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U.S Market Update

Thu, Mar 18 2010, 16:04 GMT

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Dow +25 S&P -0.5 NASDAQ +1.5

***Economic Data***

• - (BR) Brazil Mar FGV Inflation: 1.1% v 1.1%e
• - (UK) Mar CBI Industrial Trends -37 v -36 prior
• - (CL) Chile Q4 GDP Y/Y: % v 2.0%e v -1.6% prior; Current Account: 620Me v 574M prior
• - (CA) Canada Jan Intl Securities Transactions: C$11.8B v C$8.0Be
• - (US) Feb Consumer Price Index M/M: 0.0% v 0.1%e; CPI Ex Food&Energy M/M: 0.1% v 0.1%e; CPI NSA: 220.579 v 217.043e
• - (US) Initial Jobless Claims:457K v 455Ke; Continuing Claims: 4.579M v 4.516M
• - (US) Current Account: -$115.6B v -$119.0Be
• - (BR) Brazil Feb Tax Collections (BRL): 53.5B v 53.5B
• - (US) Philadelphia Fed: 18.9 v 18.0e
• - (US) Feb Leading indicators: 0.1% v 0.1%

- US equities are trading sideways this morning after European and Asian markets provided not much in the way of guidance for US trade while the weekly jobless claims data and Philly Fed index provided little momentum in either direction. Natural dipped to six-month lows after weekly inventory figures, bringing the $4 mark back into view. Treasury prices are a little lower with the 10-year yield holding up near 3.65%

- Quarterly earnings and revenue results from FedEx beat the Street, while the top ends of the firm's guidance for the next quarter and the full year were well ahead of expectations. On the conference call FedEx executives predicted that stronger demand (and better earnings) would really kick in towards the end of 2010 as the recovery becomes firmly entrenched. Shares of FDX lost altitude in the premarket, trading off 2.5%, although shares are heading back towards the flat line mid morning. UPS is up 1%. Nike's results comfortably topped consensus estimates, driven by strong margin improvements. Looking forward, the company is seeing a strong rebound in North American orders, and forecasted robust revenue growth and even better margins next quarter. Share of NKE are up 5%. Gamestop is off its best levels after its shares rose nearly 10% before the bell, on solidly in line quarterly results and forward-looking guidance. Apparel name Guess is up 3% on better-than-expected results and a big dividend hike. Winnebago was up 4% in the premarket after surprising investors with its first quarterly profit in nearly two years (analysts projected a loss). WGO has headed straight down from the open, with WGO around -2% mid morning as traders digest the firm's less-than-stellar revenue performance and growing dealer inventory.

- The other big news of the morning is Teva's acquisition of German drug maker Ratiopharm. With this €3.63B deal, Teva further secures its position as the world's number one generic drug maker, giving it a very strong European position. Teva, which beat rival bids from Pfizer and Iceland's Actavis, said the combined company would have had 2009 revenues of more than $16B, up from Teva's own sales of around $14B. According to data from Credit Suisse, the deal would put Teva's global generics market share around 19%, widening the gap over Novartis's Sandoz unit, which hold around 11% of the global generics market. Shares of TEVA are up 4% this morning.

- The USD and JPY pairs were off their best levels from the European morning in US trading. Bailout tensions between Greece and Germany continue to simmer. Greece mainly wants lower borrowing costs now that they feel they've taken appropriate steps and appear to be threatening other members with IMF aid (which would embarrassed the Euro Zone) as the country faces significant rollover in debt in the coming period. The focus being directed to the EU Summit scheduled for March 25th. Headline roulette continues to provide choppy price action in equities, currency and fixed-income markets.

***Looking Ahead***

• - 12:45 (UK) BOE's Sentence
• - 13:00 (SZ) SNB's Danthine
• - 13:00 (TU) Turkey Central Bank Interest Rate Decision: Expected to maintain the Base rate at 6.50%

Published on  Thu, Mar 18 2010, 16:06 GMT

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