THE ECONOMIC MONITOR

15 September 2010

U.S.
Free Edition

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top brokerage
firms
 Forecasts on Economic Indicators
 Important Events Scheduled on 16 September
 The Dow Jones Industrial Average gained 46.24 points, or 0.44
percent, to 10,572.73. The S&P 500 rose 3.97 points, or 0.35
percent, to 1,125.07.
 By late afternoon in New York, the dollar had climbed as high as
85.78 yen on electronic trading platform EBS.

 The benchmark 10-year Treasury notes fell 11/32 in price with

Economic Events the yield rising to 2.72 percent from 2.68 percent late on Tuesday.

 Treasury Secretary Timothy Geithner testifies on China currency  U.S. crude for October delivery fell 78 cents, or 1.02 percent, to
to Senate Banking Committee settle at $76.02 per barrel, trading from $74.66 to $76.65.

 Bank of England Monetary Policy Committee Member Adam  Spot gold was little changed at $1,268.60 an ounce by 1530 GMT,
Posen gives speech at the Macroeconomic Advisers 20th Annual after having surged more than 2 percent to a record $1,274.75 the
Washington Policy Seminar day before.

 Federal Reserve Board holds third of four public hearings on

potential revisions to the Board's Regulation C, which implements
the Home Mortgage Disclosure Act (HMDA) STOCK INDICES

 Freddie Mac issues weekly U.S. mortgage rates INDEX LAST CHNG % CHNG

DJIA* 10572.73 46.24 0.44

 EIA issues weekly U.S. underground natural gas stocks
NYSE Composite* 7179.79 17.71 0.25
 ICI weekly money market mutual fund data Nasdaq* 2301.32 11.55 0.50
S&P 500* 1125.07 3.97 0.35
Corporate Events
DJ Total Stock Market* 11733.24 42.89 0.37

 FedEx, Oracle first quarter 2011 results Russell 2000* 652.51 3.28 0.51

Global Dow* 1906.67 2.58 0.14

Breaking News Nasdaq 100* 1939.6 11.01 0.57

DJ Transportation Avg* 4474.17 23.44 0.53

 Citigroup, Terra Firma all set for EMI buy out trial
S&P 100* 508.56 1.90 0.38
 Charge-offs rise at BofA, Capital One credit cards
* CLOSING VALUES

 Beazer cuts full-year outlook

CURRENCIES
 Schwab warns for Q3 results
INDEX LAST PRIOR
 AIG could list Taiwan unit after failed sale: Paper
Euro (EUR/USD) 1.301 1.3008
 Kraft sees additional revenue from Cadbury U.K. Pound (GBP/USD) 1.5617 1.5559
Japanese Yen (USD/JPY) 85.69 83.1
 China concerned for Potash Corp bid
All prices are at 04:29 PM EDT
 Industrial output growth slows

 Import prices rise FUTURES

 Japan weakens yen, dollar surges SETTLE CHANGE

Crude Oil (Sept) 75.78 -1.02

 Lehman seeks $3 bln from CIBC
Natural Gas (Oct) 4.191 0.022
 Abbott diet drug faces FDA Gold (Dec) 1268.5 -3.20

 FDA delays AstraZeneca's drug Ticagrelor Copper ( Dec) 347.1 0.25

Wheat (Dec) 726.5 0.00

All prices are at 04:18PM EDT

THE ECONOMIC MONITOR - U.S.

STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

BROKERAGE/COMPANY ACTIONS RATING

Citigroup
Corning Cuts price target to $22.50 from $25 Buy
Danaher Rates Buy Buy
GE Rates Buy Buy
Honeywell International Rates Hold Hold
ITW Rates Buy Buy
ITT Corp Rates Hold Hold
3M Rates Hold Hold
Pentair Rates Hold Hold
Roper Industries Rates Hold Hold
United Technologies Rates Hold Hold
WW Grainger Rates Hold Hold
Macquarie
AIMCO Cuts to neutral from outperform Neutral
AvalonBay Communities Raises to neutral from underperform Neutral
BMO
Apple Raises target price to $320 from $315 Outperform
Western Digital Cuts price target to $29 from $30 Perform
Jefferies
Best Buy Raises price target to $38 from $36 Hold
Pall Corp Raises price target to $45 from $4 Buy
MKM Partners
Compuware Corp Starts with buy ratings Buy
Symantec Corp Starts with neutral ratings Neutral
Goldman Sachs
Micron Technology Cuts price target to $7.85 from $12 Neutral
CBIC
Nucor Corp Cuts price target to $40 from $45 Sector Performer
Wells Fargo
Oracle Corp Resumes coverage with outperform
S&P Equity
Novell Raises to target price to $6.50 from $5.00 Hold
UBS
Rowan Companies Raises to buy from neutral Buy

Disclaimer: The views and investment tips expressed by investment experts are their own, and not that of IBTimes or its management. We advise users to check with
certified experts before taking any investment decisions.

