Morning Report: April 2, 2012

Ahead of the Bell: Dow futures are trading down 19 points and S&P futures are trading down 2 points following weaker than expected manufacturing data from Europe that showed the economic slowdown is spreading to the core of the region.  Earlier, manufacturing data from China eased investors worries of a hard landing. The country's Purchasing Managers Index rose to an 11-month high of 53.1 in March, helped by auto, tobacco and electronics sectors.       



  • On the economic calendar today, ISM manufacturing index for March is due out after the market opens with an indication 53 compared with 52.4 for February.  Construction spending for February will also be out after the market opens, it is expected to be 0.7% versus a -0.01 for January.

  • Cleveland Federal Reserve Bank President, Sandra Pianalto will be speaking at the Economic Roundtable of the Ohio Valley, Ohio.  The dollar is up against the euro and Japanese yen but down against the British pound.  Gold is trading at $1,664. Crude oil is currently trading at $102 a barrel.

  • Last week, stocks finished out the best 1st quarter since 1998, as all the major indices were up on improving economic data, which overshadowed higher gas prices.  For the quarter, the Dow was gained 8.1%, the S&P 500 rose 12%, and the Nasdaq climbed 19%.  Investors got better than expected economic data from weekly jobless claims, GDP, housing and  consumer sentiment.  However, durable goods orders were a little disappointing.  The Supreme Court heard arguments from both sides, ones who support the health care reform legislation by President, Barack Obama and those who challenge the law.  The court will now deliberate, and its decision will be publish in the future.  Euro zone finance ministers approved a plan to increase the fire wall and expand the rescue fund for the region, but it fell short of the IMF’s recommendation.

  • The week ahead: the market begins a holiday shortened week where some traders are predicting a pull back.  There are a number of economic reports on the docket this week, including March auto sales, chain store sales, the ISM manufacturing survey, weekly jobless claims, and the minutes from the Fed’s last meeting.  The jobs report on Good Friday will the most important piece of economic data.  Economists are forecasting the employment report to show that employers added between 215K and 225K jobs in March, compared with a gain of 227K jobs in February.  On Friday, the equity markets will be closed, but the bond market and some electronic futures markets are open for trading.  Investors are getting ready for 1st quarter earnings season and traders feel it will be a good one, a surprise to the upside based on the sharp increase in equities.  The ECB will hold a meeting on Wednesday, to be followed by a press conference held by President, Mario Draghi.

  • On CNBC today, former president of the Global Wealth & Investment Management division of Bank of America, Sallie Krawcheck, talked about the culture of management and client relationship.  Krawcheck said it was always a challenging for her to indentify who is the client in investment banking and wealth management.  She likes to know who is the client and focus on that client.  She finds it easier to have one client.   Krawcheck pointed out, the size of the business can be correlated with the client relationship that investment banks have with their clients.   Separately, Krawckeck said wealth management fees are going up, people don’t paying attention to the higher fees.  She feels the disclaimers are there to protect the producer of the product and not inform the client.  Finally, she said we should use the Consumer Protection Agency as a tool to benefit the industry, to get very usable information to customers.  

  • The Kentucky Wildcats will play the Kansas Jayhawks tonight in the NCAA men’s basketball championship game at the Superdome in New Orleans. Both teams squared off earlier in the year with Kentucky winning that first meeting.

  • Happy Monday, have a nice day, and a wonderful week.

Friday’s Close


DJIA up 66.22 pts/+0.50%/13,212.04


S&P up 5.19 pts/+0.37/1,408.47


Nasdaq down 3.79 pts/-0.12/3,091.57


 


Monday’s Futures


Dow Futures down 19.00 pts/-0.07%


S&P Futures down 2.40 pts/-0.08%


Nasdaq Fut down 3.22 pts/0.09%


 


Overseas Markets


FTSE -0.07%


CAC 40 -0.52%


NIKKEI 225 +0.26%


HANG SENG -0.16%


 


Overseas:  World stock markets were down today.  European and Asian markets are mixed, following disappointing manufacturing data from the euro zone.      


 


Economic Reports:  Today, ISM Mfg Index expected to be 53.0 & Construction Spending expected to be 0.7% at 10:00 a.m., later in the week, Motor Vehicle Sales, Factory Orders, FOMC Minutes, ADP Employment Report, ISM Non-Mfg Index, Weekly Initial Jobless Claims, Fed Balance Sheet, Employment Situation, and Consumer Credit.


 


Top Headlines:    



  • Coty Inc., a provider of beauty products said it has submitted a non-binding proposal to acquire Avon Products, Inc. (AVP) for $23.25 per share in cash or approximately $10 billion.

  • Reports indicate, the government of Argentina has taken control of YPF Sociodad Anonima (YPF) and is considering whether to nationalize or intervene in management. 

  • A Brazilian prosecutor is seeking an injunction against Chevron Corp (CVX) and Transocean Ltd (RIG) to keep them from operating in Brazil following an environmental lawsuit. 

  • FT reports American International Group (AIG) is considering reentering the mortgage market following the company's bailout by the government from the financial crisis.       

Commodities/Currency:


Gold:down $3.10 to $1,664.85
Oil: down 0.57 to $102.45

EUR/USD 1.3338 -0.0002
USD/JPY 82.6850  -0.1800
GBP/USD 1.6041 +0.0025


 


Volatility Index (VIX): As of the close of business Friday, March 30, the VIX is up 0.02 at 15.50


Companies Reporting Quarterly Earnings:     


None as of yet.


Today’s Opening and Closing Bells:


 


World Autism Awareness Day (WAAD), executives and guests of Autism Speaks, the world's leading autism science and advocacy organization, visit the NYSE to celebrate World Autism Awareness Day (WAAD) and Autism Awareness Month. NYSE Euronext markets in Amsterdam, Brussels, Lisbon and Paris will ring the opening bell.


 


DuPont Fabros Visits the New York Stock Exchange CEO Hossein Fateh will ring the closing bell.


 


  


Paras Madho


NYSE Euronext


Market Watch and Corporation Actions


(212) 656- 5404


 


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