Morning Report: February 13, 2012

Ahead of the Bell: Dow futures are trading up 82 points and S&P futures are trading up 8 points after the Greek parliament approved stricter austerity measures by passing a package of spending and wage cuts demanded by EU finance ministers, allowing the nation to receive the next round of rescue funds from the IMF and EU. Japan reported its economy shrank more than expected in the final quarter of 2011, as a result of slowing global growth and the Thai floods.  President Obama will present his 2013 budget plan today. 



  • On the economic calendar today, no reports are due. Companies reporting earnings include Chimera Invest, Diebold, Nordic American Tankers, PNM Resources, Stoneridge, Charles River Labs, Fidelity National, Masco Corporation, Rackspace, Regal Entertain, and Skilled Healthcare. The dollar is down against the major currencies.  Crude oil is currently trading at $99 a barrel.  Gold is trading at $1,731.  

  • Last week, the equity markets declined, with loses across the board after European finance ministers demanded more austerity measures from Greece ahead of the country’s next round of rescue funds.  For the week, the Dow fell 0.5%, the S&P declined 0.2%, and the Nasdaq dropped 0.6%.  The economic data for the week was a mixed bag.  The Labor Department reported fewer Americans filed for unemployment benefits, however consumer confidence declined more than forecast in February, and the nation’s trade gap widened in December.  The DOJ announced it has settled its case with five major banks including BofA, JPMorgan, Citigroup, Wellfargo, and Ally Financial for about $25 billion over alleged foreclosure practices.

  • The week ahead, trading could be choppy as investors await the EU’s decision on providing Greece the next tranche of rescue funds. Some traders feel the European Union is trying to push the Greeks out of the euro zone. Earning season continues, but has takes a back burner to the Greece saga.  Roughly about 70% of the S&P 500 have reported earnings thus far and approximately 59% have beaten earnings estimates.  Other companies reporting earnings this week include, GM, Deere & Co, and Comcast.  This week the economic calendar is full with such notable reports as, retail sales, inflation data, New York & Philadelphia Fed surveys of manufacturing data, and FOMC munities.  There is also a number of Federal Reserve speakers on the circuit, who could  provide more clues as to the central bank’s thinking on QE3. 

  • On CNBC today, David Walker, former US Comptroller, and founder and CEO of the Comeback America Initiative talk about, spending, taxes, and entitlements. Walker said we are spending too much!  Americans can’t spend $1.40 for every dollar earned.  He likened the situation to what happened with Greece, it was too big, promised too much to the people, and waited too long to restructure its debt.  The Greek government was not truthful with the people and they are suffering.  Walker believes the US is not going to see any tax or social reform before the elections. We need dramatic and fundamental reforms within the leadership, from both the President and Congress.  He pointed out, President Barack Obama it putting Medicare an Medicaid on the table for negotiations, but he is not offering social security.  We also need substantive tax reform.  Walker went on to say we need to recognize the difference between social reform and how we will generate revenue.   He questions how are we going to reduce spending without compromising national security.   Finally, Walker said, America needs to make tough choices, or else we will end up like Greece. 

  • The Vow was the top movie at the Box Office this past weekend & The Grammies were dominated by pop singer Adele who won 6 awards, including album of the year. 

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

Friday’s Close


DJIA down 89.23 pts/-0.69%/12,801.23


S&P down 9.31 pts/-0.69/1,342.64


Nasdaq down 23.35 pts/-0.80/2,903.88


 


Monday’s Futures


Dow Futures up 82.00 pts/+0.64%


S&P Futures up 8.40 pts/+0.29%


Nasdaq Fut up 15.58 pts/+0.61%


 


Overseas Markets


FTSE +1.03%


CAC 40 +0.60%


NIKKEI 225 +0.58%


HANG SENG +0.50%


 


Overseas:  World stock markets were up today.  European and Asian markets are up after Greece approved stricter austerity measures to secure its second round of bailout funds.      


 


Economic Reports:  None for today, later in the week Retail Sales, Import and Export Prices, Business Inventories, Empire State Mfg Survey, Industrial Production, Housing Market Index. FOMC Munities, Housing Starts, Jobless Claims, Producer Price Index, Philadelphia Fed Survey, Fed Balance Sheet, Consumer Price Index, and Leading Indicators.


 


Top Headlines:    



  • General Motors (GM) has won approval from the local authority in China to build its $1.1 billion joint venture plant in central Hubei province. 

  • Apple Inc. (AAPL) has filed a law suit against Samsung for selling its Galaxy Nexus smartphone which uses Google's (GOOG)newest Android system for patent infringement. 

  • Reports indicate Prudential Financial Inc. (PRU) is evaluating a possible bid for ING Groep NV's Asian insurance business.

  • Reports indicate United Technologies Corporation (UTX) is reviewing a possible sale of its flow and compressor business, which could be valued about $3.5 billion.

  • Reports indicate DuPont (DD) has started the auction process for its car paint unit, which is expected to fetch approximately $4 billion.      

Commodities/Currency:


Gold:up $9.10 to $1,731.85
Oil: up 0.57 to $96.54

EUR/USD 1.3255 +0.0056
USD/JPY 77.6600  +0.0700
GBP/USD 1.5802 +0.0047


 


Volatility Index (VIX): As of the close of business Friday, February 10, the VIX is up 2.16 at 20.79


Companies Reporting Quarterly Earnings:     


Regeneron Pharmaceuticals (REGN): Q4 EPS of -$0.37 beats by $0.23. Revenue of $123M (-8% Y/Y) misses by $8M.


KVH Industries (KVHI): Q4 EPS of $0.11 in-line. Revenue of $31.9M (+18.1% Y/Y) in-line.


Orbotech (ORBK): Q4 EPS of $0.06 may not be comparable to consensus of  $0.29. Revenue of $133.3M (+3.8% Y/Y) misses by $5M.


Today’s Opening and Closing Bells:


Just Energy Visits NYSE to Celebrate Recent Listing on the NYSE Executive Chair, Rebecca MacDonald will ring the opening bell.


 


Officials and guests of the Financial Accounting Foundation will visit the New York Stock Exchange will ring the closing bell.                                                                                 


 


 


  


Paras Madho


NYSE Euronext


Market Watch and Corporation Actions


(212) 656- 5404