Welcome to Wednesday’s Morning Coffee Break – U.S. markets start the third session of the week after two straight days of uneven trading.  One positive take away from yesterday’s session was the break in the final hour sell off that has persists the last few weeks.As traders start out their day - The Dow Jones fair value is up by 9.64 to 13411.00, S&P 500 fair value is up by 1.05 to 1440.5 and the NASDAQ fair value is coming in at 2798.75 up by 5.76 (as of 7:08 am)

Traders are likely to see much of the same performance in today’s session as the Euro Zone and Spain will remain in focus as traders digest the September ADP employment report at 8:15 a.m. ET.

Analysts’ are anticipating 155k new private sector jobs for September compared to August’s 201k.  Although the ADP results are not necessary always a good indicator when it comes to U.S. Department Labor’s Non-Farm Payroll (NFP) report.

Also on the economic calendar is the Institute for Supply Management’s non-manufacturing index for the month of September scheduled for 10 a.m. ET.  Analysts are anticipating drop to 53.3 from August’s 53.7.

At 10:30 a.m. ET energy traders will receive the Energy Department’s weekly report on oil and gasoline inventories.

Morning Coffee Break Global Markets Watch

Asia

Japan’s equities closed the day out lower while Australian and Hong Kong indexes pared early gains to squeak out a gain despite continuing uncertainty surrounding the timing of a Spanish bailout on top of not so hot data out of China causes investor and traders seek out safety.

 

Overnight markets waited for Spain to formally request a bailout, which will trigger the European Central Bank (ECB) to buy bonds.  The issue now is the longer Spain waits the more fear and patience run out.  The delay is causing fear that the bailout may not come in timely manner.

China

China’s markets remain close for holiday.

Euro Zone

European equities slip into the red in early trading today, as traders grapple with concerns Spain may become a lame duck and delay a bailout. Weak China services purchasing managers survey and sluggish sentiment data are also pushing on markets.

Emerging Markets

Standard & Poor’s rating agency reiterated its negative outlook for Argentina’s - Global X FTSE Argentina 20 (ARGT, quote) – debt ratings.  Standard & Poor’s said on Monday its outlook continues remain negative, citing increasing restrictions for international trade.

 

Morning Coffee Break Companies To Watch

Earnings Watch

Mosaic (MOS, quote),  Family Dollar (FDO, quote) and among the few companies scheduled to report this morning.  After the closing bell Marriott (MAR, quote) will release earnings results.

Company Watch

As we highly yesterday in Best Buy Options Price In New LBO Level  - Best Buy (BBY, quote) is top on list to watch today after Reuters reported founder Richard Schulze and four private equity firms are exploring the retailer’s books. Media reports are suggesting a buyout worth as much as $11 billion.

InterMune (ITMN quote) are reporting Canadian regulators approved the InterMune’s drug Espriet for use in treating idiopathic pulmonary fibrosis. Espriet is already approved in 29 European countries, Japan, and South Korea.  Espriet was rejected in the U.S. in May of 2010 and since then InterMune continues to get drug approved in the U.S.

Automakers Ford (F, quote) and General Motors (GM, quote) could get some love on yesterday’s news of industry sales rate for September totaled 14.94 million vehicles compare to 13.14 million a year ago.  Tata Motors (TTM, quote) in India could also catch a bid as they re-launched their compact car with a fresh new look and lowered the price tag by Rs 23,000.

 

Futures and Commodities Corner

Crude Oil

WTI crude oil prices dropped for the fourth day in a row during the European session on continued fears of weaker global growth outlook.   Fear is sending risk appetite to the side lines as uncertainty about Spain’s bailout is questioned and debated. over whether Spain will request a bailout lingered.

Crude oil traders will also be looking for direction from the U.S. .Energy Department’s crude oil inventory later today at 10:30 a.m. ET

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.

For natural gas traders can gain exposure through the United States Natural Gas Fund (UNG, quote) ETF that seeks to replicate the performance, net of expenses, of natural gas. The trust will invest in futures contracts on natural gas traded on the NYMEX that is the near month contract to expire.

Gold

Gold prices moved lower slightly in electronic trading today as the dollar traders appreciation pressure on the green back ahead of the ADP numbers pushing the yellow metal higher in early trading. Keep an eye on the U.S. dollar as we approach the ADP number money flow is increasing to the relative safety of the U.S. dollar which in turn could pressure on commodities including gold.

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	$91.23	-0.06	-0.72%
Gold	$1776.20	+3.50	+0.20%
Wheat	$865.75	-5.75	-0.66%
Corn	$753.00	-5.25	-0.69%
Live Cattle	$126.375	UNCH	UNCH
Lean Hogs	$76.85	UNCH	UNCH
Treasury Bond	149.9688	+0.0625	+0.04%
10yr Note	133.7188	-0.0781	+0.06%
2yr Note	110.2656	UNCH	UNCH
U.S. Dollar Index	79.955	+0.125	0.16%
			As of 8:03 a.m. ET

The Morning Coffee Break Bottom Line

U.S. futures are suggesting a positive open but watch out for the final hour selloff pattern to continue. Headlines from Spain’s concerning bailout – will be delayed – if so how long? Keep an eye on the ADP report for employment although many traders do not put much stock into the number it can push the markets around on the release.