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US stock market, economy and companies update (November 01, 2012)

Contributed by Trade The News

- Equities are heading higher in New York thanks in part to the strong showing in the October ADP jobs data, which comes just one day ahead of the Labor Department's October payroll report. The ADP survey of private employers racked up its biggest increase since February. Keep in mind that this was the first ADP data released after a methodology overhaul that increased the number of firms sampled in an effort to make the report a better predictor of the payroll report. Economists expect to see a +120K figure in tomorrow's non-farm payroll report. The Conference Board Consumer Confidence reading fell a bit shy of expectations but is still at its highest level since 2008. Crude prices are higher this morning, trading the $87 handle. In Europe, negotiations continue between Greece and the Troika, although there have been concerning signs that the Greek government coalition is splintering. EUR/USD had been recovering from earlier losses and traded as high as 1.2980, before dropping again to session lows around 1.2935. USD/JPY regained a foothold above the 80 handle.

- Exxon's results were well above expectations. The outperformance clearly came from refining: profits from refining more than doubled to $3.2B while exploration and production's profit fell nearly 30% to $5.97 billion. Moreover, the firm's oil and gas production fell nearly 8% y/y. Shell's production fell slightly on a y/y basis, with both upstream and downstream profits down from last year. Shares of Exxon had been in the red in the premarket after earnings, although they recouped their losses after the open. Shell's ADRs were gaining considerably in US trading.

- Like other insurance names earlier in the earnings season, MetLife and Allstate widely beat earnings expectations, Allstate by a wide margin. Analysts believe that Allstate has a huge exposure to overall damages from Hurricane Sandy that are said to be running at around $15B. On the earnings conference call, the CEO said it was too early to say what the impact of the storm would be on the company, although he had commented to CNBC earlier that the catastrophe would not have a "material impact" on Allstate's "overall financial condition." Shares of ALL had gained 2% in the premarket but are around flat this morning, while MET is down about 1%.

- October same-store sales data out today by and large continued the slow-growth picture seen in the September reports. However, Hurricane Sandy's impact cast a shadow over many retail names, many of which are still facing store closures and lost sales. Costco, Nordstrom and Rite Aid all said November sales would suffer because of store closures. Many analysts pointed out that the course of sales in the month of November is mostly dictated by holiday sales, especially black Friday. Note that Limited Brands saw a rare SSS miss, with comps up 3% compared to expectations for +5%. Shares of LTD fell as much as 3% in the premarket before recovering. Macys widely beat consensus SSS expectations, and shares of M are up 4%.

***Looking Ahead***
- 12:30 (US) Fed's Lockhart speaks on the Economy in Tennessee
- 13:00 (BR) Brazil Oct Trade Balance: $2.0Be v $.6B prior; Exports: $22.0Be v $20.0B prior; Imports: $20.0Bet v $17.4B prior
- 14:00 (MX) Mexico Oct IMEF Manufacturing Index: 50.8e v 50.0 prior; Non Manufacturing Index: 53.3e v 53.9 prior
- 17:00 (US) Oct Total Vehicle Sales: 14.90Me v 14.88M prior; Domestic Vehicle Sales: 11.48Me v 11.49M prior
- 17:00 (US) Fed's Rosengren speaks on Economic Outlook in Massachusetts

***Economic Data***
- (DK) Danish Oct PMI Survey: 55.6 v 50.5 prior
- (BR) Brazil Sept Industrial Production M/M: -1.0% v -0.5%e; Y/Y: -3.8% v -3.3%e
- (IE) Ireland Oct Live Register Monthly Change: -1.0K v -0.4K prior; Unemployment Rate: 14.8% v 14.8% prior
- (ZA) South Africa Sept Electricity Consumption Y/Y: -2.6 v -1.3% prior; Electricity Production Y/Y: -0.7 v +1.5% prior
- (US) Oct Challenger Job Cuts Y/Y: +11.6% v -70.8% prior
- (RU) Russia Gold & Forex Reserve w/e Oct 26th: $526.5B v $529.4B prior
- (RU) Russia Oct Reserve Fund: $614B v $61.5B prior; Wellbeing Fund: $87.2B v $87.6B prior
- (BR) Brazil Oct PMI Manufacturing: 50.2 49.9e
- (US) Nov RBC Consumer Outlook Index: 48.9 v 48.4 prior
- (US) Oct ADP Employment Change: 158.0K v 135.0Ke
- (RO) Romania Oct Total International Reserves: $36.2B v $37.0B prior
- (US) Q3 Preliminary Nonfarm Productivity: 1.9% v 1.8%e; Unit Labor Costs: -0.1% v +0.8%e
- (US) Initial Jobless Claims: 363K v 370Ke; Continuing Claims: 3.263M v 3.250Me
- (US) Oct Final Markit US PMI: 51.0 v 51.3e
- (CZ) Czech Central Bank cuts its Repo Rate by 20bps to 0.05%; Not expected
- (US) Oct ISM Manufacturing: 51.7 v 51.0e; ISM Prices Paid: 55.0 v 56.5e
- (US) Oct Consumer Confidence: 72.2 v 73.0e
- (US) Sept Construction Spending M/M: 0.6% v 0.7%e