N AMERICAN MORNING BRIEFING:Stocks Seen Flat; JP Morgan Eyed

15th Jul 2010 11:28

DJIA Futures 10313.5 +5.5 +0.1% S&P 500 Futures 1091.1 +0.0 +0.0% Nasdaq Futures 1854.0 +2.8 +0.1% Above are as of 0615 ET FTSE 100 5239.4 -14.1 -0.3% Xetra DAX 6214.5 +4.7 +0.1% CAC40 3630.1 -2.9 -0.1% Above are as of 0615 ET Nikkei 225 9685.5 -109.7 -1.1% Hang Seng 20255.6 -305.2 -1.5% Above are closing prices SNAPSHOT: -Stocks seen unchanged; Treasurys higher; dollar lower; Nymex crude lower at $76.94; gold higher at $1211.45. -Watch for: Unemployment Insurance Weekly Claims, June PPI, Empire State Manufacturing Survey, all at 0830 ET; earnings from JP Morgan Chase, Google. OPENING CALL: Stock futures are flat Thursday as investors await key economic data and JP Morgan's results ahead of the open. James Hughes from CMC Markets in London said the market was now at a tipping point after the recent rally appeared to run out of steam Wednesday. "It looks like it's ready to come off a bit -- not necessarily too much, but I don't think it will take much now in the way of negative news to take the market down a bit," he said. "The focus today is going to be on those big earnings from JP Morgan and Google later on, but we also have some macro data out before the open and the job numbers will be closely watched." EQUITIES: Goldman Sachs (GS) and the SEC recently held discussions about a possible settlement to simultaneously resolve the fraud lawsuit against Goldman and some of the agency's lower-profile probes of the firm's mortgage department, the Wall Street Journal reported, citing people familiar with the situation. The settlement idea was floated by Goldman, which is eager to end the bad publicity swirling around the New York company ever since the SEC sued it in April over a collateralized debt obligation called Abacus 2007-AC1, these people said. Goldman shares were down 0.3% in Frankfurt at 0521 ET. Harvey Golub resigned late Wednesday as chairman of AIG (AIG), citing tensions with the giant insurer's chief executive, Robert Benmosche. The company said Steve Miller, another board member, would replace him. In a July 14 letter to the chairman of AIG's governance committee, Mr. Golub said he would resign from AIG's board following views Mr. Benmosche expressed to the board that their working relationship was "ineffective and unsustainable." "At this point, I view asking the board to choose between us would be an abdication of my responsibility to lead," he wrote. "Consequently, I'm resigning for the simple reason I believe it is easier to replace a chairman than a CEO" at a company like AIG that is in the midst of a major restructuring. Apple (AAPL) said it will hold a news conference Friday concerning its iPhone 4, which is facing mounting criticism over reception problems tied to antenna design. An Apple spokesman declined to give further details, including whether the conference will address reported reception problems or Apple's response to those problems. Apple watchers speculated that the company will offer some kind of fix or compensation for owners of the phone. Apple shares were down 1.1% in Frankfurt at 0554 ET. Blackstone Group (BX) and Carlyle Group, two of the world's largest buyout firms, are in talks to buy vitamin and nutritional supplements maker NBTY (NTY), the Wall Street Journal reported, citing people familiar with the situation, in a deal that could top $3 billion and would be among the largest transactions to take a public company private since the credit bubble burst. It's unclear whether other firms are in talks with NBTY or whether Blackstone and Carlyle will ultimately team up on a deal. Meanwhile, Blackstone has exited a private equity consortium bidding A$1.82 billion for Australia's Healthscope Ltd. (HSP.AU) due to concerns over the price of the bid, a person familiar with the matter said Thursday. Blackstone shares were 1.8% lower in Frankfurt at 0620 ET. Google (GOOG) plans to announce Thursday that it has landed Omnicom Group (OMC), the big New York advertising company, as a partner in online display advertising, an area the Internet giant is seeking to bolster as it tries to expand its revenue sources beyond search ads, the Wall Street Journal reported. Omnicom is expected to spend hundreds of millions of dollars to buy display ads for its clients through Google over the next two years, said a person familiar with the situation. Google shares were up 0.1% in Frankfurt at 0537 ET. BONDS:Treasurys were higher in London, extending gains made in Asia following dovish comments from the FOMC. The Fed's board members lowered its growth forecast for this year to 3% and 3.5%, down from 3.2%-3.7% previously. While members noted that further easing was not needed at this point of time, further stimulus may be needed should economic conditions worsen appreciably. "With long-term forecasts being revised to show