January 23, 2012

Morning Trend – US SPH futures are flat and the NDH futures are up 1 handle this morning. The 10-year T-Note is down 6 ticks the yield at 2.04% The dollar is lower with the Euro trading @ $1.3017 Gold is up~7@ ~$1671z. Crude is up 50c trading ~ $98.85. The vix closed at 18.26 Vix futures are up .05 at 21.90,

International Trend – European markets are higher with Germany up .4%, France -.7%, the UK is +.7%. European markets are being led by financials +2.1%, and oil & gas up .95%, utilities are off 1.1%.. Euro Debt: is tighter with Italy in 13bps (6.08%), and Spain is in 5bps @(5.37%) Asian Markets: Japan unch, HK closed, AUZ -.3% Emerging Markets: China closed, India +.1%, Korea closed, Russia is +.2% and Brazil -.1%

Technical Trend: The SPX managed a slight gain on Friday of less than a point and added more than 26 points for its 3rd winning week to start the new year for the first time since 2004. The technical picture is extended and we think there may still be another 1-2% to the upside which could take us to 1230-1245 and we would get more defensive at those levels. Current support is back at 1290-1300, and the ascending 20-day moving average at 1280. We are nearing the key crossover of the 50/200 day moving average that are just 9 points apart. The push higher in global markets has helped sentiment in stocks but volume has not confirmed the enthusiasm. To date the rally has been led by investment banks, building products and cyclical stocks such as aluminum, and autos.

Economic Reports: There are no major economic reports today.

U.S. stock futures were little changed, following a four-day rally for the Standard & Poor’s 500 Index, as finance ministers gathered in Brussels to discuss new budget rules and a Greek debt swap.
Bank of America Corp. and Chesapeake Energy Corp. increased more than 0.7 percent to pace gains among the biggest companies. Research In Motion Ltd. rallied 2.4 percent after replacing its co-chief executive officers as the BlackBerry maker struggles to compete against Apple Inc.
S&P 500 futures expiring in March dropped less than 0.1 percent to 1,310.50 at 8:28 a.m. New York time. Dow Jones Industrial Average futures gained 4 points, or less than 0.1 percent, to 12,658 today.(Bloomberg)

European stocks climbed to a five- month high, led by a rally in banks, as Germany and France said Greek debt-swap talks are making progress. Asian shares and U.S. index futures advanced.
UniCredit SpA, Italy’s largest bank, and Commerzbank AG both jumped more than 9 percent amid a report a broad agreement on Greece’s debt talks has been reached. Outokumpu Oyj surged 13 percent as Finland’s biggest stainless-steel maker held talks that may lead to a merger with a unit of ThyssenKrupp AG. Mining companies climbed with copper.
The Stoxx Europe 600 Index added 0.4 percent to 256.81 at 12:28 p.m. in London, having swung between gains and losses at least 14 times. The gauge has risen 5 percent in 2012, the best start to a year since 1997, as reports added to optimism that the global economy is strengthening. (Bloomberg)

The Bundesbank said economic growth in Germany, Europe’s largest economy, may have come to a “standstill” in the fourth quarter of 2011.
“After the strong rise in economic performance during the summer, even slightly negative growth can’t be ruled out,” the Frankfurt-based central bank said in its monthly report today. “Growth may have come to a standstill in the last quarter of 2011.” Manufacturing “in particular has suffered from the slowing global economic dynamic and the disruption from the debt crisis in the euro area.” (Bloomberg)

European officials will forge ahead today with crafting a long-term plan to tackle the region’s debt crisis, as banking and government negotiators continue trying to reach an agreement that will lighten Greece’s debt burden.
European Union finance ministers will meet in Brussels to discuss new budget rules, a financial firewall to protect indebted states and a Greek debt swap, with EU leaders racing to cobble together a firm rescue response in the coming weeks. Meanwhile, cash-strapped Greece and private bondholders said they had made progress in talks over the weekend in Athens.(Bloomberg)

Britain, America and France delivered a pointed signal to Iran, sending six warships led by a 100,000 ton aircraft carrier through the highly sensitive waters of the Strait of Hormuz.
This deployment defied explicit Iranian threats to close the waterway. It coincided with an escalation in the West's confrontation with Iran over the country's nuclear ambitions.
European Union foreign ministers are today expected to announce an embargo on Iranian oil exports, amounting to the most significant package of sanctions yet agreed. They are also likely to impose a partial freeze on assets held by the Iranian Central Bank in the EU. (Telegraph)
The European Union adopted an oil embargo Monday against Iran and a freeze of the assets of the country's central bank, part of sanctions meant to pressure the country to resume talks on its nuclear program.
Diplomats said the measures, which were adopted in Brussels by the EU's 27 foreign ministers, include an immediate embargo on new contracts for crude oil and petroleum products, while existing contracts will be allowed to run until July.
EU diplomats are calling the measure part of a twin track approach toward Iran: increase sanctions to discourage what they suspect is Iran's pursuit of nuclear weapons but emphasize at the same time the international community's willingness to talk. Iran says its nuclear program is exclusively for peaceful purposes.(AP)

