TradeTheNews.com US Market Update

Monday, March 12, 2012 10:53:41 AM TradeTheNews.com US Market UpdateDJIA +31 S&P500 -4.5 NASDAQ -6

***Economic Data***
- (IS) Israel Feb Trade Balance: -$1.9B v -$2.1B prior
- (PT) Portugal Jan Trade Balance: -€1.1B v -€1.1B prior
- (EU) OECD Jan Leading Indicators: 100.9 v 100.5 prior
- (PE) Peru Jan Trade Balance: $739M v $1.2B prior
- European and US equity markets are trading more or less unchanged this morning in a rather subdued market, with volumes well below average. Greece has officially completed its €177B debt swap after the trigger of CDS, while the shocking February Chinese trade deficit and tomorrow's FOMC decision are most forward in traders' minds today. However, given Fed Chairman Bernanke's reticence on the QE3 front, as well as plenty of cautious comments from Fed governors, few expect any dramatic news from the committee tomorrow. Recall the reports late last week that the Fed was mulling a sterilized bond-buying program that would involve purchases of long-term mortgages or USTs but effectively tie up that money by borrowing it back for short periods at low rates. EUR/USD was holding above the 1.3090 area throughout the NY morning. Front month WTI crude is around $105.
- Note that the Fed is due to release the results from its latest round of bank stress tests this week, the so-called 2011 CCAR, with the data expected on March 15th, if not before. Some banks have signaled discomfort with the volume of detail that will accompany the tests, so rather than simply pass/fail, the nuances of the numbers will be key. However, expectations are high for a number of banks to raise their dividends and start buying back stock once the tests are over. The FT reported that share buybacks and dividends paid out by US banks are expected to double, following a green light from the Fed. Shares of major US banks are trading in the red this morning, however.
- On the M&A front, there two sizable deals out overnight. Chinese online video site Youku has agreed to merge with Tudou in a stock swap valued at an estimated $1.1 billion. The details imply a deal valued at approx $39.89/share, or a 159% premium. The two companies had been rivals competing in the online video space. Zoll Medical received a bid from Japan's Asahi Kasei worth $2.2B or $93/share (approx 24% premium to prior close).
***Looking Ahead***
- (ES) Spain Jan Budget Balance:
- 11:30 (EU) WTO Appellate Body Rules on Boeing Appeal
- 11:30 (US) Treasury to sell 3-Month and 6-Month Bills
- 12:00 (EU) Euro Area Finance Ministers meet in Brussels
- 12:30 (CA) Bank of Canada's Macklem speaks in Sao Paulo, Brazil
- 13:00 (US) Treasury to sell 3-Year Notes
- 14:00 (US) Feb Monthly Budget Statement: -$234.0Be v -$222.5B prior
- 15:00 (EU) Potential time for Eurogroup press conference 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.