Morning Report: September 8, 2011

Ahead of the Bell: Dow futures are trading down 21 points and S&P futures are trading down 4 points following Wednesday's sharp increase in equities. The ECB and the Bank of England have voted to maintain interest rates, halting its rate tightening cycle to support global economic growth. Federal Reserve Chairman Ben Bernanke will be speaking to the Minnesota Economic Club in Minneapolis. The Chairman is not expected to announce any new quantitative easing program. However, some traders think Bernanke may provide a hint at further easing steps to stimulate the economy. President Obama will address a joint session of Congress and the nation this evening and he is expected to unveil his proposal to increase growth and create jobs.  

  • On the economic calendar today, the Labor Department will release its weekly initial jobless claims report before the market opens. Economists are forecasting 408K new claims for unemployment, after 409K were filed in the previous week. The Commerce Department will also release its July trade balance figures before the market opens. Economists are anticipating July’s trade balance of $51.9 billion compared with June’s deficit of $53.1 billion. The Federal Reserve's July consumer credit report will be out in the afternoon. The number is expected to fall to $5 billion from $15.5 billion in June. Companies reporting earnings include John Wiley & Sons Inc., Natl Semiconductor Corp., and Smithfield Foods Inc. The dollar is up against the euro and the British pound and down against the Japanese yen. Crude oil is currently trading about $88 a barrel and gold is trading at $1,838. 
  • Yesterday, stocks surged, halting a three-day losing streak, as fears about the European sovereign debt crisis subsided, following a German court backing  the country’s role in bailing out the Euro zone. 
  • On CNBC today, Don Carty, former Chairman and CEO of American Airlines and current Chairman of Virgin America Airlines, talked about the lack of confidence in the business community. Carty thinks the uncertainty in the economy is severe, as there is a lack of confidence from the leadership. He does not believe Washington will fix the problems, these problems need to addressed for the long term, and he doesn’t feel demand is going to come back anytime soon. Carty pointed out, a lot of companies are holding back because of uncertainty in the business environment. He also believes America will right itself, but not in the next few years. Finally, Carty does not have any expectations from Washington between now and the election as regulation is hindering growth.                                                     
  • Happy Thursday, have a nice day.

Wednesday’s Close

DJIA up 275.56 pts/+2.47%/11,414.86

S&P up 33.38 pts/+2.86/1,198.62

Nasdaq up 75.11 pts/+3.04/2,548.94

Thursday’s Futures

Dow Futures down 21.00 pts/-0.18%

S&P Futures down 4.60 pts/-0.22%

Nasdaq Fut down 2.25 pts/-0.02%

Overseas Markets

FTSE +0.37%

CAC 40 +0.54%

NIKKEI 225 +0.35%

HANG SENG -0.67%

Overseas:  World stock markets were down today. European and Asian markets are lower on weakening expectations for global growth.      

Economic Reports:  Jobless Claims expected to be 408K, International Trade expected to be -51.9 billion at 8:30 a.m., and Consumer Credit at 3:00 p.m.

Top Headlines:    

  • CNBC reports rating agency Fitch said it may downgrade the credit rating of Japan and China due to heavy debt loads incurred during the financial crisis.
  • ConocoPhillips (COP) said its previously announced spinoff is expects to be completed by mid next year. Holders will receive one share in the new company for every two shares they own.
  • Hess Corporation (HES) announced it is buying a 50% interest from CONSOL Energy (CNX) in its Utica Shale in eastern Ohio for about $593 million.
  • GE  said it plans to  disputing claims by the  FHFA that a unit of the company made inaccurate statements in the sale of two residential mortgage-backed securities to Freddie Mac.

Commodities/Currency:

Gold:up $21.10 to $1,838.85

Oil:down $0.51 to $88.83

EUR/USD 1.4050 -0.0044

USD/JPY 77.2950  +0.0800

GBP/USD 1.5969 -0.0015

Volatility Index (VIX): As of the close of business Wednesday, September 7, the VIX is down 3.62 at 33.38

Companies Reporting Quarterly Earnings:     

Smithfield Foods (SFD): FQ1 EPS of $0.30 beats by $0.04. Revenue of $3.10B (+6.6% Y/Y) misses by $50M. .

Today’s Opening and Closing Bells:

Toronto based gold-focused royalty and stream company, Franco- Nevada Corp, (FNV) to celebrate the company’s listing. President and CEO David Harquail, will ring the opening bell.

CNBC Highlights Million Dollar Portfolio Challenge with NYSE Bell Ringing Past Challenge Winners will ring the closing bell .