N AMERICAN MORNING BRIEFING: Stocks Seen Higher, ISM Data In Focus

2nd Aug 2010 11:22

DJIA Futures 10528.0 +111.0 +0.7% S&P 500 Futures 1111.2 +12.9 +0.8% Nasdaq Futures 1882.3 +20.0 +0.7% Above are as of 0615 ET FTSE 100 5339.0 +94.0 +1.1% Xetra DAX 6258.5 +91.5 +1.2% CAC 40 3722.5 +81.0 +1.2% Aboce are as of 0615 ET Nikkei 225 9620.0 +60.0 +0.4% Hang Seng 21422.0 +451.0 +1.0% Above are closing prices BREAKING NEWS *Ford Motor Company Completes Sale of Volvo To China's Geely For $1.8 Billion *HealthSouth Raises 2010 Guidance After "Solid" 2Q Results SNAPSHOT: -Stocks seen higher; Treasurys lower; dollar higher; Nymex crude higher at $79.63; gold lower at $1178.70. -Watch for: ISM Manufacturing data at 1000 ET; Bernanke speaks at 1015 ET. -PMIs Show Asia's Recovery Slowing But Not Derailing; Euro-Zone Manufacturing Growth Picks Up In July. -Earnings expected from Humana, NRG Energy and VeriSign. OPENING CALL: Stocks seen opening higher, following on from positive sessions in Europe and Asia. "European banks have reported very strong earnings, which is where futures are taking their lead from," said City Index analyst Joshua Raymond. He added that manufacturing data out of Europe and China have also been better than expected, adding to positive sentiment, with U.S. ISM manufacturing data out at 1000 ET eyed. Raymond cautioned that negative data could turn the market downwards, but added light summer volumes are making it hard to get a clear picture of the market. "We'll have a better idea of sentiment in mid-September when volumes pick up, but until then what we're seeing is range trading with market volatility artificially amplified." EQUITIES: The Wall Street Journal reported that UBS (UBS, UBSN.VX) is expected to announce Monday the hiring of two executives from Goldman Sachs Group (GS) and Bank of America (BAC) who will push to make more mortgages and other loans through the Swiss bank's brokerage force in the U.S. The move is the latest effort by Robert McCann, UBS's wealth-management chief in the U.S., to rejuvenate the brokerage unit. Since taking the job last year, the former Merrill Lynch & Co. (MER) brokerage chief has slowed the outflow of client money but needs new sources of revenue growth. UBS shares were trading 1.1% higher in Frankfurt at 0615 ET, while Goldman Sachs was 1.9% lower and Bank of America was shares were up 0.5%. In other news, Boyd Gaming (BYD) gave up its year-and-a-half effort to take over certain assets of its chief rival, bankrupt Station Casinos. Chief Executive Keith Smith said the pursuit no longer makes sense for Boyd "given the bidding procedures that favor Station insiders." He also said the potential value of the operating and development assets is limited. Shares in the company were 0.98% lower at 0615 ET in Frankfurt. Meanwhile The Wall Street Journal reported that regulators in the United Arab Emirates had said Sunday they would prohibit BlackBerry instant messaging, email and Internet-browsing services starting in October, after what officials in the country say has been a long-running dispute with the device's maker about how it stores electronic data. The U.A.E. market is a relatively small one for Canada's Research In Motion Ltd. (RIMM), which makes the BlackBerry smartphone. But the suspension comes amid unease by at least one other government, India, over the inability to monitor or review electronic-communications sent via the device in criminal, terrorist or national-security investigations. Shares traded 1% higher in Frankfurt at 0615 ET. Cameron International Corp. (CAM) could emerge as an unlikely beneficiary in the Gulf of Mexico oil spill. The company came under intense scrutiny in the first days after the Deepwater Horizon drilling rig exploded April 20, killing 11 workers and sparking the worst offshore oil spill in U.S. history. Cameron built the rig's blowout preventer, a critical safety device that failed to shut down the well. Now, it appears the disaster could help generate new sales for Houston-based Cameron, which reports second quarter earnings on Wednesday. In the wake of the well accident, regulators in the U.S. and overseas are expected to require stronger, more reliable blowout preventers. Oil companies, fearing liability, also are looking to beef up their safety systems even before any new rules go into effect. FOREX: The euro spiked higher after the euro zone's PMI for manufacturers was revised up from its original estimate. However, the single currency's gains proved short-lived in a market that remains concerned about the global economic recovery. By 0530 ET, the dollar was up in Europe at Y86.78, while the euro was down