MARKET ACCESS CENTER: MORNING REPORT
Ahead of the Bell: Dow futures are trading down 11 points and S&P futures are trading down 2 points. Investors are hopeful a slew of economic data, such as manufacturing, inflation, and jobs report due out this week will show evidence that the global economy is rebounding from a recent slowdown. With second quarter earnings season around the corner, market participants are optimistic companies will provide a brighter picture for the second half of 2014. The European Union's statistics office Eurostat said the regions inflation in June was flat, taking some pressure off the ECB to act again, according to reports.
On the economic calendar today, Chicago PMI will be out after the opening bell, it is expected to be 64.0 compared with 65.5 for the month prior. Pending home sales will also be out after the market opens, a reading of 1.0 is forecasted versus 0.4% for April.
The dollar is up against the Japanese yen and down against euro and the British pound. Gold is trading at $1,314. Crude oil is currently trading at $105 a barrel.
Stocks are about to close out the first half of 2014 up for the year, despite the harsh winter weather and the Federal Reserve dialing back its bond-buying program. The growth rate in the second quarter was weaker than forecasted but the housing sector showed improvements last week. For the last two quarters, the Dow gained 1.6%, while the broader S&P 500 index advanced 6%.
The week ahead, investors are hoping for more volatility and the employment data could provide the spark traders have been waiting for this 4th of July Holiday week. There are a number of economic reports on the docket this week, including housing, manufacturing such as the New York and Philadelphia Fed regional reports, and weekly jobless claims. However, the non-farm payroll data on Thursday is likely to give market participants a clue about growth in the second half, following the dismal performance by the economy in the last two quarters. Various reports indicate that economists are forecasting the private sector created 210K jobs in June versus 217K in May, while the unemployment rate is expected to remain unchanged at 6.3%. Other events that could impact the equity markets are the crisis in Iraq and Ukraine as crude oil prices continue to hold on to an eight-month high.
On CNBC this morning, Boris Schlossberg, Managing Director of FX Strategy for BK Asset Management and Co-Founder of BKForex.com, talked about Fed policy. Schlossberg said if average wage growth improves that will be the test for the Federal Reserve. If this happens, he expects Janet Yellen and company to begin tapering further and interest rates will begin to rise. The central bank wants to see improvements in wages as it is making the bond market very complacent. Schlossberg warns, we don’t want to become the next Japan.
Have a great day.
Friday's Close
DJIA up 5.71 pts/+0.03%/ 16,851.84
S&P up 3.74 pts/+0.19%/ 1,960.96
Nasdaq up 18.88 pts/+0.43%/ 4,397.93
Monday's Futures
Dow Futures down 11.00 pts/-0.07%
S&P Futures down 2.25 pts/-0.10%
Nasdaq Futures down 2.75 pts/-0.18%
Overseas Markets
FTSE -0.27%
CAC 40 -0.57%
NIKKEI 225 +0.44%
HANG SENG -0.13%
Overseas: Global stock markets are mixed today. European markets are up after the latest reading of inflation in the 17-member bloc showed prices are flat and near a four-year low. Asian markets are up on optimism economic data due out this week will show the global economy is rebounding.
Economic Reports: Chicago PMI expected to be 64.0 at 9:45 a.m., Pending Home Sales Index expected to be 1.0% at 10:00 a.m., Dallas Fed Manufacturing Survey, later in the week PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending, ADP Employment Report, Factory Orders, Employment Situation, International Trade, Jobless Claims, and ISM Non-Manufacturing Index.
Top Headlines
Reports indicate the DOJ is expected to announce soon a settlement with BNP Paribas for about $9 billion over alleged US sanctions violations by the bank, sources familiar with the matter said.
InterOil Corporation (IOC) announced it is selling its Papua New Guinea oil refinery and petroleum products distribution business to Singapore-based Puma Energy Group for $526 million.
Reports suggest Kindred Healthcare Inc., (KND) was preparing to revise or withdraw its offer to buy Gentiva Health Services Inc., (GTIV) after reports that the company may be trying to buy rival Amedisys Inc.
Commodities/Currency
Gold: down $5.10 to $1,314.30
Oil: down $0.54 to $105.20
EUR/USD 1.3655 +0.0012
USD/JPY 101.3460 -0.0990
GBP/USD 1.7043 +0.0007
Volatility Index (VIX): As of the close of business Friday, June 27, 2014 the VIX is down 0.43 at 11.20.
Companies Reporting Quarterly Earnings
Mandalay Digital reports Q4 EPS cont ops (10c), vs. Est (11c) and Q4 revenue $6.05M, vs. Est $6.98M.
Today's Opening and Closing Bells
New York City Rescue Mission to help raise awareness for New York City homeless will ring the Opening Bell.
Republic Services Celebrates 16th Anniversary of Listing on the New York Stock Exchange and will ring the Closing Bell.
For daily market recaps, check out our End of Day Report every evening!
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