MARKET PERFORMANCE

DJIA

A. Stocks slid at morning session after a report pointed to slowing

growth in manufacturing in the New York region. The Dow Jones
fell 22.78 points to 10,503.71.

B. As investors digested mixed economic data and Japan's attempts

to tame its soaring yen. The Dow Jones was up 35 points at 10561.
Boosting the measure, Travelers climbed 2.9%, while Hewlett-
Packard advanced 0.9%. Cisco Systems rose 1.5% one day after
the technology giant said it would start issuing a dividend.

C. The Dow Jones rose 57.48 points to 10,583.97. Twenty-three of its

30 components gained, led by insurer Travelers Companies Inc.,
up 3.1%. Hewlett-Packard Co. climbed 1.2% one day after Cisco
Systems Inc. was also up.
THE ECONOMIC MONITOR - U.S.
COMPANY NEWS
Citigroup, Terra Firma all set for EMI buy out trial
Guy Hands’ private equity firm Terra Firma Capital has
been granted the right to take Citigroup to trial over
the advice it gave on the acquisition of music company
EMI. Terra Firma acquired EMI in 2007 and it argues
that Citigroup inflated the price of EMI by not revealing
to Terra Firma that it was the only bidder.
Charge-offs rise at BofA, Capital One credit cards
Credit card charge-offs at Bank of America increased to 11.73 percent in
August, from 11.39 percent in July. Capital One said annualized net charge-offs
rate for U.S. credit cards was 8.19 percent in August, compared with 8.13 percent
in July. Even credit card delinquencies at Bank of America, Capital One Financial
and Discover Financial Services fell in August. Discover Financial said credit
card charge-off rate was 7.98 pct in August, compared with 7.28 pct in July.
Beazer cuts full-year outlook
Beazer Homes USA Inc cut its full-year outlook for new home orders. The
company said it expected to log orders for 700 to 800 new homes for the fourth
quarter ending this month due to the expiration of a federal homebuyer tax
credit. It expects full-year gross margins, excluding inventory impairments and
abandonment charges, to exceed the 11.7 percent of the prior year. The
company also cut its full-year expectations for land and land development
spending to below $200 million from its prior view of $200 million to $220
million.
Schwab warns for Q3 results
Brokerage firm Charles Schwab Corp sees low profit for the third-quarter. The
firm said profits would be hurt by the costs of covering money-market fund
losses suffered by customers in 2008 and a charge related to two struggling
credit card programs. Schwab incurred $20 million of charges from two Visa
credit card programs. Customer trading during August was down 5 percent from
the prior month, and down 16 percent from the year-earlier period.
AIG could list Taiwan unit after failed sale: Paper
According to a Taiwan newspaper the American International Group could list
its Taiwan unit Nan Shan Life as one possible option
following regulators' rejection of a $2.2 billion bid for
the unit. The Economic Daily News said that AIG had
informally been in touch with Taiwan's Financial
Supervisory Commission, offering three scenarios:
putting Nan Shan back on sale, listing it in Taiwan or
continuing to run it as a unit.
Kraft sees additional revenue from Cadbury
Ahead of an analyst meeting in New York, Kraft Foods Inc said its acquisition of
Cadbury will lead to $1 billion in additional revenue and $750 million in cost
savings by 2013. The company said additional savings over the next three years
from procurement, manufacturing and logistics will drive productivity gains in
excess of 4 percent of cost of goods sold.
China concerned for Potash Corp bid
China's Ministry of Commerce said that it will pay close attention to the $39
billion bid for Potash Corp. Yao Jian, the ministry's spokesman, said, "Such a
deal will definitely be a concern for the global potash industry, including China's
potash industry."
Yao said, "We will pay close attention to it and if we receive a formal application,
we will carry out investigations according to the law." China, which typically buys
about 7 percent of the output of Potash Corp, fears a BHP takeover might push
up the cost of fertilizers that it will need to produce food for its huge population
in coming years.
ECONOMY NEWS
Industrial output growth slows
According to data by Federal Reserve the U.S.
industrial output rose at a slower pace in August.
Industrial production rose 0.2 percent in August
