Morning Report: November 11, 2011

Ahead of the Bell: Dow futures are trading up 73 points and S&P futures are trading up 9 points following the rally from the previous trading session. Disney reported better than expected Q3 earnings after the bell. The company cites increased revenues from advertisers, and consistent theme park demand despite the weak economy. Traders are focused on political developments in Europe, particularly in Greece and Italy, which could pave the way for stricter austerity measures to stem the sovereign debt crisis in the region.

  • On the economic calendar today, the Reuter's/University of Michigan's consumer sentiment index for November will be out after the market opens, and is forecasted to be 61.5, compared with 60.9 for October.  Federal Reserve Vice Chairman, Janet Yellen will be speaking at the Chicago Fed's 14th Annual International Banking Conference. San Francisco Fed President, John Williams will be speaking on "Monetary & Macroprudential Policies: Challenges & Solutions". Companies reporting earnings include Armour Residential REIT, Atlantic Power, Brookfield Asset Mgmt, D.R. Horton, Petrobras Petroleo, Telecom Italia, and Box Ships. The dollar is up against the Japanese yen and the British pound and down against the euro. Crude oil is currently trading at $97 a barrel.  Gold is trading at $1,770.   
  • Yesterday, stocks rose, rebounding from its worst drop since August, as jobless claims decreased while a retreat in Italian bond yields and the selection of a new Greek premier eased concern about Europe’s crisis.
  • On CNBC today, Jack Welch, former Chairman and CEO of General Electric, talked about the current state of the economy, jobs, and energy exploration. Welch said growth is the most important thing, but regulations are hindering growth and job creation and demand just isn’t there due to uncertainty and fear. The biggest fears come from the housing market with ongoing foreclosures and people losing jobs. On energy, Welch thinks we have a chance to be energy independent by handling the environmental issues and allowing companies to explore by drilling.  We have studied the issues on environmental concerns and Welch says it’s time to act now and stop being political.
  • Today is Veterans Day, thank you to all Service Members and their Families.
  • Happy Friday, have a nice day, and a wonderful weekend.

Thursday’s Close

DJIA up 112.92 pts/+0.96%/11,893.79

S&P up 10.59 pts/+0.86/1,239.69

Nasdaq up 3.50 pts/+0.13/2,625.15

Friday’s Futures

Dow Futures up 73.00 pts/+0.62%

S&P Futures up 9.50 pts/+0.50%

Nasdaq Fut up 16.58 pts/+0.73%

Overseas Markets

FTSE +0.66%

CAC 40 +0.87%

NIKKEI 225 +0.16%

HANG SENG +0.91%

Overseas:  World stock markets were up today. European and Asian markets are up on positive political development in Greece and Italy.      

Economic Reports:  Consumer Sentiment expected to be 61.5 at 9:55 a.m.

Top Headlines:    

  • Peabody Energy (BTU) has extended its $5 billion offer for Australia's Macarthur Coal by two weeks, as the company has not received the 90% threshold necessary to affect the acquisition.
  • Reports indicate Caterpillar (CAT) is considering buying Chinese group ERA Mining Machinery in a dual-option deal, which could be worth about $885 million to strengthen its mining business.
  • FT reports Vivindi Universal is close to a deal to acquire EMI music business from Citigroup Inc., ( C ) for about $1.9 billion.
  • E*Trade Financial (ETFC) said after considering recommendations from its advisors, the firm has decided not to put itself up for sale.  The company will continue to execute its business plan.
  • Nabors Industries Limited (NBR) said the SEC is investigating perks received by it executives including personal flights on company jets.     

Commodities/Currency:

Gold:up $1.10 to $1,770.85

Oil:up 0.05 to $97.83

EUR/USD 1.3635 +0.0026

USD/JPY 77.4150  -0.24

GBP/USD 1.5920 -0.0013

Volatility Index (VIX): As of the close of business Thursday, November 10, the VIX is down 3.35 at 32.81

Companies Reporting Quarterly Earnings:     

D.R. Horton (DHI): FQ4 EPS of $0.11 misses by $0.03. Revenue of $927.6M (+16% Y/Y) misses by $80M.

Telefonica (TEF): Q3 net loss €429M ($584M) vs. profit of €5.1B a year earlier and forecasts for a loss of €213M. Revenues +3.7% to €15.79B vs. forecasts of €15.73B. 

Today’s Opening and Closing Bells:

United States Marine Corps Major General Melvin G. Spiese, Deputy Commanding General, I Marine Expeditionary Force, Commemorate the 93rd Anniversary of Veterans Day Joined by Members of the U.S. Armed Forceswill ring the opening bell.

iStar Financial Honors Veterans’ Service by Ringing Closing Bell at the New York Stock Exchange.