Asian Morning Briefing: U.S. Stocks Inch Higher

 
                       LAST    CHANGE  % CHG 
DJIA                 18144.07   24.29  0.13% 
Nasdaq                5160.09    6.12  0.12% 
S&P 500                2124.2    1.35  0.06% 
Japan: Nikkei 225    20809.42  381.23  1.87% 
Hang Seng            27333.46  252.61  0.93% 
Shanghai Composite    4576.49   98.13  2.19% 
S&P BSE Sensex       27804.37   74.16  0.27% 
Australia: S&P/ASX     5684.3    74.1  1.32% 
UK: FTSE 100          6834.87     9.2  0.13% 
 
 
                    PRICE CHG  YIELD 
U.S. 2 Year             -1/32  0.682 
U.S. 5 Year             -4/32  1.699 
U.S. 10 Year           -10/32  2.414 
Australia 10 Year      -31/32  3.074 
China 10 Year          -29/32   3.65 
India 10 Year            6/32  7.901 
Japan 10 Year          -12/32  0.467 
German 10 Year           4/32  0.875 
 
 
                          LAST(MID)  CHANGE 
Australia $ (AUD/USD)        0.7737   0.0009 
Yen (USD/JPY)                123.94     0.58 
S. Korean Won (USD/KRW)      1106.7     5.32 
Chinese Yuan (USD/CNY)       6.2068  -0.0037 
Euro (EUR/USD)                1.117  -0.0171 
WSJ Dollar Index               86.5     0.65 
 
 
               LAST   CHANGE  % CHG 
Crude Oil      61.06    0.68   1.13% 
Brent Crude    65.14    1.04   1.62% 
Gold          1177.8    -6.3  -0.53% 
 