whereas the July's gain was revised down to 0.6
percent from 1 percent. Excluding motor vehicles
and parts, total industry output increased 0.4
percent in August, compared with July's 0.3 percent
advance. In another data the New York Fed's
"Empire State" general business conditions index slipped to 4.14 in September
from 7.10 in August.
Import prices rise
In a report by the Labor Department the import prices increased 0.6 percent
after rising by a revised 0.1 percent in July. Although import prices rose sharply in
August, the annual increase of 4.1 percent was the smallest advance since
November. Prices of imported foods jumped 2.2 percent from a 0.1 percent rise
in July. Augusts' monthly rise reflected a 2.1 percent rise in the price of imported
petroleum and petroleum products. The Labor Department report showed
export prices rebounded 0.8 percent last month after slipping 0.2 percent in July.
Export prices were boosted by a 4.3 percent jump in food prices.
Japan weakens yen, dollar surges
Japan intervened in global currency markets by pushing the yen down 3 percent
against the dollar. Bank of Japan spent $20 billion or more to weaken the
currency against the dollar. The dollar had climbed as high as 85.78 yen. Experts
suggest the dollar looked poised to break resistance on the 50-day exponential
and simple moving averages in coming days
REGULATORY NEWS
Lehman seeks $3 bln from CIBC
Lehman Brothers Holdings Inc has sued Canadian Imperial Bank of
Commerce (CIBC) and dozens of other
defendants as the company asked Judge James
Peck, who oversees the bankruptcy, to put the
lawsuits on hold indefinitely should it try to
settle. Lehman said it want to recover more than
$3 billion as it was deprived of as a result of its
record bankruptcy two years ago. It said CIBC is
responsible for a "significant portion" of more
than $1.3 billion due under an agreement
requiring it to cover payment shortfalls tied to a large CDO transaction. Several
banks including Bank of America Corp, Bank of New York Mellon Corp,
Deutsche Bank AG and US Bancorp are defendants in the case.
Abbott diet drug faces FDA
Abbott Laboratories faces a critical test over whether its controversial diet pill
should remain on the U.S. market. The U.S. Food and Drug Administration
(FDA) is asking an advisory panel on the drug, called Meridia. Abbott's drug,
approved in 1997, has faced growing calls for its removal over its potential link to
heart attacks and strokes in certain patients. Although the FDA denied a petition
in 2002 from consumer advocacy group Public Citizen to ban Meridia, saying it
wanted to see key data from a European trial know as Scout. Meridia's sales
reached $340 million globally in 2008 and slipped to $311 million in 2009 and
now everything this year is depending on how FDA and other countries will react
on the issue.
FDA delays AstraZeneca's drug Ticagrelor
AstraZeneca today announced that the U.S. Food and Drug Administration
has increased the time span for the review of anti-clotting drug ticagrelor
(trademark name Brilinta). The FDA has delayed the Prescription Drug User Fee
Act date from September 16 to December 16. AstraZeneca would continue to
work closely with the agency on this matter. Ticagrelor is under regulatory review
in nine territories around the world, including the EU, Canada and Brazil.
THE ECONOMIC MONITOR - U.S.
NEXT TRADING DAY
Economic Events
WASHINGTON - Treasury Secretary Timothy Geithner testifies on China
currency to Senate Banking Committee - 1400 GMT.
Ninety-three U.S. lawmakers have signed a letter urging Democratic leaders in
the House of Representatives to schedule a vote on a bill to get tough with
China over its currency exchange rate practices,
a lawmaker's office said on Monday. Many
members of Congress believe China
undervalues its currency by as much as 40
percent to give Chinese companies an unfair
price advantage in world trade. With the U.S.
unemployment rate at 9.6 percent and the U.S.
trade deficit with China rising rapidly again this
year, House Democratic leaders have come
under growing pressure to address the
concern. Treasury Secretary Timothy Geithner will testify before both the
Senate Banking Committee and the House Ways and Means Committee on
China's currency.
Geithner and President Barack Obama have disappointed many in Congress by
failing to formally label China a currency manipulator in three semi-annual
