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WJR June 2011 Reports

 

June 30, 2011

Today ends the month, the quarter and the first half of the year. Stock prices in the U.S. will end up slightly positive for the first half of the year, but only the Detroit Tigers have had more big winning streaks and big losing streaks. Direct from the vault of useless statistics, keep in mind that in eight of the past ten years, stock prices have done better in the second half of the year than the first.

More voting is underway in the Greek legislature regarding the implementation of the austerity that was approved yesterday. Traders will keep one eye on that, but the other on the Chicago PMI at 9:45. Last month, the index dropped a whopping 11 points to 56.6. The consensus guess for this month’s reading is a drop to 53. Anything above 50 indicates expansion of economic activity in the Midwest, but at 53, the rate of expansion will have slowed to a snail’s pace.

In just 4 minutes or so the weekly Jobless Claims are expected to decline just a bit to 420,000 from last week’s 429,000.

Visa, Mastercard, Ebay all had great days yesterday after the Government’s edict limiting debit card fees was a lot less punitive than expected. Ebay received at least two broker upgrades this morning.

Major markets overseas are higher, following up our three day winning streak, and it looks like we’re going to try to make it four. At this point, adjusted for fair value, the S&P futures are higher by about 4½ points, Dow futures are up 49 and the NASDAQ futures are about 9½ points above fair value.

June 29, 2011

It’s all Greek to me, and to the stock futures this morning as politicians in Greece get ready to vote on a proposed austerity framework. Should the vote pass, which is expected, the dirty work starts tomorrow as they decide exactly how to implement the plan. Nevertheless, today’s expectation of passage has the euro up, therefore the dollar index is down, and stock futures are again in rally mode.

Shares of Bank of America are in rally mode to the tune of over 5 percent this morning. Bank of America settled a lawsuit bought by 22 big investors in mortgage backed securities. The core of the problem are mortgages issued by Countrywide (oh, what a great purchase THAT turned out to be!) Bank of America’s settlement will have that cough up more money than they have MADE since the mortgage crisis began in 2008. Yet, traders are interpreting this as good news, even though litigation over the mortgage crisis is far from over. In fact, over and above the 8½ billion BOA is paying, they are reserving 5½ billion for future claims. Speaking of ill-fated moves, oil is now over 94 bucks per barrel. That’s higher than it was before last week’s emergency release of oil from the Strategic Oil Reserve.

BJ’s Wholesale is going private for $51.25 per share in cash. General Mills raised their dividend 9 percent, although the stock looks lower in the pre-market. Family Dollar reported 91 cents per share in profit. That missed estimates by 4 cents.

Mainland China was off over one percent overnight, but the majority of major markets overseas are higher. We’re looking to pick up where we left off after two straight days of triple-digits gains on the Dow Jones Industrials. 

Adjusted for fair value, the S&P futures are higher by about 10 points, Dow futures are up 72 and the NASDAQ futures are about 12 points above fair value.

 
June 27, 2011

Stock prices lost another one percent on Friday, to finish the week about a half-percent lower. We’ll see how the last trading week of the month goes, but it’s been 7 years since stocks gained ground during the month of June.

And, this being the last trading week of the month, be on the lookout for any companies that warn about their upcoming quarterly earnings. With rising component costs and softening sales, there’s a lot of concern that 2ndquarter earnings estimates have not come down enough. Current estimates have earnings for the S&P 500 rising 27 percent from a year ago.

We’ll get the fourth quarter numbers from Nike after the close of trading tonight. But to begin the day, Consumer Income and Spending data will hit in just about 10 minutes. Expect that income rose four-tenths of a percent in May, which would match the April number. Spending, however, is expected to have come to a standstill, after a two-tenths of a percent increase in April.

Light sweet crude is down again, now under 91 dollars per barrel. European equity markets are fairly flat right now. Our futures are just a little bit higher, but not so much that the income and spending data couldn’t change.

Adjusted for fair value, the S&P futures are higher by about a little less than 2 points, Dow futures are up 18 but the NASDAQ futures are about 6½ points below fair value.

June 24, 2011

Stock prices were sent into a steep dive yesterday, and only partially recovered by the end of the day, after the Government announced a release of oil from the country’s Strategic Oil Reserve. Now, this kind of action is only undertaken in an emergency – like war, natural disaster, or a fall in the President’s approval ratings. The >

There was a little selling in shares of Oracle after the close yesterday. Oracle reported 75 cents per share in profit, which was 4 cents better than expected. But hardware sales were off, and that had the shares down 4 percent after hours. Chips sales are also hurting as Micron missed the 16 cent estimate by 9 cents.

