Morning Report: November 29, 2011

Ahead of the Bell: Dow futures are trading up 63 points and S&P futures are trading up 8 points following the previous trading sessions sharp rally.  Reports suggest Cyber Monday sales were up 15% from last year, but analysts don't expect consumers to continue their strong appetite through the holiday season.  Moody's said it could downgrade its debt ratings for a large number of banks across Europe, as the governments would be too cash-strapped to bail-out financial institutions.  Fitch ratings agency said, if the US government is unable to reach a budget deal by 2013 it could lower its debt rating for the nation.



  • On the economic calendar today, S&P Case-Shiller HPI report for September will be out before the market opens, and is expected to be -0.1%, compared with a flat reading for August.  The Conference Board will release consumer confidence for November, after the market opens, and it is forecasted to be 45 versus 39.8 for September.  The FHFA House Price Index for September will also be out after the market opens, and is anticipated to be flat, compared to a negative reading of 0.1% for August.  Federal Reserve Vice Chair, Janet Yellen will make opening remarks at the San Francisco Fed's Asia Economic Policy Conference in San Francisco.  Minneapolis Federal Reserve Bank President, Narayana Kocherlakota will be speaking on monetary policy to the Stanford Institute for Economic Policy Research, in Stanford, and media briefing.  Companies reporting earnings include Tiffany & Co.  The dollar is up against the major currencies.  Crude oil is currently trading at $98 a barrel.  Gold is trading at $1,712.  

  • Yesterday, stocks were up sharply on better than expected retail sale, following a record Black Friday.  Investors were encouraged after European leaders agreed on a plan to ensure fiscal discipline across the euro zone. 

  • On CNBC today, Stephen Roach, Non-Executive Chairman of Morgan Stanley Asia, talked about growth strategy for the China and the US.  Roach said growth is weak in Europe and it is an issue for China, China is a growth economy.  He also said, China is dealing with the effects of Europe, but he is still bullish long term.  Roach pointed out China needs to change its growth model to generate jobs and deal with their aging population.  He stated, China has a lot of work to do.  On the US, Roach thinks we are not in better shape, black Friday was terrific, but we still have high debt and unemployment.  Roach believes we have big issues, and we are not addressing our biggest ones, such as competiveness, jobs, and unemployment. Roach went on to say he is a big believer of strategy, implementing and executing a strategy.  Finally, Roach said what worries him, strategically we are more focused on the blame game, lets blame China and Wall Street.       

  • Happy Tuesday, have a nice day.  

Monday’s Close


DJIA up 291.23 pts/+1.58%/11,523.01


S&P up 33.88 pts/+1.66/1,192.55


Nasdaq up 85.83 pts/+1.73/2,527.34


 


Tuesday’s Futures


Dow Futures up 63.00 pts/+0.55%


S&P Futures up 8.50 pts/+0.69%


Nasdaq Fut down 9.58 pts/+0.41%


 


Overseas Markets


FTSE +0.53%


CAC 40 +0.43%


NIKKEI 225 +2.30%


HANG SENG +1.21%


 


Overseas:  World stock markets were mixed today.  European and Asian markets were up following the rally in US markets.      


 


Economic Reports:  S&P Case-Shiller HPI expected to be -0.1% at 9:00 a.m. and Consumer Confidence expected to be 45 & FHFA House Price Index is expected to be flat at 10:00 a.m.


 


Top Headlines:    



  • Reports indicate several larger banks including BofA (BAC) and Morgan Stanley (MS) are in talks with bond insurer MBIA Inc. to settle a legal battle over billions of dollars in losses, as a result of the financial crisis.

  • Reports indicate Facebook Inc is looking to go public between April and June 2012 with a valuation of over $100 billion and the company has not made any decision over which banks will be involved in the IPO. 

  • American Airlines (AMR) announced it has filed for Chapter 11 bankruptcy after failing to secure cost-cutting labor agreements with pilots.

  • KKR & Co. (KKR) announced it is acquiring Capital Safety Inc., a maker of safety products and equipment for construction for about $1.1 billion.

  • District Judge Jed Rakoff rejected a $285 million deal by Citigroup Inc. ( C ) to settle charges filed by the SEC as "neither fair, nor reasonable, nor adequate, nor in the public interest.     

Commodities/Currency:


Gold:up $1.10 to $1,712.85
Oil:up 0.27 to $98.79

EUR/USD 1.3354 -0.0100
USD/JPY 77.7360  -0.3200
GBP/USD 1.5626 +0.0100


 


Volatility Index (VIX): As of the close of business Monday, November 28, the VIX is up 2.34 at 32.13


Companies Reporting Quarterly Earnings:     


Tiffany (TIF): Q3 EPS of $0.70 beats by $0.10. Revenue of $821.8M (+20.6% Y/Y) beats by $19M. Raises FY'11 EPS guidance to $3.70-3.80 from $3.65-3.75 earlier.


Today’s Opening and Closing Bells:


The America-Israel Friendship League (AIFL) visits the NYSE to celebrate the fifth annual Israel Day at the NYSE will ring the opening bell.


 


Lloyds Banking Group plc will visit NYSE in celebration of their 10th Anniversary of Listing. Chairman, Sir Win Bischoff will ring the closing bell.