Morning Report: June 15, 2011

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Ahead of the Bell: Dow futures are trading down 42 points and S&P futures are trading down 6 points after Euro-Zone finance ministersfailed to reach an agreement on how private investors should participate in the second round of Greece's bail-out. The EU will now look to Germany and France to develop a plan. Investors are anticipating interest rate hikes from India and China. Resource-related stocks will be in focus today including gold, silver, and copper. Crude oil continues to slide, currently trading about $98 a barrel.

  • On the economic calendar today, the Department of Labor will release its consumer price index for May before the market opens and economists are forecasting inflation to tick up by 0.1% in May, down from a 0.4% increase in April. Empire State manufacturing index will also be out before the market opens and is expected to be 14.0. The Federal Reserve's industrial production and capacity utilization report will be out after the market opens and is expected to be 0.2%. The dollar is down against the major currencies.
  • Yesterday, stocks advanced sharply as the equity markets surged to its biggest gain in almost three months on higher-than-expected Chinese industrial output and retail sales eased concern about a global economic slowdown.
  • On CNBC today, Byron Wien, Vice Chairman of Blackstone Advisory Partners LP, said he is optimistic on the economy. Wien said the downturn we are seeing now is due to the Japanese earthquake, the MiddleEast political crisis and the Euro-Zone debt crisis. He does not expects more correctionsin the markets from here and he sees the economy picking up in the second half of 2011. Wien believes exports will increase due to the weak dollar and the consumer,whichis getting stronger, will lead the recovery. Wien does not see a QE3 or additional stimulus. He said corporations are in better shape,with stronger balance sheetstoday. Wien predicted thatthe unemployment rate will drop to below 7or 8%by 1Q12. However, Wien did say both parties have to realize thedebt ceilingneeds to be raised andhe expects acompromisewill be reached. 
  • Congratulations to Pandora Media Inc. ( P ) pricing above its range at $16 per share. (see our post) If you want to listen to some good music while you read this report, you can link to Pandora by clicking here:  http://www.pandora.com/#/stations/create/
  • Happy Wednesday, have a nice day. 

Tuesday’s Close

DJIA up +123.14 pts/+1.03%/12,076.11

S&P up 16.04 pts/+1.26%/1,287.87

Nasdaq up 39.03 pts/+1.48/2,678.72

Wednesday’s Futures

Dow Futures down 42 pts/-0.33%

S&P Futures down 4.90 pts/-0.37%

Nasdaq Fut down 8.75 pts/-0.39%

Overseas Markets

FTSE -0.12%

CAC 40 -0.28%

NIKKEI 225 +0.28%

HANG SENG -0.68%

Overseas:  World stock markets were down today. European markets are trading down after EU finance minister failed to come up with a rescue package for Greece. Asian markets are down on fears of interest rate hikes from India and China.

Economic Reports:  Consumer Price Index expected to be 0.1% and Empire State Mfg Survey expected to be 14.0 @8:30 a.m. & Industrial Production expected to be 0.2% @ 9:15 a.m.

Top Headlines:

  • Sensata Technologies Holding N.V. (ST) announced it is acquiring certain Sensor-NITE Group Companies from Elex Group for euro 225 million or approximately $325 million.
  • Reports indicate Regulators approved minimum capital standards for big financial institutions as required under the Dodd-Frank Actwherebig banks must at least meet the capital standards of community banks.
  • Reports indicate the SEC is investigating Merrill Lynch’s sale of a $1.5 billion CDO to an Illinois hedge fund and whether Merrill mispriced assets in the CDO.
  • JPMorgan Chase (JPM) overhauls its top management and splits its retail banking duties among three executives. The bank also ousted its mortgage chief in a management shuffle.
  • MBA reports mortgage applications were up 13% versus down 0.4% last week. The thirty-year fixed mortgage rate decreased to 4.51% from 4.54%.

Commodities/Currency:

Gold:down $4.10 to $1,519.85

Oil:down $0.39 to $98.98

EUR/USD 1.4317 -0.0126

USD/JPY 80.6850  +0.1600

GBP/USD 1.6283 -0.0094

Volatility Index (VIX): As of the close of business Tuesday, June 14, the VIX is down 1.35 pts to 18.26

Companies Reporting Quarterly Earnings:     None as of yet.

Today’s Opening and Closing Bells:

Pandora Media, Inc. (P) will visit the NYSE for an IPO Listing Breakfast and Opening Bell Ceremony. Founder and CSO Tim Westergren and CEO Joseph Kennedy will ring the opening bell.

MIXIT, Inc. Walter V. Fitzgerald, Co-Founder, President and CEO of MIXIT Inc. will ring the closing bell


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