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NYSE Morning Update 06/10/2013

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Ahead of the Bell: Dow futures are trading up 44 points and S&P futures are trading up 6 points. Signs of economic momentum in the US and Japan have temporarily overshadowed weak trade and industrial output from China. Investor sentiment pickup after a central bank forecast signaled that the French economy will grow slightly in the second quarter. However, financial markets are likely to remain choppy on concerns over the timing of a potential slowdown in the Federal Reserve's bond-buying program. Market participants will continue to scrutinize this week's economic data for clues on the timing of the Feds tapering.



  • On the economic calendar today, no reports are due today.  St Louis Federal Reserve Bank President, James Bullard will be speaking on global outlook in Montreal.

  • The dollar is up against the euro and the British pound and down against the Japanese yen.  Gold is trading at $1,381. Crude oil is currently trading at $95 a barrel. 

  • Last week, the markets managed to avoid three straight weeks of losses and pulled out modest gains and bolstered the major indices into positive territory. Stocks rallied to end the week up, after better than expected jobs data following a week of volatile trading.  For the week, the Dow rose 0.9% and the S&P 500 advanced 0.8%.  The jobs data temporarily calmed fears that the Fed will scale back its QE program.  The economic data still suggests that the economy needs the support from the Federal Reserve stimulus program.  Speculation has grown over the past few weeks that the Fed could begin reducing its support for the economy by trimming bond purchases as soon as this fall.  The economic data for the week was better than expected. The Labor Department reported employment increased more than forecasted in May, as more Americans entered the labor market, showing the economy is weathering the effects of higher taxes and the sequester.  The private sector created 175K new jobs last month after a revised 149K increase in April, while the unemployment rate rose to 7.6% from 7.5%.  Weekly jobless claims also improved for the week ending June 1, while continuing claims declined 11K to 346K.  The ISM non-manufacturing index rose largely as a result of activity in the housing sector, signaling companies are becoming confident demand will be sustained.  However, a reading of the Fed’s Beige book suggests that economic expansion throughout the country is still modest, while the international trade data shows the US is still carrying a deficit. ISM factory activity fell in May to its lowest level since June of 2009, amid a slowdown in business and government spending. Both the ECB and the Bank of England left key interest rates unchanged at 0.50% at their meeting last week.

  • The week ahead, investors are in for some more volatile trading with wild swings as market participants continue to speculate whether the Federal Reserve will roll back its stimulus program. The economic calendar is light this week, but there are a few notable reports on the docket, including weekly jobless claims, PPI inflation data, consumer sentiment, import prices, business inventories and consumer sentiment.  The retail data this week will be in focus, as investors gauge how the sequester and the payroll tax earlier this year are impacting consumer behavior.  Economists are forecasting May’s retail data will show a 0.5% increase, compared with 0.1% rise in April.  The Treasury Department is scheduled to auction off $66 billion in 3-year, 10-year, and 30-year notes, following another week of sharp moves in the bond market. Another event to watch this week is the Bank of Japan, which is scheduled to hold its two-day meeting and it could provide some support for the equity markets, particularly since the recent sell off in Asian markets.

  • On CNBC today, Steve Wood, Chief Market Strategist at Russell Investments, talked about the Federal Reserve’s exit strategy from QE.  Woods said the equity markets are not over reacting to the Federal Reserve’s tapering of its stimulus program.  He believes the Fed will be reluctant to be date certain; the central bank will not set a date when it will exit its bond-buying program.  The agency will want to keep the cards in their hands. He expects the markets to remain choppy for the remainder of the year and would not be surprised by a 5% to 7% movement either way.  Woods added, he has not seen the great rotation from bond funds to equities- it has not happened yet.  

  • Happy Monday and have a wonderful week!

Friday’s Close


DJIA up 207.50 pts/+1.38%/ 15,248.12


S&P up 20.82 pts/+1.28%/ 1,643.38


Nasdaq up 45.16 pts/+1.32%/ 3,469.22


 


Monday’s Futures


Dow Futures up 44.27 pts/+0.29%


S&P Futures up 6.50 pts/+0.40%


Nasdaq Futures up 11.25 pts/+0.36%


 


Overseas Markets


FTSE -0.19%


CAC 40 -0.24%


NIKKEI 225 +4.94%


HANG SENG -0.18%


 


Overseas:  World stock markets are up today. European markets are up on optimism the euro zone will show growth in the second quarter this year.  Asian markets are up on ultra-loose monetary policy provided by the Japanese central bank.


 


Economic Reports:  None for today, later in the week Wholesale Trade, Weekly Jobless Claims, Retail Sales, Import and Export Prices, Business Inventories, Fed Balance Sheet, Producer Price Index, Industrial Production, and Consumer Sentiment.


 


Top Headlines:    



  • IHS Inc. (IHS) said it is buying R.L. Polk & Company owner of Carfax the provider of automotive-market data for 1.4 billion.

  • Reports indicate Google Inc. (GOOG) is close to buying Israeli mapping start-up Waze, which could be valued at about $1.3 billion.

  • AstraZeneca Plc (AZN) announced it is buying Britain’s privately held respiratory drug specialist, Pearl Therapeutics for up to $1.15 billion, subject to certain milestones.

  • Activist investor Coopersmith Capital Management has sent a letter to Alere Inc. (ALR) for the health diagnostics and services company to sell three of its businesses worth about $3 billion.      

Commodities/Currency:


Gold:down $1.20 to $1,381.50
Oil:down 0.40 to $95.64

EUR/USD 1.3215 -0.0004
USD/JPY 98.8500 +1.3500
GBP/USD 1.5539 -0.0019


 


Volatility Index (VIX): As of the close of business Friday, June 6, the VIX is up 1.77 at 16.30


Companies Reporting Quarterly Earnings:


 


KMG Chemicals reports Q3 EPS 25c, vs. Est 22c and Q3 revenue $59.9M, vs. Est $77.75M.


Amira Nature Foods reports Q4 EPS 24c, vs. Est 24c and Q4 revenue $140.2M, vs. Est $133.94M.


 


Today’s Opening and Closing Bells:


 


Blackstone Mortgage Trust Inc. celebrating Symbol and Name Change (formerly Capital Trust) will ring the opening bell.


 


C Y Leung GBM, GBS, JP, Chief Executive of Hong Kong SAR will ring the closing bell.


 


 


    


 


 


Paras Madho


Corporate Actions & Market Watch


NYSE Euronext | Global Corporate Client Group
11 Wall Street | New York NY 10005
P:  (212) 656-5404


pmadho@nyx.com


 


Exclusive Market Intelligence, Insight, and Network: www.NYSEConnect.com


 


 


 


 


Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some information included above has been aggregated from multiple public third-party financial news sources for informational purposes only and redistributed to the NYSE Euronext community.  NYSE Euronext does not control the content provided by these sources and does not guarantee the accuracy, integrity or quality of such content.    


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