At 8:30 Durable Goods, which have been putting in a series of lower highs and lower lows for the past 16 months since are expected to have risen one percent, after a 3.6 percent dive in April. The final first quarter GDP number also comes at 8:30.

Most overseas markets were higher overnight, although Italian stocks are lower as trading in Italian banks was halted on concerns about capital adequacy.

Absent a pleasant surprise in the 8:30 economic reports, we’ll lose a little more ground at 9:30. Adjusted for fair value, the S&P futures are down about 3 points, Dow futures are down 27 and the NASDAQ futures, influenced no doubt by an Oracle of some sort, are 10 points below fair value.

June 23, 2011

It was an often-repeated pattern for stock prices yesterday – whether higher or lower, regress to the flat-line in time for the Fed Open Market Committee announcements. However, traders who were hoping to hear about some form of additional quantitative easing got nothing and stock prices retreated from the end of Bernanke’s press conference into the close. And, it doesn’t appear that they’re done declining just yet.

Of course, things could change at 8:30 when we’ll hear about the Weekly Jobless Claims number, but it would take a big surprise to do it. The expected number is 415,000, compared with last week’s 414,000. Not exactly what you’d call a robust improvement. And speaking of uninspiring numbers, at 10 o’clock, May New Home Sales are expected to have run at a 305,000 annualized rate. Compare that with April’s 323,000, and THAT number was 23 percent below a year ago.

All that being said, home-builder Lennar made 7 cents per share last quarter, which was 3 cents better than expected. Rite-Aid managed to lose only 7 cents per share, that was a nickel better than expected. Nissan says that profits will drop 14% from a year ago, due to fallout (no pun intended) from the March earthquake and tsunami.

While Hong Kong was slightly lower, mainland Chinese stocks had a good day, rising almost 2 percent. Other overseas markets are looking more like our futures, and it’s not a pretty picture. Adjusted for fair value, the S&P futures are down about 12 points, Dow futures are down 91 points and the NASDAQ futures are more than 18 points below fair value.

June 22, 2011

The NASDAQ chalked up its biggest percentage gain of the year yesterday as stocks rose broadly for the fourth day in a row of gains. Of course, as they say, today is another day.

And, it’s a day after the Greek Government survived a no-confidence vote, giving rise to hope that a European Union bailout is on the horizon to further forestall the day of reckoning for the massively overleveraged Greek government.

Speaking of massively overleveraged governments, our own Federal Reserve Open Market Committee will recite the latest chapter in our economic bailout plan starting at 12:30 this afternoon. Interest rates will, of course, be held near zero. Comments about additional quantitative easing at the Chairman’s press conference will be the hot-spot. That starts at 2:15.

Adobe Systems stock is in the hot seat this morning. Last night, they reported a 54 percent increase in profit, but at 45 cents, it fell 6 cent short of expectations.  The stock is looking to open 2 or 3 percent lower. This morning, FedEx beat their number of $1.72 by three cents. FedEx stock looks to open a couple of dollars higher. Bed, Bath & Beyond, CarMax and Paychex also report earnings today.

Asian markets were mixed overnight, although Japan was almost 2 percent higher. European markets are pretty quiet. Our futures have improved over the past hour, but we’re still likely to be in give-back mode at 9:30.  Adjusted for fair value, the S&P futures are down about 4 points, Dow futures are down 39 and the NASDAQ futures are 7½ points below fair value.

June 21, 2011

The Open Market Committee of our beloved Federal Reserve will kick off a two-day gabfest this morning, but you can bet that they’ll have more to gab about tomorrow than today. That’s because at 5 o’clock this afternoon there will be a confidence/no confidence vote in Greece as they continue to go through the process of deciding exactly how and when Greece will default on its sovereign debt. By the way, if you’d like to earn more than 4½ percent on a three month loan, go to Greece. They had to pay 4.62 percent on three-month paper this morning. Of course, sometimes it’s not the return ON your money, it’s the return OF your money that counts.

Meanwhile the Germans appear to be a bit concerned as to how this will all end up. The May ZEW Index, which is a measure of confidence among analysts and institutional investors in Germany cratered to minus 9 from April’s positive 3.1, which was much lower than expected.

This side of the pond, we’ll get the May Existing Home Sales Report at 10 this morning. Expect an annualized rate of four and three-quarter million units. That would be down from just over 5 million in April, when the sales rate indicated that there are more than 9 months of supply on the market.