at $1.3066 and the pound had risen to $1.5792. BONDS: Treasurys were down in London as investors took profits after the sharp gains made on the back of last Friday's gross domestic product release. Expectations of possible quantitative easing rose after the below-consensus 2.4% increase in second-quarter GDP Friday. ISM manufacturing purchasing managers' index is due, but Commerzbank sees "rather limited potential for this to support Treasuries as the market may already anticipate more weakness than the consensus is looking for." The two-year note was down at 100-04/32 yielding 0.562%; the 10-year note was at 104-26/32 yielding 2.929%; and the 30-year was down at 106-12+/32, yielding 4.005%. Corporate bonds: Spreads on European corporate credit default swap indexes were tighter, with the momentum built during last week from well-received company earnings and improved economic data continuing to provide support. COMMODITIES: Oil futures were rising, supported by firmer equities and a stronger euro. September WTI hit an intra-day high of $79.59 a barrel, and could approach $80/bbl if there are better-than-expected PMI figures, analysts said. The September/October Brent timespread also narrowed slightly, reflecting the strength of Dated Brent, which was trading at a premium to both the front-month futures. Speculative money was building in crude futures, according to the CFTC. Money managers, including hedge funds, raised their net long position in Nymex WTI to 107,716 in the week ended July 27, up 10% on the previous week. Spot gold was trading in a narrow range, hovering around $1,180 a troy ounce as the metal continued to stabilize and investors returned to the market following last week's heavy selloff. Prices fell as low as $1,158/oz last week as market participants looked to riskier assets amid increasing speculation that the global economy will continue to recover. The metal has, however, now recovered most of its losses after the dip led to a new wave of buying, analysts said. =======TODAY'S CALENDAR======= ET / PERIOD 0945 US Jul Dow Jones Economic Sentiment Indicator 1000 US Jul Online Help Wanted Index 1000 US Jul ISM Manufacturing Report on Business 1000 US Jun Construction Spending - Construction Put in Place 1015 US Fed Chmn Bernanke speaks on the challenges for the economy and state governments in Charleston, S.C. 1400 US Fed Chmn Geithner visits The Wall Street Journal 1600 US Tsy Secy Geithner speaks on financial reform in New York ============================== OTHER TOP STORIES OF THE DAY: US HOUSE VOTES TO END SIX-MONTH DEEP-WATER-DRILLING BAN The U.S. House of Representatives Friday voted to end a six-month ban on deep-water drilling, challenging the Obama administration's response to a BP PLC (BP, BP.LN) oil spill that is the worst in U.S. history. HSBC 1H NET DOUBLES TO $6.76B ON LOWER CHARGES HSBC Holdings PLC (HBC), Europe's largest bank by market capitalization, said Monday that its net profit for the first half of the year doubled on lower impairment charges and a gain on the value its own debt. BNP PARIBAS 2Q NET PROFIT SURGES 31% ON RETAIL BANKING BNP Paribas SA (BNP.FR), France's largest lender by market capitalization, Monday reported far better-than-expected second-quarter net profit, as strong retail operations and lower provisions more than offset a slide in investment banking, which was buffeted by the turmoil over euro-zone sovereign debt earlier this year. PMI GROUP SELLS FGIC, MAY GET FUTURE TAX BENEFIT PMI Group Inc.'s (PMI) U.S. mortgage insurance unit sold its equity ownership in troubled bond insurer FGIC Corp. for an undisclosed amount. CIC GETS FED'S ORAL APPROVAL ON MORGAN STANLEY STOCK CONVERSION PLAN - REPORT The Federal Reserve has given oral approval to China Investment Corp.'s plan to convert some of its common stock holdings in Morgan Stanley (MS) to non-voting preferred stocks, which would help CIC avoid closer regulatory scrutiny, the Century Weekly magazine reported Tuesday, without citing sources. WSJ: SITES FEED PERSONAL DETAILS TO NEW TRACKING INDUSTRY The largest U.S. websites are installing new and intrusive consumer-tracking technologies on the computers of people visiting their sites--in some cases, more than 100 tracking tools at a time--a Wall Street Journal investigation has found. JUDGE BARS EXPANSION OF MOSAIC CO FLORIDA PHOSPHATE MINE A federal judge has granted a preliminary injunction barring Mosaic Co. (MOS) from expanding a key phosphate mine in Florida due to environmental concerns. -By Eva Szalay, Dow Jones Newswires; 4420-7842-9449; [email protected] (MORE TO FOLLOW) Dow Jones Newswires August 02, 2010 06:22 ET (10:22 GMT)