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US stock market, economy and companies update (September 25, 2012)

Contributed by Trade The News

- US markets are bouncing higher this morning thanks to a few positive data reports, which are offsetting concerns about Caterpillar's new weaker long-term outlook. The July S&P/Case Shiller composite index rose for the sixth month in a row, indicating that home prices were up by their biggest margin y/y in more than two years. Meanwhile, the September consumer confidence survey was very strong, hitting its best level since February, with the expectations subindex especially robust. Also note that the Richmond Fed manufacturing survey was positive, versus expectations for a negative reading. Note that comments from Fed governor Williams are also in play this morning. Recall that yesterday afternoon, Williams said that if needed, the Fed would buy other assets to aid economy. Williams said that he sees a strong case for adding $45B in monthly treasury purchases to QE3 when Operation Twist ends at the end of the year.

- Shares of Caterpillar are down 2% or so this morning following the company's big long-term call yesterday afternoon. Caterpillar's fudged its FY12 outlook, calling for $8-10/shr versus the $9.60 figure it offered back in early September. The comments from executives are broadly in line with those heard from other major firms across industries: the CEO stated that Caterpillar has seen economic growth slow more than expected and remains on watch for any signs of recession. Competitor Terex is down 2.7% this morning, while Deere is in the black. Another major firm cutting earnings was Emerson, which reduced its FY12 revenue guidance. Note that Emerson brought its outlook basically into line with analysts' expectations, and shares of EMR are only down 1.7%.

- Electric vehicle firm Tesla is having a terrible morning. The firm offered a very weak Q4 revenue outlook and slashed its FY12 outlook. In addition, Tesla launched a new common stock issue. The firm blamed supplier delays and warned that it was four or five weeks on its Model S delivery schedule. Shares of TSLA are down 8%.

- Big box retailer Staples announced a major restructuring this morning, with many store closings and a big international pullback. Staples said 45 stores would be closed in Europe by the end the year, while it would close 30 stores in North America, cutting its square footage there by 15%. The firm also said it would look to do much more online. Shares of SPLS fell as much as 6% in the early going before bouncing back a bit, while shares of competitors OMX and ODP are in the black this morning.

***Looking Ahead***
- 11:30 (US) Treasury to sell 4-Week Bills
- 12:00 (US) Fed's Plosser speaks on Economic Outlook in Philadelphia
- 13:00 Treasury to sell 2-Year Notes
- 14:00 (CA) Bank of Canada Dep Govr Lane speaks in Calgary
- 15:00 (AR) Argentina Aug Shop Center Sales Y/Y: No est v 7.2% prior; Supermarket Sales Y/Y: No est v 14.5% prior
- 16:30 (US) Weekly API Crude Oil Inventories

***Economic Data***
- (BR) Brazil Sept FGV Construction Costs M/M: 0.2% v 0.3%e
- (US) Weekly ICSC Chain Store Sales w/e Spt 21st w/w: +0.6% v -2.5% prior; y/y: 2.9% v +2.1% prior
- (HU) Hungary Central Bank cuts interest rates by 25 bps to 6.50% v 6.75% prior
- (CA) Canada July Retail Sales M/M: 0.7% v 0.2%e; Retail Sales Less Autos M/M: 0.4% v 0.3%e
- (US) Redbook Retail Sales w/e Sept 22nd: 2.0% y/y, Sept MTD: 1.7% m/m, Sept MTD 2.4% y/y
- (US) July S&P/ CaseShiller 20 City M/M: 0.44% v +0.75%e; Y/Y: 1.20% v 1.05%e; Home Price Index: 144.61 v 143.70e
- (BR) Brazil Aug Current Account: -$2.57B v -$2.4Be; Foreign Direct Investment (FDI): $5.03B v $4.0Be
- (US) Sept Richmond Fed Manufacturing: +4 v -5e
- (US) Sept Consumer Confidence: 70.3 v 63.2e
- (US) July House Price Index M/M: 0.2% v 0.6%e