Morning Call For September 21, 2015

OVERNIGHT MARKETS AND NEWS

December E-mini S&Ps (ESZ15 +0.64%) are up +0.22% and European stocks are up +0.42% as a late rally in Chinese stocks gave a boost to global markets. Gains in European stocks were muted after Volkswagen AG plunged over 20% after it admitted to cheating on U.S. air pollution tests for years. Emerging markets fell on concern the Fed may still raise interest rates this year after San Francisco Fed President Williams said on Saturday that Thursday’s decision by the Fed to raise interest rates was a “close call.” Asian stocks closed mixed: Japan closed for holiday, Hong Kong -0.75%, China +1.89%, Taiwan -1.83%, Australia -2.02%, Singapore +0.09%, South Korea -1.82%, India -0.10%. China’s Shanghai Composite reversed a loss of as much as 1.2% to close up +1.89% as Chinese industrial and technology companies rose on speculation that Chinese President Xi Jinping’s visit to the U.S. this week may lead to an increase in orders from the U.S.

The dollar index (DXY00 +0.66%) is up +0.48%. EUR/USD (^EURUSD) is down -0.19%. USD/JPY (^USDJPY) is up +0.39%.

Dec T-note prices (ZNZ15 -0.28%) are down -8 ticks.

Speaking Saturday at an event in Nashville, TN, St. Louis Fed President Bullard said he argued for a short-term interest rate hike at Thursday’s FOMC meeting and that there is a “strong case” for “normalizing” U.S. monetary policy.” He added that the Fed is “ready to go” in October on an interest rate increase if conditions warrant.

Speaking in New York at a symposium on China Saturday, San Francisco Fed President Williams said that Thursday’s FOMC decision was a “close call” and that despite the “significant challenges and risks” posed by global developments, he expects a Fed rate increase sometime this year.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Aug existing home sales (expected -1.6% to 5.50 million, Jul +2.0% to 5.59 million), and (2) Atlanta Fed President Dennis Lockhart’s comments on the economy to the Buckhead Rotary Club in Atlanta.