Tuesday's Market Factors
It’s all about the election Tuesday, and with just the regular weekly chain store sales data on the economic slate, the market will simply speculate about the political results. Though, it’s our view here that a market rally will follow a Mitt Romney triumph this week. Several important economic catalysts are emanating from overseas today, namely in Greece and Germany. In early trading, the SPDR S&P 500 (SPY) +0.5%, SPDR Dow Jones Industrial Average (DIA) +0.6% and the PowerShares QQQ (QQQ) +0.1% are each higher.
Overseas Markets
| Europe | Asia |
| EURO STOXX 50: +0.5% | Nikkei 225: -0.4% |
| FTSE 100: +0.6% | Hang Seng: -0.3% |
| German DAX: +0.7% | S&P/ASX 200: +0.2% |
International Drivers
After yesterday’s discussion, the Greek Parliament takes up austerity measures and is expected to pass them despite pressure from Greek unions, which have called for a general strike. You can expect things to turn nasty again in Greece if a new round of austerity gets the okay. In fact, the disruptive political coalition should gain support if Greece continues to load its citizens with austerity as it struggles through economic depression. Enough is enough already.
German factory orders fell more than they have in a year. Factory orders fell by 3.3% in September, even after adjustment for prices; and this follows a revised August order number, which was down 0.8%. Economists were caught off guard, with the consensus forecast seeing a 0.4% decline. The spread of economic contagion into Germany has the cornerstone economy cracking. Perhaps this will be a catalyst toward turning European leaders’ targets to growth and away from debt management and austerity. It’s just a shame historic evidence was not enough.
Manufacturing output in the United Kingdom rose, but by less than expected in September. Factory output rose by 0.1% in the U.K., though economists were looking for a 0.4% increase. Overall industrial output dropped by 1.7%, though that was attributed to maintenance work at oil and gas refining facilities. The UK exited recession in the September quarter, but more recent signs have indicated there could be a double dip.
U.S. Data Drivers
Weekly chain store sales were disrupted by Hurricane Sandy which struck through the period. Sales through the period ending November 3 showed sales slipped 0.2% week-to-week. The year-over-year sales pace slipped to +1.4% from +2.7% the week before. Redbook showed an increase in the yearly pace to 0.8%, versus 1.8% the week before. Even excluding the hurricane, sales have hit stall speed after slowing dramatically over the last several months, so we’ll want to keep a close eye on activity as the critical holiday season starts in a few weeks.
The day’s earnings highlights reports from Computer Sciences (NYSE: CSC), CVS Caremark (NYSE: CVS), Denbury Resources (NYSE: DNR), DirecTV (NYSE: DTV), Discovery Communications (Nasdaq: DISCA), Emerson Electric (NYSE: EMR), Expeditors International (Nasdaq: EXPR), Fossil (Nasdaq: FOSL), Frontier Communications (NYSE: FTR), Health Care REIT (NYSE: HCN), International Flavors & Fragrances (NYSE: IFF), Marathon Oil (NYSE: MRO), Marsh & McLennan (NYSE: MMC), News Corp. (Nasdaq: NWSA), NYSE Euronext (NYSE: NYX), Pepco Holdings (NYSE: POM), Prudential Financial (NYSE: PRU), SCANA (NYSE: SCG), Sempra Energy (NYSE: SRE), Acadia Healthcare (Nasdaq: HCHC), Access Midstream Partners (Nasdaq: ACMP), AcelRx Pharmaceuticals (Nasdaq: ACRX), Alexza Pharmaceuticals (Nasdaq: ALXA), Alterra Capital (Nasdaq: ALTE), Amdocs (NYSE: DOX), AOL (NYSE: AOL), Calamos Asset Management (Nasdaq: CLMS), Calpine (NYSE: CPN), Charter Communications (Nasdaq: CHTR), Cinemark (NYSE: CNK), Coeur d’Alene Mines (NYSE: CDE), Financial Engines (Nasdaq: FNGN), Georgia Gulf (NYSE: GGC), Gulfmark Offshore (NYSE: GLF), Gulfport Energy (Nasdaq: GPOR), Hecla Mining (NYSE: HL), Higher One Holdings (NYSE: ONE), Isis Pharmaceuticals (Nasdaq: ISIS), Louisiana Pacific (NYSE: LPX), Neenah Paper (NYSE: NP), Office Depot (NYSE: ODP), OfficeMax (NYSE: OMX), PharmAthene (NYSE: PIP), Rackspace Hosting (NYSE: RAX), Scientific Games (Nasdaq: SGMS), Tidewater (NYSE: TDW), Towers Watson (NYSE: TW), Vitamin Shoppe (NYSE: VSI) and more.
The Morning’s Most Active Stocks
| Upside | Downside |
| Fabrinet (NYSE: FN) +24% | THQ (Nasdaq: THQI) -45% |
| Rosetta Genomics (Nasdaq: ROSG) +22% | Sypris Solutions (Nasdaq: SYPR) -26% |
| EnerNOC (Nasdaq: ENOC) +21% | ServiceSource (Nasdaq: SRVE) -36% |
| Jive Software (Nasdaq: JIVE) +17% | Responsys (Nasdaq: MKTG) -29% |
| Carbonite (Nasdaq: CARB) +12% | MakeMyTrip (Nasdaq: MMYT) -25% |
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