Morning Report: April 16, 2012

Spain (Photo credit: robynejay)

Ahead of the Bell: Dow futures are trading up 48 points and S&P futures are trading up 4 points as investors remain cautious about the outlook for Spain; the nation has a crucial bond auction this week. The Chinese yuan traded lower today, following a decision by China’s central bank to double the size of the currency’s trading band. The banking sector will be in focus today after Citigroup reported better than expected  quarterly results.

• On the economic calendar today, retail sales for March will be out before the market opens and it is expected to be 0.3%, compared with 1.1% for February. Empire State Manufacturing Survey for April will also be out before the market opens and it is forecasted to be 18 versus 20.21 for March. Business inventories and housing market index is expected to be out after the market today. The dollar is up against the major currencies.  Gold is trading at $1,648. Crude oil is currently trading at $102 a barrel.
• Last week, stocks seesawed between positive and negative territory and fell for a second week in a row; reacting to headlines from Europe and China. Investors were worried about weaker GDP data from China and that Spain would be the next euro zone nation to seek financial assistance. On Tuesday, the markets had its worst performing day of the year, that was followed up with its best performing day of the year on Thursday.  However, all the major indices were down for the week. The Dow fell 1.6% and the S&P 500 declined about 2%. First quarter earnings season kicked off with a bang after Alcoa, Google, and JPMorgan all reported better than expected quarterly results.The economic data for the week was weaker than forecasted led by weekly initial jobless claims and the producer price index. Consumer price index data was in line with expectations, and the trade data was better than expected. 
• The week ahead: first quarter earnings season will get into full swing with about 20% of the S&P 500 due to report quarterly results. Investors will get earnings from a few Dow components like, IBM, Microsoft, Coca-Cola, and McDonald’s, Citigroup and Bank of America. Investors will also get a few important economic reports this week that could impact the markets, including March retail sales, industrial production, existing home sales and weekly jobless claims. The European debt crisis is expected to stay in the headlines as Spain’s bond yields continue to rise. Investors will be watching China as it gears up for a soft landing and tries to cool its real estate sector.
• Happy Monday, have a nice day, and a wonderful week.

Friday’s Close

DJIA down 136.99 pts/-1.05%/12,849.59

S&P down 17.31 pts/-1.25/1,370.26

Nasdaq down 44.22 pts/-1.45/3,011.33

Monday’s Futures

Dow Futures up 48.00 pts/+0.17%

S&P Futures up 4.40 pts/+0.08%

Nasdaq Fut up 8.22 pts/+0.19%

Overseas Markets

FTSE +0.69%

CAC 40 +0.98%

NIKKEI 225 -1.74%

HANG SENG -0.44%

Overseas:  World stock markets were up today.  European and Asian markets are mixed on concerns over euro zone debt crisis., Spain is the latest nation to come into focus over its debt crisis.      

Economic Reports:  Today, Retail Sales expected to be 0.3% at 8:30 a.m., Treasury International Capital expected to be 18 at 9:00 a.m., Business Inventories expected to be 0.6% at and Housing Market Index expected to be 29 at 10:00 a.m., later in the week, Housing Starts, Industrial Production, Jobless Claims, Existing Homes Sales, Philadelphia Fed Survey, Leading Indicators, and Fed Balance Sheet.

Top Headlines:  

• Reports indicate Exxon Mobil (XOM) and Russia’s oil company Rosneft are expected to sign a strategic deal that will allow both companies access to each other’s projects and share know-how.
• Bloomberg reports Blackstone Group LP (BX) plans on acquiring 65 industrial properties from Australia’s Dexus Property Group for about $770 million.
• Reports indicate Goldman Sachs (GS) is selling a stake in Industrial & Commercial Bank of China Ltd. to Temasek Holdings for about $2.5 billion.
• According to a report being published today, the priciest lawyers are charging more per hour ($873), a 25% increase, while the lowest charging law firms are barely keep up with inflation.    

Commodities/Currency:

Gold:down $10.10 to $1,648.85

Oil: down 0.31 to $102.52

EUR/USD 1.3030 -0.0158

USD/JPY 80.7705  -0.1065

GBP/USD 1.5843 -0.0117

Volatility Index (VIX): As of the close of business Friday, April 13, the VIX is up 2.35 at 19.55

Companies Reporting Quarterly Earnings:     

Citigroup reports Q1 EPS $1.11 ex-items, vs. Est $1.00 and Q1 revenue $19.4B, vs. Est $19.81B.

Mattel reports Q1 EPS 2c, vs. Est 7c and Q1 revenue $928.4M, vs. Est $988.62M.

Today’s Opening and Closing Bells:

CEOs from Exploration and Production companies will visit the NYSE.  They are in town to participate in the annual IPAA (Independent Petroleum Association of America) OGIS (Oil & Gas Investment Symposium) Conference in New York from April 16 to 18 and will ring the opening bell.

The Nature Conversancy will ring the closing bell.  

Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some information included above has been aggregated from multiple public third-party financial news sources for informational purposes only and redistributed to the NYSE Euronext community.  NYSE Euronext does not control the content provided by these sources and does not guarantee the accuracy, integrity or quality of such content.