        MARKETS AT A GLANCE
        (Data as of approximately 5 p.m. ET)
        SNAPSHOT:
        U.S. stocks rose slightly Tuesday, propelling the Nasdaq Composite to a fresh record on continued optimism that Greece was nearing a bailout deal with its creditors. Safe havens Treasurys and gold slipped. Oil prices gained, fueled by expectations of a drop in U.S. crude-oil and gasoline supplies. The euro posted its biggest daily drop against the dollar in three months.
        OPENING CALL:
        With a dire economic outlook slowly receding, Chinese investors are rightly growing nervous that the central bank's largess could fade sooner rather than later. The Shanghai Composite, whose steep ascent has been fueled by easy cash and margin lending, at one point Tuesday was down more than 4%, widening its loss for the past week to 15%. It recovered to end 2% higher for the day.
        EQUITIES
        U.S. stocks rose slightly, propelling the Nasdaq Composite to a fresh record on continued optimism that Greece was nearing a bailout deal with its creditors.
        The Dow Jones Industrial Average rose 24.29 points, or 0.1%, to 18144.07 and the S&P 500 gained 1.35 points, or 0.1%, to 2124.20.
        The Nasdaq Composite climbed 6.12 points, or 0.1%, to 5160.09, notching an all-time high for the second day in a row. The Russell 2000, the benchmark for small-company stocks, also posted a record close for the second session in a row.
        Investors have been closely watching talks between Greece and its creditors amid concerns that without a bailout agreement, the country may default on its debt and possibly leave the eurozone. As negotiations have made some progress this week, investors have become more optimistic that this scenario, which potentially could roil financial markets across the region, will not occur.
        European markets also rose Tuesday after Greece's creditors suggested for the first time that a deal to avoid the country's bankruptcy was in sight. On Tuesday, Pierre Moscovici, European commissioner for economic and financial affairs, told French radio France Inter that he expected a deal this week.
        "The optimism we had yesterday on hopes of a Greek deal appears to be carrying over," said David Lafferty, chief market strategist at Natixis Global Asset Management, which oversees $880 billion. "Nothing has derailed that glimmer of hope we had yesterday."
        In corporate news, shares of AT&T jumped 2.5%, lifting the telecommunications sector, after Wall Street analysts upgraded their views on the telecom giant.
        Stocks in China rebounded from their worst weekly selloff since 2008 on Tuesday, after Shanghai slid earlier in the day as investors who have borrowed heavily sold shares to meet loan requirements.
        FOREX:
        The euro posted its biggest daily decline against the dollar in three months as a resolution to the latest installment of Greece's debt crisis appeared at hand and as a Federal Reserve official bolstered confidence in higher U.S. interest rates this year.
        Tuesday's drop in the common currency, which sank as far as 1.9% versus the dollar during intraday trading, is the latest example of volatility in the foreign-exchange market. A breathtaking rally in the U.S. currency that began a year ago has stalled in recent months amid doubts about the relative strength of the U.S. economy and the timing of the Fed's first interest-rate increase in nearly a decade. Since mid-March, currency markets have gyrated as investors grapple with a tepid stream of economic data and mixed signals from central bank officials.
        The bounce in the euro had continued even as worries about Greece's bailout and its role in the eurozone intensified in recent weeks. Some traders attributed the euro's strength to a reluctance by investors to place bearish bets amid the uncertainty. Now that investors appear to have more clarity on the situation surrounding Greece, they are re-establishing their wagers against the euro. Helping to boost the dollar as well is an uptick in confidence in the U.S. economy, thanks to stronger retail-sales and wage-growth indicators.
        The euro fell steadily during European trading and took another leg down after Federal Reserve Governor Jerome Powell said he sees closer to even chances of the central bank raising interest rates for the first time as early as September, followed by a second increase in December. Higher borrowing costs would make the dollar more attractive to yield-hungry investors.
        "When a centrist on the Fed board, a guy regarded generally as a good team player, talks up September, the market will take notice," said Richard Franulovich, senior currency strategist at Westpac Bank. "There's a lot of pent-up demand for the dollar and pent-up selling pressure for the euro."
        BONDS:
        U.S. Treasury bonds pulled back for a second consecutive session, sending the yield on the benchmark 10-year note to near the highest level since September.
        Optimism that Greece is near a bailout deal with creditors fueled a broad rally in European stocks and Greece's government bonds, sapping demand for ultrasafe U.S. government debt.
        Federal Reserve Gov. Jerome Powell, who votes on interest-rate decisions, said he expects the central bank to raise short-term interest rates in September with another boost in December, adding to selling in the bond market.
        The yield on the benchmark 10-year Treasury note rose to 2.409% in late-afternoon trading, compared with 2.362% on Monday.
        It marks the third-highest closing yield this year. Bond prices fall as yields rise.
        Demand for Treasury bonds has soured this quarter as data in the U.S. and eurozone pointed to an improving economy and fading deflation threats. Investors start to fret that bonds' valuations are getting stretched following a strong price rally since the start of 2014.
        Many investors have been shedding bondholdings to prepare for the Fed's pending shift away from ultra-loose monetary policy. The Fed is prepared to raise benchmark short-term interest rates for the first time since 2006. Investors are concerned that tightening monetary policy would send interest rates broadly higher, shrinking the value of outstanding bonds.
        "The deflation scare has been off and the bond market is moving away from very high valuations," said James Camp, head of fixed income at Eagle Asset Management, which has about $32.8 billion assets under management at the end of March.
        COMMODITIES:
        Oil prices gained, fueled by expectations of a drop in U.S. crude-oil and gasoline supplies.
        The U.S. crude-oil benchmark, known as West Texas Intermediate, settled up 63 cents, or 1%, at $61.01 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose $1.11, or 1.8%, to $64.45 a barrel on ICE Futures Europe.
        Oil prices rallied sharply earlier in the year as U.S. crude-oil inventories declined from record highs and investors grew more bullish due to growing global demand and cutbacks in new drilling. But the market has been stagnant in recent weeks on concerns that the world remains oversupplied with crude oil and any further price gains could spur new production.
        "Oil prices remain pinned between a $65 WTI cap--where U.S. shale producers are expected to come back--and $60 Brent floor--where consumer interest remains high," said Citigroup in a note Tuesday.
        Gold prices fell and silver ended at a near-two-month low, as investors sold the precious metal amid signs that Greece is nearing a deal with its creditors.
        TODAY'S HEADLINES:
        Trade Bill Clears Key Hurdle in Senate
        The Senate gave President Obama's trade agenda a big push forward, in a pivotal vote that clears the highest remaining procedural hurdle to giving the president expanded trade-negotiating power.
        Takata Executive Says Air-Bag Death Toll Could Rise
        The death toll tied to rupture-prone Takata air bags would likely rise if the Japanese supplier created a compensation fund for victims of the faulty parts, a company executive said during a Senate hearing.
        Alibaba Stumbles in U.S. Foray
        Alibaba is selling U.S. shopping site 11 Main, highlighting the challenges facing the Chinese e-commerce company in Western markets.
        U.S. Officials Warn Chinese Cyber Espionage Imperils Ties
        Top U.S. officials issued stern admonitions about China's behavior in cyberspace, warning it could threaten one of the most important geopolitical relationships in the world.
        Momo Receives Buyout Offer From CEO
        Chinese social networking platform Momo said that it has received a buyout offer from its chief executive that values it at more than $3 billion.
        Police Search Toyota Offices After Arrest of U.S. Executive
        (MORE TO FOLLOW) Dow Jones Newswires

