Morning Call For Friday, Dec. 14

Overnight Markets And News

Mar E-mini S&Ps (ESH19 -0.91%) this morning are down -0.80% and European stocks are down -0.87% on global growth concerns. Eurozone Dec manufacturing activity expanded at the slowest pace in 2-3/4 years and Eurozone Nov new car registrations declined for a third month. Weaker-than-expected Chinese economic data on Nov industrial production and retail sales also shows signs of slower global growth and weighed on stock prices. U.S. and European stocks recovered from their worst levels after China said it will remove the retaliatory 25% tariff on automobiles imported from the U.S. for three months starting Jan 1. Asian stocks settled mostly lower: Japan -2.02%, Hong Kong -1.62%, China -1.53%, Taiwan -0.86%, Australia -1.05%, Singapore -1.09%, South Korea -1.43%, India +0.09%. Signs of a slowdown in Chinese manufacturing activity weighed on Asian equity markets after China Nov industrial production rose a weaker-than-expected +5.4% y/y, the slowest pace of increase in 10 years.

The dollar index (DXY00 +0.52%) is up +0.57% at a 1-month high. EUR/USD (^EURUSD -0.57%) is down -0.62% at a 2-week low. USD/JPY (^USDJPY unch) is down -0.03.

Mar 10-year T-note prices (ZNH19 +0-085) are up +8 ticks as the slide in global equity markets boosts safe-haven demand for T-notes.

The Eurozone Dec Markit manufacturing PMI fell -0.4 to 51.4, weaker than expectations of no change at 51.8 and the slowest pace of expansion in 2-3/4 years.

Eurozone Nov new car registrations fell -8.0% y/y to 1.121 million and year-to-date are up +0.8% to 14.160 million,

Eurozone Q3 labor costs rose +2.5% y/y, the fastest pace of increase in more than 7 years.

The German Dec Markit/BME manufacturing PMI fell -0.3 to 51.5, weaker than expectations of -0.1 to 51.7 and the slowest pace of expansion in 2-3/4 years.

China Nov industrial production rose +5.4% y/y, weaker than expectations of +5.9% y/y and the slowest pace of increase in 10 years.

China Nov retail sale rose +8.1% y/y, weaker than expectations of +8.8% y/y and the slowest pace of increase in 15-1/2 years.

The Japan Q4 Tankan large manufacturing business conditions was unch at 19, stronger than expectations of -1 to 18.

U.S. Stock Preview

Key U.S. news today includes: (1) Nov retail sales (expected +0.1% and +0.2% ex autos, Oct +0.8% and +0.7% ex autos), (2) Nov manufacturing production (expected +0.3%, Oct +0.3%) and Nov industrial production (expected +0.3%, Oct +0.1%), (3) prelim-Dec Markit manufacturing PMI (expected -0.3 to 55.0, Nov -0.4 to 55.3) and prelim-Dec Markit U.S. services PMI (expected -0.1 to 54.6, Nov -0.1 to 54.7), (4) Oct business inventories (expected +0.6%, Sep +0.3%).

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