Stocks Slipping Gears to Begin the Final Week of the Year
The US equity markets are under some pressure in early action as traders return from the long Christmas holiday weekend, digesting an interest rate hike out of China and battling a severe winter storm on the East Coast. Treasuries are lower amid the decline in stocks and as there are no major economic reports scheduled for release today. The US economic docket will be relatively subdued in the final week of trading for 2010. Equity news is also light, with Dow member General Electric Co announcing that it will sell its Mexican mortgage business to Grupo Financiero Santander Mexico, including a $2 billion mortgage portfolio. Overseas, Asia finished mixed in the wake of the interest rate hike in China, which is pressuring stocks in Europe.
As of 8:44 a.m. ET, the March S&P 500 Index Globex future is 4 points below fair value, the Nasdaq 100 Index is 5 points below fair value, while the DJIA is 35 points below fair value. Crude oil is $0.66 lower at $90.85 per barrel, and the Bloomberg gold spot price is unchanged at $1,381.45 per ounce. Elsewhere, the Dollar Index-a comparison of the US dollar to six major world currencies-is down 0.1% at 80.40.
GE Capital, the financing unit of Dow member General Electric Co. (GE $18 1) announced that it reached an agreement to sell its consumer mortgage business in Mexico, which includes a $2 billion mortgage portfolio, to Grupo Financiero Santander Mexico. Financial terms of the deal were not disclosed and the transaction is expected to close in the first half of 2011.
Housing data to dominate short economic docket
Treasuries are mostly lower in early action as the economic calendar is void of any major releases today and will remain relatively light for the final week before the New Year. The yield on the two-year note is 5 bps higher to 0.70% and the yield on the 10-year note is up 1 bp to 3.40%, while the 30-year bond yield is flat at 4.47%. However, in late-morning action, we will get a look at regional manufacturing activity, with the release of the Dallas Fed Manufacturing Activity Index, forecasted to improve slightly to 17.0 in December, from 16.2 in November. The release will be the first of a few regional reports this week as the Richmond Fed Manufacturing Index and the Chicago Purchasing Managers Index are due out on Tuesday and Thursday,respectively.
Meanwhile, the relatively light week on the economic front will be highlighted by some readings on the struggling housing market, beginning with tomorrow's release of the S&P/Case Shiller Home Price Index, forecasted to show a month-over-month (m/m) decline of 0.6% and a year-over-year (y/y) dip of 0.18% for October. Elsewhere, pending home sales will be released on Thursday, and the gauge of the pipeline of existing home sales is anticipated to show sales rose 2.0% m/m in November. Other reports due out this week include: consumer confidence on Tuesday andweekly initial jobless claims on Thursday.
Europe under pressure in the wake of China action
The equity markets in Europe are solidly lower in afternoon action, with consumer goods and financials leading the way, following the announcement over the weekend that China increased its benchmark interest rates. However, trading is lighter than usual which may be exacerbating the declines in the region as traders return from the Christmas Holiday weekend and the UK markets remained closed. Automakers are the worst performers amid concerns about thepotential impact of the monetary policy tightening out of China on sales. Economic data across the pond is also scarce with housing data dominating the calendar. A read on UK housing declined in December, while separate reports showed Spain's total housing permits and home mortgages both posted solid declines.
The US equity markets are under some pressure in early action as traders return from the long Christmas holiday weekend, digesting an interest rate hike out of China and battling a severe winter storm on the East Coast. Treasuries are lower amid the decline in stocks and as there are no major economic reports scheduled for release today. The US economic docket will be relatively subdued in the final week of trading for 2010. Equity news is also light, with Dow member General Electric Co announcing that it will sell its Mexican mortgage business to Grupo Financiero Santander Mexico, including a $2 billion mortgage portfolio. Overseas, Asia finished mixed in the wake of the interest rate hike in China, which is pressuring stocks in Europe.
As of 8:44 a.m. ET, the March S&P 500 Index Globex future is 4 points below fair value, the Nasdaq 100 Index is 5 points below fair value, while the DJIA is 35 points below fair value. Crude oil is $0.66 lower at $90.85 per barrel, and the Bloomberg gold spot price is unchanged at $1,381.45 per ounce. Elsewhere, the Dollar Index-a comparison of the US dollar to six major world currencies-is down 0.1% at 80.40.
GE Capital, the financing unit of Dow member General Electric Co. (GE $18 1) announced that it reached an agreement to sell its consumer mortgage business in Mexico, which includes a $2 billion mortgage portfolio, to Grupo Financiero Santander Mexico. Financial terms of the deal were not disclosed and the transaction is expected to close in the first half of 2011.
Housing data to dominate short economic docket
Treasuries are mostly lower in early action as the economic calendar is void of any major releases today and will remain relatively light for the final week before the New Year. The yield on the two-year note is 5 bps higher to 0.70% and the yield on the 10-year note is up 1 bp to 3.40%, while the 30-year bond yield is flat at 4.47%. However, in late-morning action, we will get a look at regional manufacturing activity, with the release of the Dallas Fed Manufacturing Activity Index, forecasted to improve slightly to 17.0 in December, from 16.2 in November. The release will be the first of a few regional reports this week as the Richmond Fed Manufacturing Index and the Chicago Purchasing Managers Index are due out on Tuesday and Thursday,respectively.
Meanwhile, the relatively light week on the economic front will be highlighted by some readings on the struggling housing market, beginning with tomorrow's release of the S&P/Case Shiller Home Price Index, forecasted to show a month-over-month (m/m) decline of 0.6% and a year-over-year (y/y) dip of 0.18% for October. Elsewhere, pending home sales will be released on Thursday, and the gauge of the pipeline of existing home sales is anticipated to show sales rose 2.0% m/m in November. Other reports due out this week include: consumer confidence on Tuesday andweekly initial jobless claims on Thursday.
Europe under pressure in the wake of China action
The equity markets in Europe are solidly lower in afternoon action, with consumer goods and financials leading the way, following the announcement over the weekend that China increased its benchmark interest rates. However, trading is lighter than usual which may be exacerbating the declines in the region as traders return from the Christmas Holiday weekend and the UK markets remained closed. Automakers are the worst performers amid concerns about thepotential impact of the monetary policy tightening out of China on sales. Economic data across the pond is also scarce with housing data dominating the calendar. A read on UK housing declined in December, while separate reports showed Spain's total housing permits and home mortgages both posted solid declines.
France's CAC-40 Index is down 1.3%, Germany's DAX Index is 1.4% lower, and Spain's IBEX 35 Index is falling 2.2%.
Asia mixed following Chinese rate hike
Stocks in Asia finished mixed in a short-handed trading session with markets in Australia, New Zealand, and Hong Kong all closed for Christmas. However, the Chinese markets were in focus as China's central bank increased its benchmark lending rate on Christmas Day by 25 basis points-the second hike in over two months-to 5.81%, while it also increased its benchmark deposit rate to 2.7Stocks Slipping Gears to Begin the Final Week of the Year
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