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US stock market, economy and companies update (October 09, 2012)

Contributed by Trade The News

- Global equity indices are losing ground this morning in the wake of the IMF's latest World Economic Outlook report. The report lowered the forecast for global growth in 2012 and 2013, surprising absolutely nobody. The only surprise was that the IMF actually raised its 2012 GDP forecast for the US to +2.2% from 2.0% prior, while cutting guidance for every other major economy. According to the IMF, the world economy will grow 3.3% this year, the slowest rate of growth since the 2009 recession, and 3.6% next year. Shares of Apple officially entered correction territory this morning, as they have now fallen 10% from the high of $705/shr seen on September 21st, the day iPhone 5 sales began. Note also that declines in Intel following a Sanford Bernstein downgrade is pulling down the DJIA. EUR/USD has managed to hold above the 1.2900 level thanks to support from sovereign names, although sell stops were said to be not far below this level.

- Greece was a major focus as German Chancellor Merkel flew in to visit Athens for the first time since the crisis began. Merkel was greeted by tens of thousands of protesters before meeting with PM Samaras and the president. Samaras said that Merkel's visit shows Greece is not isolated, while Merkel offered warm but ultimately empty words. The main event remains the Troika report on Greece's progress with austerity, which would make or break payment of the next tranche of aid to Athens. The Troika's presentation on Greece at the Eurogroup meeting was said to be mostly positive, although it did not say when it would release its final report. The Greek government said today that it expects payment before the end of November, by which time it believes it will be out of funds. Nothing else of consequence emerged from the European meetings, except reiteration of the eurozone members' standing positions.

- Alcoa opens the September quarter earnings season tonight, even as numerous firms continue to warn that business in the period has not been very strong. Edwards Lifesciences offered subpar preliminary Q3 revenue guidance, warning that transcatheter heart valve sales were below expectations for the quarter. Shares of EW are down nearly 18%. ScanSource warned that its Q3 revenue would be much lower than expected due to softness in its PC business. SCSC is down nearly 5%. Shares of Super Micro Computer are down after the firm warned its Q1 revenue would be at the bottom of its prior guidance range. In a rare spot of good corporate news, pipe and valve manufacturer MRC Global offered strong Q3 guidance and raises its FY12 outlook. Shares of MRC are up nearly 4%.

***Looking Ahead***
- 11:00 (US) Fed to buy$1.75-2.25B in bonds
- 11:30 (US) Treasury to sell combined $60B in 3-Month and 6-Month Bills
- 13:00 (US) Treasury to sell $32B in 3-Year Notes
- 13:30 (UK) BOE Gov King delivers Stamp Lecture at London School of Economics

***Economic Data***
- OECD Aug Harmonized Unemployment Rate: 7.9% V 8.0% Prior
- (US) Sept NFIB Small Business Optimism: 92.8 v 93.5e
- (US) ICSC/GS weekly chain store sales w/e Oct 5th w/w: +0.2% v -0.3%; y/y: +2.8% v 2.4%
- (RU) Russia Q3 Consumer Confidence: -6 v -4 prior
- (CA) Canada Sept Housing Starts: 220.2K v 205.0Ke
- (US) Redbook Retail Sales w/e Oct 5th: +1.6% y/y; Oct MTD:-1.7 % m/m
- (MX) Mexico Sept Consumer Prices M/M: 0.4% v 0.5%e; Y/Y: 4.8% v 4.8%e; CPI Core M/M: 0.2% v 0.2%e
- (EU) Weekly ECB Forex Reserves w/e Oct 5th: €229.4B v €229.2B
- (US) Oct IBD/TIPP Economic Optimism: 54.0 v 51.8 prior
- (UK) Sept NIESR GDP Estimate: 0.8% v 0.2% prior