Morning Call For November 20, 2015

OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.23%) are up +0.20%, led by a 3% increase in Nike after the company approved a $12 billion stock buyback program and increased its dividend, while European stocks are down -0.12%, led by weakness in bank stocks as Barclays Plc fell over 2% after Morgan Stanley downgraded the stock to ‘Equal weight’ from ‘Overweight.’ Losses in European stocks were limited as 10-year German bunds rallied to a 3-week high and EUR/USD fell after ECB President Draghi hinted that the slow pace of inflation may require additional monetary easing from the ECB. Asian stocks settled mostly higher: Japan +0.10%, Hong Kong +1.13%, China +0.37%, Taiwan -0.14%, Australia +0.26%, Singapore -0.07%, South Korea unch, India +0.10%.

The dollar index (DXY00 +0.39%) is up +0.30%. EUR/USD (^EURUSD) is down -0.56% after ECB President Draghi said that the slow pace of inflation may require additional stimulus from the ECB. USD/JPY (^USDJPY) is down -0.02%.

Dec T-note prices (ZNZ15 -0.01%) are down -1 tick.

Comments from ECB President Mario Draghi suggest the ECB is worried about the slow pace of inflation and may be ready to expand stimulus when it meets in 2 weeks as he said “if we decide that the balance of risks to our medium-term price stability objective is skewed to the downside, we will act by using all the instruments available within our mandate.”

German Oct PPI fell-0.4% m/m and -2.3% y/y, weaker than expectations of -0.2% and -2.0% y/y with the -2.3% y/y drop the largest year-over-year decline in 5-1/2 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) St. Louis Fed President James Bullard’s speech on the economy to the Fort Smith Chamber of Commerce, (2) Nov Kansas City Fed manufacturing activity (expected +1 to 0, Oct +7 to -1), (3) New York Fed President William Dudley speaks about the economy to students at Hofstra University.

There are 2 of the Russell 1000 companies that report earnings today: Foot Locker (consensus $0.95), Sirona Dental Systems (1.10).