a bleaker picture than what was forecast a few months ago, the talk has shifted away from when on the horizon the Fed could tighten," BNP Paribas said. The 2-year note was unchanged at 100-01+/32 to yield 0.601%; the 10-year note was up at 104-00+/32 to yield 3.023%; and the 30-year bond was up at 106-12+/32, yielding 4.005%. Corporate bonds: Spreads on European corporate credit derivatives indexes were tighter from opening levels in Europe after a successful Spanish bond auction boosted market sentiment. Volatility remained, and credit markets still faced "uncertainty regarding the impact of reduced growth on earnings, availability of financing and most important default rates," according to UniCredit analysts. FOREX: The euro bounced higher after the Spanish bond auction successfully raised nearly EUR3 billion Thursday and further increased confidence that the euro zone debt crisis is at an end. This followed a fresh wave of anti-risk sentiment, driven by dovish FOMC minutes and soft growth data from China, left the yen higher. However, the euro remained in its short-term technical uptrend against the dollar and increasing its chances of hitting $1.30. By 0530 ET, the dollar was down in Europe at Y88.04, while the euro was up at $1.2802 and the pound had risen to $1.5322. COMMODITIES: Oil prices continued to move south as a weaker economic outlook damped market sentiment said a JBC Energy analyst. Wednesday, the Fed reduced its expectations for both economic growth and inflation, pointing out that the recovery is progressing at a slower-than-expected rate. "This comes just one day after positive company results lifted spirits, reflecting the extremely volatile environment we are currently experiencing," the analyst added. Bullish news came from inventory data with crude draws much more substantial than expected but this hasn't proved enough to sustain momentum higher. Gold's technical outlook and strong bargain-hunting demand suggested prices were close to a breakout and could retest $1,245/oz, said TheBullionDesk. In the near-term, gold is at risk of long liquidation if it fails to rise above resistance around $1,215-$1,219/oz, it said. =======TODAY'S CALENDAR======= ET PERIOD 0830 Fed Gov Duke gives opening remarks at hearing on the Home Disclosure Act in Atlanta 0830 Dep Tsy Secy Wolin speaks in New York 0830 Jul 10 Unemployment Insurance Weekly Claims Report 0830 Jun PPI 0830 Jul Empire State Manufacturing Survey 0915 Jun Industrial Production & Capacity Utilization 1000 Jul FRBP Business Outlook Survey 1000 Jul 3 DJ-BTMU U.S. Business Barometer 1000 U.S. Senate Banking Committee considers nominee for Federal Reserve Vice Chair 1030 Jul 9 EIA Weekly Natural Gas Storage Report 1630 Money Stock Measures 1630 Jul 14 Foreign Central Bank Holdings 1630 Jul 14 Federal Discount Window Borrowings ============================== OTHER TOP STORIES OF THE DAY: CHINA'S GROWTH SLOWS AS STIMULUS FADES China's economic growth slowed in the second quarter of 2010, official figures issued Thursday show, as stimulus spending continued to wind down gradually and controls on bank lending and property speculation began to be felt in the broader economy. WHITE HOUSE DOESN'T SEE 'DOUBLE-DIP' RECESSION THIS YEAR White House top adviser Christina Romer on Wednesday said she doesn't think the economy will fall into another recession this year, damping fears the U.S. will slide back into what economists call a "double-dip" recession. GLAXO TO BOOK GBP1.57 BILLION CHARGE GlaxoSmithKline said it will record a charge of GBP1.57 billion to cover the cost of settling lawsuits involving the diabetes drug Avandia and the antidepressant Paxil, and a U.S. investigation of a Glaxo factory in Puerto Rico. EURO BOUNCES AFTER SUCCESSFUL SPANISH AUCTION The euro bounced higher after a Spanish bond auction successfully raised nearly EUR3 billion Thursday and further increased confidence that the euro-zone debt crisis is at an end. MBK PLANS TO BID FOR KOREA EXCHANGE BANK - SOURCE Private equity firm MBK Partners plans to submit a bid for Lone Star Funds' 51% stake in Korea Exchange Bank, a person familiar with the situation said Thursday. STILLWATER, NORILSK MEET OVER POSSIBLE STAKE SALE Management of Stillwater Mining Co. have met with their counterparts at Russia's OAO Norilsk Nickel (GMKN.RS) to discuss the possible sale of its stake in the U.S. firm, Stillwater's chairman and chief executive officer said late Wednesday. US FORECLOSURE FILINGS DOWN SLIGHTLY IN JUNE; UP 8.3% IN 1H The number of properties in the U.S. receiving a foreclosure filing fell slightly in June, closing out a quarter in which they were little changed and a first half that saw an 8.3% increase from a year earlier, according to market researcher RealtyTrac. GOLDMAN SACHS UPS 12-MONTH GOLD FORECAST 1.5% (MORE TO FOLLOW) Dow Jones Newswires July 15, 2010 06:28 ET (10:28 GMT)