Asian Morning Briefing : U.S.Stocks Swings Lower

 
                       LAST    CHANGE   % CHG 
DJIA                 17613.68   -27.16  -0.15% 
Nasdaq                 4661.5    -3.21  -0.07% 
S&P 500               2023.03    -5.23  -0.26% 
Japan: Nikkei 225    17087.71  -110.02  -0.64% 
Hang Seng            24215.97   189.51   0.79% 
Shanghai Composite     3235.3     5.98   0.19% 
S&P BSE Sensex       27425.73  -159.54  -0.58% 
Australia: S&P/ASX     5404.7      -18  -0.33% 
UK: FTSE 100          6543.07    41.65   0.64% 
 
 
                    PRICE CHG  YIELD 
U.S. 2 Year              0/32  0.545 
U.S. 5 Year              2/32   1.37 
U.S. 10 Year             2/32  1.902 
Australia 10 Year       25/32   2.62 
China 10 Year           19/32    3.6 
India 10 Year        -2 15/32  7.993 
Japan 10 Year            5/32  0.262 
German 10 Year           0/32  0.483 
 
 
                          LAST(MID)  CHANGE 
Australia $ (AUD/USD)        0.8142  -0.0015 
Yen (USD/JPY)                118.75     0.39 
S. Korean Won (USD/KRW)     1083.02      0.3 
Chinese Yuan (USD/CNY)       6.1978  -0.0062 
Euro (EUR/USD)                1.176  -0.0075 
WSJ Dollar Index              84.26     0.38 
 
 
               LAST   CHANGE  % CHG 
Crude Oil      46.21    0.14   0.30% 
Brent Crude       48    -0.7  -1.44% 
Gold          1231.3    -1.5  -0.12% 
 