Treasury Department reports since they assumed office in January 2009.
Lawmakers are expected to grill the Treasury chief on what the administration
will say in the next report due on October 15 and whether it supports legislation
to deal with the issue. The Yuan's appreciation has quickened in recent days, a
move some analysts see as an effort by Beijing to calm the political waters in
Congress. However, it has still risen less than 1 percent since China loosened a
peg to the dollar in June. Lawmakers often circulate a letter to persuade the
leadership to schedule a vote on a bill.
WASHINGTON - Bank of England Monetary Policy Committee Member Adam
Posen gives speech at the Macroeconomic Advisers 20th Annual Washington
Policy Seminar.
Earlier this month Adam Posen in an interview said on U.S. firms cutting jobs
that he was not surprised U.S. firms cut jobs so aggressively. "It was always going
to be the case in the U.S., because we have what you can call either flexible or
heartless (depending on your point of view) labor markets," Posen says. "It was
always going to be ... easier for companies to just shed labor in the U.S. And it's
not just a legal matter, it's an attitude." But it's questionable whether this strategy
is a winner in the long term, he said. "It's not clear that running an economy
where your response to everything is to shed your labor, meaning fire people
rather than invest in them and carry them through and keep your core people,
is a good idea."
WASHINGTON - IMF Managing Director Dominique Strauss-Kahn delivers
opening remarks at an event on reaching the Millennium Development Goals -
1900 GMT
Dominique Strauss-Kahn, Managing Director
of the International Monetary Fund, on
Monday in a speech at Oslo stressed on job
creation and reducing unemployment, "We
must acknowledge that the crisis will not be
over until unemployment decreases," he said.
"We must not expect that growth alone will
automatically create the jobs we need--and set
job creation as priority using all the available policy tools. We need to make the
financial system an effective support of the real economy."
"The rules of the game have changed. The global economy after the crisis is not
the same as before the crisis. So, in a nutshell, we need to think differently," he
said.
NEW YORK - CFTC Chairman Gary Gensler delivers keynote address to the ISDA
regional conference in New York on the Dodd-Frank Act - 1330 GMT
In his comments on the joint CFTC-SEC Public Roundtable yesterday to Discuss
Swap Data, Swap Data Repositories and Real Time Reporting CFTC Chairman
Gary Gensler said, “Promoting transparency is at the core of the CFTC’s mission,”
he also said. “The Dodd-Frank Act’s provisions on data, swap data repositories
and real time reporting will increase transparency both to regulators and to the
public. The views of today’s panels will help the CFTC as we write rules to
implement essential provisions of the Dodd-Frank Act.”
NEXT TRADING DAY (contd…)
CHICAGO - Federal Reserve Board holds third of four public hearings on po-
tential revisions to the Board's Regulation C, which implements the Home Mort-
gage Disclosure Act (HMDA). Federal Reserve Governor Elizabeth Duke gives
opening remarks - 1330 GMT
HMDA requires mortgage lenders to provide detailed information about their
mortgage lending activity to federal agencies and the public.
WASHINGTON - Freddie Mac issues weekly U.S. mortgage rates, 1000/1400
U.S. 30-year mortgage rates rose for the first time in nearly three months in the
latest week, according to a Freddie Mac survey released last Thursday. The aver-
age 30-year fixed mortgage rate rose to 4.35 percent in the week through Thurs-
day, from 4.32 percent in the previous week, said Freddie Mac. Fifteen-year
mortgage rates held steady at 3.83 percent, the lowest on Freddie Mac's records.
Interest rates on 30-year fixed-rate mortgages rose for a second consecutive
week, real estate website Zillow.com said on Tuesday. Mortgage rates on 30-
year fixed mortgages, the most widely used loan, were 4.32 percent Tuesday
afternoon, up from 4.27 percent at the same time last week, according to Zillow
Mortgage Marketplace. It is the second consecutive week the 30-year fixed rate
has risen since reaching 4.26 percent on Aug. 31, which was the lowest reported
since Zillow Mortgage Marketplace launched in April 2008.