Optimism over the Greek vote tonight has the euro stronger this morning. That has the dollar index down a quarter of a percent, which of course has our stock futures looking good. Markets overseas are generally higher.  Greek stocks, as if it matters, are up almost 4 percent.

Adjusted for fair value, the S&P futures are higher by 8 points, Dow futures are up 52 and the NASDAQ futures are almost 10 points above fair value.

June 20, 2011

Stocks managed to break a long weekly losing streak with a small gain last week.

But once again this morning, the world’s equity markets are tensely waiting for some sort of Grecian formula to emerge out of the European Central Bank. One wonders how the world markets could be held hostage by the goings-on in a country with the Gross Domestic Product that’s about the >

Also tomorrow, our Federal Reserve Open Market Committee gets together for a two day meeting. As for today, the docket is free from any of those pesky economic reports. There’s a bunch coming later this week, but today should be pretty quiet. Just to spice things up a bit, Goldman Sachs piped in this morning with a cut in its domestic GDP projection to 2 percent.

In this morning’s alphabetic amalgamation PNC is buying RBC’s retail banking operations for about 3½ billion dollars.

Mainland China was down almost 2 percent overnight. Russia and Italy are off almost 3 percent. Major European markets are off one to two percent. We will likely head lower at 9:30 as well.

Adjusted for fair value, the S&P futures are lower by almost 8 points, Dow futures are down 59 and the NASDAQ futures are almost 11 points below fair value.

June 17, 2011

It’s the Merkel and Sarkozy show this morning. In the fine tradition of all modern politicians, the German and French leaders made comments that give every indication that the Greek debt-default can will get kicked further down the road. Those words and a little shake-up in the Greek Government have stocks in Europe and futures in the U.S. on a roll higher.

On a roll lower will be shares of Blackberry maker Research in Motion. RIM beat earnings estimate by a penny last night. But revenue missed badly and they officially lowered their full year estimate from $7.50 to somewhere between 5¼ and 6 bucks.

And for all of the IPO lovers out there, another lesson learned as shares of Pandora are looking to open just a little higher than 13 bucks this morning after coming public a few days ago at $16 and briefly being bid up to the mid-twenties.

Just before 10 this morning, the University of Michigan’s first take on June Consumer Confidence is expected to rise ever so slightly to 74.5 from May’s 74.3. Then at 10, the Leading Economic Indicators are expected to rise to two-tenths of a percent from last month’s negative three-tenths.

Oil is down almost another dollar this morning. Asian stocks were mainly lower, the FTSE and the rest of Europe turned meaningfully higher within the past couple of hours, and our markets will head higher at 9:30. Adjusted for fair value, the S&P futures are higher by about 14 points, Dow futures are up 103 and the NASDAQ futures are 15½  points above fair value.

June 16, 2011

Yesterday was indeed a heavy-data day, and the economic news was, in a word – lousy. Stock prices are now back down to where we were in the tsunami days of mid-March. Don’t look now, but another 7 or 8 reports are on the way today and at this point, there doesn’t appear to be great optimism about what’s in store.

About 6 minutes from now, the May Housing starts are expected to improve just a bit to 547,000 annualized units from April’s 523,000. Unfortunately, this is a number that’s been relatively unchanged since January 2009, except for the artificial yet expensive sugar rush provided by the Government’s home-buyer tax credit.

Weekly Jobless claims also come at 8:30. Expect that another 420,000 people filed for benefits in the last week.

Perhaps most watched will be the Philadelphia Fed survey at 10 o’clock. After yesterday’s extremely weak Empire survey, the Philly Fed survey is expected to rebound to a reading of 9 after May’s surprisingly weak 3.9.

The deal of the day is in natural gas transmission. Energy Transfer Equity is buying Southern Union at a 17 percent premium in a 4.2 billion dollar deal.

Asian markets were lower by 1½ to 2 percent overnight. Europe is lower and the beleaguered euro is taking another pounding against the dollar and that is not good news for our stock market. Adjusted for fair value, the S&P futures are down about 6 points, Dow futures are down 53 and the NASDAQ futures are almost 9½ points below fair value.

June 15, 2011

It’s what you could call a data-heavy day and it kicked off this morning with the Mortgage Bankers Association report. Mortgage applications ticked higher last week in response to lower interest rates. Purchase applications were up 4½ percent. Refi’s were up over 16 percent for an overall rise of 13 percent.

