Morning Report: March 7, 2012

Ahead of the Bell: Dow futures are trading up 44 points and S&P futures are trading up 4 points.  Markets are looking for a bounce back following the previous trading session’s steep selloff on fears of a global slowdown.  Europe looks to be heading into a recession after a decline in household spending and an unexpected decline in German factory orders.  Investors are anxious to hear the results of Greece's bond swap with private holders, the deadline will expire tomorrow.



  • On the economic calendar today, ADP employment report for February will be out before the market opens, consensus is that it will be 203K versus 170K for January.  Productivity and Cost for the final quarter of 2011 will also be out before the market opens, expectation is it will be 0.9% compared with 0.7% the previous quarter. 

  • Consumer credit for January will be out after the market opens and is anticipated to be $10.0 B versus $19.0 for December.  The dollar is up against the Japanese yen and down against the euro and British pound.  Gold is trading at $1,681. Crude oil is currently trading at $105 a barrel.

  • Yesterday, stocks declined sharply after reports of a global slowdown in China, Europe, and Brazil.  Reports suggest Greece will not meet its deadline on Thursday for a bond swap as the Dow fell more than 200 points.

  • On CNBC today, Tom Stemberg, founder of Staples and Partner of the Highland Consumer Fund, talked about regulations and taxes.  Stemberg believes regulations under President Obama have restricted business and everyone from the labor department to the Justice Department is guilty of piling on.  Stemberg thinks we need regulations that make sense, building bridges to nowhere is not good use of his tax dollars.  He went on to say, we also need comprehensive tax reform and tax loop holes need to be closed.  Big companies are leaving billions of dollars overseas trying to avoid double taxation, while we should be encouraging businesses to bring their investment to America.  Finally, Stemberg believes the tax code is too complicated, it needs to be simplified and made business friendly for small business owners to be able to benefit from it. 

  • Republican candidate Mitt Romney won close races in key states on Super Tuesday. 

  • Happy Wednesday, have a nice day.

Tuesday’s Close


DJIA down 203.06 pts/-1.57%/12,759.15


S&P down 20.97 pts/-1.54/1,343.36


Nasdaq down 40.16 pts/-1.36/2,910.32


 


Wednesday’s Futures


Dow Futures up 44.00 pts/+0.35%


S&P Futures up 4.40 pts/+0.35%


Nasdaq Fut up 11.22 pts/+0.44%


 


Overseas Markets


FTSE +0.36%


CAC 40 +0.74%


NIKKEI 225 -0.64%


HANG SENG -0.86%


 


Overseas:  World stock markets were up today.  European and Asian markets rebounded today on investor optimism that Greece will manage to effect a successful bond swap with private holders.      


 


Economic Reports:  ADP Employment Report expected to be 203K at 8:15 a.m., Productivity and Costs expected to be 0.9% at 8:30 a.m. and Consumer Credit expected to be $10.0B at 3:00 p.m.


 


Top Headlines:    



  • Boeing Company (BA) said it has formed an alliance with Commercial Aircraft Corp. of China to develop fuel efficient planes, and cut greenhouse-gas emissions.

  • HSBC Holdings Plc (HBC) plans on selling its general insurance business to AXA and Australia's QBE Insurance Group for $914 million in cash.

  • CNBC reports Netflix (NFLX) is seeking to expand its subscription video-streaming business and is considering partnerships with cable operators to offer its service.

  • Bloomberg reports Apple Inc. (AAPL) will introduce its most significant overhaul of the iPad today at an event in San Francisco.

  • MBA reports mortgage applications were down 1.2% versus down 0.3% last week. Thirty-year fixed mortgage rate decreased to 4.06% from 4.07%.     

Commodities/Currency:


Gold:up $6.80 to $1,681.85
Oil: down 0.63 to $105.33

EUR/USD 1.3135 +0.0017
USD/JPY 80.7750  -0.0465
GBP/USD 1.5727 +0.0006


 


Volatility Index (VIX): As of the close of business Tuesday, March 6, the VIX is up 2.82 at 20.87


Companies Reporting Quarterly Earnings:     


Brown Shoe Company (BWS): Q4 EPS of $0.10 misses by $0.10. Revenue of $628.9M (+4% Y/Y) misses by $15M.


Today’s Opening and Closing Bells:


 


Domtar Corporation celebrate the company’s 5th listing anniversary. CEO John Williams joined by members of Domtar Corporation’s senior management team, will ring the opening bell.


 


Admiral Ferguson, along with a distinguished group of female Navy Sailors, are in NY to participate in a panel at the UN focusing on accountability for the Representation of Women in Non-Traditional Sectors (law enforcement and armed forces).  Admiral Ferguson ring the closing bell.