Wednesday's Brew Nv 29

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 S&P 500, NASDAQ and the recently beaten down Dow Index, are all indicating a higher open today. Revised higher GDP data for the third quarter, showing GDP growth of 2.2%, is driving the rise. However, the same data showed an increase in inventory, which could be a negative factor to GDP in the fourth quarter should demand wane below expectations of American businesses.

OVERSEAS MARKETS

Stocks across Asia climbed higher today, with the Hang Seng up 0.76%, the S&P/ASX 200 Index 1.27% higher and the NIKKEI 225 up 1.39%. Helping drive the rise, Japanese industrial production climbed to a record level, rising 1.6% in October. American Fed Chairman Ben Bernanke's comments yesterday that the U.S. economy should grow in 2007, helped boost Asian markets as well. The American market is critical to the exporting Japanese and Chinese. However, the strength of American spending on Asian goods will remain dependent on housing and other credit strains on consumers, as well as employment within the U.S.

We remain concerned about the impact of a pending war Israel, Iran, Syria, Lebanon, Palestine, Iraq and America appear to be heading toward at full steam. Recent American efforts to alter strategy within Iraq may be partly driven by plans to deploy forces on its eastern front with Iran. We believe any attack on Iran's nuclear facilities will precipitate an Iranian invasion of Iraq, where full-scale civil war will take hold. We see Iraq becoming annexed by Iran, as we anticipate alliances and surprises yet unforeseen by the Pentagon, or at least the Bush Administration, disrupting American strength in the Persian Gulf.

European and U.K. shares are also benefiting from Bernanke's comments and the revised GDP strength, as the FTSE 100 Index shows a 0.79% rise today. The Dow Jones STOXX 50 PR, measuring 50 blue chip European shares, is up 0.78% through midday.

ECONOMIC DATA & NEWS

Wednesday welcomes the revised GDP number for the third quarter, with the 2.2% posted growth surpassing the consensus expectation for a 1.8% rise and the 1.6% increase in the second quarter. Also, the Fed's Beige Book will be released, highlighting regional economic activity.

More housing data Wednesday could feed further market concern, with October new home sales scheduled for 10 AM release. Bloomberg's survey shows consensus expectations at 1.05 million, versus 1.08 million in September. Mortgage application data released last week seems to point toward a greater decrease in home sales overall.

New York Fed President Timothy Geithner will contribute to an AICPA panel on financial stability and counterparty risk management.

COMMODITY MARKETS

Crude and heating oil are climbing today, as the nation prepares for a potentially powerful cold front. Temperatures in Calgary reached a 100-year low. Natural gas is lower, however, having already benefited from weather driven catalysts. Still, if the cold front lives up to its potential, we would expect natural gas to rise higher as well. Inventory data released today for oil and tomorrow for nat gas, could throw off trends temporarily. The nearing of conflict with Iran and likely an expanded war-front in the Middle East, should drive the floor higher under oil prices longer term, in our opinion.

Gold is down slightly, after benefiting significantly in recent days from a decline in the dollar. Ben Bernanke's comments and the revised GDP data, pose threat to gold prices today. However, we believe gold will rise further as it becomes apparent America is heading for war. Perhaps telling on that front, Iran's President Mahmoud Amadinejad will release a letter to the American people today through the United Nations.

STOCKS IN THE NEWS

Marathon Oil and EOG Resources will meet with analysts Wednesday, while Tiffany & Company, Aeropostale, and Synopsys report earnings. We hope you enjoyed your "Morning Coffee" and advise you to read "The Greek's Week Ahead" for a schedule of the week's market moving events. (disclosure)