N AMERICAN MORNING BRIEFING:Stks To Rise Ahead Of Fed;Data Eyed

23rd Jun 2010 11:38

DJIA Futures 10288.00 +45.00 +0.40% S&P 500 Futures 1097.35 +6.85 +0.60% Nasdaq Futures 1889.13 +10.88 +0.60% Above are as of 0615 ET FTSE 100 5230.68 -16.30 -0.30% Xetra DAX 6246.71 -22.33 -0.40% CAC40 3677.16 -28.16 -0.70% Above are as of 0615 ET Nikkei 225 9923.70 -189.10 -1.90% Hang Seng 20856.61 +37.53 +0.21% Above are closing prices SNAPSHOT: -Stocks seen higher; Treasurys higher; dollar lower; Nymex crude lower at $77.67; gold higher at $1,242.68. -Watch for: New Residential Sales at 1000 ET; EIA Weekly Petroleum Status Report at 1030 ET; Fed interest rate decision at 1415 ET. OPENING CALL: Stock futures are indicating a higher open Wednesday, although volumes remain low, suggesting subdued trading ahead of the Fed rate decision. This is a typical summer day for the market said IG Index analyst Ben Critchley in London, but he cautioned that poor results from the housing data could trigger a selloff. "Housing data will be all-important. Any slight concern will see profit-taking." EQUITIES: John Fleming, president and chief executive of Ford's (F) European unit, said Wednesday that the auto market had weakened significantly in the second quarter after demand held up relatively well in the first three months of the year due to continued scrapping schemes, and added that a higher portion of fleet sales lead to a drag on profitability for automakers in the region. The second quarter will be "much weaker" than the first, Fleming told Dow Jones Newswires in an interview at the sidelines of the Automotive News Europe industry conference in Bilbao. The annualized sales rate in the first quarter was 16 million compared with around 14.5 milion in the second quarter as demand in the five major European markets turned anemic, Fleming said. At 0630 ET in Frankfurt Ford was trading down 1.71%. BP (BP) is teaming up with Chevron (CVX) in bidding for a South China Sea exploration block, a person familiar with the matter said, signaling that the U.K. major's failure to stop a leaking Gulf of Mexico oil well isn't deterring rival producers from choosing it as a partner in deepwater projects. Chevron will have a 60% stake in the block and act as operator, with BP holding the remaining interest, the person said. Cnooc (CEO), the listed unit of China National Offshore Oil Corp., has the right to take a 51% stake in the block if the companies make a commercial oil or natural gas discovery. At 0630 ET in Frankfurt Chevron was down 1.76%. Walt Disney (DIS) plans to unveil Wednesday its first foray into residential real estate in more than a decade with a pricey vacation-home development in Florida's Walt Disney World. It's a risky move. Disney will offer homes prices between $1.5 million and $8 million in a state where the foreclosure rate remains among the nation's highest. At 0630 ET in Frankfurt Walt Disney was down 1.82%. Las Vegas Sands (LVS) Chairman Sheldon Adelson is confident his gaming group can be a first mover in Japan if and when the nation legalizes casino gambling. But the gaming tycoon in an interview with Dow Jones Newswires has poured cold water on suggestions that any move into the Japanese market would be a direct extension of any strategy by the group's subsidiary Sands China (1928.HK) to expand its business outside its key Macau market. At 0630 ET in Frankfurt Las Vegas Sands was trading down 2.33%. The FCC approved AT&T's (T) $2.35 billion purchase of wireless licenses from Verizon Wireless on Tuesday. The FCC said the transaction didn't raise competitive concerns and that the voluntary conditions proposed by AT&T were "likely to result in transaction-specific public interest benefits." AT&T agreed to a variety of voluntary conditions on the deal, mostly involving honoring Verizon's agreements with smaller carriers and offering roaming agreements. BONDS: Treasurys were up in London as weakness in risky assets prompted a flight to quality. The safe-haven status of Treasurys was reinforced on Tuesday when two-year notes were sold at the lowest yield on record at an auction. The Treasury also auctioned $38 billion of five-year notes Wednesday. The 2-year note was at 99-27+/32, to yield 0.692%; the 10-year was up at 103-29/32, to yield 3.152%; and the 30-year bond was up at 104-27+/32 to yield 4.091%. Corporate bonds: European corporate credit markets opened wider, after falls on Wall Street Tuesday and as increased concerns about the euro zone banking sector continued to weigh on sentiment. FOREX: The euro rose briefly Wednesday when the latest euro zone purchasing managers' indexes surprised a little on the upside. Sentiment wasn't helped by the performance of the Chinese yuan, which once