Morning Report: June 28, 2011

ATHENS, GREECE - FEBRUARY 23:  Police in full ...

Image by Getty Images via @daylife

Ahead of the Bell: Dow futures are trading down 7 points and S&P futures are trading down 2 points following a proposal by France that would voluntarily roll over maturing Greek debt for 30 years, allowing the government to implement its five-year austerity plan. According to plan details, banks would reinvest 70% of the proceeds realized from maturing Greek debt from 2011 through 2014 and cash out the remaining proceeds.  Of the 70% reinvested, 50% would go into a 30-year bond and 20% would go into zero-coupon AAA rated bond with deferred interest. The plan needs IMF and EU approval. German banks seemed encouraged by the proposal. Meanwhile in Greece, workers have walked off their jobs in a two-day strike and thousands have gathered in front of the Parliament to protest the austerity measures.

  • On the economic calendar today, S&P Case-Shiller home price index for April will be out before the market opens. According to Briefing.com, the index is forecast to fall 3.9% versus the 3.6% it dropped in March. The consumer confidence survey will be out after the market opens and economists forecast the the index will edge lower to a reading of 60.3 compared with May's 60.8. The dollar is down against the major currencies.  Crude oil is trading at about $91 a barrel.
  • Yesterday, the equity markets were up after three days of losses following an agreement reached by global regulators to increase bank capital requirements to strengthen bank balance sheets. The rally was led by financial stocks.
  • On CNBC today, Don Peoples, Peoples Corporation, talked about the crisis in Europe, Greece, and the U.S.  Peoples said the world is unstable and he pointed first to problems in Europe and the Middle East. Peoples said bondholders of Greek debt will have to take a hit. He said bonds are an investment and you take a risk when you invest; bondholders of AIG and GM took a hit. Peoples said Greece needs to make fundamental change; and, if it does that, the free and private market will come back and invest in Greece. Peoples pointed out that Latin America was in terrible financial shape in the 1980’s, but investors came back. The same will happen in Greece as long as they address problems now. Peoples also pointed to problems in the US, in particular the housing market.

Feel the love – XOXO begins trading on the NYSE today (The Knot, Inc. transfers from Nasdaq and changes its name)! Happy Tuesday, have a nice day.

Monday’s Close

DJIA up 108.98 pts/+0.91%/12,043.56

S&P up 11.65 pts/+0.92%/1,280.10

Nasdaq up 35.39 pts/+1.33/2,688.28

Tuesday’s Futures

Dow Futures down 7 pts/-0.07%

S&P Futures down 2.50 pts/-0.19%

Nasdaq Fut down 2.75 pts/-0.26%

Overseas Markets

FTSE +0.46%

CAC 40 +0.55%

NIKKEI 225 +0.74%

HANG SENG +0.09%

Overseas:  World stock markets were up today. European and Asian markets were up after a proposal by France to address the Greek sovereign debt crisis.    

Economic Reports:  Consumer Confidence expected to be 62.0 @10:00 a.m.

Top Headlines:   

  • Reports indicate French finance Minister Christine Lagarde is expected to be chosen as early as today to be the new leader of the International Monetary Fund.
  • Standard & Poor’s announced Accenture Plc, (ACN) will be added to the S&P 500 index, replacing Marshall & Ilsley (MI) which is being acquired by the Bank of Montreal (BMO).
  • Reports indicate the SEC is looking into whether Stifel Financial Corp (SF) sold CDOs that were suitable to five Wisconsin school districts that incurred losses.
  • Bloomberg reports the SEC is seeking more details about how top executives were paid at Blackstone Group (BX).  The letter was disclosed in a filings on June 27 by company.
  • Microsoft (MSFT) plans to introduce its new Office 365 suite of programs today including a full internet-based version of Office 2010 to fend off competition from Google.

Commodities/Currency:

Gold:up $3.10 to $1,501.85

Oil:up $0.62 to $91.31

EUR/USD 1.4271 -0.0016

USD/JPY 80.8350  -0.0800

GBP/USD 1.5961 -0.0026

Volatility Index (VIX): As of the close of business Monday, June 27, the VIX is down 0.54 pts to 20.56

Companies Reporting Quarterly Earnings: None as of yet.

Today’s Opening and Closing Bells:

The Knot Inc. Celebrates 15th Anniversary, Transfers Listing to the NYSE, Changes Name to XO Group Inc. (XOXO). Co-Founder and CEO and Carley Roney, Co-Founder and Editor in Chief will ring the opening bell.

Hill International visits the New York Stock Exchange. Chairman and CEO Irvin E. Richter and President and COO David L. Richter will ring the closing bell.

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