Morning Report: March 26, 2012

Ahead of the Bell: Dow futures are trading up 46 points and S&P futures are trading up 4 points after German business confidence rose unexpectedly in March.  However, investors are concerned that Spain's debt load is weighing on the country's stock market, and could be the next debt laden nation in the euro zone to default on its obligations.  Investors are grappling between their appetite for risk and concerns about a global economic slowdown.       



  • On the economic calendar today, the National Association of Realtors will release pending home sales index for February after the market opens, it is expected to be 1.0% compared with 2.0% for January.  Philadelphia Federal Reserve Bank President, Charles Plosser will discusses monetary policy issues on a panel in Paris, France.

  • Federal Reserve Chairman, Ben Bernanke will deliver the opening speech at the National Association for Business Economics in Arlington, VA.  The dollar is down against the major currencies.  Gold is trading at $1,661. Crude oil is currently trading at $106 a barrel.

  • Last week, stocks ended a choppy five day session on disappointing economic data from Europe and China.  For the week, the Dow was down 1.2%, the S&P 500 fell 0.5%, and the Nasdaq gained 0.6%.  The economic data for the week was a mixed bag.  Jobless claims were better than expected; while a number of housing data showed glimmering signs of improvement, but still bumping along the bottom.  Federal Reserve Chairman, Ben Bernanke testifying before Congress, saying market conditions have improved, but the European banking system still needs strengthening and remains a difficult situation.  President Barack Obama, named Jim Yong Kim, the president of Dartmouth College, and a global health expert, as its nominee to lead the World Bank.  Crude oil continues to fluctuate and react to developments from the middle east, China, and Europe. 

  • The week ahead: stocks enter the final week of the first quarter with investors a little jittery about global economy growth. There are a few economic reports due this week that could impact the market.  Investors will be watching to see if the improving employment data has impacted consumer sentiment, personal income and spending, as well as durable goods and Chicago purchasing managers data.   Federal Reserve Chairman, Ben Bernanke and a host of FOMC members will be on the speaking circuit this week.  Fed watchers will be looking for hints whether FOMC members have become more hawkish after their dovish stands on additional stimulus for the economy, as it gains traction.  Later in the week European finance ministers will meet to hammer out the structure and size of the bailout funds.  In addition, the Supreme Court will hear  a challenge to the health care reform legislation, by President Barack Obama today.

  • On CNBC today, Harry Wilson, Meva Advisors Chairman & CEO and former member of the Auto Task Force, talked about maximizing shareholder value and corporate governance reform. Wilson said he is concerned with the direction of board members in corporate America.  He cited General Motor’s former board as a text book example of how not to run a board.  The board was not focused on shareholder value and holding management accountable.  Wilson believes one way to fix the problem with boards is we need to dramatically improve the quality of directors, and improve the screening process.  He added board compensation should be aligned with performance, we need to tie pay performance to results.  Finally, he believes Republican candidate Mitt Romney shouldn’t have slammed the auto industry bailout. 

  • The Hunger Games was the top movie at the Box Office this past weekend. 

  • The Road to the Men’s NCAA Basketball Final Four is set, Kentucky will matchup with Louisville and Kansas will play Ohio State on Saturday, at the Superdome in New Orleans.

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

Friday’s Close


DJIA up 34.59 pts/+0.27%/13,080.73


S&P up 4.33 pts/+0.31/1,397.11


Nasdaq up 4.60 pts/+0.15/3,067.92


 


Monday’s Futures


Dow Futures up 46.00 pts/+0.28%


S&P Futures up 4.40 pts/+0.24%


Nasdaq Fut up 13.22 pts/+0.39%


 


Overseas Markets


FTSE +0.48%


CAC 40 +0.14%


NIKKEI 225 +0.07%


HANG SENG -0.01


 


Overseas:  World stock markets were up today.  European and Asian markets are mixed, as investors weigh their risk appetite versus a slowing global economy.      


 


Economic Reports:  Today, Pending Home Sales Index expected to be 1.0%, Dallas Fed Mfg Survey, S&P Case Shiller HPI, Consumer Confidence, Durable Goods Orders, GDP, Jobless Claims, Fed Balance Sheet, Personal Income and Outlays, Chicago PMI, and Consumer Sentiment.


 


Top Headlines:    



  • Reports indicate Morgan Stanley (MS) is interested in acquiring Citigroup's (C ) remaining 14% stake in a joint venture with the company which could be valued at about $10 billion.

  • Yahoo Inc. (YHOO) has appointed three new independent directors in advance of a proxy fight with activist investor Daniel Loeb. 

  • Reports indicate the DOJ is taking a hard look at the price of electronic books and whether competitors are colluding together and agree on price.

  • Roche Holding AG has extended its $5.7 billion cash bid for Illumina Inc. (ILMN) for a second time.       

Commodities/Currency:


Gold:down $1.10 to $1,661.85
Oil: down 0.29 to $106.59

EUR/USD 1.3241 +0.0010
USD/JPY 82.8081  +0.1820
GBP/USD 1.5857 +0.0057


 


Volatility Index (VIX): As of the close of business Friday, March 23, the VIX is down 0.60 at 14.82


Companies Reporting Quarterly Earnings:     


Cal-Maine Foods (CALM) reports Q3 EPS $1.09, one estimate $1.02 and Q3 revenue $303.7M, one estimate $319.5M.


Today’s Opening and Closing Bells:


 


Cellcom Israel (CEL) visits the NYSE to celebrate the 5th-year anniversary of its listing on the NYSE. Nir Sztern, CEO of Cellcom Israel will ring the opening bell.


 


Catalyst Visits the New York Stock Exchange President and CEO Ilene H. Lang will ring the closing bell.


 


  


Paras Madho


NYSE Euronext


Market Watch and Corporation Actions


(212) 656- 5404


 


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