Morning Report: September 26, 2011

Ahead of the Bell: Dow futures are trading up 141 points and S&P futures are trading up 18.40 points setting up a second straight day of gains after ECB Governing Council member, Ewald Nowotny, said there is a possibility of an interest rate cut as well as several other officials indicating easing or stimulus measures

  • There are no economic indicators pending on the calendar for today, but Germany reported its business climate index earlier this morning.  Business sentiment was reported at 107.5, better than the 106.5 that was forecasted, but marked the third straight month of declines, and is the lowest reading since June 2010. The dollar is down against the Japanese yen, Euro, and British Pound. Crude oil is currently trading at about $80.24 per barrel. Gold is currently trading at $1,621.
  • U.S. Treasury Secretary Tim Geithner made a speech to the International Monetary Fund on Saturday, and urged them to take the threat of cascading default, bank runs, and catastrophic risk off of the table. A senior European official hinted that a bailout fund of up to €2 trillion is being contemplated. This morning Bloomberg is reporting that the European Central Bank is considering resuming covered-bond purchases.
  • Bank of England policymaker, Ben Broadbent, said this morning that the British economy will not have to weaken much further before the Bank of England will institute a second round of quantitative easing. Economists are anticipating that the bank will launch the program in either October or November.
  • On CNBC this morning, Robert Doll, Chief Equity Strategist for Blackrock Advisors LLC, was discussing the debt crisis in Europe and its impact on the global economy. Doll said that the sooner Europe is able to declare a uniform, unconditional backstop, whether it is Germany or the EFSF, the less it will cost them. Doll believes that we “muddle through” the situation in Europe, but there is a 1/3 chance of a disorderly default, which would have a domino effect that could result in global recession.

Friday’s Close

DJIA up 37.65 pts/+0.35%/10,771.48

S&P up 6.57 pts/+0.61%/1,136.43

Nasdaq up 27.56 pts/+1.12%/2,483.23

Monday’s Futures

Dow Futures up 141pts/+1.3%

S&P Futures up 18.40 pts/+1.6%

Nasdaq Futures up 25.75 pts/+1.15%

Overseas Markets

FTSE +0.89%

CAC 40 +2.99%

NIKKEI 225 -2.17%

HANG SENG -1.48%

Overseas:  Europe is trading higher on improved sentiment because of further expected easing in Europe.

Economic Reports:  None scheduled for today

Top Headlines:    

  • UBS announced that CEO, Oswald Gruebel, has resigned in the wake of the $2.3 billion rogue trader scandal.  Sergio Ermotti will serve as CEO on an interim basis.
  • Boeing formally delivered its first 787 Dreamliner to Japanese carrier All Nippon Airways, after delays had delayed the delivery of the much anticipated aircraft for three years.
  • The Mosaic Company announces it has priced a secondary offering of 18 million shares owned by Margaret A. Cargill trusts, related to Mosaic’s inclusion into the S&P 500 index, at $57.65 per share.
  • McGraw-Hill Companies announced this morning that it has received a Wells Notice from the SEC connected to S&P’s ratings for “Delphinus CDO 2007-1”, an offering of collateralized debt obligations.  The Wells notice is neither a formal allegation nor a finding of wrongdoing.

Commodities/Currency:

Gold:down $27.30 to $1,612.20

Oil:down $0.51 to $79.34

EUR/USD 1.3484 +0.0025

USD/JPY 76.35 +0.13

GBP/USD 1.55132 +0.00882

Volatility Index (VIX): As of the close of business Friday, September 23, the VIX is down 0.10 to 41.25

Companies Reporting Quarterly Earnings:   None

Today’s Opening and Closing Bells:

Guggenheim Partners visits the NYSE to celebrate the formation of Guggenheim Investments, the aggregation of all of Guggenheim Partners’ asset management capabilities.  In honor of the occasion, Scott Minerd of Guggenheim Partners rings The Opening BellSM. The bell ringing also recognizes the launch of the Guggenheim Yuan ETF (NYSE Arca: RMB) which provides access to China’s growing Dim Sum bond market.

Africa investor (Ai), a leading international investment research and communications group will host The African Investor CEO Institutional Investment Summit at the New York Stock Exchange.The event will feature the Africa Investors/United Nations African Heads of State Investment Dialogue and Networking Luncheon. In honor of the occasion, African Capital Market Leaders and Other African Officials ring The Closing BellSM