Morning Report: September 7, 2011

BURBANK, CA - JANUARY 26:  Customers buy goods...

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Ahead of the Bell: Dow futures are trading up 107 points and S&P futures are trading up 12.30 points after the top German court removed a key hurdle for German participation in Euro-zone bailouts and China revised its 2010 GDP reading higher.

There are no major economic indicators on the calendar for today, but the Fed Beige book is expected to be released at 2:00 pm. Investors are still focused on jobless claims tomorrow morning, and the President’s jobs plan to be announced tomorrow night.  Media outlets are reporting the President is set to announce a $300 billion plan that will include tax cuts, government spending, as well as increased spending on infrastructure. The dollar is down against the Japanese yen, the Euro, and British Pound. Crude oil is currently trading at about $86.80 a barrel.  Gold is currently trading at $1,834.

The top German court ruled against law suits that were filed to try and block Germany’s funding bailout packages for distressed Euro-zone countries. While the measures German Chancellor Angela Merkel announced still have to be approved by Parliament, the ruling alleviated some short term fears that any further German involvement would be ruled unconstitutional.

China revised its 2010 GDP reading slightly higher from 10.3% to 10.4%, after output from service and industrial sectors was better than expected. This marks the first revision of the gross domestic product data for China, who typically revises the figures twice.

Richard Parsons, Chairman of Citigroup and member of the President’s Council on Jobs and Competitiveness, was a guest on CNBC this morning. Parsons was talking about threats to the economic recovery and said that Europe is a greater threat than the weak housing market domestically. The US banks have been getting healthier over the last few years, however European banks have not because they continue to buy other European banks’ paper. Parsons said that to create jobs we have to boost credit, develop infrastructure, add incentives and remove obstacles for hiring.

Tuesday’s Close

DJIA down 100.96 pts/-0.90%/11,139.30

S&P down 8.73 pts/-0.74%/1,165.24

Nasdaq down 6.50 pts/-0.26%/2,473.83

Wednesday’s Futures

Dow Futures up 107 pts/+0.95%

S&P Futures up 12.40 pts/+1.05%

Nasdaq Futures up 21.50 pts/+0.98%

Overseas Markets

FTSE +1.78%

CAC 40 +2.40%

NIKKEI 225 +2.01%

HANG SENG +1.71%

Overseas:  World stock markets are higher today following the ruling by the top German court.

Economic Reports:  JOLTS Job Openings at 10:00 am and the Fed Beige Book will be released at 2:00 pm.

Top Headlines:  

CNBC is reporting that regulators, including the FDIC, are asking banks to test their capital levels against the Fall of 2008 market conditions to make sure they have sufficient capital.

The SEC announced yesterday that it will not appeal a federal court decision that rejected the “proxy access” rule, which would allow shareholders to print names of candidates for corporate boards directly on the company ballot.

Bank of America announced a reorganization of the company which creates three core customer groups: individuals, companies, and institutional investors.   As a part of the reorganization, David Darnell and Tom Montag were appointed to the newly created post of co-Chief Operating Officers.

The Board of Directors of Yahoo! has appointed Timothy Morse interim CEO effective immediately, replacing Carol Bartz.

Sprint filed suit yesterday to block the proposed AT&T’s proposed acquisition of T-Mobile, alleging that the transaction violates Section 7 of the Clayton Antitrust Act.


Gold:down $34.40 to $1,839.00

Oil:up $0.80 to $86.81

EUR/USD 1.4040 +0.0045

USD/JPY 77.14 -0.40

GBP/USD 1.6008 +0.0062

Volatility Index (VIX): As of the close of business Tuesday, September 6, the VIX is up 3.15 to 37.07

Companies Reporting Quarterly Earnings:   

Navistar International (NAV):FQ3 EPS of $0.79 misses by $0.47. Revenue of $3.54B (+9.8% Y/Y)

The Pep Boys (PBY):  Q2 beats on EPS but misses on revenue estimates. Overall sales were 32% higher Y/Y.

VeriFone (PAY):FQ3 EPS of $0.49 beats by $0.03. Revenue of $317M (+21% Y/Y)

Today’s Opening and Closing Bells:

Wesco Aircrafts visits the NYSE. In honor of the occasion, representatives from the company will ring The Opening BellSM.

The American Humane Society visits the NYSE.In honor of the occasion, representatives from the American Humane Society will ring The Closing BellSM.






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