Morning Report: September 30, 2011

JINJIANG, CHINA - APRIL 01:   Employees work a...

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Ahead of the Bell: Dow futures are trading down 120 points and S&P futures are trading up 12 points following a report that China's manufacturing sector contracted for a third straight month in September, suggesting that the Chinese economy is not immune to the global slowdown, while factory inflation increased. German retail sales also signaled global growth is slowing.  

  • On the economic calendar today, the government will report personal income and spending before the market opens. Economists expect income to have stayed the same in August after rising 0.3% in the previous month, while spending is forecasted to have increased 0.2% last month, following an 0.8% increase in July. Chicago PMI will be released after the market opens and is anticipated to have moved to 54.0 in September from 56.5 in August. The University of Michigan will also release its final reading on consumer sentiment in September  after the market opens. Economists are forecasting a reading of 57.6, down slightly from the last reading of 57.8.  St. Louis Federal Reserve Bank President, James Bullard, will be speaking at Point Loma Nazarene University in San Diego. The dollar is up against the euro and British pound and down against the Japanese yen. Crude oil is currently trading at $81 a barrel.  Gold is trading at $1,621.   
  • Yesterday, stocks were up after see-sawing on lower- than-expected claims for unemployment benefits, which helped offset losses by consumer and technology shares.     
  • On CNBC today, Glenn Hutchins, Silver Lake Co-Founder & CO-CEO and NY Federal Reserve Board Member, talked about how this recovery is different. Hutchins said you can’t solve a problem if you don’t understand the problem, we are not in a cyclical recovery, this recovery in a different, we have massive debt. He is forecasting a decade long of lower growth, this is like having a long term illness. Hutchins pointed out, we were not in a robust recovery, it will take time, hard work, and tough choices to help the U.S. recover. Hutchins went on to say, this recovery will take time but you can’t wait for time, you need to do something about it now. Hutchins recommend Congress and the President to get America’s fiscal house in order and adopt recommendations made in the Simpson-Bowles report. He believes the biggest problem is a lack of demand and a lack of business confidence. Finally, Hutchins said we need to address the debt in government, debt at the household sector, the housing market, and tax reform.    
  • Happy Friday, have a nice day and a wonderful weekend.

Thursday’s Close

DJIA up 143.08 pts/+1.30%/11,153.98

S&P up 9.34 pts/+0.81/1,160.40

Nasdaq down 10.82 pts/-0.43/2,480.76

 

Friday’s Futures

Dow Futures down 120.00 pts/-1.02%

S&P Futures down 12.30 pts/-0.46%

Nasdaq Fut down 21.58 pts/-0.97%

 

Overseas Markets

FTSE -1.78%

CAC 40 -2.20%

NIKKEI 225 -0.01%

HANG SENG -2.32%

Overseas:  World stock markets were down today. European and Asian markets are trading lower on weaker manufacturing data from China and weak retail sales from Germany.

Economic Reports:  Personal Income and Outlays expected to be 0.3% at 8:30 a.m., Chicago PMI expected to be 54.0, and Consumer Sentiment expected to be 57.6 at 9:55 a.m.

Top Headlines:    

  • Bank of America (BAC) said it plans to introduce a $5 monthly debit card usage fee for many of its account holders beginning early next year.
  • Reports indicate McGraw Hill Companies (MHP) is in talks to sell its S&P indices business to the CME Group (CME). 
  • Apache Corporation (APA) said its plans to develop the Balnaves oil field off the coast of Australia, where production could reach 30,000 barrels per day.
  • H&R Block (HRB) announced today it will discontinue service under its EXPRESSTAX brand.  The company has 269 EXPRESSTAX franchise offices which generated $3 million fees in fiscal 2011.      

Commodities/Currency:

Gold:up $6.10 to $1,621.85

Oil:down $0.48 to $81.83

EUR/USD 1.3497 -0.0086

USD/JPY 76.8350  +0.0100

GBP/USD 1.5595 -0.0009

Volatility Index (VIX): As of the close of business Thursday, September 29, the VIX is up 2.24 at 38.84

Companies Reporting Quarterly Earnings:     

None as of yet.

Today’s Opening and Closing Bells:

Business Wire Celebrates its 50th Anniversary Berkshire Hathaway Chairman Warren Buffett and Business Wire CEO Cathy Baron Tamraz will ring the open bell.

Habitat for Humanity International to celebrate 500,000th/500,001st Habitat for Humanity Milestone Houses in Kenya and Paterson, N.J., on World Habitat Day, Oct. 3. CEO Jonathan Reckford will ring the closing bell.

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