Morning Call For Tuesday, Nov. 27

Overnight Markets And News

Dec E-mini S&Ps (ESZ18 -0.36%) this morning are down -0.21% and European stocks are down -0.19% after President Trump late yesterday said that additional tariffs on China are still likely. Trump told the WSJ he expects to move ahead with an increase on tariffs to 25% on $200 billion of Chinese goods and he’s prepared to add tariffs of 10% or 25% to the final batch of $267 billion of Chinese goods “if we don’t make a deal.” Weakness in technology stocks is leading the overall market lower with Apple down almost 2% in pre-market trading after President Trump suggested a 10% tariff may be placed on iPhones and laptops made in China. Mining stocks and commodity producers are lower as well with Dec COMEX copper (HGZ18 -1.03%) down -0.93% to a 1-1/2 week low as threats from President Trump of more tariffs bolsters demand concerns for industrial metals. The slide in equities has boosted the safe-haven demand for government debt as the yield on the 10-year German bund fell to a 2-3/4 month low of 0.330%. Asian stocks settled mixed: Japan +0.64%, Hong Kong -0.17%, China -0.04%, Taiwan +0.14%, Australia +1.00%, Singapore -0.10%, South Korea +0.85%, India +0.45%. China’s Shanghai Composite fell to a 3-1/2 week low on trade concerns, although Japan’s Nikkei Stock Index climbed to a 2-week high on economic optimism after Adobe projected online shopping on Cyber Monday may hit $7.9 billion, up +19.7% y/y and the largest online shopping day of all time in the U.S.

The dollar index (DXY00 +0.12%) is up +0.10% at a 1-1/2 week high. EUR/USD (^EURUSD -0.08%) is down -0.05% at a 1-1/2 week low. USD/JPY (^USDJPY +0.04%) is up +0.03% at a 1-1/2 week high.

Dec 10-year T-note prices (ZNZ18 +0-025) are up +1.5 ticks.

UK Nov CBI retailing reported sales rose +14 to 19, stronger than expectations of +5 to 10.

China Oct industrial profits rose +3.6% y/y, the smallest increase in 7 months.

Japan Oct PPI services prices rose +1.3% y/y, stronger than expectations of +1.2% y/y.

U.S. Stock Preview

Key U.S. news today includes: (1) Fed Vice Chair Richard Clarida is keynote speaker at the Clearings House 2018 annual conference in New York, (2) Sep FHFA house price index (expected +0.4%, Aug +0.3% m/m), (3) Sep S&P CoreLogic composite-20 home price index (expected +0.2% m/m and +5.3% y/y. Aug +0.09% m/m and +5.49% y/y), (4) Conference Board U.S. Nov consumer confidence index (expected -2.1 to 135.8, Oct +2.6 to 137.9), (5) Treasury auctions $40 billion 5-year T-notes, (6) Atlanta Fed President Raphael Bostic (voter), Kansas City Fed President Esther George (non-voter) and Chicago Fed President Charles Evans (non-voter) discuss he economy, regulation, financial innovation and the future of payments on a panel at a Clearing House conference in New York.


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