Thursday's Brew (Nov 2)

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 across the Dow, S&P 500 and NASDAQ Indices had indicated a higher open at around 8 AM, as America's major retailers prepare to release same-store sales data. The information is a clear barometer for overall consumer spending. However, WalMart, the nation's largest retailer, reported less than encouraging results, with its same-store sales rising just 0.5%, the lowest rate of growth since August 2004. Adding to the slew of weak economic data of late, U.S. productivity data and jobless claims both came in worse than anticipated, and futures are now decidedly lower. WalMart shares were down roughly 1.5% in pre-market activity. Today looks like it could start off like a bloodfest folks.

OVERSEAS MARKETS

While the NIKKEI dipped fractionally, the Hang Seng Index soared Thursday 1.42%, as we speculate poor U.S. manufacturing data led investors to imply market share gain in China. Besides that likely scenario, politically, China is making sense these days. Even in its disagreement concerning sanctions on Iran, its foreign ministry communicates logically. Russia is another story... Selling anti-aircraft missiles to Iran ahead of a possible air action on Iran's nuclear facilities by Israel and/or the U.S. is indeed suspect.

France's CAC 40 Index seems to be the only decisive mover over the pond today, down roughly 0.79%. The FTSE and DAX are fractional movers in either direction thus far today, but we suspect all European markets will follow the well-networked U.S. market lower today on the recent slew of poor economic data and today's weak retail spending data.

COMMODITY MARKET NEWS

Gold is down thus far today, on profit taking, as it has run recently and sits now at $618 per troy ounce. Corn and wheat are leading the charge higher today, both up over 1%. Crude is down 1%, on the strength of yesterday's inventory data, showing levels of crude 12% above their five-year average for the week.

ECONOMIC DATA & NEWS

Labor costs rose 3.8% and were up 5.3% in the 12 months though September, the biggest gain since 1982. Employee productivity was basically unchanged. The rise in labor costs poses threat to the U.S. economy and Fed outlook on inflation. If labor costs are rising, there is pressure driving inflation higher, a scenario the Fed was not expecting. A Fed hike seems more likely, as does recession, after today's news.

Thursday, Challenger, Gray & Christmas, the global outplacement consultancy, releases its monthly report on planned job cuts announced in October. September cuts climbed 54%. Americans filing first-time claims for unemployment rose to a three-month high last week, according to the Labor Department. Initial jobless claims rose 18,000 to 327,000, the highest since early July. Wall Street was looking for 310,000 claims. While the level posted is still representative of a healthy job market, the direction of change should be concerning to markets.

STOCKS

Reporting earnings on Thursday are Qualcomm, CVS Corp., Transocean Inc., Caremark Rx Inc., CBS Corp., Becton Dickinson, Electronic Arts, and International Paper. Over 60% of U.S. retailers have posted lower than expected monthly same-store sales this morning, and are pressuring stocks overall. We hope you found "Today's Morning Coffee" useful, and wish you a good day trading. See the disclosure at the Wall Street Greek site.