Morning Call For Wednesday, Feb. 1

OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH17 +0.23%) are up +0.19% and European stocks are up +0.90%. Optimism about corporate earnings is lifting stock indexes this morning with Apple up 3% in pre-market trading after it reported better-than-expected quarterly earnings results after the market closed on Tuesday. Although expectations are for no change in monetary policy after today’s FOMC meeting, the markets will parse the post-FOMC statement for any change in forward guidance as to when the Fed may next raise interest rates. European stocks received an added boost after the Eurozone Jan Markit manufacturing PMI was revised upward to the fastest pace of expansion since the data series began in 2014. Asian stocks settled mostly higher: Japan +0.56%, Hong Kong -0.18%, Australia +0.57%, Singapore +0.68%, South Korea +0.55%, India +1.76%. China and Taiwan were closed for holiday. Japan’s Nikkei Stock Index recovered from a 1-week low and closed higher as strength in USD/JPY boosted exporter stocks.

The dollar index (DXY00 +0.06%) is up +0.06%. EUR/USD (^EURUSD) is unchanged. USD/JPY (^USDJPY) is up +0.41%.

Mar 10-year T-note prices (ZNH17 -0.14%) are down -4.5 ticks.

The Eurozone Jan Markit manufacturing PMI was revised upward to 55.2 from the originally reported 55.1, the fastest pace of expansion since the data series began in 2014.

The China Jan manufacturing PMI fell -0.1 to 51.3, stronger than expectations of -0.2 to 51.2.

The Japan Jan Nikkei manufacturing PMI was revised downward to 52.7 from the originally reported 52.8, still the fastest pace of expansion in 2-3/4 years.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +4.0% with purchase sub-index +6.0% and refi sub-index +0.2%), (2) Jan ADP employment (expected +167,000, Dec +153,000), (3) revised Jan Markit U.S. manufacturing PMI (prelim-Jan +0.8 to 55.1), (4) Jan ISM manufacturing PMI (expected +0.5 to 55.0, Dec +1.0 to 54.7), (5) Dec construction spending (expected +0.2% m/m, Nov +0.9% m/m), (6) FOMC announces policy decision (no change expected for 0.50%-0.75% fed funds target range), (7) Jan total vehicle sales (expected 17.50 million, Dec 18.29 million), (8) EIA Weekly Petroleum Status Report.