Morning Report: November 17, 2011

Ahead of the Bell: Dow futures are trading down 29 points and S&P futures are trading down 4 points following the sell off from the previous trading session. Spanish and French bond yields will be in focus today, as Germany and France are at odds over whether the ECB should intervene more forcefully to stem the debt crisis in the Euro zone. France wants the central bank to be more involved as it faces rising borrowing costs and a threat to its AAA credit rating. German Chancellor, Angela Merkel said Berlin would resist any plans for the European Central Bank to take a bigger role to resolve the crisis saying the Union rules prohibits such action.

  • On the economic calendar today, housing starts will be out before the market opens for October, and is expected to be 0.605M, compared with 0.658M for September. Initial jobless claims will also be out before the market opens, and is expected to be 395K, versus 390K for the previous week. Philadelphia Fed Survey will be out after the market opens, and is anticipated to be 9.0 for November, compared with 8.7 for October.  Cleveland Federal Reserve Bank President, Sandra Pianalto will be speaking on the economic outlook to the Rotary Club of Lexington, Kentucky. New York Federal Reserve Bank President, William Dudley will be speaking on the economic outlook at policy at West Point. Companies reporting earnings include Brady, Buckle, Dole Food, Donaldson, GameStop, Stage Stores, Williams-Sonoma, Foot Locker, Gap, and New York & Co. The dollar is up against the major currencies. Crude oil is currently trading at $103 a barrel. Gold is trading at $1,758.  
  • Yesterday, stocks fell amid concerns that Europe’s debt crisis will spill over to the US banking system and rising energy prices will hurt economic growth.
  • Today marks the 2 month anniversary for the occupy wall street protestors, and the group plans several protest following the forced evacuation earlier this week.
  • On CNBC today, James Bullard, President of the St. Louis Federal Reserve Bank, talked about GDP, operation twist, crude oil prices, and Europe. Bullard said the economy has improved since the summer.  Recent economic data has been improving and he thinks the recession scare has passed for now, but notes Europe continues to present a risk. The soft patch the economy experienced during the summer can be attributed to the July 29 GDP report that marked down all forecast models. However, Bullard said the data coming in since has been better and he expects GDP to be about 2.5% for the rest of the year and increase to 3.5% next year. Europe’s impact on US GDP is an unknown and Bullard thinks consumer confidence will be key. He also feels crude oil prices are putting a strain on the economy and could be potentially negative for the recovery.     
  • Happy Thursday, have a nice day.  

Wednesday’s Close

DJIA down 190.57 pts/-1.58%/11,905.59

S&P down 20.90 pts/-1.66/1,236.91

Nasdaq down 46.59 pts/-1.73/2,639.61

Thursday’s Futures

Dow Futures down 29.00 pts/-0.24%

S&P Futures down 4.50 pts/-0.32%

Nasdaq Fut down 7.58 pts/-0.34%

Overseas Markets

FTSE -2.19%

CAC 40 -1.74%

NIKKEI 225 +0.19%

HANG SENG -0.76%

Overseas:  World stock markets were down today. European and Asian markets were down following the selloff in the US and the continued sovereign debt crisis in Europe.      

Economic Reports:  Housing Starts expected to be 0.605M and Initial Jobless Claims expected to be 395K at 8:30 a.m. and Philadelphia Fed Survey expected to be 9.0 at 10:00 a.m.

Top Headlines:    

  • Reports indicate GE plans on making a $1 billion investment in software systems to make its products smarter and more profitable. Norfolk Southern has chosen GE to develop software to analyze train traffic.
  • Morgan Stanley (MS) has settled alleged charges with the SEC, that the fund paid an outside advisor for services it did not receive.
  • Bloomberg reports Stifel Financial Corp. (SF) is in talks to buy Morgan Keegan brokerage from Regions Financial (RF) which could be valued at about $1.5 billion.     

Commodities/Currency:

Gold:down $6.10 to $1,758.85

Oil:down 1.46 to $103.79

EUR/USD 1.3458 -0.0100

USD/JPY 76.9775  -0.0500

GBP/USD 1.5748 -0.0001

Volatility Index (VIX): As of the close of business Wednesday, November 16, the VIX is up 2.29 at 33.51

Companies Reporting Quarterly Earnings:     

Helmerich & Payne (HP): FQ4 EPS of $1.11 beats by $0.06. Revenue of $700.7M (+25.4% Y/Y) beats by $26M.

Williams-Sonoma (WSM): Q3 EPS of $0.41 beats by $0.03. Revenue of $867M (+6.3% Y/Y) beats by $11M.

Today’s Opening and Closing Bells:

InvenSense, Inc. (INVN), a leading provider of MotionProcessing solutions for the consumer electronics market, visits the NYSE. to commemorate the company’s initial public offering. Steve Nasiri, Founder and CEO will ring the opening bell.

The Entrepreneurs’ Organization Visits the NYSE and Celebrates Global Entrepreneurship Week Chairman of the Global Board of Directors of the Entrepreneurs' Organization Kevin Langley will ring the closing bell.