Morning Report: November 18, 2011

Ahead of the Bell: Dow futures are trading up 104 points and S&P futures are trading up 14 points. Europe will once again be in focus, as surging borrowing cost for several EU members is adding pressure on Germany and France to settle their differences on how involved the ECB should be in backstopping the debt crisis. ECB President, Mario Draghi said Euro zone governments should not waste any time in bolstering the region’s rescue fund, Europe is running out of options to resolve the sovereign debt crisis.

  • On the economic calendar today, leading indicators for October will be out after the market opens and is expected to be 0.5% compared with 0.2% for September. New York Federal Reserve Bank President, William Dudley will be speaking on the economic outlook at policy at SUNY Albany. Dallas Federal Reserve Bank President, Richard Fisher will be speaking on the Fed and the Texas economy to the Texas Teach Alumni Association in Dallas. Companies reporting earnings include Ann Inc., Heinz Co., Tsakos Energy Navigation, and WGL Holdings Inc. The dollar is up against the Japanese yen and British pound and down against the euro. Crude oil is currently trading at $100 a barrel.  Gold is trading at $1,736.  
  • Yesterday, stocks fell for a second day in row after a report showed manufacturing activity expanded less than forecast in November. German Chancellor Angela Merkel rejected calls by France to deploy the ECB, as the crisis backstop for the debt crisis. 
  • On CNBC today, Steven Ross, Miami Dolphins owner & Chairman and CEO of Related Companies, talked about the economy, jobs, and taxes. Ross believes we are primed to grow and create jobs, but we need to get consumer confidence back and quell concerns about the direction of the country. There is a lack of confidence in Washington and the administration is not creating jobs. Ross thinks things will change after the elections and says there is a lack of direction right now which is hurting growth and confidence. He believes we are a centrist country and need to move back to the center. Lastly, Ross thinks we need to reduce costs rather than increase revenues and we need to address the tax code.    
  • Happy Friday, have a nice day, and a wonderful weekend.  

Thursday’s Close

DJIA down 134.86 pts/-1.13%/11,770.73

S&P down 20.78 pts/-1.68/1,216.13

Nasdaq down 51.62 pts/-1.96/2,587.99

Friday’s Futures

Dow Futures up 104.00 pts/+0.89%

S&P Futures up 14.50 pts/+1.16%

Nasdaq Fut up 17.58 pts/+0.78%

Overseas Markets

FTSE -0.58%

CAC 40 -0.05%

NIKKEI 225 -1.23%

HANG SENG -1.73%

Overseas:  World stock markets were down today. European and Asian markets were down on concerns Europe will not be able to contain the debt crisis.      

Economic Reports:  Leading Indicators expected to be 0.5% at 10:00 a.m.

Top Headlines:    

  • Hewlett Packard Co., (HPQ) said it has added activist investor Relational Investor LLC to its board which owns about a 1% stake in the company.
  • Reports indicate Amazon.com Inc. (AMZN) is seeking to build on its expansion into e-readers and tablets, is working on a smartphone that will go on sale in the fourth quarter of next year.
  • Rio Tinto Group (RIO) has raised its offer for Canadian uranium miner Hathor Exploration Ltd. to about C$654 million ($636 million) to fend off Cameco Corp.’s hostile bid.     

Commodities/Currency:

Gold:up $15.10 to $1,736.85

Oil:up 1.20 to $100.12

EUR/USD 1.3594 +0.0100

USD/JPY 76.6415  -0.3700

GBP/USD 1.5865 -0.0100

Volatility Index (VIX): As of the close of business Thursday, November 17, the VIX is up 1.00 at 34.51

Companies Reporting Quarterly Earnings:     

Heinz (HNZ): Q3 EPS of $0.81 beats by $0.01. Revenue of $2.83B (+8.3% Y/Y) misses by $80M.

Today’s Opening and Closing Bells:

Delphi Automotive Celebrates IPO on the New York Stock Exchange Rodney O'Neal, Chief Executive Officer & President, will ring the opening bell.

Brazil’s Cosan Limited (CZZ) visits the NYSE to celebrate “Cosan Day.”  Cosan Day represents an opportunity to share the company’s plans for the future and its growth potential with investors, market analysts and other representatives of the financial community, including the media. Cosan CEO Marcos Lutz will ring the closing bell.