In less than ten minutes we’ll get the May Consumer Inflation Data and the Empire Manufacturing Index. Expect that headline inflation was (according to the Government) non-existent in May, and only up two-tenths of a percent absent those unnecessary items like food and energy. The Empire survey is expected to tick higher to 14 from 11.8. If so, it means that manufacturing activity in New York continues to improve, and at a slightly improving rate.

Industrial Production data, Oil inventory data and the Home Builders’ Index of housing prices come later.

The money-losing internet radio company Pandora was expected to IPO today at 10 to 12 bucks per share today. Now it looks like it will be 16 dollars per share, and probably much, much more when the feeding frenzy starts.

Labor strikes in Greece is giving the euro the shivers this morning. That has the dollar higher, and as usual, that will send stock prices lower early on, at least.

Adjusted for fair value, the S&P futures are down almost 5 points, Dow futures are down 51 and the NASDAQ futures are nearly 12 points below fair value.

June 14, 2011

The S&P 500 Index is now off just about 7 percent over the past six weeks. But following yesterday’s failed rally attempt, we might get some buyers with legs today.

Overnight, May’s Chinese Inflation Rate was announced at 5½ percent. That was a three-year high but was right in line with expectations. The Chinese Central Bank also announced the sixth hike in the bank reserve requirements this year. It’s up to 21½ percent for the big banks there. Market consensus seems to be that that the Chinese may be able to moderate inflation without crashing their economy. Mainland Chinese stocks rose more than one percent, sparking over markets overseas higher overnight.

About 15 minutes ago, Best Buy checked in with 35 cents per share in operating earnings. That was 2 cents better than expected.   Same store sales, which were expected to drop almost 4 percent, were only off 1.7 percent, and Best Buy stock is looking to open about 6 percent higher.

At 8:30 the Producer Price Index is expected to moderate to a one-tenth of a percent increase, and two-tenths food and energy. Overall retail sales are expected to have dropped three-tenths of a percent, but actually rose three-tenths of a percent ex-automobiles.

Cisco Systems, Juniper Networks, Caterpillar and Research in Motion all suffered downgrades from one house or another this morning.

Adjusted for fair value, the S&P futures are up almost 10 points, Dow futures are up 68 and the NASDAQ futures are 14 points above fair value.

June 13, 2011

It’s been about 9 years since we’ve seen six straight weeks of lower stock prices. That is, until now. The Dow Jones Industrials slipped below the 12,000 level Friday as we stared at red numbers for the sixth time in seven sessions.

As we look for news that might reverse the course, we’re still more than three weeks away from getting any substantial earnings news. That means that the current worries about default in Greece, the price of oil in the Middle East and the lack of adult behavior in Washington will likely have us in turmoil for a few weeks more. Perhaps we could send everyone there away for a few weeks of “treatment.” Or at least get them to quit posing for photos and get to work.

Anyway, there will be a good number of reports out this week regarding the economy, but nothing is on the docket today.

If you like Timberland shoes, you may be able to buy them in a package with your North Face jackets and Wrangler jeans soon. VF Corp., which already owns North Face and Wrangler, is paying 43 bucks for Timberland. That, coincidentally, is about a 43 percent premium to Friday’s close.

Overseas markets are mixed, but major European markets are slightly positive at this point. Adjusted for fair value, the S&P futures are up 3 points, Dow futures are up 38 and the NASDAQ futures are about 4½ points above fair value.

June 10, 2011

We avoided a seven day losing streak yesterday. That’s the good news if you’re long stocks. Unfortunately, we had another late day sell-off that cut the gains almost in half from earlier in the day. Just a month or so ago, late afternoon melt-ups were more the norm.

Worries continue about just what will happen after the end of this morning when the Federal Reserve’s Quantitative Easing is scheduled to end. Ben Bernanke’s official stance is that enough is enough. However, we’ll see. Next year is an election year and at this point, and according to the Department of Labor, the number of people who have been unemployed at least 27 weeks is nearly 5 times larger than it was 4 years ago. Those people are likely NOT better off now than they were then.

It will be a beautiful afternoon in New York City. It’s also Friday, and outside of the May Treasury budget numbers at 2 o’clock, there is absolutely nothing big on the economic or earnings calendar today. Accordingly, it may be hard to justify keeping the lights on at the trading floor by mid-afternoon as everyone heads for the shore.

Asian stocks traded higher overnight, following up our Thursday rally, but major European markets are mixed this morning. If trading here were to start now, it would start with slightly lower prices. Adjusted for fair value, the S&P futures are down 3 points, Dow futures are down 17 and the NASDAQ futures are about 7 points below fair value.

