Morning Report: May 3, 2012

Ahead of the Bell: Dow futures are trading up 24 points and S&P futures are trading up 4 points. Investors’ appetite for riskier assets is on the rise, following a better than expected Spanish bond auction while French costs declined at an auction, easing concern that the countries will struggle to finance their borrowings.  Investors are optimistic the European Central Bank will unveil further monetary easing, despite an increase in inflation when it meets in Barcelona today. Currently euro zone inflation is 2.6%, above the ECB's target of 2%.       

  • On the economic calendar today, weekly initial jobless claims will be out before the market opens, and it is expected to be 378K compared with 388k for the previous week.  Productivity and costs for the first quarter will also be out before the market opens, and it is forecasted to be -0.4% versus 0.9%.  ISM Non-Manufacturing index for April will be out after the market opens, and it is anticipated to be 56.0, compared with a flat reading for the previous month. 

  • Several Federal Reserve bank Presidents will be presenting at the University of California at Santa Barbara Economic Forecast Project 2012, including Charles Plosser, Dennis Lockhart, and John Williams. .

  • The dollar is up against the euro and British pound and down against the Japanese yen.  Gold is trading at $1,645. Crude oil is currently trading at $104 a barrel.

  • Yesterday, stocks were mixed, after a report showed German unemployment rose in April, as euro-area manufacturing shrank for a ninth month, more than initially forecasted.

  • On CNBC today, Peter Orszag, former OMB Director and Vice Chairman of Global Banking at Citigroup, talked about how the housing market crisis was underestimated.  Orszag said the Fed and other forecasters treated the housing collapse as “ bust 2.0” and official models completely missed the recession’s severity.  He added the models couldn’t distinguish between the full housing collapse and the tech bust.    

  • Edvard Munch's famous 'The Scream' painting fetched $119 million at Sotheby's in New York, the most expensive artwork ever sold at auction.

  • Happy Thursday and have a nice day.

Wednesday’s Close

DJIA down 10.75 pts/-0.08%/13,268.57

S&P down 3.51 pts/-0.25/1,402.31

Nasdaq up 9.41 pts/+0.31/3,059.85


Thursday’s Futures

Dow Futures up 24.00 pts/+0.19%

S&P Futures up 3.40 pts/+0.11%

Nasdaq Fut  7.22 pts/+0.27%


Overseas Markets

FTSE +0.59%

CAC 40 +1.29%

NIKKEI 225 +0.31%

HANG SENG -0.28%


Overseas:  World stock markets were up today.  European and Asian markets are higher on better than expected Spanish and French bond auctions.      


Economic Reports:  Initial Jobless Claims expected to be 378K, Productivity and Costs expected to be -0.4% at 8:30 a.m. and ISM Non-Mfg Index expected to be 56.0 at 10:00 a.m.


Top Headlines:    

  • Novartis AG, (NVS) announced it is acquiring closely held Fougera Pharmaceuticals Inc. for about $1.5 billion, to become the top seller of generic skin medications.

  • Ford Motor Company ( F ) plans to opened a $450 million plant in Thailand that can make 150,000 cars a year to meet rising demand in neighboring countries.

  • Kensey Nash Corporation (KNSY) said it has agreed to be acquired by Dutch food and chemical group, DSM for about $360 million or $38.50 per share.        


Gold:down $8.10 to $1,645.85
Oil: down 0.24 to $104.98

EUR/USD 1.3134 -0.0018
USD/JPY 80.3350  +0.2200
GBP/USD 1.6179 -0.0020


Volatility Index (VIX): As of the close of business Wednesday, May 2, the VIX is up 0.28 at 16.88

Companies Reporting Quarterly Earnings:     

General Motors reports Q1 adjusted EPS 93c, vs. Est 85c and Q1 revenue $37.8B, vs. Est $37.59B.

Cardinal Health reports Q3 EPS 94c, vs. Est 88c and Q3 revenue $26.9B, vs. Est $26.71B.

Alpha Natural reports Q1 EPS (27c), vs. Est (6c) and Q1 revenue $1.93B, vs. Est $1.90B

Today’s Opening and Closing Bells:


Everbank Financial Corp. (EVER) will ring the opening bell.


NovaCopper Visits the NYSE Mr. Rick Van Nieuwenhuyse, President & CEO will ring the closing bell.



Paras Madho

NYSE Euronext

Market Watch and Corporation Actions

(212) 656- 5404


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