Futures -55bps this morning after markets touch 14 months highs yesterday on light volume. The past two weeks of consolidation might be setting the market up for potential breakouts. However, PPI came out greater than expected (Core PPI mo/mo was +.5% vs. +2% expected; Core PPI yr/yr +1.2% vs +.9% expected), so somewhat inflationary data has begun to rear its head. Interest rates are breaking out on back of the news. Empire manufacturing came in at 2.55 vs. 24.00 expected. Would anyone like a side-order of Stagflation with breakfast this morning? BBY reports $.53 vs $.43 estimates
and is trading down 4.5% as a stronger whisper number was expected into the holiday season. A lot of chatter out this morning about the recent dollar strength and how the correlation between short USD and long materials has faded. There’s also some chatter from respected columnists, Krishna Guha (FT) and Jon Hilsenrath (WSJ), that the discount rate (where banks borrow directly from the Fed) will be raised coming out of the FOMC meeting tomorrow. Consensus for the meeting is that it will be a non-event as the FOMC will not want to change the rules of the game this close to year-end. 1100 still remains a magnet for the S&P into quad witching this Friday.
WFC is raising $10.4 bln in a secondary to pay back TARP. Pricing was originally for tonight but from what I’m hearing, the book is shaping up well
and pricing could be expedited to before the bell. Right now WFC is trading +2% in the pre-mkt. Master Trust data trickles in: COF NCO’s ticked higher to 9.6% from 9.04% but this was largely expected. Look for other trust data to hit the tape throughout the day. Senate Democrats drop Medicare expansion plans, leaving the bill a shell of its former self.
Bank of America Merrill Lynch ups AVB, ELS, HOT, NAL & SNH, Deutsche Bank ups BBT, FBR, NWS & WFC, JPMorgan ups BCR, Keefe, Bruyette & Woods ups WFC, Macquarie ups ACH, Stephens ups ACXM, UBS ups Q, Wells Fargo ups NWSA, Bank of America Merrill Lynch cuts HCP & NLY, HSBC cuts HON, Jefferies cuts AEP, JMP Securities cuts LIMS, Keefe, Bruyette & Woods cuts FICO, UBS cuts CBS, Weeden cuts XTO. A ‘Heard on the Street’ article suggests XOM overpaid for XTO
and entered into a market that looks dreadful now. The article points out that after spending much of the decade buying back shares, XOM jumped in to pay more than double what other unconventional Natural gas reserves have received on average this year. US Berkshire sold 3.45 mln shares of Moody’s, reducing its stake to 31.9 mln.
Brightpoint PreMarket (yest close/premkt/% change/volume):
S&P 500 PreMarket (last/% change prior close/volume):
WEYERHAEUSER CO 42.5100 47.80 +12.44%
NVIDIA CORP 15.6700 14.85 -5.23%
BEST BUY CO INC 45.3700 43.29 -4.58%
QWEST COMMUNICAT 4.0800 4.25 +4.17%
SLM CORP 12.00 12.50 +4.17%
ZIONS BANCORP 13.7600 13.24 -3.78%
METROPCS COMMUNI 6.8700 7.08 +3.06%
FLIR SYSTEMS 30.250 29.38 -2.88%
JDS UNIPHASE 8.0200 7.80 -2.74%
WELLS FARGO & CO 25.490 26.12 +2.47%
INTUITIVE SURGIC 292.91 285.82 -2.42%
TELLABS INC 5.4900 5.36 -2.37%
MARSHALL &ILSLEY 5.9900 5.85 -2.34%
HONEYWELL INTL 41.3100 40.47 -2.03%
Today’s Trivia: What is the only
state with a one-syllable name? U.S.