Ahead of the Bell: Dow futures are trading down 49 points and S&P futures are trading down 4.8 points despite the Greek conservative pro-bailout party winning elections over the weekend which lessened the risk of the country exiting the euro zone. Concerns over debt troubles in Spain and Italy are weighing on U.S. markets as Spanish 10-year government bond yields rose 22 basis points on the day to 7.14 percent and Italian 10-year bond yields rose 15 basis points to 6.08 percent which is causing pressure on the futures this a.m.
- On the economic calendar today, National Association of Home Builders Market Index at 10:00 a.m.; a reading of 28 is expected.
- Friday, stocks closed higher after G20 officials confirmed that central banks stand ready to act with liquidity measures to stabilize financial markets following potential turmoil from Greek elections this weekend.
- On CNBC today, Nathan Sheets, Former Fed Int’l Finance Division Director and current Global Head of International Economics for Citigroup, still believes that Europe as a whole is solvent. That Euro bonds need to be addressed and bank resolution schemes and insurance schemes need to be devised. ECB should be even more aggressive than it is being now, which is part of, but not the complete solution. U.S. leverage in solving the European crisis is important but not enough; we need more worldwide support. If the G20 came out with a strong statement urging the Europeans to act, that might facilitate a solution in Europe. Later, Terry McGraw, Chairman & CEO of The McGraw Hill Companies Inc. noted that the G20 has a big agenda, which needs to be focused on bringing us economic growth, jobs creation and prosperity. A conglomerate of CEO’s, the B-20, have gotten together in Cabo to come up with short term and longer term ideas to propose to the G20. Short term discussions focused on remedies for Spanish banks and solving the problems in Greece; longer term concerns centered on finding the funding needed to stimulate the financial markets. “There’s no solution to global growth if government and business don’t work together.”
- Happy Monday – have a good day.
Friday’s Close
Dow closed up 155.53 pts/+1.24% to 12,651.91
S&P closed up 14.22 pts/+1.08% to 1,329.10
Nasdaq closed up 17.72 pts/+0.63% to 2,836.33
Monday’s Futures
Dow Futures down 49.00 pts
S&P Futures down 4.80 pts
Nasdaq Fut down 3.25 pts
Overseas Markets
FTSE +15.68/+0.29%
CAC 40 -8.24/-0.27%
NIKKEI 225 +151.70/+1.77%
HANG SENG +193.87/+1.01%
Overseas: Worldwide markets are trading mostly higher today all bolstered by the conservative pro-bailout party’s win in Greece over the weekend. The G20 summit begins in Mexico today; post-election plans for Greece will surely be discussed. Additionally, China home price decline slowed while the Bank of Japan is more upbeat on exports and output but warns of a euro zone fallout.
Economic Reports: National Association of Home Builders Market Index (28 is expected) at 10:00 a.m..
Top Headlines:
PetSmart, Inc. (PETM) reported that it is increasing its quarterly dividend by 18%; the board also authorized a new $525 million share purchase plan.
Microsoft (MSFT) is reportedly expected to unveil a new tablet computer today to optimize its launch of Explorer 8.0 and to step up its competition with Apple Inc.
Morgan Stanley (MS), in a Wall Street Journal article, is being charged with making several decisions in the weeks leading up to the Facebook IPO that contributed to the rocky first day of trading. The firm reportedly shut co-managers, J.P. Morgan Chase (JPM) and Goldman Sachs (GS), out of the roadshow which hindered Morgan Stanley’s ability to measure demand.
WellPoint Inc. (WLP) announced on Friday that it will pay $90 million to settle a class action lawsuit brought on by 700,000 former members of Anthem Insurance Companies, Inc., a subsidiary of WellPoint. Legal claims arose from Anthem’s 2001 conversion from a mutual company, owned by its insured policyholders, to a stock company. WellPoint is revising earnings per share guidance for full year 2012 to be at least $7.57 per share vs. guidance of $7.78 per share.
Commodities/Currency:
Gold: down $5.40 to $1,622.80
Oil: down $0.75 to $83.58
EUR/USD: -0.0096 to 1.2624
USD/JPY: +0.14 to 79.03
GBP/USD: -0.008 to 1.5645
Volatility Index (VIX): As of the close of business Thursday, June 14, the VIX is up 0.57 to 21.11.
Today’s Opening and Closing Bells:
Citigroup Inc. is visiting the New York Stock Exchange to celebrate the company’s 200th Anniversary of Listing. Vikram Pandit, Chief Executive Officer, will ring The Opening BellSM.
Federal Realty celebrates 50 years of being a proven leader in the ownership, operation, and redevelopment of high quality retail real estate in the country's best markets. Donald C. Wood, President and CEO of Federal Realty rings The Closing BellSM.
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