Morning Report: February 8, 2012

Ahead of the Bell: Dow futures are trading up 27 points and S&P futures are trading up 2 points following upbeat corporate earnings and investor optimism that Greece will secure a deal and avoid default. Greece's political parties will try again today to strike a deal with the government, as the pressure builds on Athens to accept stricter austerity measures. The fourth quarter earnings parade continues today with mixed results out of The Walt Disney Company. 



  • On the economic calendar today, no reports are due.  San Francisco Federal Reserve Bank President, John Williams will be speaking to the Bishop Ranch Forum on The Federal Reserve and the Economic Recovery, in San Ramon, California. Companies reporting earnings include Agrium, Computer Sciences, Moody's, Time Warner, General Growth Properties, Kimco Realty, Plains All American, Prudential, Silvercorp Metals, and Visa.  The dollar is down against the major currencies.  Crude oil is currently trading at $99 a barrel.  Gold is trading at $1,774.  

  • Yesterday, stocks rose after Greece’s government made progress on implementing stricter austerity measures so that they may receive the next round of bailout funds from the IMF and EU.

  • On CNBC today, Sam Zell, Chairman of Equity Group Investments, talked about the state of the housing market.  Zell said it’s important for the US to stop propping up the housing market.  We have a serious problem where houses are worth less than the mortgage, about 1/3rd of single family houses are currently underwater, and we have a huge foreclosure inventory.  By propping up the market, the US is just putting off facing reality and Zell feels this will not come out well for us in the end.  The longer we do it, the longer it will take to get through the inventory.  Instead of all of the government interference, we need to encourage lenders to move forward and exercise their rights.  Realistically, lenders will favor refinancing over foreclosure anyway, especially at these market levels.  We are the only country in the world which allows homeowners to borrow money and walk away from the house.  Zell thinks all of this intervention needs to change for the US to really recover. 

  • Happy Wednesday and have a nice day.

Tuesday’s Close


DJIA up 33.07 pts/0.26%/12,878.20


S&P up  2.72 pts/+0.20/1,347.05


Nasdaq up 2.09 pts/+0.07/2,904.08


 


Wednesday’s Futures


Dow Futures up 27.00 pts/+0.21%


S&P Futures up 2.40 pts/+0.08%


Nasdaq Fut up 3.58 pts/+0.14%


 


Overseas Markets


FTSE +0.02%


CAC 40 +0.37%


NIKKEI 225 +1.10%


HANG SENG +1.54%


 


Overseas:  World stock markets were up today.  European and Asian markets are up on optimism Greece will reach a deal with private bond holders on a debt swap to receive the next round of bailout funds.


 


Economic Reports:  None


 


Top Headlines:    



  • Gene sequencing company Illumina Inc. (ILMN) has rejected a $5.7 billion hostile offer from Roach Holdings, saying the bid is inadequate and undervalues the company.

  • Yahoo (YHOO) announced chairman, Roy Bostock and three other directors will step down as the company tries to secure a deal with its Asian Alibaba Group and Yahoo Japan.

  • Research In Motion (RIMM) suffered another setback after Haliburton (HAL) said it plans to issue iPhones to its employees instead of Blackberry smartphones, as it is better suited.       

Commodities/Currency:


Gold:up $1.10 to $1,774.85
Oil: up $0.93 to $99.34

EUR/USD 1.3284 +0.0025
USD/JPY 76.9730  +0.1800
GBP/USD 1.5886 -0.0013


 


Volatility Index (VIX): As of the close of business Tuesday, February 7, the VIX is up 0.66 at 17.76


Companies Reporting Quarterly Earnings:     


Apartment Investment and Management Company (AIV): Q4 EPS of $0.42 beats by $0.01. Revenue of $272.9M (flat Y/Y) in-line.


Level 3 Communications (LVLT): Q4 EPS of -$0.80 beats by $0.18. Revenue of $1.58B (+71.4% Y/Y) misses by $60M.


Ingersoll-Rand (IR): Q4 Adj. EPS of $0.76 beats by $0.09. Revenue of $3.51B (-5% Y/Y) misses by $70M.


Moody's (MCO): Q4 EPS of $0.43 misses by $0.06. Revenue of $567.1M (+0.5% Y/Y) in-line.


Reynolds American (RAI): Q4 EPS of $0.72 beats by $0.04. Revenue of $2.08B (+0.11% Y/Y) misses by $40M.


Genesee & Wyoming (GWR): Q4 EPS of $0.83 beats by $0.11. Revenue of $210M (+24% Y/Y) in-line.


Agrium (AGU): Q4 EPS of $2.34 beats by $0.34. Revenue of $3.18B (+32% Y/Y) beats by $80M.


Hhgregg (HGG): FQ3 EPS of $0.60 misses by $0.01. Revenue of $829.5M (+26.9% Y/Y) beats by $4M.


Triple-S Management (GTS): Q4 EPS of $0.67 beats by $0.14. Revenue of $65.9M (+33.5% Y/Y) beats by $10M.


Jones Apparel Group (JNY): Q4 EPS of $0.10 beats by $0.09. Revenue of $894M (+2.3% Y/Y) misses by $37M.


IntercontinentalExchange (ICE): Q4 EPS of $1.76 beats by $0.08. Revenue of $327.2M (+15% Y/Y) in-line.


Wright Express (WXS): Q4 EPS of $0.98 beats by $0.06. Revenue of $139.8M (+21.7% Y/Y) in-line.


Alere Inc (ALR): Q4 EPS of $0.74 beats by $0.03. Revenue of $652.6M (+12.5% Y/Y) beats by $19M.


Today’s Opening and Closing Bells:


Epam Systems Inc., (EPAM) to celebrate its IPO will ring the opening bell.


 


Cementos Pacasmayo SSA will ring the closing bell.