        MARKETS AT A GLANCE
        (Data as of approximately 5 p.m. ET)
        SNAPSHOT:
        U.S. stocks ended slightly lower after sharp swings Tuesday. Oil extended its selloff after the UAE's oil minister said OPEC would stand firm on output. Treasurys strengthened as demand for havens increased. Gold prices rose as investors grew concerned that a shaky global economy would stymie the Federal Reserve's plans to raise U.S. interest rates later this year. The euro slumped to a nine-year low against dollar on ECB easing expectations.
        OPENING CALL:
        On Wednesday, South Korea will release its unemployment rate for December. South Korea's unemployment rate decreased to 3.40 percent in November from 3.50 percent in October, and is forecast to remain at 3.40 percent for December.
        EQUITIES:
        U.S. stocks closed lower after posting their largest intraday swing since October, amid fresh concerns about the future of Europe's economy.
        Stocks briefly made a sharp decline in afternoon trading, with the Dow Jones Industrial Average making its biggest swing within a single session since Oct. 15. It rose as many as 282 points in morning trading, before sliding as many as 142 points to its low after 2 p.m. It closed down 27.16 points, or 0.2%, to 17613.68.
        Traders pointed to shifting views on the outlook for European Central Bank policy as one driver of market moves. Investors broadly expect the ECB to introduce new stimulus in coming months, so investors are closely following developments in the region, traders said. The U.S. stock declines started after European stocks closed broadly higher, however.
        "The ECB is just as important to U.S. stocks right now as the Fed," said Michael Purves, chief global strategist with Greenwich, Conn.-based brokerage firm Weeden & Co. "More and more people are expecting them to announce [stimulus] in the form of sovereign bond purchases."
        The S&P 500 index dropped 5.23 points, or 0.3%, to 2023.03. The Nasdaq Composite Index fell 3.21 points, or 0.1%, to 4661.50.
        A monthslong oil-price decline and uncertainty about stimulus in Europe have made investing stocks a riskier proposition, said Paul Zemsky, who helps manage about $30 billion in global investments for Voya Investment Management. Crude-oil futures are down nearly 60% since June, and on Tuesday fell 0.4% to $45.89 a barrel.
        Valuations on U.S. stocks will probably need to rise more for the market to provide solid returns this year, Mr. Zemsky said. But that could be tough if investors remain worried about global growth, he added, since stocks are trading above long-term average levels.
        "It's hard to get valuations to rise if you have all this uncertainty," he said. Still, he is bullish on U.S. stocks, since he considers them a better option than bonds or international shares.
        In corporate news, KB Home dropped 16% after warning the margin pressures it experienced in its latest quarter are likely to continue as weak demand leads the home builder to ramp up incentives.
        Stocks in China and Hong Kong advanced after China's upbeat report, with Hong Kong's Hang Seng Index up 0.8% and China's Shanghai Composite gaining 0.2%. Japan's Nikkei Stock Average fell 0.6% after being closed Monday for a public holiday.
        FOREX:
        The euro slipped to a new nine-year low against the dollar as investors bet the European Central Bank would announce broad measures to lift the economy and consumer prices at its meeting next week.
        The euro dropped to $1.1753, the lowest since Dec. 8, 2005, before recovering to trade at $1.1773, down 0.5% for the day. The euro has fallen 0.9% against the yen to a two-month low of 138.73 yen.
        Investors have been abandoning the euro in droves since last May as the ECB has eased monetary policy in its effort to battle stagnant growth and falling inflation in the eurozone. The euro has dropped 16% against the greenback from a 2014 high of $1.3995 it reached on May 8.
        There is growing anticipation across financial markets that the ECB will announce a large asset-purchase program, also called quantitative easing, at its meeting on Jan. 22. Such a move would boost eurozone equities but would weaken the single currency.
        Falling oil prices have weighed on already low inflation expectations for economies across the globe but have added pressure on the ECB in particular to take action. The global oil-price benchmark ended Monday below $50 a barrel for the first time in nearly six years and has fallen more than 17% since the start of 2015.
        As the central bank meeting draws closer, the euro remains vulnerable to sliding to new lows, said Joe Manimbo, senior market analyst at Western Union.
        "It sounds like full-blown QE in the eurozone is on the way as soon as next week," Mr. Manimbo said. "That might provide some much-needed relief to the economy, but it's liable to come at the price of a weaker euro."
        BONDS:
        The yield on the benchmark 10-year U.S. government bond closed below 1.9% for the first time in 20 months as weaker stocks and commodities prices boosted the allure of ultrasafe U.S. government debt.
        The bond market shook off an earlier round of selling driven by tepid demand on a $21 billion sale of 10-year notes.
        In late-afternoon trading, the yield on the benchmark 10-year Treasury note fell to 1.890% from 1.909% on Monday.
        It marks the lowest closing level since May 2013. Bond prices rise as their yields fall.
        The yield on the 30-year Treasury bond fell to 2.482%, near the record closing low of 2.466% set in July 2012.
        Treasury bond prices have strengthened for three straight sessions as investors are grappling with an uncertain global growth outlook and the risk of deflation especially in Europe.
        Trading in stocks and some other riskier markets has been volatile, a sign of investors' anxiety. U.S. stocks had rallied earlier Tuesday but fell in the afternoon session.
        "There is lots of uncertainty at the moment," said Russ Certo, managing director of rates trading at Brean Capital in New York. "Investors are concerned whether the selloff in commodities, from oil to copper, is signaling that something deeper is happening."
        COMMODITIES:
        Global oil prices fell further, bringing their year-to-date decline to 19%, on signs the market's oversupply would be long-lasting.
        Market participants estimate that crude supply is overshooting demand by as much as 2 million barrels a day. That mismatch has driven prices off a cliff since last summer, with Brent falling to its lowest level since March 2009.
        The United Arab Emirates' oil minister said that the Organization of the Petroleum Exporting Countries would stand firm on its decision to keep output unchanged. The U.S. government also released new forecasts showing that it expects the global oil market to remain oversupplied this year and next.
        Brent crude for February delivery fell 84 cents, or 1.8%, to $46.59 a barrel on ICE Futures Europe, the lowest settlement since March 2009. On the New York Mercantile Exchange, oil futures fell 18 cents, or 0.4%, to $45.89 a barrel, the lowest since April 2009. U.S. prices fell below $45 a barrel earlier in the session.
        The U.S. contract briefly traded above the Brent contract for the first time since 2012.
        OPEC opted at its November meeting to maintain its production quota of 30 million barrels a day, even though that level exceeds the group's estimated demand for its oil.
        "(OPEC) cannot continue protecting a certain price. That is not the only aim of OPEC," said Suhail Mohamed Faraj al-Mazrouei, the U.A.E. oil minister, at an energy event in Abu Dhabi.
        Gold prices hit their highest level in two and a half months, as investors grew concerned that a shaky global economy would stymie the Federal Reserve's plans to raise U.S. interest rates later this year.
        TODAY'S HEADLINES:
        World Bank Lowers Outlook for Global Growth
        The World Bank cut its outlook for global growth, saying a strengthening U.S. economy and plummeting oil prices won't be enough to offset deepening trouble in the eurozone and emerging markets.
        Data Recorder From AirAsia Flight Downloaded
        Air-crash investigators said they successfully downloaded data from the flight data recorder of AirAsia Flight 8501 Tuesday night, paving the way to begin data analysis of what led to the Dec. 28 crash.
        U.S. Reports Smallest Budget Deficit Since 2007
        The U.S. Treasury posted a $2 billion surplus in December, making the deficit for calendar year 2014 the smallest since 2007. Over the previous 12 months, the government reported a deficit of $488 billion.

