Morning Report: February 9, 2012

Ahead of the Bell: Dow futures are trading down 7 points and S&P futures are trading down 2 points after China reported January inflation data rose unexpectedly, which could force the government to alter course on its monetary policy.  Analysts were anticipating a cut in the bank reserve requirement ratio, but the recent inflation data could have eliminated the expectation.  Reports suggest Greece is close to a deal, the only sticking point remaining is pension reform, as leaders head to a meeting with the ECB in Brussels. 



  • On the economic calendar today, the labor department will release weekly initial jobless claims before the market opens, it is forecasted to be 370K compared with 367K for the previous week.  Wholesale inventories for December will be out after the market opens and they are looking for 0.4% versus 0.1% for November.  Companies reporting earnings include Aeroflex, Coca-Cola, Corn Products, Credit Suisse, Inland Real Estate, KKR, LinkedIn, Lorillard, PepsiCo, Philip Morris, Pitney Bowes, Sealed Air, Sonoco Products, and Gardner Denver.  The dollar is down against the major currencies.  Crude oil is currently trading at $99 a barrel.  Gold is trading at $1,731.  

  • Yesterday, stocks were mixed as investors sat on the sidelines and awaited the results of negotiations between Greece and private bondholders that would hopefully tame the debt crisis.

  • On CNBC today, Indra Nooyi, Chairman and CEO of PepsiCo, talked about the company’s Q4 earnings. PepsiCo reported Q4 core EPS $1.15 vs. consensus $1.13 and Q4 revenue $20.16B vs. consensus $19.91B.  Nooyi said business across the board was better than expected, but acknowledges that the macro environment in 2011 was difficult. PepsiCo’s goal is to hold on to or increase beverage market share and leverage its core business with scale and geographic diversity.  Nooyi also commented on the  planned 8,700 layoffs by the company which represents about 3% of the overall workforce from about 30 countries around the world.  She said layoffs are always difficult, but PepsiCo still plans on hiring. 

  • Happy Thursday and have a nice day.

Wednesday’s Close


DJIA up 5.75 pts/0.04%/12,883.95


S&P up 2.91 pts/+0.22/1,349.96


Nasdaq up 11.78 pts/+0.41/2,915.86


 


Thursday’s Futures


Dow Futures down 7.00 pts/-0.05%


S&P Futures down 2.40 pts/-0.20%


Nasdaq Fut down 5.58 pts/-0.21%


 


Overseas Markets


FTSE +0.02%


CAC 40 +0.37%


NIKKEI 225 +1.10%


HANG SENG +1.54%


 


Overseas:  World stock markets were mixed today.  European markets are up on optimism Greece will reach a deal with the ECB and IMF to secure its next bailout package.  Asian markets are down following lower inflation data from China.


 


Economic Reports:  Initial Jobless Claims expected to be 370K at 8:30 a.m. and Wholesale Trade expected to be 0.4% at 10:00 a.m.


 


Top Headlines:    



  • Reports indicate Federal officials are close to a $26 billion deal with the major banks including Ally Financial, BofA, Citi, JPMorgan, and Well Fargo over alleged foreclosure abuses.

  • UnitedHealth Group Inc. (UNH) said it will change the way it pays doctors and hospitals by encouraging providers to give preventative healthcare.

  • Bloomberg reports BP Plc (BP) is negotiating with the government to settle pollution claims over the 2010 Gulf of Mexico oil spill.  BP could be liable for about $17.6 billion in fines.

  • Reports indicate the DOJ is close to clearing Google's (GOOG) $12.5 billion acquisition of Motorola Mobility Holdings (MMI), but the deal still faces EU approval.      

Commodities/Currency:


Gold:up $1.95 to $1,731.85
Oil: up $0.68 to $99.39

EUR/USD 1.3247 +0.0001
USD/JPY 77.1950  +0.1200
GBP/USD 1.5864 +0.0049


 


Volatility Index (VIX): As of the close of business Wednesday, February 8, the VIX is up 0.55 at 18.20


Companies Reporting Quarterly Earnings:     


Lorillard (LO): Q4 EPS of $2.20 beats by $0.25. Revenue of $1.62B (+10.3% Y/Y) beats by $540M.


Thomson Reuters (TRI): Q4 EPS of $0.54 may not be comparable to consensus of $0.58. Revenue of $3.35B (+3.4% Y/Y) in-line.


Noble Energy (NBL): Q4 EPS of $1.18 beats by $0.02. Revenue of $985M (+25.7% Y/Y) beats by $20M.


Aeroflex Holding (ARX): FQ2 EPS of $0.15 beats by $0.03. Revenue of $171.1M (-5.8% Y/Y) beats by $6M.


Sirius XM Radio (SIRI): Q4 EPS of $0.01 in-line. Revenue of $783.7M (+6.5% Y/Y) in-line.


Teradata (TDC): Q4 EPS of $0.66 beats by $0.04. Revenue of $673M (+22.8% Y/Y) beats by $35M.


Mack-Cali Realty (CLI): Q4 FFO of $0.68 beats by $0.01. Revenue of $179.7M (-6.5% Y/Y) beats by $4M.


BCE (BCE): Q4 EPS of $0.62 misses by $0.06. Revenue of $5.16B (+10.4% Y/Y) in-line.


Corn Products International (CPO): Q4 EPS of $1.11 in-line. Revenue of $1.63B (+9% Y/Y) in-line.


Group 1 Automotive (GPI): Q4 EPS of $0.94 beats by $0.06. Revenue of $1.63B (+13.1% Y/Y) beats by $50M.


Today’s Opening and Closing Bells:


FX Alliance Inc. will ring the opening bell.


 


Air Products Visits NYSE to Celebrate 50th-Year of Listing on the New York Stock Exchange Chairman and CEO John McGlade will ring the closing bell.