Friday's Brew (Nov 10)

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. Futures across the Dow, S&P 500 and NASDAQ indices are all indicating a slightly higher open. However, we believe yesterday's move lower, driven by concern about the Democratic impact on corporate economics, was the beginning of a trend that could continue to drive gold higher in the near term while impacting stocks negatively. Still, slipping oil prices portend to protect stocks some today.

OVERSEAS MARKETS

Stocks were down in both Japan and Hong Kong today, with the NIKKEI down 0.53% and the Hang Seng slipping 0.33%. In Japan, a government report showed machinery orders fell unexpectedly and signaled that economic growth may be slowing. China announced yesterday that it would diversify its capital reserves away from dollars. While diversification is a good risk reduction tool, the decision concerned investors who viewed it as a political signal on the heels of some Congressional threats of import tariffs for Chinese goods. Mark this down as the first impact of Democratic Congressional control.

Stocks across Europe were also lower this morning, with not much to look forward to in American markets and after the Bank of England's rate increase earlier in the week. The FTSE 100 was relatively unchanged today, while the OMX Stockholm 30 Index led all markets lower, falling 0.66%.

French economic growth slowed dramatically in the third quarter. The news may reduce the likelihood that the European Central Bank will continue raising interest rates next year. The CAC 40 Index was relatively unchanged today.

ECONOMIC DATA & NEWS

Friday brings the quiet before the storm of economic data set for release next week. The most significant news today may come from Fed Chairman Ben Bernanke, as he speaks at a conference in Frankfurt.

COMMODITY MARKETS

While the dollar suffered on China's announcement to diversify reserves, gold rocketed higher as speculators assumed China would be a buyer of the commodity. Gold is giving back ground today on early profit taking, down approximately 0.64%.

Natural gas shot higher yesterday on an unexpected level of draw down of gas in storage. Crude oil is down today as the International Energy Agency reduced its projection for world oil demand this year by 80,000 barrels a day. The IEA attributed the adjustment to lower gasoline demand than previously forecast for China. The agency also reduced its consumption expectations for 2007, and this news is seen putting downward on oil prices today.

STOCKS IN THE NEWS

Disney is down 2.6% in pre-market activity, despite posting strong quarterly results. It raised market concerns, as it told investors it would be spending heavily in new theme park attractions. Analysts are concerned that the spectacular success the company had in 2006 will make earnings comparables difficult to surpass in a business largely dependent on the success of the next film.

While stocks look to be pressured by Democratic impact within Congress, today they will likely receive a bit of protection from the oil demand news. As oil weakens, energy costs to corporations stand to decrease as do expenses of consumers, who may then spend more freely. We hope you enjoyed "Today's Morning Coffee" and wish you a good day trading. Look for your weekly market-moving event planner, "The Greek's Week Ahead", available Sunday evening. (disclosure)