Wednesday, November 11, 2009

Morning Note...

Futures +65bps this morning as China posts better-than-expected industrial production results (+16% y/y) and Japan’s machinery orders increased (+10% m/m).  Recall that these are the world’s #2 and #3 economies… Additionally, the USD is down slightly, -15bps.  In Europe, the BofE’s Mervyn King said officials have “an open mind” about maintaining quantitative easing (buying their own bonds).  Materials/Metals stocks are leading gainers in Europe.  Also, Credit Agricole is higher in France on an earnings beat, and the world’s #2 cement maker – Switzerland’s Holcim – is up 5% after it made positive comments on cost savings.  In US news, ADBE plans to cut 9% of its workforce, Macy’s is lower on earnings and forward guidance, AXP said spending on its cards increased in October (first time this year), WSJ reports US shopping center vacancies continue to rise, and FedEx says its busiest day this year (projected as Dec 14th) will be 8% higher than last year.  Gold continues to make new record highs… Bond market is closed today. 

According to BBERG, a record 80% of S&P500 companies have bested Q3 earnings projections.  Yesterday, Fed speakers were cautious about recovery in the US economy.  Recent short interest figures show financials show an increase, but overall short interest is down on both the NYSE and NASDAQ.  1100 remains the key psychological level for the S&P500, and we’ll be testing that today…

AMAT reports after the bell tonight.  AMD analyst meeting today.  COST analyst day in NYC.  TOL Q4 earnings outlook at 2pm today.  AIG’s CEO considers stepping down.  WSJ reports that ESRX joins with Greatwater Software to install self-service kiosks.  WSJ reports slow harvest season is pushing up corn prices.  BCAP ups DCOM, WBS.  CITI ups FLR, FPL.  CSFB ups AWC, TROW.  DBAB ups HEW.  GSCO ups MCHP.  JEFF ups ASTI.  CITI ups AYE.  JPHQ cuts RHIE, TSN.  OPCO cuts ADBE.  PRU ups dividend.  WELA ups TOL. 

Asia mostly higher overnight.  Europe +1% on average.  Bond prices higher.  USD -20bps.  Gold +120bps.  Oil +130bps. 

Politics aside, everyone should spend a moment reflecting on those brave souls dedicated to protecting America for better or worse… thanks to all of you for your courage and conviction, and thanks to those gone before who have made our very way of life possible…

Brightpoint News: 

Brightpoint PreMarket (yest close/premkt/% change/volume):

S&P 500 PreMarket (last/% change prior close/volume): 
MGIC INVT CORP            4.60      +5.75%             3300
MACY'S INC                   18.45    -5.04%              2673655
EXCEED CO LTD             9.65      +4.66%             100
PULTE HOMES INC          9.90      +4.65%             32300
DR HORTON INC             12.22    +4.53%             24780
TEREX CORP                  22.40    +3.56%             200
LENNAR CORP-CL A        14.80    +3.5 %              8702
NYSE EURONEXT            26.07    -3.34%              1000
HJ HEINZ CO                  43.28    +3.17%             300
AMERIPRISE FINAN         39.87    +3.08%             300
KB HOME                       15.12    +3.0 %              8050

Today’s Trivia:  The potential “most expensive beer in the world” is a 1930’s bottle of Lowenbrau that may fetch up to $8,000 at auction Saturday.  Why is it so valuable?

Yesterday's Answer:  World War I’s major hostilities were ended at the 11th hour of the 11th day of the 11th month in 1918, prompting Woodrow Wilson to recognize this as Armistice Day starting on November 11th, 1919. 

Best Quotes: “Once again the action was almost inaction. Volume did not reach a billion shares until after the closing bell had rung. Traders debated whether the light volume was a sign of apathy and indifference or an indication that skepticism was growing. That debate was far more animated than the tape action. While the influence of the dollar was muted (as just noted), it remains the key factor in moving asset prices. That added fuel to the debate about the rally’s sustainability. The skeptics fear a sudden flight to safety in the dollar could produce a trapdoor reaction in a variety of assets including the stock market. Stocks bulls dismiss the fear, claiming the rally is based on corporate improvements. The dollar, they claim helps only through the multi-nationals. So, the debate continues. The debate among the technicians not only continues, it grows more heated. The bears, particularly the Elliot Wave types, talk not of a correction but of a potential crash. (A few think it will follow “one last up-spike” – others maintain “this” is the topping area.) The bulls say the tape speaks for itself and the party rolls on. Stay tuned.”  --Art Cashin, UBS morning note

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