        Life insurer MetLife sued the federal government over a finding late last year that the firm poses significant risks to the U.S. financial system and should be drawn in for tougher oversight, setting up the biggest test yet of the Dodd-Frank law.
        EIA Sees Global Oil Supply Outpacing Demand
        The U.S. Energy Information Administration, in its monthly short-term energy outlook, called for benchmark U.S. crude-oil prices to average $54.58 a barrel this year, down from $93.26 a barrel in 2014.
        CSX Profit Rises 15% on Strong Demand
        CSX said its fourth-quarter earnings rose 15% to $491 million, or 49 cents a share, as the freight railroad operator continued to benefit from strong freight demand. Revenue increased 5.3% to $3.19 billion.
        Energy Future Moves to Open the Bidding on Oncor Again
        Energy Future Holdings moved to restart the bidding on its stake in Oncor, the transmissions business whose prospects shook up the Texas company's $42 billion bankruptcy.
        Amazon Signs Woody Allen to Create TV Series
        Amazon.com, fresh from its Golden Globe wins for its original show "Transparent," has signed filmmaker Woody Allen to write and direct his first television series.
        EIA Sees Global Oil Supply Outpacing Demand
        The U.S. Energy Information Administration, in its monthly short-term energy outlook, called for benchmark U.S. crude-oil prices to average $54.58 a barrel this year, down from $93.26 a barrel in 2014.
        Supreme Court Backs Borrowers' Right to Rescind Mortgages
        The U.S. Supreme Court adopted a borrower-friendly interpretation of a federal law that gives consumers the right in some circumstances to unwind certain mortgage loans.
        RECENT DJ DOMINANTS:
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        Microsoft and Intel: Priced for PC Perfection -- Heard on the Street
        Rates Don't Cooperate With Banks -- Ahead of the Tape
        Hungarian Imports of Russian Diesel Fuel Via Ukraine Disrupted
        TV Makers Set a New Strategy; OLED Is Delayed
        TODAY'S CALENDAR
        (Times in GMT, followed by country and event)
        2145 NZ Dec Electronic Card Transactions
        2300 SKA Dec Economically Active Population Survey, incl Unemployment
        2300 NZ Dec QV Nationwide Residential Property Values
        2350 JPN Dec Money Stock, Broadly-defined Liquidity
        0030 AUS Nov Job Vacancies
        0030 AUS Nov Lending Finance
        0300 SKA Nov Money Supply index L
        0300 SKA Dec Economic Trends, including household loans, money supply index Lf
        0300 AUS Jan Monthly Leading Indicator of Employment
        0600 JPN Dec Preliminary Machine Tool Orders
        0630 IND Dec Monthly WPI (all commodities)
        0745 FRA Nov Balance of Payments
        0745 FRA Dec CPI
        0900 ITA Dec CPI
        0930 UK Nov CML Monthly Lending Trends
        1000 EU Nov Industrial Production
        1100 FRA Q3 OECD Contributions to GDP growth data
        1200 US 01/09 MBA Weekly Mortgage Applications Survey
        1330 US Dec Import & Export Price Indexes
        1330 US Dec Advance Monthly Sales for Retail & Food Services
        1400 US FRB Philadelphia President Charles Plosser speech on the economic outlook
        1415 UK Treasury Committee evidence session with Mark Carney on the Bank of England's Financial Stability Report
        1500 US Nov Manufacturing & Trade: Inventories & Sales
        1530 US 01/09 EIA Weekly Petroleum Status Report
        1900 US U.S. Federal Reserve Beige Book
        2350 JPN Nov Orders Received for Machinery
        2350 JPN Dec Corporate Goods Price Index
        (END) Dow Jones Newswires

        January 13, 2015 17:30 ET (22:30 GMT)
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        (MORE TO FOLLOW) Dow Jones Newswires

        January 13, 2015 17:30 ET (22:30 GMT)