Morning Report: October 14, 2011

Ahead of the Bell: Dow futures are trading up 77 points and S&P futures are trading up 14 points after Google reported better-than expect 3rd quarter results, the company citing strong advertising sales and stringent cost controls. China reported consumer inflation fell in September to 6.1%, although food prices remain high.  Standard and Poor's cut Spain's credit rating to AA- from AA which is expected to be the main topic of finance officials at a G20 meeting in Paris.

  • On the economic calendar today, The Commerce Department will release September sales, and economists are expecting a 0.7% increase versus an unchanged reading in August. Import and export prices will also be out before the market opens, and economists are forecasting a 0.3% drop in import prices and a 0.2% increase in export prices. The University of Michigan Surveys of Consumer, will release preliminary October sentiment index after the market opens. Economists are predicting a reading of 60.2, compared with a final reading of 59.4 for September.  The dollar is down against the major currencies. Crude oil is currently trading at $85 a barrel.  Gold is trading at $1,672.   
  • Yesterday, stocks were down on lower earnings from JPMorgan Chase, and concern equities rose too much on optimism about Europe’s debt crisis.
  • On CNBC today, Venture Capitalist and co-founder of Elevation Partners, Roger McNamee, talked about where technology is going.  McNamee said the tech market is changing so fast that the financial world can’t keep up, it has changed the market leaders and competition. It is a totally different world. He pointed out that the move away from personal computers to handheld devices started with Apple’s iPhone.  He thinks Apple could become a trillion dollar company sometime in the future. They have the best people, cost structure, and products.  McNamee also said the world Apple created, he calls it the hyper net, is no longer the web, apple has its own ecosystem, because of the propriety connection to apple, it gets to share a piece of the pie with its iTunes, iPhone, and the Apple stores. McNamee believes because of Apple’s products and innovations it has forced Google from monopolizing the market, and Microsoft’s acquisition of Skype was a brilliant move.  McNamee believes Google is done with index search, as the market has reached its peak, and people are now moving to apps to search the web. Finally, McNamee commented that the next 10 years will be about creating content, which will be different, as he believes the iPad is the greatest invention since the IBM PC.              
  • The cleanup of Zucatti Park where the “Occupy Wall Street” protesters have been staying has been postponed, the cleanup was scheduled for 7 a.m.          
  • Happy Friday, have a nice day and a wonderful weekend.

Thursday’s Close

DJIA down 40.72 pts/-0.35%/11,478.13

S&P down 3.59 pts/-0.30/1,203.66

Nasdaq up 15.51 pts/+0.60/2,620.24

Friday’s Futures

Dow Futures up 77.00 pts/+0.68%

S&P Futures up 14.50 pts/+0.60%

Nasdaq Fut up 14.58 pts/+0.21%

Overseas Markets

FTSE +0.76%

CAC 40 +0.71%

NIKKEI 225 -0.85%

HANG SENG -1.36%

Overseas:  World stock markets were mixed today.  European and Asian markets were lower on the downgrade of Spain and China reported positive inflation data.

Economic Reports:  Retail Sales expected to be 0.8% and Import and Export Prices expected to be -0.5% at 8:30 a.m., Consumer Sentiment expected be 60.0 at 9:55 a.m., Business Inventories expected to be 0.4% at 10:00 a.m., and Treasury Budget expected to be $-64.5B  at 2:00 p.m.

Top Headlines:    

  • Reports indicate PepsiCo Inc., (PEP) is expected to announced a joint venture with a German dairy producer, Theo Muller Group in an effort to break in the yogurt market.
  • Ford Motor Company ( F) suffered a setback after a significant number of UAW members voted not to approve  the tentative deal reached with the company on labor negotiations. 
  • Bloomberg reports Apple Inc. (AAPL) is in talks with Hollywood studios to allow users of its iPad and iPhone to buy, download, and watch streaming versions of movies on Apple devices.    

Commodities/Currency:

Gold:up $4.10 to $1,672.85

Oil:up 1.11 to $85.34

EUR/USD 1.3781 +0.0004

USD/JPY 76.9850  +0.1140

GBP/USD 1.5777 +0.0014

Volatility Index (VIX): As of the close of business Thursday, October 13, the VIX is down 0.56 at 30.70

Companies Reporting Quarterly Earnings:     

None as of yet.

Today’s Opening and Closing Bells:

Celebrating the 40th Anniversary of Immaculata’s Women’s Basketball First National Championship Win and The Premiere of Sony Pictures Film The Mighty Macs Director Tim Chambers, Real Mighty Macs Coach Cathy Rush, Player and Cast Members will ring the opening bell.

NetSuite Visits New York Stock Exchange for Analyst Meeting Chief Operating Officer Jim McGeever will ring the closing bell.