The positive news on retail sales and comments from Warren Buffett that "we are on the mend" is helping lift Asia and Europe.
August CPI, which was slightly higher than expected but core CPI was in-line, caused little change in stock futures.
Sellers get no traction. It's the technical aspects that are getting the most attention. Once again, sellers came in two days in a row in the early morning, and once again there was no follow-through to the downside. Stocks ended at or near their highs for the day for the past two days. And volume was strong yesterday as well.
1) Can there be more confusion on inflation? 52-week highs in gold and silver is eliciting a lot of commentary from the inflation bugs, but elsewhere there is not much signs of inflation.
Indeed, the weak dollar and the relatively low 10-year Treasury yield indicate little worry about inflation at the moment. Indeed, Goldman has a note out of London this morning arguing that 10-year yields, currently about 3.4 percent, could drop as low as 3 percent in the next several months.
The MBA said purchases fell 10.3% but follows last week's 8 month high. The Nov 30th expiration and possible extension of the home buying tax credit looms large. Refi's fell 7.4%
2) Steelmaker ArcelorMittal is up 1 percent as it boosted its forecast for growth in China demand this year. During an investor presentation, CEO Lakshmi Mittal projected that China demand would grow more than 15 percent this year, ahead of a prior forecast of 10 percent growth. Furthermore, he expects Chinese and emerging markets to make up 80 percent of the global market for steel this year.
However, looking ahead he remains cautious on the U.S. and Europe, warning that those markets are "not expected to normalize" in 2010.
3) Agricultural equipment maker AGCO is down 7 percent after cutting its 2009 earnings and sales forecasts on weaker results out of European markets, specifically in Germany, France, and the U.K.
Overall sales are now expected to fall 23 percent to 25 percent and earnings are seen between $1.30 and $1.50 per share. Both numbers are below current analyst expectations for a 20 percent decline in revenues and EPS of $2.06.
4) Anadarko Petroleum is up 6 percent after announcing an oil discovery off the coast of Sierra Leone. The finding could potentially open the door for additional oil discoveries along a 1,100 km frontier off Africa's west coast. In addition to Anadarko, Woodside Petroleum, Repsol, and Tullow Oil have partial stakes in the drilling operations there.
5) Verizon is down 2 percent following a downgrade by UBS. Lowering the stock to "neutral," UBS cautions that the telecom company will be hurt by continued weakness in the business markets, which are "unlikely to improve until 2010."
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