Morning Report: March 1, 2012

Ahead of the Bell: Dow futures are trading up 37 points and S&P futures are trading up 3 points following a Chinese government survey that showed factory orders grew more than expected in February on higher export orders, as the government tries to orchestrate a soft landing.  Analyst are optimistic China central bank will continue to cut the reserve requirement for banks and ramp up credit.  Commodities are trading up, and borrowing costs declined for Spain and France.



  • On the economic calendar today, motor vehicles sales for February will be out before the market opens and it is expected to be 11.0 versus 10.7 for January.  The Labor Department will also release weekly initial jobless claims before the market opens, it is forecasted to be 355K compared with 351K for the previous week. 

  • Personal income and outlays for January will be out at 8:30 a.m. and is anticipated to be 0.5% versus a flat reading for the prior month.  ISM manufacturing index and construction spending comes out after the market opens, the ISM data is projected to rise by a by half a percent, and construction spending is expected to dip by half a percent. 

  • Federal Reserve Chairman, Ben Bernanke will be testifying before Committee on Banking, Housing, and Urban Affairs, of the Senate on the agency’s "Semiannual Monetary Policy Report to the Congress".  Companies reporting earnings today include Limited Brands, Toronto Dominion Bank, Sunrise Senior Living. The dollar is up against the yen and down against euro and British pound. Gold is trading at $1,714. Crude oil is currently trading at $107 a barrel.

  • Yesterday, stocks erased earlier gains following comments by Fed Chairman, Ben Bernanke to Congress, which damped speculation of more quantitative easing to aid the economic recovery.

  • On CNBC today, former New York State Governor, George Pataki, talked about the race for the White House.  Pataki said he is afraid the republican candidates have lost sight of the ball, which is to defeat President Barak Obama.  The candidates need to stop bashing each other and focus on what needs to be done.  He gives the candidates tremendous credit for being out there, but we still need ideas. America is desperate for ideas and leadership.  Pataki went on to say, the US needs a tax plan that is simple and comprehensive.  He still believes with all the damage that has been done to the republican party, they still have a chance of defeating President Obama.  Pataki pointed out, he does not like it when Republicans look back and site President, Ronald Reagan, because he did not bash any candidates.  Finally, he said to win this election you need to win a lion’s share of the independent and conservative votes.  

  • Happy Thursday and have a nice day.

Wednesday’s Close


DJIA down 53.05 pts/-0.41%/12,952.07


S&P down 6.50 pts/-0.47/1,365.68


Nasdaq down 19.87 pts/-0.67/2,966.89


 


Thursday’s Futures


Dow Futures up 37.00 pts/+0.28%


S&P Futures up 3.40 pts/+0.28%


Nasdaq Fut up 11.58 pts/+0.42%


 


Overseas Markets


FTSE +0.64%


CAC 40 +0.73%


NIKKEI 225 -0.16%


HANG SENG -1.35%


 


Overseas:  World stock markets were mixed today.  European and Asian markets are mixed on better than expected manufacturing data from China and borrowing cost for Spain and France.


 


Economic Reports:  Motor Vehicle Sales expected to be 11.0M, Initial Jobless Claims expected to be 355K, and Personal Income and Outlays expected to be 0.5 at 8:30 a.m., ISM Mfg Index expected to be 54.6 & Construction Spending expected to be 1.0% at 10:00 a.m.


 


Top Headlines:    



  • Reports indicate Bank of America (BAC) plans on charging a fee to customers who only have checking accounts and do not bank online or maintain certain minimum balances.

  • James Murdoch resigned as head of News International in wake of the phone hacking scandal, raising doubts he could succeed Rupert Murdoch as CEO of the parent company News Corp., (NWS). 

  • Reports indicate Royal Bank of Scotland (RBS) is close to a deal to sell its Asian assets including cash equities, research, and equity capital markets to Maalaysia's CIMB Group Holdings.

  • A Delaware Chancery Judge has deny a temporary injunction and cleared the way for Kinder Morgan (KMI) to proceed with its $21 billion acquisition of El Paso Corp., (EP).    

Commodities/Currency:


Gold:up $17.10 to $1,714.85
Oil: up 0.17 to $107.24

EUR/USD 1.3334 +0.0008
USD/JPY 81.0600  -0.2500
GBP/USD 1.5948 -0.0026


 


Volatility Index (VIX): As of the close of business Wednesday, February 29, the VIX is up 0.47 at 18.43


Companies Reporting Quarterly Earnings:     


Toronto Dominion Bank (TD): FQ1 EPS of $1.86 beats by $0.09. Revenue of $5.64B (-0.4% Y/Y) in-line.


Orion Marine Group (ORN): Q4 EPS of -$0.19 misses by $0.03. Revenue of $55.3M (-38.8% Y/Y) misses by $4M.


Weingarten Realty Investors (WRI): Q4 FFO of $0.48 beats by $0.03. Revenue of $135.9M (+0.80% Y/Y) in-line.


Sunrise Senior Living (SRZ): Q4 EPS of $0.03 may not be comparable to consensus of by -$0.07. Revenue of $330.6M (+4.2% Y/Y) beats by $13M.


Vanguard Natural Resources (VNR): Q4 EPS of $0.76 may not be comparable to consensus of $0.50. Revenue of $86M (+272% Y/Y) beats by $4M.


Today’s Opening and Closing Bells:


 


Bill Gross, Founder and Co-Chief Investment Officer, PIMCO, will ring the Opening Bell from their California office. Curtis A. Mewbourne, Managing Director & Head of Portfolio Management (New York City Office) will simultaneously ring the bell from the NYSE bell.


 


Closing bell TBA.