March 23, 2012

Morning Trend – US SPM futures are off 1.5 handles NDM futures are flat this morning. The 10-year T-Note is up 9 ticks the yield at 2.24%. The dollar is weaker with the Euro trading @ $1.3224 Gold is up ~$7@ ~$1649z. Crude is up 40c trading ~ $105.75 The vix closed at 15.57 Vix futures are flat @ 18.35.

International Trend – European markets are fractionally lower with Germany down .4% France -.55%, the UK is down .3%. Euro Debt: is wider with Italy out 11bp (5.18%), and Spain is out 4bps @(5.49%) Asian Markets: Japan -1.14%, HK -1.11%, AUZ -.08% Emerging Markets: China -1.10%, India +.96%, Korea +.04%, Russia is -.45%.

Technical Trend: The SPX retreated for the 3rd straight session paring 10.11 points and on pace for its first losing week since Feb. 10. The Index found support at 1390 and below that we could see at test of the 20-day at 1379.55. Resistance is back at 1400-1410. The markets are attempting to adjust to news flow from China suggesting a global slowdown and the continued delivering in Euroland. We are now about 1 week from the end of the quarter and the investor maywant to see an earnings follow through before committing new money.

Economic Reports: New Home Sales for Feb. est. 325K

U.S. stock-index futures declined, indicating the Standard & Poor’s 500 Index will extend its biggest weekly drop since December, as investors awaited a report on new-home sales.
Micron Technology Inc. fell 4.7 percent after reporting a third consecutive quarterly loss after sluggish demand for personal computers dragged down chip prices. Nike Inc. climbed 0.5 percent as third-quarter profit at the world’s largest sporting-goods company topped analysts’ estimates. Accenture Plc shares advanced 1.1 percent as the world’s second-biggest technology-consulting company raised its full-year earnings forecast to above the average analyst projection.
S&P 500 futures expiring in June fell 0.2 percent to 1,386.20 as of 8:02 a.m. in New York. The benchmark index is down 0.8 percent for the week. Dow Jones Industrial Average futures lost 33 points, or 0.3 percent, to 12,968. (Bloomberg)
Federal Reserve Bank of St. Louis President James Bullard said the U.S. and world economies risk elevated inflation that persists for years should developed nations mistime their exits from easy monetary policies.
“Once inflation gets out of control, it takes a long, long time to fix it,” Bullard said in a Bloomberg Television interview in Hong Kong today. “Ultra-easy” policies across the Group of Seven nations, which include the U.S. and Germany, may be retained for too long, he said.
U.S. monetary policy may be at a “turning point” and the Fed’s first interest-rate increase since the global financial crisis could come as soon as late 2013, Bullard said in a speech earlier today. That view contrasts with a debate among Fed policy makers on whether more stimulus is needed even after the U.S. economy accelerated and the unemployment rate fell.

European stocks declined for the fifth day, heading for the biggest weekly drop since November, as investors awaited data on American new-house sales. U.S. index futures were little changed and Asian shares dropped.
Randgold Resources Ltd., a miner of the precious metal in Africa, retreated 2.1 percent, leading a gauge of commodity shares lower. Publicis Groupe SA, the third-largest advertising agency, lost 1.9 percent. BT Group Plc, the U.K.’s largest fixed-line phone company, rose to its highest since May 2008 after announcing it will cut its pension deficit by half.
The Stoxx Europe 600 Index fell 0.4 percent to 264.31 at 11:34 a.m. in London. The benchmark gauge has slid 3 percent this week, the biggest drop since Nov. 25. Standard & Poor’s 500 Index futures expiring in June lost 0.1 percent. The MSCI Asia Pacific Index slipped 0.6 percent. (Bloomberg)

The Obama administration has approved guidelines that allow counterterrorism officials to lengthen the period of time they retain information about U.S. residents, even if they have no known connection to terrorism.
The changes allow the National Counterterrorism Center (NCTC), the intelligence community's clearinghouse for terrorism data, to keep information for up to five years. Previously, the center was required to promptly destroy — generally within 180 days — any information about U.S. citizens or residents unless a connection to terrorism was evident. (Washington Post)

Depending on who is speaking, a bill approved by the Senate on Thursday to make it easier for small companies to raise money will either improve the economy by creating jobs or cause unwitting investors to get swindled.
The Senate voted 73 to 26 to approve the JOBS Act, whose acronym stands for Jump-start Our Business Start-ups. The legislation, approved overwhelmingly by the House two weeks ago, would designate a new category of “emerging growth” companies that could conduct initial public offerings of stock while being exempt from certain financial disclosure and governance requirements for up to five years.