Trading in U.S. stocks fell to the lowest level since at least 2008 amid mutual fund withdrawals and Wall Street job cuts.
An average of 6.69 billion shares changed hands on U.S. exchanges in the 50 days ended Jan. 18, the fewest on record in Bloomberg data starting three years ago that excludes over-the- counter venues. On the New York Stock Exchange, volume has tumbled to the lowest level since 1999, the data show.
The slowdown in trading shows that investors remain skittish after five years of withdrawals from mutual funds that buy U.S. equities and one of the most volatile years on record for the Standard & Poor’s 500 Index. While the benchmark index is having its best January rally since 1997, securities firms around the world cut more than 200,000 jobs last year. (Bloomberg)

Jim Balsillie and Mike Lazaridis, the men who made BlackBerry the must-have smartphone for almost a decade, have stepped down as co-chief executives of its maker, Research in Motion, after failing to reverse the company's decline.
The two will quit their positions immediately in a move that sees little-known German executive Thorsten Heins take the helm at the troubled company.
Having made BlackBerry the indispensable device for business executives, lawyers and bankers who wanted to check their emails when not at their computers, the last five years has seen the Canadian company fail to fight back against competition from Apple and Google. (Telegraph)

JPMorgan Chase & Co., the biggest and most profitable U.S. bank, cut the stock awarded to Chief Executive Officer Jamie Dimon’s operating committee 15 percent as the value of the firm’s shares fell.
Dimon’s top 13 executives collected $60.9 million in restricted shares plus stock options for their performance in 2011, according to regulatory filings. That compares with $71.4 million of stock granted to 14 people who served on the committee in 2010.
The restricted stock averaged $4.7 million per executive as of the Jan. 18 award date, compared with $5.1 million a year earlier when New York-based JPMorgan’s shares were higher. (Bloomberg)

Vancouver displaced Sydney as the least-affordable housing market after Hong Kong among large English-speaking cities, as home prices rose faster than incomes, a study of 325 metropolitan areas worldwide showed.
Vancouver’s median home price of C$678,000 ($686,400) in the third quarter was 10.6 times its median pretax household income of C$63,800, making the city “severely unaffordable,” Demographia said in a report today. A ratio of 3 or less is considered “affordable,” according to the public-policy firm’s survey of markets in Australia, New Zealand, Ireland, the U.K., the U.S., Canada and Hong Kong.
Sydney’s ratio of median home price to income was 9.2, while Hong Kong’s was 12.6, a record for the eight-year-old survey, surpassing the previous high of 11.5 for Los Angeles in 2007. Home prices in Hong Kong, Vancouver and Sydney haven’t plunged as they have elsewhere, such as in Ireland, now the second most-affordable country, after the U.S., the study said. (Bloomberg)

Halliburton's net income spiked 50 percent in the final three months of 2011 as the world's biggest oilfield services company shifted its focus from natural gas to oil, with a barrel of crude again trading near the triple digit mark yet again.
Energy companies are capitalizing on new technology to reach crude that was once prohibitively expensive to pump, especially in the United States, and Halliburton has benefited immensely.
The Houston company posted earnings of $906 million, or 98 cents per share, for the fourth quarter. That compares with $605 million, or 66 cents per share, for the same part of 2010. (AP)

Oil and gas producer Apache Corp. is buying privately held Cordillera Energy Partners III LLC in a cash-and-stock deal valued at $2.85 billion.
Apache Chairman and CEO G. Steven Farris said the deal is "a unique bolt-on opportunity" that more than doubles Apache's acreage in the Anadarko Basin.
The acquisition gives Apache access to Cordillera's approximately 254,000 net acres in the Granite Wash, Tonkawa, Cleveland and Marmaton areas in western Oklahoma and the Texas Panhandle.(AP)

Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit.
With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.
“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”(Bloomberg)

Pan American Silver Corp. agreed to acquire Minefinders Corp., operator of the Dolores gold and silver mine in Mexico, for about C$1.5 billion.
The offer represents a 36 percent premium to Minefinders close on Jan. 20 in Toronto trading.(Bloomberg)