WASHINGTON - EIA issues weekly U.S. underground natural gas stocks,
1030/1430
The Energy Department's Energy Information Administration said in its last
week’s report that natural gas inventories held in underground storage in the
lower 48 states increased by 58 billion cubic feet to 3.164 trillion cubic feet for
the week ended September 3.
WASHINGTON - Treasury Department weekly announcement of 3- and 6-
month bill sale offerings; announces 52-week bill sale, 1100/1500
WASHINGTON - ICI weekly money market mutual fund data, after 1600/2000
Total money market mutual fund assets increased by $10.55 billion to $2.839
trillion for the week ended Wednesday, September 8, the Investment Company
Institute reported last week. Taxable government funds did not change by a
significant amount, taxable non-government funds increased by $9.91 billion,
and tax-exempt funds increased by $640 million. The assets of retail money
market funds were increased by $3.07 billion to $969.07 billion. The assets of
institutional money market funds were increased by $7.48 billion to $1.869 tril-
lion.
Corporate Events
FedEx Corp is expected to post a profit of
$1.21 per share for the first quarter 2011, up
from the 42 cents for the same period a year
ago. FedEx Corp said in its last quarterly re-
lease that healthcare and pension costs will
pinch profits in 2011, though results that beat
analysts' expectations. The package delivery
giant posted fourth-quarter earnings of $696
million, or $1.33 per share, compared with a
year-earlier loss of $849 million, or $2.82 per share. FedEx's fourth-quarter reve-
nue jumped 20 percent to $9.43 billion, beating analyst estimates of $9 billion.
Average daily package volume for FedEx's International Priority express service
rose 23 percent in the fourth quarter. Asian exports were up 41 percent.
WallStreet expects Oracle Corp to report a profit
of 37 cents per share for the first quarter 2011,
up from 30 cents for the same period a year ago.
The software major reported a 25 percent
growth in earnings in the recent fourth quarter,
helped by strong software licenses and new
revenue from acquisition of Sun Microsystems.
The company said Sun contributed over $400
million to non-GAAP operating income in the
fourth quarter, compared to a loss in Sun's quarter ending June of last year.
Total revenues for the fourth quarter increased 39 percent to $9.51 billion from
$6.86 billion in the comparable quarter of last year. Non-GAAP revenues were
$9.63 billion, up 40 percent from $6.88 billion a year ago.
THE ECONOMIC MONITOR - U.S.
ECONOMIC INDICATOR WATCH
Current Account (Q2)
Forecast: -$125 billion Prior: -$109 billion
The U.S. current account deficit widened in the first quarter to $109.0 billion, or 3
percent of U.S. gross domestic product, from a sharply smaller estimate for the
fourth quarter of 2009, the Commerce Department report said on its June
release. It was the third consecutive quarterly increase from a low of $84.4 billion
in the second quarter of 2009, when world trade fell sharply because of a global
recession.
The Commerce Department lowered its estimate of the fourth quarter current
account deficit to $100.9 billion, or 2.8 percent of GDP, from a previously
reported $115.6 billion. Wall Street analysts had expected the first quarter deficit
to widen to about $120.7 billion. It said the revisions reflect several changes in
definitions, classifications and presentation as part of a multi-year effort to align
the report with international statistical standards.
Source: Department of Commerce
Jobless Claims (Weekly)
Initial Claims - Forecast: 460,000 Prior: 451,000
4 Week Average Claims - Forecast: NA Prior: 477,750
Continuing Claims - Forecast: 4,460,000 Prior: 4,478,000
New U.S. claims for unemployment benefits fell more than expected for the
week ended September 3, to a two-month low, while the trade deficit narrowed
sharply in July, hopeful signs for the stuttering economic recovery. The data
released last week helped to calm fears of a sharp slowdown in growth and
implied the economy could start working its way out of a soft patch.
Initial claims for state unemployment benefits dropped 27,000 to 451,000, the
lowest since the week ended July 10, the Labor Department said. That was well
below financial market expectations for 470,000. Analysts polled by Reuters had
forecast claims dipping to 470,000 from the previously reported 472,000 the
