Welcome to Tuesday’s Morning Coffee Break – U.S. futures are hanging in this morning as the market participants prepare for a slew of earnings results from the likes of Coca Cola (KO, quote), Mattel (MAT, quote) and Intel (INTC, quote) as well as a busy economic calendar today.

Market participants will be watching closely to the market’s final hours as attempt put in third straight up session in the Dow Jones.

Key economic data such as September’s Consumer Price Index (CPI) is scheduled out at 8:30 a.m. ET.  Analysts’ are forecasting an increase of 0.2% in core CPI and a 0.4% in overall CPI. CPI measures the change in the price of goods and services purchased by consumers and core CPI excludes food and energy.

Then at 9:15 a.m. ET investors will receive September’s Industrial Output Report.  Analysts’ are looking for a modest move higher of 0.2% after disappointing August results of -1.2%.  August’s dropped represented the worst drop since March 2009.  The results should be inline with expectations as output keeps pace with Monday’s Retail Sales Report indicating solid U.S. consumer activity in the space.

Investors will also get a fresh look at the housing industry as the National Association of Home Builders Index is scheduled for release at 10 a.m. ET.  Analysts’ are looking for momentum to continue with the index moving higher to 41 from last month’s 40.

As traders start out their day – The Dow Jones  (DIA, quote) fair value is up by 69.70 to 13422.00, S&P 500 (SPY, quote) fair value is up by 7.37 to 1442.20 and the NASDAQ (QQQ, quote) fair value is coming in at 2733.43 up by 12.03(as of 9:02 am)

Morning Coffee Break Global Markets Watch

Asia

Asian equities moved higher in overnight trading on better than expected U.S. data and on reports that Spain is finally considering requesting a bailout.  The NIKKEI index continued higher once again sending the Yen lower against the U.S. dollar as traders took on additional risk.

China equities did not fare as well as the rest of the region as traders became cautions ahead of China’s Gross Domestic Product Report (GDP) scheduled to be released on this week Thursday. The Shanghai Composite Index managed to close higher by 0.10 points to finish the session in the green.

The key take away from Asia is the region is once again following the news out the U.S. rather than China.

Euro Zone

Reports of Spain finally considering a bailout sent Euro Zone markets higher with banks in the driver seat. European media outlets began reporting late Monday that Spain is ready to make a formal bailout request.  Reports also indicate that Spain is delaying an announcement on concerns of the impact on other euro-zone countries borrowing cost such Italy.

Reports of a Spanish bailout on the horizon also help to move the Euro higher against the U.S. Dollar and against the major pairs.

This of course sent banks like Royal Bank of Scotland Group PLC (RBS, quote), Barclays PLC (BCS, quote) and HSBC Holdings PLC (HBC, quote) all higher by more than a percentage point in early European trading.

 Emerging Markets

Principal Financial Group (PFG, quote) announced today it will be buying Chilean pension manager AFP Cuprum. The deal is being reported as a $1.5 billion deal.  This is the latest efforts of PFG to expand into emerging markets.

Morning Coffee Break Companies To Watch

Earnings Watch

Coca Cola (KO, quote)) Q3 earnings are forecasted to decline by 2% or $0.51 per share.

Mattel (MAT, quote) Mattel surprised the street with Q3 profits of $365.9 million or $1.04 per share.  Net revenue jumped 4% on sales growth across all segments and especially doll sales according to the company press release.

Intel (INTC, quote) is schedule to report after the close. Analysts’ are expecting Intel to report Q3 earnings of $0.50 per share.  A drop of 23% from the same period a year ago and sales are being forecasted as a drop of 7% to $13.22 billion.

Last week Advanced Micro Devices Inc. (AMD, quote) cited weaker than expected demand as reason for such poor earnings results.

We will be watching Intel closely as we monitor our Intel position. Check back after Intel reports for a position update.

Company Watch

Priceline.com (PCLN, quote) could be a stock to watch as the company announced CEO Jeffery Boyd take on the additional role of chairman as of January 1.  Current chairman Ralph Bahna will step down at that time.

Bankrate (RATE, quote) cut its full year revenue guidance and is now saying current quarter results could be shy of analysts’ estimates. Bankrate days its mortgage and deposit business is still strong, however, changes in its insurances leads business will result in a short term impact to the bottom line.

News Corp. (NWSA, quote) is under pressure as it holds its annual meeting today.  Pension giants Calpers and Calstrs are reportedly pushing to remove CEO Rupert Murdoch from the chairman’s role along with his two sons.

CVS Caremark (CVS, quote) is to pay $5.25 million to settle a drug pricing case with the Department of Justice. A CVS subsidiary RxAmerica allegedly gave false information about generic drug pricing between 2007 and 2008.

Starbucks (SBUX, qoute) will start selling its new Verismo coffee brewer today.  This just the latest attempt to snag share of the single serve market that created by Green Mountain Coffee’s (GMCR, quote) Keurig machines. It’s also important to note that Green Mountain Coffee’s k-cup patent have now expired allowing other coffee manufactures to produce k-cups.

Citi Bank (C, quote) CEO after Vikram Pandit announced today that he is stepping down from the top position of the bank.  Michael Corbat  will be stepping into the role.  President and Chief Operating Officer John Havens has also resign today. Both resignations were unexpected.

Futures and Commodities Corner

Crude Oil

WTI crude oil prices were flat during the early European session on concerns about future oil demand continues to pressure price.  Keeping price supported around the flat level (another words providing support and slowing the price drop) is the rising geopolitical tensions in the Middle East, amid fears over a disruption of crude oil.

Reports are surfacing in German media today that Iran has plans to flood the Strait of Hormuz with crude oil.

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 tick higher in overnight trading as the U.S. Dollar slipped back on a shift back to riskier assets.

The U.S. Dollar was trading around 79.70 during the Asia session allowing for commodities including gold and silver to drift higher.

As you know a weak dollar tends to aid dollar priced commodities such as gold as it makes the commodity cheaper for holders of other currencies.

Although gold is drifting up its unlikely to breakout without another catalyst and as the Euro Zone seems to be making strides in the right direction for the first time in a long time and the U.S. holding its own at the moment we do not see a catalyst in the near term.  Even the sable rattling in Iran will likely only send oil 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	$91.97	+0.12	+0.13%
Gold	$1743.60	+7.60	+0.44%
Wheat	$856.50	+8025	+0.97%
Corn	$744.25	+7.00	+0.95%
Live Cattle	$125.975	UNCH	UNCH
Lean Hogs	$78.55	UNCH	UNCH
Treasury Bond	148.5938	-0.8438	-0.56%
10yr Note	133.00	-0.3125	-0.23%
2yr Note	110.2188	-0.0078	-0.01%
U.S. Dollar Index	79.395	-0.41	-0.51%
			As of 8:43a.m. ET

The Morning Coffee Break Bottom Line

U.S. futures are suggesting a positive open this morning for the second straight session this week. Basically the same drill as yesterday as earnings will drive sentiment be sure to keep eye on the housing market.   Watch for signs on the Euro Zone markets close – if they close higher it well help U.S. market maintain the momentum and of course watch the Currency Shares Euro Trust (FXE, quote) it’s has been good indicator on the direction of U.S. Markets.