US Market Update – 2/9/10
Tuesday, February 9th, 2010US Market Update
Dow +79 S&P +6.5 NASDAQ +8.3
***Economic Data***
- (US) Jan NFIB Small Business Optimism: 89.3 v 88.0 prior
- ICSC/GS weekly chain store sales w/e Feb 6th: +1.4% w/w, +1.8% y/y
- Redbook Retail Sales for the week ending Feb 6th: +2.0% y/y; MTD +1.7% v Jan
- (RU) Russia Dec Trade Balance: $12.7B v $11.0Be; Exports: $34.4B v $31.9Be, Imports: $21.9B v $21.3Be
- (US) Dec Wholesale Inventories: -0.8% v 0.5%e
- (US) Feb IBD/TIPP Economic Optimism: 46.8 v 48.8 prior
- (MX) Mexico Consumer Prices M/M: 1.1% v 1.0%e; Y/Y: 4.5% v 4.4%e; CPI Core M/M: 0.7% v 0.6%e
- (MX) Mexico Nov Gross Fixed investment: -7.1% v -6.6%e
- US equity indices opened at or near yesterday’s highs helped by good results from Coca Cola and diminished sovereign debt concerns in Europe. Futures perked up Tuesday morning on word the ECB’s Trichet had left a meeting in Australia early to return to Europe, with many speculating he would attend an EU meeting on Thursday that would address Greece’s severe debt problems. Peripheral spreads narrowed markedly headlined by a 40+ basis point reduction in the Greeky 10-year over Bunds. Note that outgoing EU Commissioner Almunia commented that he saw clear risks of spillover from the Greece crisis among other EU members, while ECB’s Nowotny commented that the UK was most at risk of contagion given that the recent Greek bond offering was mostly taken up by UK investors. S&P revised it outlook on several US banks with both Citigroup and bank of America lowered to to negative from stable. Front-month crude is up less than a buck, trading above $72. Bond prices opened lower but have rebounded to post some gains. The 10-year note is up less than a quarter of a point while the yield remains below 3.6%.
- Dow component Coca Cola is up 4% after meeting expectations in its Q4 earnings report. Executives made very general but upbeat comments on the conference call. McDonalds January comps beat expectations, although it’s worth noting that US comps were negative on a sequential basis. Share of MCD are up slightly in positive territory. Hartford Financial Services lost ground in the premarket despite better than expected core earnings, and HIG is at -4% after a quick spike into positive territory after the open. The investment firm had expressed doubts about market conditions in 2010 in its earnings release. Fertilizer name Agrium missed bottom line expectations, but noted that it expects a “significant recovery” in its markets in 2010. AGU is up 5%. Coventry Health killed its earnings targets in its Q4. CVH was up as much as 6% at the open, although the stock is off its best levels. Biogen Idec also crushed its earnings expectations and offered strong 2010 guidance, although BIIB is only up 2%. Like many of the other homebuilders, Pulte Homes saw its new orders and order backlog shrink in Q4. Pulte’s quarterly loss was bigger than expected, although revenue was ahead of the consensus view. PHM is down 4%.
- Elevated risk appetite kept the greenback soft during the New York morning while the yen was off its worst levels. The EU meeting this week has provided the recent spat of price movements. With plenty of European officials offering words of support for Greece’s reform efforts this morning and hopes growing on news of an emergency meeting of key Euro Zone figures, markets are flush with appetite for risk. However, currency dealers are saying it is unlikely EU leaders would announce plans for loan backstops given that official rhetoric has overwhelmingly concentrated on telling Greece to resolve the situation on its own. Some believe key announcements would wait until the EU summit on Monday, Feb 15th when US markets would be closed for a holiday. ECB’s Nowotny sought to calm fears about contagion, noting that the debt situation in Spain and Portugal is better than in Greece. EUR/USD is holding above a key hourly pivot point of 1.3740.
***Looking Ahead***
- 12:30 (UA) Ukraine to sell 2-year and 3-year bonds
- 12:30 (MX) Mexico to sell MXN2.5B in 5-year FRN and MXN2.5B in 30-year bonds
- 13:00 (US) To sell $40B in 3-year notes
- 16:30 (US) API Crude Oil/Gasoline/Distillate Inventories
Written by Trade the News
