US Market Update

Share This Story:  Thursday, February 09, 2012 11:27:08 AM TradeTheNews.com US Market UpdateDJIA -1.3 S&P500 -1 NASDAQ +3
***Economic data***
- (UK) Bank of England (BOE) raises Asset Purchase Target (APT) by £50B to £325B (as expected) Leaves interest rates unchanged at 0.50% (as expected)
- (EU) ECB leaves the Main 7-day Refi Rate unchanged at 1.00%; as expected
- (CA) Canada Dec New Housing Price Index M/M: 0.1% v 0.2%e; Y/Y: 2.5% v 2.5%e
- (US) Initial Jobless Claims: 358K v 370Ke; Continuing Claims: 3.515M v 3.50Me
- (MX) Mexico Dec Final Trade Balance: $6.6M v $7.7M prior
- (MX) Mexico Jan Consumer Prices M/M: 0.7% v 0.7%e; Y/Y: 4.1% v 4.0%e; Core CPI M/M: 0.5% v 0.4%e
- (US) Dec Wholesale Inventories: 1.0% v 0.4%e
- (UK) Jan NIESR GDP Estimate: -0.2% v -0.2% prior
- (US) Weekly Natural Gas Inventory data -78 BCF v -85 BCF to -90 BCF expected
- With the Greece bailout cliffhanger continuing in Europe, investors are in no mood to dive into risk or send equity indices much higher. As of writing, it appears that the Greek government has managed to strike a deal to pass all the required austerity measures, after contentious, down-to-the-wire negotiations (at least one government minister has resigned over the deal and nation-wide strikes are in the works). Now euro zone finance ministers, including Greece's Venizelos, are meeting in Brussels to hash out the release of the second bailout package. Venizelos also hinted that a deal with Greece's private creditors (PSI) had been reached. In the US, initial jobless claims took another big leg down, further reinforcing that the jobs picture is getting better. The other big news this morning is a final foreclosure deal in the US, with the big banks agreeing to pay $25B to the states for mortgage fraud. The banks involved include Bank of America, Wells Fargo, JPMorgan, Citigroup and Ally Financial.
- After difficult couple of quarters, Cisco is finally showing some improvements. The firm's Q2 results met diminished expectations, and its revenue guidance for Q3 was satisfactory. Executives warned that the guidance was in fact conservative, and it's worth noting that many competitors' growth outlook is much flatter than Cisco's. Tech darling Groupon offered its first quarterly report as a publically traded company, and the picture is not pretty. Groupon missed Q4 earnings targets, although its Q1 revenue guidance was stronger than expected. Groupon blamed the miss on foreign taxes. Shares of GRPN are down 11% this morning, while CSCO is down 2%. Semi name Ingram Micro is down 2% as well after warning that revenue in its Q1 would be flat to down, despite handily topping EPS and revenue targets in Q4. IM warned that the uncertainty in Europe would be a major headwind.
- Visa reported very strong profit growth in its Q1 and topped revenue expectations. Visa offered a very strong FY12 forecast, with double-digit percentage growth seen on the top and bottom lines. Visa saw solid growth in payments transactions, but warned that Dodd-Frank was having a negative impact. Shares of Visa gained as much as 5% in the premarket, but shares have dipped below +4% in the early going. Prudential Financial bucked the trend in its Q4, reporting a big gain in AUM and very strong profits, setting it apart from its peers. PRU is down 2%, off its worst levels. Note that in Europe, both ING and Credit Suisse reported terrible results in their Q4, with both banks racking up sizable quarterly losses.
- PepsiCo's Q4 results were broadly in line with expectations, with incremental growth in its main product categories. In addition, it launched a new restructuring program and hiked its dividend slightly. PepsiCo's CEO also took the opportunity to again reiterate that the company would not be spinning off its snacks business. Shares of PEP are down 4%. Tobacco names Philip Morris and Lorillard both met expectations on incremental gains in volume growth. PM is up 3% and LO is up nearly 8%. Media names News Corp and Thompson Reuters were also right in line with consensus views in quarterly reports. Both TRI and NWSA are in the red.
- The ECB left key rates unchanged while the BoE increased its asset purchase target by £50B to protect the nascent UK economic recovery from the threat posed by Europe's debt crisis. Continued optimism lingered on Greece after press reports circulated that the country's political leaders finally agreed on its austerity measures ahead of the Eurogroup meeting today paving the way for a swap to cut the nation's debt and win its second rescue package. The major currency pairs remained within earlier trading ranges. EUR/USD is hovering just under the 1.33 handle and USD/JPY testing the 77.30 area. Dealers were actually eyeing the EUR/JPY cross for possible insight for further euro-related moves as the cross was near key resistance at 103.
***Looking Ahead***
- 12:00 (EU) Eurogroup meeting in Brussels
- 12:00 (US) CBO Director Elmendorf
- 13:00 (DE) German Bundesbank member Nagel
- 13:00 (US) Treasury to sell $16B in 30-Year Bonds
- (CN) China Jan Trade Balance: $10.4Be v $16.5B prior; Exports Y/Y: -1.4%e v +13.4% prior; Imports Y/Y: -3.6e v +11.8% prior Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.