prior week, which was revised up to 478,000 in last week’s report.’
Source: Department of Labor
Treasury International Capital (July)
Foreign buying, T-Bonds - Forecast: NA Prior: $33.3 billion
Net Capital Inflows (ex-swaps) - Forecast: NA Prior: $44.4 billion
Net Capital Inflows (in-swaps) - Forecast: NA Prior: $23.5 billion
Overall Net Capital Inflows (ex-swaps) - Forecast: NA Prior: -$6.7 billion
The United States recorded a net capital outflow in June for the first time in five
months, the Treasury Department said last month, and China trimmed its
holdings of U.S. government bonds for a second straight month.
Overseas investors unloaded a net $6.7 billion in U.S. securities in June, including
short-term instruments such as Treasury bills. In May, they were buyers to the
tune of $17.1 billion. Overseas appetite for long-term U.S. securities was healthier
in June. Foreigners bought a net $44.4 billion in June compared with $35.3 billion
in May. Most of that money went into Treasury notes and bonds, which
registered a net inflow of $33.2 billion, up about $18.3 billion from May. U.S.
agency debt purchases fell by a $9.2 billion while overseas investors were net
sellers of both U.S. corporate debt and equities for a second straight month.
As the biggest single buyer of Treasuries, China provides an important source of
financing for the U.S. current account deficit. Its purchases also keep the value of
its Yuan currency from appreciating too quickly against the dollar.
Source: Department of Treasury
ECONOMIC INDICATOR WATCH (contd…)
Producer Price Index (August)
PPI MoM - Forecast: 0.3% Prior: 0.2%
PPI YoY - Forecast: 3% Prior: 4.2%
Core PPI MoM - Forecast: 0.1% Prior: 0.3%
Core PPI YoY - Forecast: 1.3% Prior: 1.5%
U.S. producer prices rose in July for the first time in four months, pulled by higher
prices for food and consumer goods, a U.S. government report showed last
month. The Labor Department said the seasonally adjusted index for prices paid
at the farm and factory gate rose 0.2 percent, in line with Wall Street analyst
expectations, after dipping 0.5 percent in June.
In the 12 months to July, producer prices increased 4.2 percent after rising 2.8
percent in May. The year-on-year increase was also in line with forecasts. Food
prices rose 0.7 percent in July after tumbling 2.2 percent in June. Energy prices
dropped 0.9 percent for their fourth consecutive monthly decline.
Stripping out volatile food and energy costs, core producer prices edged up a
surprising 0.3 percent. Analysts had expected a 0.1 percent gain. In the 12
months to July, the core producer price index rose 1.5 percent, above market
expectations for a 1.3 percent rise.
Source: Department of Labor
Philadelphia Federal Reserve Business Activity Index
Forecast: 2 Prior: -7.7
Factory activity in the U.S. Mid-Atlantic region unexpectedly contracted in
August to its lowest level in more than a year, the Philadelphia Federal Reserve
Bank survey showed on last month, heightening worries over the sustainability of
the economic recovery.
The Philadelphia Federal Reserve Bank said its business activity index fell to
minus 7.7 in August from July's plus 5.1. Any reading below zero indicates a
shrinking in the region's manufacturing. The August reading was the lowest and
also the first contraction since July 2009, when the economy was recovering
from the credit crisis.
Source: Federal Reserve Bank of Philadelphia
SEMI Book/Bill Ratio
Forecast: NA Prior: 1.23
North America-based manufacturers of semiconductor equipment posted $1.83
billion in orders in July 2010 (three-month average basis) and a book-to-bill ratio
of 1.23, according to the July 2010 Book-to-Bill Report published today by SEMI.
A book-to-bill of 1.23 means that $123 worth of orders was received for every
$100 of product billed for the month.
The three-month average of worldwide bookings in July 2010 was $1.83 billion.
The bookings figure is up 5.9 percent from the final June 2010 level of $1.73
billion, and is 220.4 percent above the $571.8 million in orders posted in July
2009.
The three-month average of worldwide billings in July 2010 was $1.49 billion.
The billings figure is up 1.8 percent from the final June 2010 level of $1.47 billion,
and is 177.6 percent above the July 2009 billings level of $538.0 million.
Source: Semiconductor Equipment and Materials International
THE ECONOMIC MONITOR - U.S.

