Ahead of the Bell: Dow futures are trading up 73 points and S&P futures are trading up 7.7 points as investors feel optimistic ahead of a busy week in domestic economic news and stipulation that Chinese officials are considering a stimulus plan to help boost the company’s economy. Spanish stocks were under pressure after a 9.8% drop in retail sales was announced over the weekend and questions over the country’s banking system remain a concern.
- On the economic calendar today: the S&P CaseShiller Home Price Index is expected to be +0.20%; Conference Board’s Consumer Confidence Index is expected to show a reading of 69.5, and the Dallas Fed Manufacturing Activity Index is expected to be 1.5.
- The dollar is higher against the major currencies. Gold is trading at $1,575. Crude oil is currently trading at $91.27 a barrel.
- Friday, stocks were lower as investors remained concerned over the financial woes in Europe and questions over Greece’s longevity in the European Union as there was reluctance to buy into the markets ahead of the long Memorial Day weekend. However, markets did manage to log a positive week.
- On CNBC today, Southern Company Chairman, President and CEO, Tom Fanning, shared his thoughts on how the U.S. can recover. He wondered why federal policy would mandate higher risk investments; he thinks government should keep tax rates as low as it can on dividend paying investments. Taxing capital commitments plans hinders job creation which is a key component of what we’re missing with our fragile economic recovery. Though it is not ideal, he would be able to gain some comfort level with a policy of deferring tax increases until we see what happens with the recovery. Fanning feels that corporate income taxes are too complex, and he’d be in favor of giving up all other tax incentives in order to receive a lower corporate tax rate. He believes that capital formation and capital expenditure would ensure a solid recovery. Donald Trump joined the conversation and agreed on all points. He feels regulation is over-reaching; we need to see a restoration of America’s financial integrity. He’d also like to see a simplified tax rate that is more transparent. Trump feels that we’re lagging behind as a nation. We’re no longer ahead of the curve and admired by everyone; he actually said that we’re “laughed at.” He compared, as an example, our airports with those of other wealthy nations – they’re impressive while ours are disgraceful. Trump believes our administration needs to look at real unemployment (including those who have stopped looking for a job). People are unhappy which has already begun showing up in the polls.
- Happy Tuesday – have a good day!
Friday’s Close
DJIA down 74.92 pts/-0.60% to 12,454.83
S&P down 2.86 pts/-0.22% to 1,317.82
Nasdaq down 1.85 pts/-0.07% to 2,837.53
Tuesday’s Futures
Dow Futures up 73.00 pts
S&P Futures up 7.60 pts
Nasdaq Fut up 18.25 pts
Overseas Markets
FTSE +10.06/+0.19%
CAC 40 +14.17/+0.47%
NIKKEI 225 +63.93/+0.74%
HANG SENG +254.47/+1.35%
Overseas: World stock markets were higher today. European markets are trading up, though down off the highs of the day as concern over Spain’s banking system stemmed earlier optimism over possible stimulus plans coming from China.
Economic Reports: S&P CaseShiller Home Price Index (+0.20% expected) at 9:00 a.m.; Consumer Confidence (69.5 expected) at 10:00 a.m.; Dallas Fed Manufacturing Activity (0.0 expected) at 10:30 a.m.
Top Headlines:
- Federal investigators are reportedly exploring whether BP Plc (BP)executives lied to Congress about on how much oil was leaked in the 2010 Gulf of Mexico oil spill.
- Goldman Sachs (GS) has been forced to delay the launch of its new corporate-bond trading platform following several "logistical issues," including trade reporting problems.
- Sources report that JPMorgan Chase & Co. (JPM) has sold an estimated $25 billion of profitable securities in an attempt to offset the trading losses the company recently announced in the newly coined debacle known as the “London Whale.”
Commodities/Currency:
Gold: up $5.00 to $1,576.20
Oil: up $0.46 to $91.32
EUR/USD: -0.0016 to 1.2524
USD/JPY: +0.10 to 79.56
GBP/USD: -0.0008 to1.5653
Volatility Index (VIX): As of the close of business Friday, May 25, the VIX is up 0.22 at 21.76
Companies Reporting Quarterly Earnings:
The Bank of Novia Scotia (BNS) reported EPS of Cdn $0.15, in line with expectations; revenue was $1.46 billion. The company expects to generate FY 2012 growth in earnings per common share (diluted) of 5 to 10% and to earn a return on equity of 15 to 18% in 2012
Today’s Opening and Closing Bells:
Digital Domain Media Group Chairman and CEO, John Textor, will ring the Opening BellSM to celebrate the company’s November 18th, 2011 listing on the NYSE.
In honor of the CFA Institute’s 50th Anniversary of its CFA Program and NYSSA’s 75th Anniversary of Founding, Daniel Meader, Chair of The Board of Governors at CFA Institute, and Kathy O'Conner, Chair of The Board of Directors at NYSSA, will ring The Closing BellSM.
Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some information included above has been aggregated from multiple public third-party financial news sources for informational purposes only and redistributed to the NYSE Euronext community. NYSE Euronext does not control the content provided by these sources and does not guarantee the accuracy, integrity or quality of such content.
