Morning Report: December 2, 2011

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Ahead of the Bell: Dow futures are trading up 146 points and S&P futures are trading up 15.90 points following yesterday’s mixed session.  Investors will be focusing on the jobs report expected at 8:30 am, but futures are trading higher as European government debt yields are falling this morning.

·     On the economic calendar, Non-Farm Payrolls are expected at 8:30 AM.  Economists are expecting the report to show that Non-Farm Payrolls increased by 125k last month, Private Payrolls added 150k, and the Unemployment Rate held at 9.0%. Thedollar is down against the Euro and higher against the Yen and British Pound.  Crude oil is currently trading at about $100.94 per barrel.  Gold is currently trading at $1,755.

·     German Prime Minister Angela Merkel addressed the German Parliament this morning, and reinforced her stance that Euro bonds are not a rescue measure for the current crisis in Europe.  Merkel also said that while it is inevitable that there will be changes to the EU treaty, it is absurd to say that Germany wants to dominate Europe.

·     European debt yields are falling this morning as Italy’s ten-year yield fell to 6.53% and Spain’s ten-year fell to 5.53% today, both well below the crisis levels that had been seen in previous weeks.

·     On CNBC this morning Richard Portes, Professor of Economics at the London Business School, was discussing how the December 9th EU summit is critical to the debt crisis in Europe.  The largest question going into the meeting will be if the deal the EU is able to strike will be able to cap European debt yields, because the bond market is not operational in Europe right now.  Portes argued that because of rising yields, the only institutions purchasing European debt are domestic institutions under government pressure or the ECB buying the distressed debt, which is an unsustainable solution. 

·      Today marks the 10-year anniversary of the bankruptcy filing of Enron in 2001.

·      Have a great weekend!

Thursday’s Close

DJIA down 25.65 pts /-0.21%/12,020.03

S&P down 2.38 pts/-0.19%/1,244.58

Nasdaq up 5.86 pts/+0.22%/2,626.20

 

Friday’s Futures

Dow Futures up 146 pts/+1.22%

S&P Futures up 15.90 pts/+1.26%

Nasdaq Futures up 29.50 pts/+1.28%

 

Overseas Markets

FTSE +2.04%

CAC 40 +3.72%

NIKKEI 225 +1.56%

HANG SENG +1.97

 

Overseas:  World markets are higher as markets are bullish on the falling Spanish and Italian debt yields.

 

Economic Reports:  Non-Farm Payrolls (expected to be 125k), Private Payrolls (expected to be 150k) and Unemployment (expected to be 9.0%) at 8:30 AM

 

Top Headlines:    

 ·    Two of the three unions representing railroad employees reached an agreement with the negotiating group representing rail carriers including CSX, Union Pacific, and Norfolk Southern, avoiding the imminent threat of a national rail strike.  The third union has agreed to extend the deadline for an agreement by two months.

·     Thomson Reuters Corp. announced last night that CEO Thomas H. Glocer will retire, effective December 31st.  Glocer will be succeeded by James C. Smith, who is currently serving as COO.

 ·    US Car sales rose to an almost two year high, up 14% to an annualized rate of 13.6 million according to a report from Autodata Corp.

 ·    Western Digital Corp. updated guidance to reflect the impact of the Thailand floods, saying it expects to take a charge of $225-275 million.  WDC also announced it has resumed drive production in Thailand this week, after the flooding halted production in July.

Commodities/Currency:

Gold:up $15.40 to $1,755.30

Oil:up $0.74 to $100.94



EUR/USD 1.3493 +0.0030

USD/JPY 77.96 +0.27

GBP/USD 1.5491 -0.00400

 

Volatility Index (VIX): As of the close of business Thursday, December 1st, the VIX is down 0.39 to 27.41

 

Companies Reporting Quarterly Earnings:   

Big Lots (BIG): 3Q EPS of $0.17 vs. estimates of $0.25.  Revenue of $1.4 billion vs. estimates of $1.39 billion.

Today’s Opening and Closing Bells:

NYSE Euronext hosts the third Belgian Equity Investments Conference at the NYSE.In honor of the occasion, Olivier Henin, Chief of Staff to H.E. Didier Reynders, Belgium’s Deputy Prime Minister and Minister of Finance; Koen Hoffman, Managing Director of KBC Securities; Tanguy Piret, Managing Director of JPMorgan and executives of leading NYSE Euronext-listed Belgian companies, ring The Opening BellSM.

 

BlackRock visits the NYSE to celebrate the initial public offering of the BlackRock Utility and Infrastructure Trust (NYSE-Listed BUI).In honor of the occasion, Bob Shearer and Kathleen Anderson, of BlackRock’s Equity Dividend Team and lead portfolio managers of BUI, ring The Closing BellSM.

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