Market Moving News for You

We understand the importance of market moving news. 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. The Dow, S&P 500 and NASDAQ Indices have all opened higher this morning, as the Santa Claus rally seeks support from key economic data on tap for today.

OVERSEAS MARKETS

Asian markets would likely prefer the Thai government to keep quiet, as markets across developing Asia were pressured today. This was perhaps partly due to some questionable commentary emanating from the Thai government. Thailand's financial leaders labeled their stock market's reaction to the government's recent restrictive investment policy-making as "a side effect." Thai leaders pledged that the remaining restrictions upon the non-equity markets were only temporary, until the Thai Baht stabilized. The Thai Baht promptly weakened sharply, as capital flows out of the nation. Thailand's SET Index fell 2.2%, while Vietnam's Ho Chi Minh Stock Index sank 3.8%. Pakistan's Karachi 100 Index fall of 2.5% was not influenced by the new Al Qaeda tape release, as you may have guessed, but by the government's reopening of an investigation of 88 brokerages for stock market manipulation.

The NIKKEI 225 inched up 0.22%, as the weakening yen against the dollar improves Japan's export environment. Hong Kong's Hang Seng Index was nearly unchanged.

Across the pond, Europe's DJ STOXX 50 Index slipped 0.2% through morning trading, while the FTSE 100 was down a bit more. Third quarter U.K. GDP was revised higher 20 basis points, to 2.9%, and expectations for another interest rate hike from the Bank of England were solidified. Data this morning from the U.S., Europe's most important trade partner, is likely the main factor dragging on Europe's markets this morning.

ECONOMIC DATA & ANALYSIS

After Wednesday's rest, the economic calendar turns it up a notch today with the release of revised third quarter GDP data. A significant change to the data was not expected by most experts, but GDP growth was revised lower to 2.0%, from a previous estimate of 2.2%. We believe this reinforces the view that Fed rate action is slowing the economy, but recent PPI data, which strengthens the Fed's inflationary concerns, may preclude the Fed from cutting interest rates too soon.

Initial jobless claims for the week ended December 16th were reported this morning, showing a 9,000 claim rise to 315,000. Before you raise the warning flag, we should note that jobless claim levels thus far through 2006 have averaged 312,000, compared to 332,000 for all of 2005. We believe data directional change alone moves markets significantly, but the four-week moving average fell to 325,750. Therefore, we believe this week's measure indicates a general and weak move in the right direction, and is unlikely to impact markets.

November Leading Indicators will be reported at 10:00 AM EST, with the consensus expectation for a 0.1% rise, versus a 0.2% increase in the most recent period. The December Philly Fed Survey is also due for release today, with the consensus seeing a 3.8 measure, versus 5.1 in the most recent period, according to Bloomberg News.

Lone Fed dissenter and Richmond President Jeffrey Lacker, will address an audience in North Carolina with his outlook on the economy. This may allow critics and supporters to see the basis of his view that interest rates should be raised to curb inflation. Overseas, the ECB Governing Council will meet, though no decision on interest rates will result.

COMMODITY MARKETS

Natural gas closed at its lowest level in two months yesterday, and today's inventory data is generally anticipated to be bearish for the commodity, according to CNBC's commentary. Natural gas was down 1.5% this morning, to a level of $6.67/MMBtu. Crude and heating oil were both down roughly a half a percentage point this morning, after yesterday's data showed a heating oil inventory build of 1.2 million barrels. This first rise in inventory since September was generally attributed to relatively mild weather in North America. According to Meteorlogix LLC, heating oil demand in the Northeastern United States, where a good deal of homes burn the fuel, will be below average through the next week.

Crude oil stocks fell 6.32 million barrels, impacted by OPEC's production cut and fog caused shipping delays at the important Houston hub. Previously, we mentioned that mild weather was likely impacting gasoline usage and was being accredited for crude inventory reduction, but yesterday's increase in gas stockpiles would seem to weaken that argument. However, refinery capacity post maintenance season has increased to 90.7%, marking its highest point since September. This is also likely playing a role in crude inventory reduction, while demand for gasoline remains strong within the U.S. We refer you to yesterday's edition of "Morning Coffee," where we covered the geopolitical impact of escalating tension between Iran and the U.S. on gold and crude prices.

STOCKS IN THE NEWS

Reporting earnings on Thursday, look for General Mills, Carnival Corp., Conagra Foods, Commercial Metals, Solectron, Herman Miller, Worthington Industries, American Greetings and Shuffle Master. We hope you found value in today's edition, and we wish you a good day trading. (disclosure)