The Republican-led U.S. House voted to eliminate a Medicare advisory board from the 2010 health-care overhaul days before the U.S. Supreme Court hears arguments on the law’s constitutionality.
The measure, H.R. 5, passed yesterday on a 223-181 vote. It also would cap awards in medical-malpractice claims for pain and suffering at $250,000 in most states.
President Barack Obama signed the health-care law, known as the Affordable Care Act, two years ago today. It is intended to extend insurance coverage to tens of millions of uninsured Americans, impose new taxes on the highest wage earners and produce savings in Medicare, the health-care system for the elderly. The Supreme Court hears arguments March 26-28 on legal challenges to the law. (Bloomberg)

Germany's new president urged his compatriots on Friday not to turn their backs on European unity amid the debt crisis and said he wants to help ensure that people of all origins feel at home in the country.
Joachim Gauck, a former Lutheran pastor and East German pro-democracy activist with no party affiliation, was formally sworn in after a parliamentary assembly elected him by an overwhelming majority last weekend.
In an inaugural address to Parliament, the 72-year-old said it is important to "preserve (Germany's) 'yes to Europe."' (AP)

US Airways Group Inc., seeking support for a possible American Airlines merger, is discussing a takeover plan with some creditors of the bankrupt carrier and their advisers, people with knowledge of the talks said.
Executives have laid out details of US Airways’ proposal for a combined airline to some members of the unsecured creditors committee and gotten a positive reception, said the people, who declined to be identified because the terms aren’t public. The goal would be to complete a merger before American parent AMR Corp. exits Chapter 11, the people said yesterday. (Bloomberg)

Nike Inc., the world’s largest sporting-goods company, reported third-quarter profit that topped analysts’ estimates as sales gained in North America.
Net income in the quarter ended Feb. 29 rose 7.1 percent percent to $560 million, or $1.20 a share, from $523 million, or $1.08, a year earlier, Beaverton, Oregon-based Nike said today in a statement. Analysts projected $1.17 a share, the average of 19 estimates compiled by Bloomberg. Nike’s profit has surpassed analysts’ projections in 22 of the past 23 quarters.

Accenture Plc, the world’s second- largest technology-consulting company, raised its full-year earnings forecast as customers seek more advice and savings through outsourcing.
Earnings for the year ending in August will rise to $3.82 to $3.90 a share, the company said today in a statement. Analysts projected $3.80, the average of estimates compiled by Bloomberg. Second-quarter earnings also exceeded analysts’ projections.

Manhattan office leasing in the first quarter is poised to be the lowest in almost three years as Wall Street cut jobs and needed less space, according to preliminary data from brokerage Studley Inc.
Agreements will be signed for the rental of about 5.7 million square feet (530,000 square meters) this year through March, according to New York-based Studley’s projection. That’s the smallest three-month tally since the 4.5 million square feet leased in the second quarter of 2009, months after the credit crisis pushed Lehman Brothers Holdings Inc. into bankruptcy and froze demand for space in the biggest U.S. office market. (Bloomberg)

Bank of America says it has begun a pilot program offering some of its mortgage customers who are facing foreclosure a chance to stay in their homes by becoming renters instead of owners.
The "Mortgage to Lease" program, which was launched this week, will be available to fewer than 1,000 BofA customers selected by the bank in test markets in Arizona, Nevada and New York.
Participants will transfer their home's title to the bank, which will then forgive the outstanding mortgage debt. In exchange, they will be able to lease their home for up to three years at or below the rental market rate. The rent will be less than the participants' current mortgage payments and customers will not have to pay property taxes or homeowners insurance, the bank said.(AP)

Zynga Inc. Chief Executive Officer Mark Pincus, the largest shareholder in the social gaming company, will sell 15 percent of his stake during a secondary offering of shares.
Pincus plans to sell 16.5 million shares, or 15 percent of the 111.1 million he holds, San Francisco-based Zynga said in a regulatory filing today. The stake being sold by the CEO is worth about $227 million at current market price.

Chinese banks misclassified about 20 percent of their outstanding loans to local governments, understating the risk that slowing revenue will cut borrowers’ ability to repay, a person with knowledge of the matter said.
The China Banking Regulatory Commission told lenders last month that they had incorrectly placed about 1.8 trillion yuan ($286 billion) of loans to local government financing vehicles in the safest category of lending, the person said, declining to be named because the matter is private. The banks erred in calculations and underestimated risks when they decided the loans were fully covered by cash flows from the projects, the person said.