Thursday's Brew - Oct 19

Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful. Stock futures are mixed today with the NASDAQ and S&P 500 indices lower and Dow futures up a bit.

OVERSEAS

Indices across Asia were mostly lower, as North Korean tensions continue to weigh. The North appears to be preparing for a second test of a nuclear device to validate their efforts after the first test fizzled. Rhetoric from George W. Bush was especially hard this morning, as he spelled out how the U.S. would react to nuclear proliferation, saying their would be "grave consequences" for deliver of weaponry or technology to Iran or Al Qaeda. The NIKKEI 225 Index slipped fractionally, driven partly by sharp falls in select technology shares. The FTSE 100 and the DAX indices were both up just slightly this morning.

ECONOMIC DATA
On tap for Thursday, the Labor Department released its recent data on weekly U.S. jobless claims. Claims were 10,000 lower than expectations, coming in at 299,000, providing more positive news for the market heading into next week's Fed meeting. The number of Americans filing first-time claims for unemployment benefits was the lowest level in almost three months.

Today, the Conference Board, a private research group, will post its composite index of leading indicators for September. The index represents a gauge of future economic activity, and is expected to measure 0.3%. With all the information becoming available this week, the market will weigh one against another in an attempt to gauge what the Fed will do with rates the following week, but more importantly, it will feel out the depth of economic slowdown and date of arrival of recovery.

Also on Thursday, The Federal Reserve Bank of Philadelphia will report on its business-conditions index for October, a measure of the region's manufacturing sector's health. In September, an unexpected contraction of 0.4 sparked rallies in stocks and bonds. An expansion of 7.0 points is expected this period, according to Bloomberg.

COMMODITIES

Gold is down approximately $1.70 today, giving back some recent gains as the market weighs the extent of safe-haven necessity and inflation concern in U.S. markets. One analyst speculates gold may trade lower post the Philly Fed data. "Gold may trade lower as the dollar gains; the market is watching for the FOMC meeting,'' said Bernard Sin, chief trader at Geneva-based MKS Finance, one of Switzerland's four gold refiners. There is some concern that U.S. market expansion could raise the dollar and impact gold. However, we feel any short short-term weakness could provide opportunity to purchase gold for a tense medium term in the geopolitical scheme of things.

Crude is slightly higher today, as OPEC's emergency meeting in Qatar begins. Iran yesterday threatened repercussions to any U.N. sanctions. The Persian nation said it could disallow inspectors again, and we speculate it could even pull out of the NPT. See our discussion yesterday about Israeli preparations for war.

STOCKS

Reporting earnings today, look for Google, Coca Cola and Baxter International highlight the schedule. Apple Computer and eBay both reported solid EPS results, but warned on future outlook. Citigroup also reported better than expected results. We hope you enjoyed "Today's Morning Coffee" and we wish you a good day trading. (disclosure)