Futures Drifting

Futures have drifted slightly lower. August housing starts came in in-line with expectations (though single family starts fell), but that is good news: starts have clearly bottomed in the last several months and are at their highest levels since November 2008.

Initial jobless claims were slightly lower than expected, but continuing claims were higher. So the pace of firing is bottoming but there is no sign of an upswing in hiring.


1) Shares of FedEx are down fractionally after reporting Q1 earnings and Q2 guidance inline with last week's preliminary earnings announcement.

While the shipper's announcement last week revealed an upside earnings surprise, Q1 net income still fell 53 percent from last year, as express shipment revenues dropped 23 percent. Despite a slight increase in U.S. domestic express shipment volumes, lower fuel surcharges, shipment prices, and package weights contributed to the revenue declines.

The company also announced a 5.9 percent increase in express shipment rates in 2010, but that increase is less than the 6.9 percent increase it implemented in January 2009.

2) American Airlines up nearly 20 percent pre-open as they raised $2.9 billion in new funding, partly by selling aircraft and partly by selling its frequent flyer miles to Citigroup . This will help them repair their balance sheets and likely retain--and possibly expand--their alliance with Japan Airlines.

3) Eastman Kodak is down about 2 percent after projecting a nearly $400 million loss this year and announcing it was seeking to raise $700 million in capital to help refinance its current debt.

The photography firm announced it would sell $400 million of notes to private equity firm KKR. In exchange, Eastman Kodak agreed to issue KKR warrants that permit the investment company to buy up to 53 million shares, giving it about a 20 percent stake in Eastman Kodak.

Separately, it would also offer $300 million in a private placement of convertible senior notes.

4) Pier 1 Imports rises 7 percent to a little over $3 after reporting a narrower-than-expected Q2 loss. Improved inventory controls and greater cost cuts helped the home furnishings retailer, which saw its same-store sales decline a better-than-expected 7.6 percent in the quarter.



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