U.S. Morning Call for Tuesday, July 7, 2009

Overnight Developments

• The European DJ Stoxx 50 this morning is up +0.71% and Sep S&Ps are trading +1.20 points (+0.13%). Bullish factors in European trading include a sharp +4.4% m/m jump in German manufacturing orders (far above the market consensus of +0.5%) and a rise in the UK June nationwide consumer confidence index to 55 from 53 in May. Persimmon, the largest UK home builder, is up 4.7% this morning after the company said that home prices are stabilizing in some regions and that it would take another "substantial" negative event such as a bank failure to force fresh land writedowns. On the negative side in the UK, May UK manufacturing production fell -0.5% m/m and -12.7%, which was weaker than market expectations for a report of +0.2% m/m and -11.8% y/y. EU Finance Ministers today said that it is too soon to think about exit strategies from the monetary stimulus programs. Obama economic advisor Laura Tyson, who is a member of Obama's Economic Recovery Advisory Board, said in a sp eech today in Singapore that Congress should consider another stimulus package since February's $787 billion package was "a bit too small," although she said she was speaking for herself and not the administration. This morning's higher trade in metals prices has boosted BHP Billiton and Rio Tinto Group by more than 3%. The Asia-Pacific stock markets today closed mixed. The following Asian markets closed lower: Japan -0.34%, Hong Kong -0.65%, China -1.02%, Australia -0.44%. The follower Asian markets closed higher: Taiwan +0.98%, Singapore +0.27%, South Korea +0.33%, Bombay +0.90%. (more)