Morning Call For January 27, 2016

OVERNIGHT MARKETS AND NEWS

March E-mini S&Ps (ESH16 -0.51%) are down -0.67% and European stocks are down -1.04% as technology stocks slide, led by a 3% decline in Apple in pre-market trading, after it reported fewer-than-expected iPhones sold in Q1 and forecast a smaller-than-expected increase in Q2 revenue. The fall in China’s Shanghai Composite to a 13-3/4 month low is also negative for stocks as is the -3.59% decline in crude oil prices that is undercutting energy producing stocks. The markets will be on edge ahead of the post-FOMC meeting statement later this afternoon. Asian stocks settled mixed: Japan +2.72%, Hong Kong +1.02%, China -0.52%, Taiwan +0.27%, Australia -1.20%, Singapore +0.02%, South Korea +1.66%, India +0.03%. China’s Shanghai Composite fell to a 13-3/4 month low on economic concerns after China December industrial profits fell for a seventh month, although Japan’s Nikkei Stock Index rallied up to a 1-week high and closed higher as carmakers rallied after the Nikkei newspaper reported that Toyota Motor may align with Suzuki Motor to better compete in emerging markets. Another positive sign for Japanese stocks was exchange data that showed short sales made up 43% of trading on the Tokyo Stock Exchange as of Tuesday’s close, the highest this year. The last time short sales were this high was Sep 29, which marked the bottom of the market for several months.

The dollar index (DXY00 -0.37%) is down -0.35%. EUR/USD (^EURUSD) is up +0.05%. USD/JPY (^USDJPY) is down -0.12%.

Mar T-note prices (ZNH16 -0.07%) are down -2 ticks.

German Feb GfK consumer confidence was unch at 9.4, stronger than expectations of -0.1 to 9.3.

China Dec industrial profits fell -4.7% y/y, the seventh consecutive month that profits have declined.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) the outcome of the 2-day FOMC meeting that concludes today, (2) weekly MBA mortgage applications (previous +9.0% with purchase sub-index -1.6% and refi sub-index +18.7%), (3) Dec new home sales (expected +2.0% to 500,000, Nov +4.3% to 490,000), and (4) the Treasury’s auction of $15 billion of 2-year floating-rate notes and $35 billion of 5-year T-notes.