020- 8/15/2022
11:30am: U.S. to sell $40b 4-week bills
1:00pm: U.S. to sell $35b 2-year notes Fed
12:00pm: Fed’s Plosser speaks on economic outlook in Philadelphia
- Caterpillar, the world’s largest construction and mining equipment maker, cut its forecast for 2015 earnings after commodity prices reduced capital expenditure. The firm’s guidance was lowered to $12-$18 per share, compared with a previous projection of $15-$20. Chairman and CEO Doug Oberhelman said that growth through 2015 will be “anemic” while construction in emerging markets should show modest improvements. “We’ve seen a slowing in economic growth that was more than we expected,” he said. “We think ‘13 could look like 2012 in terms of worldwide economic growth.”
- Obama will pledge in a speech to world leaders today at the U.N. that the U.S. is committed to keeping Iran from obtaining a nuclear weapon and that the time for resolving the issue through diplomacy “is not unlimited.” While the U.S. does believe “there is still time and space” to settle the matter, a nuclear armed Iran would imperil Israel and destabilize the global economy, according to excerpts released by the White House.
- “Make no mistake: a nuclear-armed Iran is not a challenge that can be contained,” Obama will say, according to the excerpts. “That is why a coalition of countries is holding the Iranian government accountable. And that is why the United States will do what we must to prevent Iran from obtaining a nuclear weapon.”
- Lawyers at the ECB and Germany’s Bundesbank are examining under which circumstances the announced bond-buying program might violate EU treaties, according to Bild-Zeitung.
- RBS managers condoned and participated in the manipulation of LIBOR rates, indicating the wrongdoing extends beyond the four traders the bank has already fired. During an instant message conversation in late 2007, the head of yen products in Singapore, Jezri Mohideen, instructed colleagues in the U.K. to lower RBS’s submission to the London interbank offered rate that day. According to employees, regulators, and lawmakers interviewed by Bloomberg News, RBS traders and their managers routinely sought to influence the firm’s LIBOR submissions between 2007 and 2010 to profit from derivative bets. Traders even communicated with counterparts at other firms to discuss where rates should be set, according to one person.
- Diplomats from China and Japan failed to ease tensions over a territorial dispute as the Japanese Coast Guard used water cannons to drive off Taiwanese vessels near the islands at the center of the spat. “We will continue to guard the area around the Senkakus intensely and remain in contact with the relevant agencies,” Chief Cabinet Secretary Osamu Fujimura told reporters today in Tokyo.
- South Korea’s government will cut its fiscal deficit next year to the smallest in six years as policymakers preserve firepower amid a slowing global economy and rising welfare costs. Total spending will increase +5.3% to 342.5 trillion won ($306B), according to the budget proposal for 2013 the Ministry of Strategy and Finance released today.
“Opportunity does not knock, it presents itself when you beat down the door.”
Global Market Strategist
C 901 494 7376