June 9, 2011

After six day steak of losses in the stock market, we may get a little relief today, at least early on.

This morning, both the Bank of England and the European Central Bank held their short-term interest rates steady. That was exactly as expected.

What’s also expected is the Weekly Unemployment Claims Report is just about 10 minutes. Expect another 418,000 claims, which would be a little bit better than the month-ago level of 432,000 and the four week average of 425,000. However, it’s still nothing to write home about, even if you have the time to write home because you can’t find a job.

Texas Instruments stock lost about 5% of its value after the close yesterday, but then regained most of the loss. TI cut its sales and earnings estimates, but it looks like it is the result of a cut in orders from just one big customer, believed to be Nokia.

As if it didn’t have enough problems, Citigroup revealed that it suffered a security breach in early May. Personal information from perhaps 1 percent of Citi Online customers may have been accessed, although Citi says no social security numbers were stolen.

Chinese stocks lost 2 percent overnight. Japan and Europe are pretty much unchanged. As we look forward to the weekly jobless claims at 8:30, our futures have lost some gas but are still slightly positive. Adjusted for fair value, the S&P futures are higher by about 2 points, Dow futures are up 19 and the NASDAQ futures are just about even with fair value.

June 8, 2011

Until the last hour of trading yesterday, it looked like stocks were going to break out of their June swoon. That was before Ben Bernanke’s 3:45 speech in Atlanta.

The Chairman didn’t break any new ground, describing the economic recovery and job growth as frustratingly slow, but he didn’t offer any hope of another round of Quantitative Easing. The most interesting interchange came during the questions and answers when JP Morgan’s Jamie Dimon asked Bernanke whether anyone is bothering to measure the impact of all the new banking regulatory reforms and capital requirements. The answer, of course, was no. Then, you would think that that question would be better posed to the source of the issue, perhaps Congress and the Administration. But they weren’t out suffering questions yesterday.

The cost of a barrel of oil is a buck lower this morning as OPEC has begun a meeting in Vienna. It’s expected that production quotas will be raised. Any comments by Saudi Arabia are particularly worth noting, as they are suspected to be the only significant player that’s not producing at capacity already.

McDonald’s May same store sales came in lower than expected this morning. Mickey-D’s stock is indicated about 2 percent lower pre-market.

Asian markets were lower overnight, but Europe is lower and here we go again.

Right now, adjusted for fair value, the S&P futures are lower by about 6 points, Dow futures are down 38 and the NASDAQ futures are 12 points below fair value.

June 7, 2011

The dollar index is down about a half-percent this morning, which should give us some relief, at least in the early going, from another day of stock prices that have been slip-sliding away every day this month.

There are a few earnings reports out, but they’re nothing to write home about. Pep Boys reported 23 cents of profit which was 7 cents short of estimates. Navistar also missed their number, with $1.02 in profit versus $1.14. Later, home builder Hovnanian is expected to report a loss of 53 cents per share.

As you mentioned, the General Motors has their annual meeting is today. Ford is holding an investor day (just a coincidence, I’m sure) announcing some aggressive overseas growth plans this morning. Both stocks are likely to be pretty active.

Speaking of active, International Paper has gone hostile in its bid for Temple-Inland. IP is offering $30.60 per share. Temple Inland closed yesterday at just a penny over 21 bucks.

Asian markets were mixed overnight, but Europe has turned positive, and we should gain some ground back at 9:30.

Right now, adjusted for fair value, the S&P futures are higher by about 4½ points, Dow futures are up 42 and the NASDAQ futures are 5½ points above fair value.

June 6, 2011

It’s been about 7 years since stock prices fell for five consecutive weeks. But here we are, after five down weeks, looking at a week without any big-time earnings or economic reports on the agenda. Granted, over the past 5 weeks stocks are only down about “a-half-of-a-correction,’ or about 5 percent. However, in a light-data week, it’s hard to think of what might change our generally downward direction. Of course, maybe Congress will get its act together and quit kicking the entitlement can down the road. Yeah, right.

Two Federal Reserve Governors speak later today. Ben Bernanke also will give a speech just before the stock market closes. But perhaps the most anticipated speech will come from Steve Jobs. Jobs will return from his latest medical leave to deliver a speech at an Apple Developers’ Conference in San Francisco. He may unveil details of Apple’s cloud strategy, but is not expected to have anything new to say about the iphone, the ipad, or any other idea.