again came under selling pressure as state-owned Chinese banks bought the dollar. The dollar was fixed at CNY6.8102 Wednesday, up from CNY6.7980 Tuesday, despite market hopes that the Chinese currency would embark on a rally after Beijing released its peg to the dollar last weekend. Instead, the Chinese authorities appear determined to ensure that the yuan doesn't become a one-way bet. By 0530 ET, the dollar was flat in Europe at Y90.40, while the euro was up at $1.2284 and the pound had risen to $1.4901. COMMODITIES: Oil futures were edging lower Wednesday following falls in European stocks and despite small gains in the euro against the dollar. Bearish API inventory statistics late Tuesday are weighing on sentiment ahead of the release of the Department Of Energy statistics, which "are more likely to bring a negative surprise," said analysts at Commerzbank. Spot gold prices may be boosted late Wednesday if the Fed announces that it will keep interest rates low for an extended period, as expected. The market will be looking very closely at the strength of the wording when the FOMC makes its statement, according to Commerzbank analyst Daniel Briesemann. Briesemann said the market was also being supported by news that the Standard and Poor's Depositary Receipts gold trust increased its holdings by 5.1 metric tons Tuesday, to a new high of 1,313 tons. =======TODAY'S CALENDAR======= ET PERIOD 0700 MBA Weekly Mortgage Applications Survey 1000 May New Residential Sales 1030 EIA Weekly Petroleum Status Report 1415 Federal Reserve Board interest rate decision ============================== OTHER TOP STORIES OF THE DAY: WSJ: JUDGE OVERTURNS DRILLING BAN A federal judge Tuesday overturned the Obama administration's six-month moratorium on new deepwater oil and gas drilling, delivering a temporary victory to the oil industry and a rebuke to the White House. OIL COMPANIES, RIG OPERATORS AT ODDS OVER WHO PAYS FOR IDLED RIGS Oil companies and rig operators are entering uncharted waters as a fight over who pays for rigs idled by the recent offshore drilling moratorium heads to court. AFGHANISTAN GOVERNMENT BACKS MCCHRYSTAL TO KEEP JOB The Afghanistan government got behind U.S. Gen. Stanley McChrystal on Wednesday, hoping he keeps his job despite the furor over an interview in which he criticized top American officials. WSJ: LINCOLN INTERVENES FOR ARKANSAS BANK Sen. Blanche Lincoln, one of the chief architects of the financial-regulation overhaul nearing completion in Congress, is pushing for a change that would benefit a bank in her home state of Arkansas. WSJ: FCC GETS FLOODED WITH SUGGESTIONS ON COMCAST-NBC DEAL Comcast Corp. (CMCSA) rivals and business partners flooded the Federal Communications Commission Monday night with suggested requirements to impose on Comcast before approving its takeover of General Electric Co.'s (GE) NBC Universal media unit, including conditions that could alter the online-video marketplace. SURVEY: US CAPITAL EQUIPMENT FINANCING UP 4.7% IN MAY VS. YEAR-AGO The financing sector for U.S. business equipment continued to improve in May, as financing volume measured by an industry survey grew 4.7%. WSJ: LOCKHEED WINS BIG DEFENSE JOB AFTER COMPETITOR IS SUSPENDED AMID PROBE Lockheed Martin Corp. (LMT) won a contract worth up to $5 billion to support the U.S. military's special-operations units, after a competitor was barred amid an investigation into alleged improper surveillance of government emails. DISNEY, DISH NETWORK BATTLE OVER FEES FOR HIGH-DEF CHANNELS Subscribers to Dish Network Corp.'s (DISH) satellite television service have lost access to four high-definition channels owned by the Walt Disney Co. (DIS) as the two companies reached an impasse in negotiations over carriage fees. EURO-ZONE FLASH JUNE COMPOSITE PMI 56.0 VS MAY 56.4 The euro zone's private sector expanded at the slowest pace in three months in June, but the increase still indicates that economic growth picked up in the second quarter from the first, a survey by financial information firm Markit showed Wednesday. UK OSBORNE: BUDGET WILL HELP AVOID SOVEREIGN DEBT CRISIS U.K. Chancellor of the Exchequer George Osborne said Tuesday's emergency budget was tough but fair and necessary to deal with the bigger-than-expected hole in public finances left by the previous Labour government. SPANISH FIN MIN: DEFINITELY WON'T NEED EU RESCUE FUND -REPORT Spain won't need to resort the European Union's new mechanism for helping countries in financial difficulties, finance minister Elena Salgado said Wednesday in an interview published in the newspaper Handelsblatt. -By Sarah Kent, Dow Jones Newswires; 4420-7842-9376; [email protected] (MORE TO FOLLOW) Dow Jones Newswires June 23, 2010 06:38 ET (10:38 GMT)