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US stock market, economy and companies update (September 24, 2012)

Contributed by Trade The News

- The week opened with investors taking a modestly risk reduction approach. Softness in European equity trade, emanating from another decline in the German IFO business climate reading, led to a lower open for US stocks. Commodities have given back some ground with crude oil down about 1% and gold futures down more than 0.75%. Sep Dallas Fed manufacturing data showed some improvement though, with new orders, production and wages all moving to the upside. US Treasury markets have found a bid pushing the benchmark 10-year yield back down to 1.7%. The long bond yield as slipped back below 2.9% which as flattened the curve.

- Apple is under a little bit of pressure and NASDQ 100 futures took a noticeable hit in the US premarket after the company said they sold more than 5M iPhone 5 in the first week. Apple confirmed the sold out their initial supply but the 5M number was shy of some analyst estimates. Also Taiwan press confirmed that iPhone production had been halted due to a fight involving 2,000 Foxconn employees and other violence.

- TIVO shares surged nearly 10% in the early going after settling patent litigation with Verizon. Tivo will receive $250M initially with monthly licensing fees through the middle of 2018. Rambus gapped up more than 10% after a California judge ruled RMBS patents are valid in its long heard case with Hynix. The parties have been ordered to provide briefs on the issue of the damages SK Hynix will need to pay Rambus.

- Lennar Corp was just the latest homebuilder to report encouraging results. In the wake of KB Homes strong numbers on Friday LEN eps came in well above consensus estimates with the company backlog of homes jumping nearly 80% y/y. Management noted that low mortgage rates, affordable home prices, increased buyer confidence and an extremely favorable rent-to-own comparison are driving growth in each of our markets.

- The US Dollar index has enjoyed a modest bounce today in the mild risk off environment. The Euro declined roughly 90 pips following the IFO announcement and continue to hover around 1.29 down about 75 pips on the day. Commodity related currencies are also a bit soft the Aussie, Kiwi and Loonie all giving ground.

***Looking Ahead***
***All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
11:00 (US) Fed to purchase $1.50-2.00B in Notes
13:00 (US) Treasury to sell 3-Month and 6-Month Bills
14:00 (PT) Portugal Year-to-Date Budget Report
15:30 (US) Fed's Williams to speak in San Francisco
18:00 (CH) SNB's Jordan Speaks in Pfaeffikon

***Economic Data***
(BR) Brazil Sep FGV consumer confidence: 122.1 V 120.4 PRIOR
(US) Aug Chicago Fed National Activity Index: -0.87 V -0.12 PRIOR
(US) Sept Dallas Fed Manufacturing Activity: -0.9 v -1.6 prior