TradeTheNews.com US market update

Thursday, February 16, 2012 11: 36: 32 AM

TradeTheNews.com US market update

Dow + 75 S & P + 4 NASDAQ + 16

B. economic data.
-(PT) Portugal Q4 unemployment rate: 14.0% v 12.4% prior
-(PE) Peru Dec economic activity index Y/Y: 6.9% v 5.5%e
-(PE) Peru Jan unemployment: 7.8% v 7.2%e
-(PL) Poland Jan employment: M/M: 0.9% v 1.0%e; Y/Y: 0.9% v 1.1%e
-(PL) Poland Jan AVG gross wages M/M: - 8.7% v 11.5%e; Y/Y: 8.1% v 4.8%e
-(US) Jan producer price index M/M: 0.1% v 0.4%e; PPI ex food & energy M/M: 0.4% v 0.2%e
-(US) initial jobless claims: 348K v 365Ke; Continuing claims: 3.426M v 3.49Me
-(US) Jan housing starts: 699K v 675Ke; Building permits: 676K v 680Ke
-(CA) Canada Dec int'l securities transactions: C$ 7.4B v C$ 10.0Be
-(CA) Canada Dec manufacturing sales M/M: 0.6% v 2.0%e
-(MX) Mexico Q4 GDP Q/Q: 0.4% v 0.8%e; Y/Y: 3.7% v 3.7%e; 2011 Annual growth rate: % v 4.0%e
-(MX) Mexico Dec global economic indicator: 3.5% v 3.6%e
-(US) Q4 Mortgage delinquencies: 7.58% v 7.99% prior; MBA Mortgage Foreclosures: 4.38% v 4.43% prior
-(US) Feb Philadelphia Fed: 10.2 v 9 0e
-(US) weekly EIA natural gas inventories 127 of bcf v-115 bcf to-125 bcf expected

-Investors are shrugging off the latest round of Greek drama to concentrate on robust US economic data out this morning. The employment picture continues to improve, with the weekly initial jobless claims back below 350 k, and at the lowest levels in almost four years. The Feb Philly Fed data what better than expected, with the fourth consecutive monthly gain in prices paid, and new orders still look tough. New housing starts were nearly + 700K, well ahead of expectations. Mortgage delinquencies fell to their lowest levels since before Lehman. This better data comes on the heels of yesterday's disclosure of the minutes of the Fed's January 24-25 meeting. The minutes suggested that some Fed governors still believe a third round of quantitative easing would be needed in 2012 to support the U.S. economy. There what some softness among shares of the big US banks after Moody's warned last night that the European debt crisis impact could force it to cut the credit ratings of 17 global and 114 European finance institutions, including U.S. majors Morgan Stanley, Goldman Sachs and Bank of America. In Greece, the situation is very fluid, with political actors in both Athens and other European capitals growing very disenchanted with the process and fears growing that both sides may not be able to make the bailout work.

-Tech in the segment, eyes are once again on Apple this morning. Yesterday morning shares of the tech giant shot up 3% and then plummeted right into the red. There were no firm items driving the trade, besides unsubstantiated talk of a NASDAQ 100 rebalancing. Shares of Apple fell a bit further this morning, and observers are chalking the most moves up to technical trading. Troubled wireless networking name Clearwire surprised investors with a larger-than-expected loss and a bid sequential decline in net additions. Shares of CLWR fell 14%, before trading up to - 6% mid morning. Semi manufacturer NVIDIA topped expectations slightly in its Q4, thanks to very strong margin improvements. NVDA lost 6% in the pre-market and are up to - 2% mid morning. Wafer maker MEMC's quarterly losses were a bit steeper than expected. MEMC said it expects strong growth in 2012 as the semi industry recovers, although solar remains a wild card. Shares of BFR are flat this morning. DirecTV beat expectations and launched a big new share buyback program.

-General Motors more or less met direction expectation expectations in its Q4. The firm offered little commentary on the quarter in its release, noting only that it expects continued pricing improvement with cost inflation well contained, while product mix and pension expense are expected to be unfavorable. On the call, GM executives said they are not expecting the European market to improve any time soon. Shares of GM are up 4% this morning.

-In the materials sector, Vale was slightly below par in its Q4. The firm saw lower prices and higher costs for its iron ore business, and so, said results were hurt by the crisis in Europe. Looking forward, Vale said that the crisis would impact iron ore demand, which should remain tight in 2012. Competitor cliffs missed profit targets in its Q4, although it saw both higher iron ore sales volumes and revenue per ton in the quarter. Both CLF and VALE are down nearly 3% this morning. Shares of Republic steel rose as much as 5% in early trading this morning, following respect outperformance in the firm's Q4. Note that the firm's Q1 and FY12 earnings guidance what a bit soft.

-Traders were focusing on comments by Netherlands Finance Minister de Jager, a noted Greece skeptic, in the premarket this morning. He commented that the EU finance ministers would meet on Sunday, Feb 19th ahead of planned Eurogroup confab the next day and warned that the EU was still discussing various contingency plans to put pressure on Greece. The euro maintained a soft tone in the New York session, but managed to hold above the 50% Fibonacci level of 1.2970 based upon the 2012 range to date of 1.2622 and Feb high of 1.3330. The pair climbed back above the 1.3030 level by the mid-NY morning. USD/JPY pair continued to hit fresh three-month highs as it approached the 79 neighborhood.

B. Looking ahead.
-11; 00 (US) Treasury 2-year, 5-year and 7-year note refunding announcement
-11: 00 (US) fed to purchase $1.5-2.0B in notes
-12: 00 (NO) Norway Central Bank (Norges) gov Olsen's annual address
-13: 00 (US) Treasury to sell 30-year TIPS
-16: 00 (CO) Colombia Dec trade balance: $100.0Me v $71.1M prior

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