Morning Call For January 25, 2016

OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH16 -0.13%) are down -0.24% and European stocks are down -0.32% as a -3.63% slide in crude oil prices (CLH16 -2.64%) undercuts energy producers. European stocks also moved lower after a gauge of German business confidence fell for a second month in January to the lowest in 11 months. Losses in European stocks were limited on signs the ECB may be leaning toward increasing stimulus after comments from ECB Governing Council member Knot who said the ECB may need to expand stimulus if the recent oil price drop starts to influence inflation elsewhere in the economy. Asian stocks settled higher: Japan +0.90%, Hong Kong +1.36%, China +0.75%, Taiwan +1.78%, Australia +1.84%, Singapore +0.22%, South Korea +0.62%, India +0.21%.

The dollar index (DXY00 -0.10%) is down -0.14%. EUR/USD (^EURUSD) is up +0.20%. USD/JPY (^USDJPY) is down -0.29% after comments from BOJ Governor Kuroda lowered expectations the BOJ will boost stimulus measures when it meets this Thursday and Friday when he said “we don’t think the current market situation has been affecting corporate behavior unduly.”

Mar T-note prices (ZNH16 +0.06%) are up +4 ticks.

ECB Governing Council member Knot said that “if the oil price drop starts to influence inflation elsewhere in the economy and takes a foothold in the economy, it would be a reason to revisit monetary policy.”

The German Jan IFO business climate fell -1.3 to 107.3, weaker than expectations of -0.3 to 108.4 and the lowest in 11 months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Jan Dallas Fed manufacturing activity (expected +6.1 to -14.0, Dec -15.2 to -20.1).

There are 5 of the S&P 500 companies that report earnings today: McDonalds (consensus $1.23), Halliburton (0.24), Kimberly-Clark (1.43), DR Horton (0.41), Zions Bancorporation (0.41).

U.S. IPO’s scheduled to price today: none.

Equity conferences this week: Cleantech Forum San Francisco on Tue-Wed, Real Estate Capital Markets 2016 Seminar on Wed.