Markets Higher: Back to Work Tuesday

Lou Brien |

Stocks were generally well bid in Asian trade. Shanghai was up 3.3%, Australia rose 1.4%, the Hang Seng added one percent and the Nikkei was up 0.2%. European indexes are mixed this morning, with the DAX down a half percent and the Footsie better by 0.4%. Us stock futures are up about one percent as I write.

*The January reading of China’s Trade Balance a surplus of $63.3 billion, slightly more than forecast; it is the largest surplus on record. But a large surplus was again achieved even though overall trade was down: Exports fell 11.2% on a year on year basis and Imports were down 18.8% on the year; both results were much more negative than expected.

*The Q4 reading of Japan’s GDP is -0.4% quarter on quarter and -1.4% annualized; both results were weaker than forecast.

*Yesterday, in an appearance before the EU Parliament in Brussels, ECB boss Mario Draghi echoed his “whatever it takes” pledge; the ECB will not hesitate to act if needed and would indeed act if market turmoil weakens price stability. An even longer term LTRO, up to five years, is seen a likely strategy for the bank to employ. He painted a troubled picture of the Euro Zone; “Since early December, a general deterioration in market sentiment has taken root and has gathered pace over the last week…This initially appeared closely linked to concerns regarding weakening economic activity around the globe—notably in emerging markets—and to potential adverse signals from falling commodity prices…over time however, market sentiment has become more volatile and susceptible to rapid change,” he said in a prepared text.

*Alexander Novak, Russia’s energy minister, says Saudi Arabia, Qatar and Venezuela have agreed with Russia to freeze oil production at current levels…if…other producers do the same thing. This is a freeze at current levels not a cut. Current output is at near record levels. Iran is not yet part of any deal, but, according to Reuters, word from Tehran is they will only freeze their output, once they increase output to pre-sanction levels. WTI Crude Oil traded as high as $31.53 on news of the agreement, but is back around $29.40 at the moment, which is unchanged from the Friday settle.

*The February reading of the Euro Zone’s ZEW Survey of Economic Expectations is 13.6, down from 22.7 the month before; it is the lowest result since November 2014.

*The February reading of Germany’s ZEW Survey of the Current Situation is 52.3, down from 59.7 the month before and about three points under the estimate. The Expectations component was 1.0, down from 10.2 in January, but better than the 0.0 forecast.

*The January reading of the UK Consumer Price Index is -0.8% on the month and +0.3% on the year, which matched the forecast. The Core CPI was +1.2% year on year in January, a tenth under the estimate

*The February reading of the Empire State Manufacturing Index is due out at 7:30am CST, it is expected to be -10.00; it was -19.37 the month before. The February reading of the NAHB Housing Market Index is due out at 9:00am CST, it is forecast to be steady on the month at 60. The Treasury will release at 3:00pm CST the net change in December of foreign holdings of long term US securities; no estimate is provided.

*There are three Fed speakers on the calendar today, including: Philly Fed boss Harker will give his take on the economy at 8:00am CST; Neel Kashkari, new Minneapolis Fed boss, will at 9:30am CST make his first appearance since he took office at the Brookings Institution in DC, he will talk about lessons learned from the financial crisis; and Boston Fed’s Rosengren is set to deliver a speech at 6:00pm CST.

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