MARKET BRIEFING ECONOMIC CALENDAR

 Wall Street advanced but remained hemmed in a recent trading range as DATE EDT INDICATOR F’CAST PRIOR
disappointing economic data hindered the S&P 500 from breaking THU 09/16 0830 Current Account Q2 -$125 bln -$109 bln
through a stubborn technical level. Markets were pressured early by a
report showing a measure of New York state business conditions slipped 0830 Initial Claims 460k 451k
to the lowest level in more than a year, while industrial output rose at a
0830 4 Week Average NA 477.75 k
slower rate in August. The S&P found support shortly after the reports at
its 200-day moving average, climbing back above the 1,115 level. The 0830 Continuing Claims 4.46 mln 4.478 mln
Dow Jones Industrial Average gained 46.24 points, or 0.44 percent, to
0830 Producer Prices mm 0.30% 0.20%
10,572.73. The S&P 500 rose 3.97 points, or 0.35 percent, to 1,125.07.
The Nasdaq Composite climbed 11.55 points, or 0.50 percent, to 0830 Producer Prices yy 3% 4.20%
2,301.32.
0830 Ex-Food/Energy mm 0.10% 0.30%
 Japan intervened in global currency markets, pushing the yen down 3 0830 Ex-Food/Energy yy 1.30% 1.50%
percent against the dollar, though investors remained cautious on
whether the action would impact the currency longer term. Dealers said 0900 Net Cap Inflows NA $44.4 bln
the Bank of Japan spent $20 billion or more to weaken the currency 0900 Foreign Buy,T-bnds NA $33.3 bln
against the dollar, which staged its biggest daily gain against the yen in
nearly two years. By late afternoon in New York, the dollar had climbed 1000 Philly Fed Index 2.0 -7.7
as high as 85.78 yen on electronic trading platform EBS. It last traded at 1800 SEMI Book/Bill NA 1.23
85.61 yen. A 15-month Japanese intervention campaign that ended in
2004 cost about 35 trillion yen and achieved mixed results. This time FRI 09/17 0830 Consumer Prices mm 0.20% 0.30%
round, Japan faces a weak U.S. and global economic outlook that makes
0830 Consumer Prices yy 1.10% 1.20%
the yen an attractive safe-haven. Preventing yen strength could prove
difficult if the Federal Reserve decides to pump more money into the U.S.
0830 Ex-Food/Energy mm 0.10% 0.10%
economy to prevent a faltering recovery from stalling. The euro, sterling
and Australian dollar also soared against the yen as a result of the 0830 Ex-Food/Energy yy 1% 0.90%
Japanese intervention, which the Ministry of Finance said was carried out
without any foreign assistance. The timing caught most investors off 0830 CPI index level 218.3 218
guard, coming after Prime Minister Naoto Kan won a party leadership
election over a challenger who was a more strident advocate of 0830 Real Earnings 0.10% 0.20%
intervention.
0955 Reuters/UMich Sent 70 68.9
 Longer-dated U.S. Treasuries fell, steepening the Treasury yield curve as
investors bet any buying by Japan in the wake of its currency 0955 Current Conditions 79 78.3
intervention would likely take place in shorter-dated debt. That expected
focus on shorter-dated issues hit longer-dated debt, and benchmark 10- 0955 Expectations 64.2 62.9
year Treasury notes fell 11/32 in price with the yield rising to 2.72
percent from 2.68 percent late on Tuesday. On the short end, two-year 1030 ECRI Weekly Index NA 122
Treasury notes rose 1/32 in price to yield 0.49 percent, down from 0.51
percent late on Tuesday. TIME TBA Cleveland Fed CPI NA 0.10%

MON 09/20 1000 NAHB Index 14 13

 Oil prices fell a second consecutive day on expectations that a key
Canada-U.S. crude pipeline will resume after a week-long interruption, TUE 09/21 0745
ICSC/GS Report (ww
NA NA
although government data showing a drop in U.S. crude stocks limited w/e)
losses. Disappointing regional manufacturing data and slower U.S. 0830 Housing Starts (Aug) 0.55 mln 0.546 mln
industrial production growth, coupled with a dive in the Japanese yen,
also pressured, extending oil prices' retreat from a one-month high 0830 Build Permits (Aug) 0.57mln 0.559 mln
above $78 a barrel reached on Monday. U.S. crude for October delivery
0855 Redbook (mm & w/e) NA NA
fell 78 cents, or 1.02 percent, to settle at $76.02 per barrel, trading from
$74.66 to $76.65, with crude's losses concentrated at the front end of the FOMC meeting result
1415 NA 0%-0.25%
price curve as traders factored in a quicker resumption in Canadian FF rate
exports that would boost supplies. In London, expiring ICE October Brent 1700 ABC CCI (w/e) NA NA
crude fell 25 cents to settle at $78.91 a barrel, leaving the discount for
U.S. crude futures to Brent near $3 a barrel.

 Gold hovered near record highs on the second anniversary of the

collapse of Lehman Brothers, holding flat on the day in dollar terms, yet
hitting two-month highs in yen after Japanese currency intervention.
Spot gold was little changed at $1,268.60 an ounce by 1530 GMT, after
having surged more than 2 percent to a record $1,274.75 the day before.
U.S. gold futures for December delivery were down $1.70 an ounce at
$1,270.10.

CORPORATE RESULTS
DATE - 16/September2010
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