Morning Report: December 12, 2011

Ahead of the Bell: Dow futures are trading down 69 points and S&P futures are trading down 8.40 points as investors have become skeptical of the ability for the EU deal announced on Friday to adequately address Europe’s debt issues as the deal does not appear to address the immediate short-term issues.    

  • There are no economic reports pending today, but investors are looking to retail sales, producer prices, consumer prices, jobless claims, and consumer prices later this week. Also in focus will be the US debt auction scheduled for Thursday. The dollar is currently up against the Euro, British Pound, and Japanese Yen. Crude oil is currently trading at about $101.03 per barrel.  Gold is currently trading at $1,723.
  • Italian and Spanish yields are climbing today as enthusiasm for Friday’s deal is waning. Spanish 10-year bonds are up over 6%, trading at 6.069%, and the Italian 10-year is trading at 6.766%.
  • Today marks “Green Monday”, the busiest day of the year for shipping companies. FedEx is expecting today to be the busiest day of the year, and possibly the busiest in over forty years. The rush comes as consumers near Friday’s unofficial deadline to ship gifts to be sent in time for Christmas.
  • This morning on CNBC Neil Kashkari, Pimco Head of Global Equities, appeared to discuss the European debt crisis. Kashkari said that Friday’s agreement was only a half measure, and was not the strong sweeping agreement that is needed to resolve Europe’s issues. The European Central Bank needs to go “all in” and announce a round of quantitative easing to relieve some of the pressure on Spain and Italy. Kashkari said that while this may not be palatable politically, the longer the ECB waits to act the more expensive will be, and acting sooner will reduce the impact on the European economy. Kashkari also said that while it is easier in theory than practice, it might be best for Greece and a few other countries to default, but that Italy and Spain need to be protected.
  • Have a great week!

Friday’s Close

DJIA up 78.41 pts /+0.65%/12,097.83S

S&P up 12.80 pts/+1.03%/1,257.08

Nasdaq up 28.83 pts/+1.10%/2,655.76

Monday’s Futures

Dow Futures down 69 pts/-0.57%

S&P Futures down 3.30 pts/-0.68%

Nasdaq Futures down 11.75 pts/-0.51%

Overseas Markets

FTSE -0.54%

CAC 40 -0.96%

NIKKEI 225 +1.37%

HANG SENG -0.06%

Overseas:  World markets are lower as investors react to Friday’s EU announcement.

Economic Reports:  None

Top Headlines:    

  •  The Department of Defense announced a $4 billion contract for Lockheed Martin for 30 F-35 joint strike fighter aircraft.
  •  Boeing announced it has received an order for 12 jets from Etihad Airways in a deal valued at $2.8 billion.
  • Abbot Laboratories agreed to pay Reata Pharmaceuticals $400 million to develop and commercialize next-generation antioxidant inflammation modulators.  Early-stage trials are expected to begin in 2012.
  • Whitehaven Coal and Aston Resources have reached a $2.5 billion takeover deal, creating Australia’s largest independent coal miner, and sparking speculation that the new company could become a global takeover target.

Commodities/Currency:

  • Gold:down $33.80 to $1,682.50
  • Oil:down $1.40 to $98.01
  • EUR/USD 1.3264 –0.118
  • USD/JPY 77.77 +0.11
  • GBP/USD 1.5611 -0.00180

Volatility Index (VIX): As of the close of business Friday, December 9th, the VIX is down to 26.38

Companies Reporting Quarterly Earnings:   

None

Today’s Opening and Closing Bells:

TC PipeLines, LP (NYSE-Listed TCP) visits the NYSE to commemorate the first day of trading on the NYSE since their listing move from the NASDAQ and to highlight their new ticker symbol change to “TCP”.In honor of the occasion, President of TC PipeLines, GP, Inc., Steve Becker, rings The Opening BellSM

Enduro Resource Partners LLC (NYSE-Listed NDRO), the sponsor of Enduro Royalty Trust, visits the NYSE to celebrate the recent completion of the trust’s initial public offering.In honor of the occasion, Enduro Resource Partners’ President and Chief Executive Officer Jon S. Brumley, Executive Vice President and COO John Arms, and Vice President and CFO Kim Weimer, joined by members of its Board, ring The Closing BellSM