Gold and silver are a little higher. Oil is down a little more than a dollar per barrel.

Asian stocks were mixed overnight, but most of Europe is a little lower, although the U.K. just turned higher.

Over here? Well, here we go again. Adjusted for fair value, the S&P futures are down about 6 points, Dow futures are down 37 and the NASDAQ futures are 10 points below fair value.

June 3, 2011

More times than not, stock prices will float near the break-even mark in advance of the monthly Unemployment Report. Well, it’s the First Friday of the month once again, but stock futures this morning are lower. The ADP Employment report on Wednesday was horrible. And even though the ADP Report has a questionable record of accuracy, the other rather ugly economic reports released this week have traders expected a lousy number at 8:30 this morning.

The latest range of forecasts calls for somewhere between 125,000 and 160,000 new non-farm jobs added to the economy in May. That would a downer from April’s 244,000. The Unemployment Rate is expected to inch up to 8.9 percent. But it’s going to take a surprisingly good number to get stock prices out of their funk.

Speaking of getting out, the Government is getting out of its ownership interest in Chrysler. The Treasury will get $560 million from Fiat for their remaining interests in Chrysler, which will give Fiat a controlling ownership interest.

Newell-Rubbermaid unsealed their profit outlook and burped it a bit this morning. The forecast was only lowered to about $1.63 from $1.67, but the stock is being marked down about 10 percent pre-market.

Overseas markets are painting a mixed picture, but our picture, at least in the early going, will be painted with the Jobs Report in 7 minutes.

Adjusted for fair value, the S&P futures are down about 3 points, Dow futures are down 34 and the NASDAQ futures are about 8½ points below fair value.

June 2, 2011

A steady stream of pretty lousy economic reports turned into a flood of sell orders yesterday as stocks lost about 2¼ percent. The Dow Jones Industrials lost more points than it had in any day in almost a year.

Today, we’ll get another basket full of economic reports, and quite frankly, it could be more trouble ahead.

At 8:30, the weekly jobless claims aren’t expected to be any better than last week’s 424,000 new claims. We’ll also get the 1stquarter productivity and unit labor cost numbers. Both of those metrics have each been moving in the wrong direction for about a year now. Expect a slight reversal, with productivity expected to edge higher to 1.7% and Labor costs to edge slightly lower to an increase of eight-tenths of a percent.

It’s the first Thursday of the month, so Chain Store Sales reports will flow from the major retailers all morning. At 10 o’clock, the April Factory Orders Report should come in nearly one percent lower, after March’s 3 percent increase.

Juniper Networks was a 10 percent loser yesterday on word that they may not be faring much better than Cisco in the switching business. Orbitz was the big winner, rising over 50% after an Illinois Circuit Court ruled that American Airlines cannot keep its flight schedule and ticket sales to itself.

As you might expect, overseas markets are a mess after yesterday’s bloodletting in the U.S. Our futures were a little higher earlier, but they’ve now pulled back as we await more economic data. Adjusted for fair value, the S&P futures are up a point, Dow futures are up 8 and the NASDAQ futures are 4½ points above fair value.

June 1, 2011

Yesterday’s rally cut the stock market’s May loss almost in half. Granted, volume was pretty light, but a gain is a gain. Today, on the other hand, starts a brand new month with a brand new set of data to consider.

First and foremost around these parts are the monthly auto sales reports. Those will be rolling out all day and are expected to total up to an annualized sales rate of about 12,700,000 units. The impact of the Japanese earthquake and tsunami will get most of the blame. Nevertheless, we haven’t seen a rate below 13 million units since February.

Earlier this morning the Mortgage Bankers Association reported that mortgage applications for home purchases were unchanged last week, but refi’s were off more than 5 percent. It seems that more and more people are having trouble qualifying for refinancing due to insufficient equity in their homes. Surprise, surprise, surprise.

Later this morning, the ISM Manufacturing Index is expected to fall from April’s 60.4 to about 57½ as our little economic “soft patch” in the economic expansion continues.

Nokia shares may well be the disaster of the morning. Nokia was downgraded by no fewer than 8 brokerage firms this morning. Shares are indicated more than 9 percent lower pre-market.

Asian markets were mixed overnight, but Europe is mostly lower. Our futures have been on the soft side all morning, but are not pointing significantly lower at this point.

Adjusted for fair value, the S&P futures are down less than a point, Dow futures are down 13 points, and the NASDAQ futures are about 3 points below fair value.


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