Morning Report: January 5, 2012

 

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Professional Bull Riders at NYSE

Ahead of the Bell: Dow futures are trading down 63 points and S&P futures are trading down 8 points. Investors will focus on the euro zone debt crisis following an 8 billion euros ($10.3 billion) in 10-30 year bond auction by France. Interest in the French bond auction was meek, after borrowing costs rose following a disappointing German bond auction late last year. The euro currency dropped below $1.29 against the dollar, as markets fretted over a lack of direction from EU leaders and a possible downgrade of euro zone countries.

  • On the economic calendar today, the ADP employment report for December will be release before the market opens, and is expected to be 160K, compared with 206K for November. The Labor Department will also issue weekly initial jobless claims before the market opens, and is forecasted to be 375, versus 381K for the previous week. ISM Non-Mfg report for December will be out after the market opens, and is anticipated to be 53.4, compared with 52.0 for November. The dollar is up against the euro and British pound and down against the Japanese yen. Crude oil is currently trading at $102 a barrel.  Gold is trading at $1,609.  
  • Yesterday, stocks were up on better than expected retail sales and carmakers helped bolster confidence in the economy.
  • On CNBC today, Ralph Schlosstein, President and CEO of Evercore Partners and co-founder of Blackrock, talked about growth and GDP. Schlosstein said the US will experience a  very long period of subpar growth, as a result of deleveraging. He thinks, this is a regression to the mean, stocks are relatively cheap compared with bonds. Schlosstein also said, over the next five years, growth and stock performance will be relatively tepid.  He is expecting GDP to be about 2% – 2.5% growth, but the problem with that is every time you dip below 2% you move into recessionary levels. Schlosstein pointed out, we need to see consumers continue to pay down debt.  However, he still believes stocks are the only safe bet for the long term. Finally, Schlosstein believes Europe is still out there, they have not resolved their debt crisis for the long term.               
  • Happy Thursday, have a nice day.  

Wednesday’s Close

DJIA up 21.04 pts/+0.17%/12,418.42

S&P up 0.24 pts/+0.02/1,277.30

Nasdaq down -0.36 pts/-0.01/2,648.36

Thursday’s Futures

Dow Futures down 63.00 pts/-0.51%

S&P Futures down 8.60 pts/-0.60%

Nasdaq Fut down 11.58 pts/-0.49%

Overseas Markets

FTSE -0.63%

CAC 40 -0.85%

NIKKEI 225 -0.83%

HANG SENG +0.46%

Overseas:  World stock markets were down today. European and Asian markets are down on concerns Europe will struggle to contain the debt crisis.   

Economic Reports:  ADP Employment Report expected to be 160K at 8:15 a.m., Jobless Claims expected to be 357K at 8:30 a.m., and ISM Non-Mfg Index expected to be 53.4 at 10:00 a.m.

Top Headlines:    

  • Disney (DIS) and Comcast (CMCSA) have reached a long-term agreement that provides cable TV subscribers with programs on TVs, computers and mobile devices. Analysts are speculating Disney may receive between $22 billion to $25 billion for ESPN programming alone over the 10 years.
  • Reports indicate Eastman Kodak (EK) plans on filing for Chapter 11 bankruptcy protection if it does not secure the necessary funding to keep the company afloat.
  • Boeing Company (BA) said it will close its Wichita defense, space & security facility in by the end of 2013. The facility currently employs about 2,160 employees.
  • Reports indicate PepsiCo (PEP) is considering cutting about 400 jobs and reducing pension contributions in order to boosts earnings.    

Commodities/Currency:

Gold:down $3.10 to $1,609.85

Oil:down $0.66 to $102.58

EUR/USD 1.2837 -0.0100

USD/JPY 76.8300  +0.0700

GBP/USD 1.5521 -0.0091

Volatility Index (VIX): As of the close of business Wednesday, January 4, the VIX is down 0.74 at 22.23

Companies Reporting Quarterly Earnings:     

None as of yet.

Today’s Opening and Closing Bells:

Southern Company (SO) visits the NYSE to commemorate the company’s 100th anniversary. Chief Financial Officer Art Beattie will ring the opening bell.

Professional Bull Riders, Inc. to kick off the 2012 Built Ford Tough Series will ring the closing bell.

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