Morning Report: September 21, 2011

Ahead of the Bell: Dow futures are trading down 32 points and S&P futures are trading down 2 points on speculation the Federal Reserve may announce further stimulus measures to boosts growth after the FOMC concludes its meeting this afternoon.  Oracle reported better than expected software sales and is forecasting higher earnings for the quarter.  Adobe Systems also announced it anticipates higher sales for the fourth quarter, offering investors some reassurance that global spending continues.                                            



  • On the economic calendar today, the National Association of Realtors will release its August existing home sales data after the market opens.  Companies reporting earnings include General Mills, Bed Bath & Beyond, and Walter Energy. The dollar is up against major currencies.  Crude oil is currently trading at $86 a barrel.  Gold is trading at $1,802.   

  • Yesterday, stocks were mixed, as investors speculated the Federal Reserve would take steps to shore up the economy, and optimism grew that Greece will satisfy requirements for international aid.

  • On CNBC today, Indiana Governor, Mitch Daniels, talked about social programs, addressing social security and medicare.  Daniels said we need to trust Americans to make decisions in their private lives.  Daniels also said the government does not create jobs, rather it creates the conditions which allows business to grow.  Daniels thinks we need to have a safety net like social security and medicare, the question is over structure.  Daniels also thinks the most urgent issue today is to reshape entitlement programs and get started now.  Daniels believes the current social safety net does not treat people with respect.  Daniels went on to say he is in favor of means testing for social programs.  He pointed out, neither side of the national debate gives Americans enough credit.  Finally, Daniels believes the moves to aid the economy over the past few years have had a negative impact.                                                                                                

  • Happy Wednesday, have a nice day.

Tuesday’s Close


DJIA up 7.65 pts/+0.07%/11,408.66


S&P down 2.00 pts/-0.17/1,202.09


Nasdaq down 22.59 pts/-0.86/2,590.24


 


Wednesday’s Futures


Dow Futures down 32.00 pts/-0.23%


S&P Futures down 2.30 pts/-0.23%


Nasdaq Fut down 3.58 pts/-0.19%


 


Overseas Markets


FTSE -0.33%


CAC 40 -0.91%


NIKKEI 225 +0.23%


HANG SENG -1.00%


 


Overseas:  World stock markets were mixed today.  European and Asian markets were mixed on speculation the Fed will announce a new round of stimulus to aid the lagging economy.


 


Economic Reports:  Existing Home Sales expected to be 4.750M at 10:00 a.m. & FOMC Meeting Announcement at 2:15 p.m.


 


Top Headlines:    



  • SABMiller Plc  announced it is acquiring Foster’s Group Ltd.  for A$9.9 billion ($10.2 billion) or about A$5.10 a share in cash.

  • General Motors (GM) CEO said he is concerned about a recession in the U.S. but pent-up demand is likely because of the need to replace aging cars.

  • Pepsico (PEP) announced it is forming a council to bring together its food and beverage units to take advantage of its combined scale of its businesses and reaffirms it guidance for 2011.

  • Google (GOOG) opened its social network service called Google+ to the public. Users will be able to search for topics like cooking, post pictures, and network with users over the web.

  • Microsoft Corp., (MSFT) raised its quarterly dividend 25% to $0.20, the new dividend is a penny more, the $0.19 a share projected by Bloomberg.

  • MBA reports mortgage applications were up 0.6% versus up 6.3% last week.  The thirty-year fixed mortgage rate remain unchanged at 4.29%.    

Commodities/Currency:


Gold:down $1.10 to $1,802.85
Oil:down $0.52 to $86.53

EUR/USD 1.3655 -0.0047
USD/JPY 76.3050  -0.1500
GBP/USD 1.5641 -0.0096


 


Volatility Index (VIX): As of the close of business Tuesday, September 20, the VIX is up 0.13 at 32.86


Companies Reporting Quarterly Earnings:     


Walter Energy (WLT): Sees Q3 EPS of $1.00-1.16 and Q4 EPS of $2.63-2.95, vs. consensus of $3.23 and $3.16, citing poor weather and difficulties at an Alabama mine


General Mills (GIS): FQ1 EPS of $0.64 beats by $0.02. Revenue of $3.85B (+9% Y/Y) beats by $50M. Sees FY12 EPS of $2.59-2.61.


Today’s Opening and Closing Bells:


Corporation for Enterprise Development Visits the New York Stock Exchange President Andrea Levere will ring the opening bell.


 


The Rt. Hon. David Cameron MP, Prime Minister of the United Kingdom will ring the closing bell.