Morning Report: June 30, 2011

Qe2

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Ahead of the Bell: Dow futures are trading up 25 points and S&P futures are trading up 2 points following a approval by the Greek government to implement harsh austerity measures, a prerequisite for receiving an additional $17 billion in aid from the IMF and EU. A second vote is expected today in Greece so a default can be avoided. Traders see Greece's new austerity plan as short term and are concerned that other EU countries, including Portugal, Ireland, Italy, and Spain, will seek restructuring of their existing debt. In the US, QE2 officially ends today.

  • On the economic calendar today, the Department of Labor will issue its weekly jobless claims data before the market opens and economists are forecasting for weekly claims to fall to 420,000. Chicago purchasing managers' index will be out after the market opens and is expected to slip to 53.5. St. Louis Federal Reserve Bank President James Bullard will brief reporters following a conference on quantitative easing in St. Louis. The Fed quantitative easing program ends today, however the Fed has not provided any hints for additional stimulus for the lagging economy. Companies reporting earnings include Apollo Group, Constellation Brand, and Darden Restaurants. The dollar is down against the major currencies.  Crude oil is currently trading at about $94 a barrel. 
  • Yesterday, the equity markets were up sharply for a third day in a row after Greece passed austerity measures staving off default for heavily indebted nation and pending home sales surprisingly climbed.
  • On CNBC today, Jon Corzine Chairman & CEO, MF Global and former New Jersey Governor, talked about the Greek austerity vote. Corzine said Greece needed this austerity plan, the world and the global banking system were on edge and the main issue is to make sure new money continues to get into the system. Corzine expects French and German banks will have to restructure and take write-offs as they have big exposure in Greece. The hope and focus now is to ensure the situation in Greece doesn’t spread throughout the EU zone. Corzine believes the EU needs to move to a more fiscal union, communization of tax rules, and holding the community together is key. The Greeks demonstrated they can address their fiscal problems and Greece will come back, per Corzine.   
  • Happy Thursday, have a nice day. 

Wednesday’s Close

DJIA up 72.73 pts/+0.60%/12,261.42

S&P up 10.75 pts/+0.83%/1,307.42

Nasdaq up 11.18 pts/+0.41/2,740.49

Thursday’s Futures

Dow Futures up 25 pts/+0.11%

S&P Futures up 2.10 pts/+0.16%

Nasdaq Fut up 3.75 pts/+0.13%

Overseas Markets

FTSE +0.53%

CAC 40 +0.19%

NIKKEI 225 +0.19%

HANG SENG +1.53%

Overseas:  World stock markets were up today.  European and Asian markets were up after Greece passed the new austerity proposal.

Economic Reports:  Jobless Claims expected to be 420K @ 8:30 a.m. and Chicago PMI expected to be 53.0 @ 9:45 a.m.

Top Headlines:

  • Reports indicate AMR Corp's (AMR) American Airlines is negotiating with Airbus and Boeing (BA) to replace its entire domestic fleet by purchasing at least 250 airplanes for about $15 billion.
  • News Corp. (NWS) announced it is selling Myspace to Specific Media, Vanderhook brothers, and Justin Timberlake for about $35 million in stock and cash below the $100 million the company was seeking for the social network.
  • TMX Group (X) and London Stock Exchange (LSE) announced they have cancelled their planned merger after failing to get two-thirds investor support for the C$3.29 billion ($3.39 billion) deal.
  • The Fed Reserve issued its final ruling on debit card swipe fees, the Fed raises the cap on debt card swipe fee to 21 cents, from 12 cents which was mandated by the Dodd-Frank Act.
  • Raymond James Financial (RJF) announced it has settled with the SEC and will pay $280 million to clients who bought auction-rate securities and a fine of $1.75 million to the SEC.
  • The SEC approved a vote on setting standards for how dealers treat customers entering into security-based swap transactions including certain types of credit-default swaps.

Commodities/Currency:

Gold:down $2.10 to $1,510.85

Oil:down $0.18 to $94.60

EUR/USD 1.4470 +0.0035

USD/JPY 80.4350  -0.3700

GBP/USD 1.5989 -0.0077

Volatility Index (VIX): As of the close of business Wednesday, June 28, the VIX is down 1.82 pts to 17.31

Companies Reporting Quarterly Earnings:

None as of yet.

Today’s Opening and Closing Bells:

Habitat for Humanity - New York City Visits the New York Stock Exchange. David Terveen, Member of the Habitat-NYC Board will ring the opening bell.

Luxottica Group Celebrates 50 Years of Excellence CEO. Andrea Guerra will ring the closing bell.

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