Thursday's Brew Dec 7

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 edging higher as market participants wait for tomorrow's employment report.

OVERSEAS MARKETS

Hong Kong's Hang Seng Index aligned itself with the prior day's flailing markets of mainland China. The Hang Seng dipped nearly a full percentage point today, and markets within the mainland fell as well. The Hong Kong based index was greatly impacted by two stocks in particular. HSBC Holdings Plc was downgraded by Citigroup Inc. and Credit Suisse Group, following a weak earnings report that was impacted by growth in bad debt within the U.S. market. Heads have already rolled within HSBC's New York bond trading desk, where twenty traders were given their walking papers. Also impacting the index, a large investor liquidated his HK$1.15 billion ($148 million) investment in China Mobile Ltd. at a discount, driving the shares lower. The two stocks comprise 44% of the benchmark, and drove the index down.

In Japan, the NIKKEI 225 rose 0.62% on a rumor that Elpida Memory Inc. had plans to expand mobile memory chip capacity with the building of a plant in Taiwan. This led technology shares higher in Japan. Also, a talking head from Barclay's forecast Japanese economic growth in 2007.

European stocks are up modestly today, despite a decision by the European Central Bank to raise interest rates to 3.5%. Positive comments from the ECB outweighed the impact of its widely anticipated action. Through midday, the DJ STOXX 50 PR was up 0.31%, while the FTSE 100 was up 0.48% and the CAC 40 0.22% higher.

ECONOMIC DATA & NEWS

October consumer credit data will reach the market at about 3:00 PM EST today, and could set the table for tomorrow's nonfarm payroll and unemployment report. The consensus of economists surveyed by Bloomberg sees October consumer credit growth of $4.1 billion versus a decrease of $1.2 billion in September. We view consumer credit critical to the economic picture, and will closely watch the direction of defaults and overall credit to gauge how lenders are impacting liquidity and how well capitalized consumers are for the holiday shopping season.

COMMODITY MARKETS

Crude oil is down today, despite a kidnapping in Nigeria just ahead of the upcoming OPEC meeting there, which poses its own threat to production rates. Considering the persistent efforts of Nigerian rebels to impact oil markets and to gain credibility within Nigeria, security should be the highest priority of the meeting.

Natural gas is relatively flat today, ahead of important inventory data release at 10:30 AM EST. Market participants will be interested in the impact of recent North American cold weather upon the draw/build picture, but warm weather seems to be the focus of fair weather fans today within the energy markets. Please see our discussion yesterday, within the commodities section of "Wednesday's Brew" for our long-term view on energy.

STOCKS IN THE NEWS

Small and mid-cap banks take center stage Thursday, as they discuss their outlook and the industry's consolidation progress at a Ryan Beck conference in New York. A panel of FDA advisers starts a two-day meeting Thursday to discuss whether implanting drug-coated stents in heart arteries raises the risk of fatal blood clots. Recent studies by device makers coincidentally showed stents were safe. The shares of stent makers Johnson & Johnson and Boston Scientific are likely to be active today as a result.

Reporting earnings on Thursday are Carreker Corp., Methode Electronics, Fleetwood Enterprise, Jos A. Bank, National Semiconductor, Atwood Oceanics Inc. and Esterline Tech Corp. (disclosure)