Morning Report: December 13, 2011

Ahead of the Bell: Dow futures are trading up 61 points and S&P futures are trading up 7.70 points as the markets bounce back from yesterday’s triple digit decline. Investor sentiment was buoyed by a successful Spanish bond sale, although economic data expected later this morning, as well as the FOMC announcement this afternoon could ultimately prove to be the driving forces for today’s markets.    

  • On the economic calendar today, Retail Sales are expected to be reported at 8:30 am and JOLTs Job Openings are expected at 10:00 am. Investors will be keying in on today’s Fed Open Market Committee rate decision at 2:15 pm. The rate is expected to remain unchanged at 0.25%, and there are not expected to be any other major policy announcements expected. The dollar is currently down against the Euro, British Pound, and Japanese Yen. Crude oil is currently trading at about $98.50 per barrel. Gold is currently trading at $1,673.
  • The Spanish Treasury sold €4.9 billion in 12 and 18-month T-bills at 4.05% and 4.226% respectively, almost a full percent lower than the yields paid only a month ago. Eight Spanish banks, including CaixaBank, Banco Sabadell and Bankia, were placed under review by Moody’s for a possible downgrade because of exposure to loans to bankrupt property developers.
  • The Bank of Japan lent a record $4.756 billion in an offering of three-month dollar loans this morning, the first offering since the world’s Central Banks reached an agreement to increase dollar liquidity. The funds were available to Japanese financial firms and foreign firms with operations in Japan, but the BOJ does not disclose who accessed the funding.
  • MF Global executives, including Jon Corzine, are expected to appear in front of Congressional committees today. The prepared testimony from CFO Henri Steenkamp and COO Bradley Abelow indicates they will reiterate Corzine’s testimony last week, and will testify they also do not know where the missing customer funds are.
  • This morning on CNBC Ken Langone, Arthur Blank, and Bernie Marcus, co-founders of Home Deopot, were discussing the status of the American Dream. Blank said that the American Dream is hurting because jobs are disappearing for the middle class, making it more difficult for Americans to own homes. Langone disagreed, saying that it is alive and well, but what Americans need is more encouragement. The group all agreed that the primary challenge facing Americans is that our education system is falling behind, which is keeping many people from getting jobs, and creating the growing disparity in wealth. 

Monday’s Close

DJIA down 162.87 pts /-1.34%/12,021.39

S&P down 18.72 pts/-1.49%/1,236.47

Nasdaq down 34.59 pts/-1.31%/2,612.26

Tuesday’s Futures

Dow Futures up 61 pts/+0.51%

S&P Futures up 7.70 pts/+0.62%

Nasdaq Futures up 15.50 pts/+0.67%

Overseas Markets

FTSE +0.88%

CAC 40 +0.23%

NIKKEI 225 -1.17%

HANG SENG -0.69%

Overseas:  Europe is trading higher following the successful auction of Spanish treasuries.

Economic Reports:  None

Top Headlines:    

  • Medtronic has announced a settlement agreement with the Department of Justice regarding post-market clinical trials and device registries. Under the terms of the settlement Medtronic will make a payment of $23.5 million. The company made no admission that any studies were improper or unlawful.
  • An independent arbitrator ruled in favor of Rio Tinto PLC in its challenge of certain provisions in a poison pill adopted by Ivanhoe Mines Ltd. Rio Tinto can now increase its stake, which currently stands at 49%, in Ivanhoe after the standstill pact expires on January 18th.
  • Sources are reporting that Freeport McMoRan is close to reaching an agreement with Grasberg workers, who have been on strike since September 15th because of a dispute over pay. The sources are indicating that the deal is expected to include a 40% pay increase.

Commodities/Currency:

Gold:up $5.00 to $1,673.10

Oil:up $0.73 to $98.51

EUR/USD 1.3218 +0.0030USD/JPY 77.74 -0.17

GBP/USD 1.5585 -0.00630

Volatility Index (VIX): As of the close of business Monday, December 12th, the VIX is down 0.71 to 25.67

Companies Reporting Quarterly Earnings:   

None

Today’s Opening and Closing Bells:

CEO2CEO Summit visits the NYSE to mark the 12th annual CEO2CEO Summit, a trusted networking event for CEOs. In honor of the occasion, Chief Executive Group Chairman and President Wayne Cooper and Chief Executive Marshall Cooper ring The Opening BellSM. They will be joined on the bell podium by Cary Pappas, CEO of FedEx TechConnect; John Wood, Vice Chairman of Heidrick & Struggles and Emmet Keeffe, CEO and Co-Founder of iRise.

Elephant Talk Communications Corp. (NYSE Amex-Listed ETAK), an international provider of business software and services to the telecommunications and financial services industry, visits the NYSE to celebrate the company’s December 5th initial public offering. In honor of the occasion, CEO Steven van der Velden rings The Closing BellSM