        June 23, 2015 17:34 ET (21:34 GMT)

        Japanese police searched Toyota Motor's offices on Tuesday in connection with the arrest last week of a Toyota executive on suspicion of violating Japan's drug laws.
        Differences Remain on Greece Plan
        Greece's lenders were scrutinizing a proposal seen as a potential breakthrough on a last-minute bailout deal, but significant concerns by demanding creditors suggest tough negotiations still lie ahead.
        Boeing Names Muilenburg Its New CEO
        Boeing operating chief Dennis Muilenburg has been tapped as CEO, will replace W. James McNerney, who will continue as chairman.
        Subpeonas Issued in Investor Lawsuit on Credit Swaps
        Allegations that banks and two swaps industry groups colluded against would-be competitors in the credit-derivatives market are rippling through the investment world again.
        Citigroup Executive Pressured Brokers Over Libor
        A Citigroup executive in London said he was pressuring brokers to get other banks to lower their interest-rate submissions, a London court heard.
        RECENT DJ EXCLUSIVES:
        BlueMountain, Citadel, Pimco Subpoenaed In Investor Lawsuit On Credit Swaps -- Sources
        Indians Buy Gold as Chinese Shift to Stocks
        Cracking BlackBerry's Software Code -- Heard on the Street
        For Bed Bath, the Time Could Be Right -- Ahead of the Tape
        UniCredit's Targets Could Do With a Tune-Up -- Heard on the Street
        TODAY'S CALENDAR
        (Times in GMT, followed by country and event)
        2245 NZ May International Visitor Arrivals
        2350 JPN May Services Producer Price Index
        2350 JPN May Bank of Japan Monetary Policy Meeting Minutes
        0100 AUS Jun Vacancy Report
        0300 SKA May Net barter terms of trade
        0645 FRA Q1 GDP - detailed figures
        0800 TAI May Industrial output
        0800 GER Jun Ifo Business Climate Index
        0830 UK May BBA main high street banking groups statistics
        0900 ITA May Foreign Trade non-EU
        1100 FRA OECD Business and Finance Outlook report launch
        1100 US 06/19 MBA Weekly Mortgage Applications Survey
        1230 US Q1 3rd estimate GDP
        1230 US Q1 Revised Corporate Profits
        1430 US 06/19 EIA Weekly Petroleum Status Report
        1600 FRA May Claimant count and job advertisements collected by Pole empl
        2301 UK May UK monthly automotive manufacturing figures
        (END) Dow Jones Newswires

        June 23, 2015 17:34 ET (21:34 GMT)

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