Welcome to Monday’s Morning Coffee Break – Today’s U.S. session is the session of first – first day of new week, first day of new month and first day of a new quarter.  U.S. markets finished off the September and the 3^rd quarter in the green albeit the bulls loss some steam the final week of trading.The question being asked around proverbial water cooler today is – will October 2012 see similar gains as October 2011 when the S&P 500 index rocketed 11% while the Dow Jones index moved higher by 9.5%.

U.S. economic calendar eases into the week with two key data points being released at 10 a.m. ET today.

September ISM Manufacturing Index scheduled for 10 a.m. has analysts forecast of 49.5 ticking down by .10 from August’s 49.6.  If the forecasts are in line it will mean the manufacturing index continues to be below the 50 level. Below the 50 mark indicates contraction.

Due out at the same time will be a fresh new look at construction spending for August.  Analysts are looking for spending to increase by 0.4% after a decline in July of 0.09%.

Also on deck are two speeches – Federal Reserve Chairman Ben Bernanke’s will address the Economic Club of Indiana at 12:30 p.m. ET.

Also speaking today will be San Francisco Fed President, John Williams in San Francisco at 12:00 p.m. ET.

Morning Coffee Break Global Markets Watch

Asia

Japan

Japan’s equities dropped to their lowest level in more than three weeks during the overnight on weak Chinese manufacturing data along with mediocre results of the quarterly Tankan survey popped investor confidence as we start the 4^th and final quarter 2012. Equity markets were closed China, Hong Kong and South Korea were closed for a holiday. Trading volumes were meek for those markets that were open.

Euro Zone

Moody’s rating service released a report that Spain’s recapitalization of Spanish banks a move to credit positive but eventually may be "insufficient”. Market participants are waiting for the final review of Moody’s Spanish debt review.  The Spanish government indicates the banking sector needs another bailout of 59.3 billion Euros or roughly $76 billion to recapitalization according to the stress test released on last week Friday. Moody’s agrees the recapitalization will help with the materially health of the banking system but Moody’s believes the Spanish banks will need much more if markets grow in negative sentiment could hinder the efforts of the bailout.

Emerging Markets

China

China Manufacturing deteriorated a slightly slower rate in September compare to August’s PMI. China’s official PMI results moved higher to 49.8 compare to previous month of 49.2, still below the 50 level which considered the minimum value for growth.

India

India’s manufacturing PMI index remained unchanged for the month September at 52.8.  HSBC, reported the September’s factory output along with purchases and export order offset slowdown in employment.

Morning Coffee Break Companies To Watch

Oracle (ORCL, quote) is a name to watch today as it opens the Oracle customer conference in San Francisco where Oracle will highlight its enhanced Public Cloud Service.  The service targets Amazon (AMZN, quote) and Google (GOOG, quote).

Oracle has penned a deal with Nokia (NOK, quote) for Nokia’s mapping data and location services.

AutoZone’s (AZO, quote) board of r directors authorized an additional $750 million worth of shares to its stock repurchase program.

Keep an on eye on the airline carriers today after the industry group IATA increased profit forecast for 2012.  The group also cited continuing improvement for 2013.  This means United Continental (UAL, quote), Delta Air Lines (DAL, quote), Southwest Airlines (LUV, quote), and U.S. Airways (LCC, quote) could see a bump.

Futures and Commodities Corner

Crude Oil 

WTI crude oil prices fell during Asian trading after weaker than expected output data in China, Japan and the U.S. As the U.S. session kicks off crude oil fought to way back to even on the day on U.S. futures suggesting a strong start to the fourth quarter.  Crude oil prices are in a tug-a-war between strong U.S. futures and continued sluggish manufacturing from the big 4 (China, Japan, Euro Zone and U.S.)

Be sure to check out the Daily Energy Report for a compressive look at the global energy markets by Tom Pawlicki.

Equity only readers can gain exposure to WTI Crude Oil through the United States Oil Fund (USO, quote) ETF that seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The USO will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.

Gold

Gold slid during European session today when data from Japan and China put pressure on sentiment until early electronic trading in the U.S. session has move gold back to the flat line. Gold closed out the third quarter out with largest quarterly gain since 2010, helped by the FMOC initiation of third round of quantitative easing (QE3).  Typically monetary easing causes inflations as the currency depreciation and normally sends commodities higher.

Equity only readers gain exposure to the gold through the SPDR Gold Shares Trust (GLD, quote) ETF that seeks to replicate the performance, net of expenses, of the price of gold bullion. The GLD trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets.

Crude Oil	$92.38	+0.19	+0.21%
Gold	$1777.30	+6.20	+0.35%
Wheat	$893.00	-9.50	-1.05%
Corn	$760.75	+4.50	+0.6%
Live Cattle	$124.70	UNCH	UNCH
Lean Hogs	$73.75	UNCH	UNCH
Treasury Bond	149.6875	+0.3125	+0.21%
10yr Note	133.5469	+0.0625	+0.05%
2yr Note	110.2656	UNCH	UNCH
U.S. Dollar Index	79.86	0.01	+0.01%
			As of 8:54 a.m. ET

The Morning Coffee Break Bottom Line

Futures are looking for a strong start to the final quarter of the year with what appears to be sentiment towards risk at the moment. The issues going into the end of the year are clouds on the horizon making it unclear for traders. This pushes market participants to trade in the moment and to be nimble and on guard for the next shift.