US Market Update: Eurozone Crisis Grabs Center Stage Again

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US Market Update: Eurozone Crisis Grabs Center Stage Again

26.09.2012 17:33 Wednesday
***Economic Data***
- (UK) Sept CBI Industrial Reported Sales: +6 v +5e
- (DE) Germany Sept CPI Bavaria M/M: -0.2% v +0.4% prior; Y/Y: +2.3% v +2.5% prior
- (IE) Ireland Aug Property Prices M/M: +0.5% v +0.2% prior (largest rise since 2007); Y/Y: -11.8% v -13.6% prior
- (US) MBA Mortgage Applications w/e Sept 21st: +2.8% v -0.2% prior
- (DE) Germany Sept Preliminary Consumer Price Index M/M: 0.0% v 0.0%e; Y/Y: 2.0% v 2.0%e
- (DE) Germany Sept Preliminary CPI EU Harmonized M/M: 0.0% v 0.0%e; Y/Y: 2.1% v 2.1%e
- (CA) Canada Aug Teranet/National Bank House Price Index M/M: No est v 0.7% prior; Y/Y: No est v 4.8% prior; HPI: No est v 155.28 prior
- (MX) Mexico Aug Preliminary Trade Balance: -$+979M v -$800Me
- (US) Aug New Home Sales: 373K v 380Ke
- (US) Weekly DOE Crude Oil Inventories

- Risk assets are getting pummeled as anti-austerity protests in both Athens and Madrid turn violent and the fiscal crisis in Spain's regions goes from bad to worse. In Madrid, police are using rubber bullets and teargas against protesters and analysts fear that the conflict between the government and Catalonia could become a major problem. Behind the scenes it is assumed that PM Rajoy is preparing to request ESM help, although in public he continues to insist that Spain will not request more aid beyond the standing bank bailout "unless yields rise too high." At the same time, the Northern European eurozone states Germany, Finland and the Netherlands seemed to suggest that any aid Spain receives for its banks might remain on its public debt. Yields on Spanish and peripheral debt have spiked overnight, and 10-year Spanish yields are just about to go back above 6%. Meanwhile, analysts are concerned about Germany's second straight "technically uncovered" 2022 Bund auction. In Asia, the Shanghai Composites closed at its lowest level since late Jan 2009, just above 2,000. Both WTI crude and gold have tumbled a bit more than 1% in the session.

- Profits at contract electronics manufacturer Jabil Circuit were nearly flat on an adjusted basis in the firm's Q4 while revenue rose a bit, with both figures more or less meeting consensus expectations. Note that the firm's guidance for Q1 was disappointing. Shares of JBL are down 9% on the day. Specialty chemicals name Omnova is down 17% after missing profit expectations in its Q3 report.

- Shares of home decorating name Blyth are down a whopping 17% this morning after it withdrew the planning IPO of its subsidiary ViSalus due to uncertain market conditions. Management noted that the company had achieved net sales growth in excess of 450% in the first half of 2012 but warned current market conditions are not conducive to recognizing this level of achievement.

- American Greetings' CEO and Chairman Zev Weiss has proposed to buy the company for $17.18 per share, nearly a 20% premium over yesterday's closing price. The company said it would examine the proposal. Kraft Foods is also in focus this morning, following news that it would replace Alpha Natural in S&P500, effective after close Oct 1st.

***Looking Ahead***

- 11:30 (CA) Canada's Chief Trade Negotiator Verheul for Canada/EU Speaks
- 12:00 (FR) France Aug Net Change in Jobseekers: No est v +41.3K prior; Total Jobseekers: No est v 2.987M prior
- 13:00 (US) Treasury to sell 5-Year Notes

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