Morning Report: August 19, 2011

Ahead of the Bell: Dow futures are trading down 145 points and S&P futures are trading down 15 points. The selloff from yesterday is expected to continue today amid worsening economic outlook for the U.S., and concerns over Europe's banks. Investors are unclear about the exposure of the region’s banks to the sovereign debt crisis, which is causing headline risk in global markets. European markets are down about 3.5% and Asian markets were down 2.5% following three straight sessions of losses. Reports indicate the German economy (the EU's only prosperous economy) is starting to slowdown following higher-than-expected PPI data.          

  • On the economic calendar today, no reports are due.  New York Federal Reserve Bank President, William Dudley will be speaking on the regional and national economic outlook to the Meadowlands Chamber of Commerce in Lyndhurst, New Jersey. Cleveland Fed President, Sandra Pianalto will be speaking on the evolving financial services industry and the outlook for U.S. economic growth.  Companies reporting earnings include New York & Co. and Ann Inc. The dollar is up against the euro and Japanese yen and down against the British pound. Crude oil is currently trading at about $79 a barrel. Gold is currently trading at $1,873.
  • Yesterday, stocks plunged amid growing concern the global economy is slowing and speculation that European banks lack sufficient capital. The Dow sank 3.68% and S&P dropped over 4.46%.    
  • On CNBC today, Kevin Caron, Strategist and Portfolio Manager at Stifel Nicolaus and Carter Worth, Managing Director and Chief Market Technician at Oppenheimer Asset Management Inc., talked about whether the U.S. is heading into a recession and buying opportunities. Caron said the Philadelphia Fed index data suggest we are heading into a recession and we should be concerned and that the 2 year, 5 year, and 10 year treasuries all indicate higher inflation is ahead. On buying opportunities, Caron suggested people who want to invest in this market have to look for companies with consistency and clean balance sheets, especially given the pending recession. Caron went on to say he currently sees a mixed bag, there are opportunities, but the volatility in the market presents a concern for investors. Worth added that he sees the weak economic data and the discount prices in stocks as a buying opportunity. Worth also said avid volatility and spiking gold prices presents a buying trend in consumer and energy stocks,  and thinks we are at a bottom now.             
  • Happy Friday, have a nice day and a wonderful weekend. 

Thursday’s Close

DJIA down 419.63 pts/-3.68%/10,990.58

S&P down 53.24 pts/-4.46%/1,140.65

Nasdaq down 131.05 pts/-5.22/2,380.43

Friday’s Futures

Dow Futures down 145.00 pts/-1.33%

S&P Futures down  15.40 pts/-1.36%

Nasdaq Fut down 20.50 pts/-1.01%

Overseas Markets

FTSE -2.18%

CAC 40 -2.64%

NIKKEI 225 -2.51%

HANG SENG -3.08%

Overseas:  World stock markets were down today. European markets are down on the euro zone debt crisis. Asian markets are down on global economic slowdown.      

Economic Reports:  None for today.

Top Headlines:    

  • Bloomberg reports Sprint Nextel (S) is in talks with Comcast (CMCSA) and Time Warner Cable (TWC) about a possible acquisition of Clearwire Corp (CLWR) which is partly owned by the cable operators. 
  • Hewlett Packard Co., (HPQ) confirmed it is in discussions with Autonomy Corporation plc regarding possible business combination and it is exploration of strategic alternatives for its Personal Systems Group.
  • Barnes & Noble Inc. (BKS) announced Liberty Media has invested $204 million by buying newly issued convertible preferred stock.
  • Forest Laboratories (FRX) announced shareholders have elected the Company’s entire slate of director nominees.  Shareholders also rejected activist investor Carl Icahn's board nominees.    

Commodities/Currency:

Gold:up $51.10 to $1,873.85

Oil:down $2.35 to $79.18

EUR/USD 1.4318 -0.0005

USD/JPY 76.4850  -0.0600

GBP/USD 1.6515 +0.0010

Volatility Index (VIX): As of the close of business Thursday, August 18, the VIX is up 11.09 at 42.67

Companies Reporting Quarterly Earnings:     

None as of yet. 

Today’s Opening and Closing Bells:

Primero Mining Corp. (PPP) began trading on the NYSE on Monday, August 15, 2011 Executive Chairman, Wade Nesmith, President and CEO Joseph F. Conway will ring the opening bell.

Harley-Davidson visits the NYSE – Showcases 2012 Harley-Davidson Motorcycles Outside the NYSE President and CEO Keith Wandell will ring the closing bell.

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