Morning Coffee Break - Thursday March 21

With no significant impact from the Federal Reserve’s two day meeting and statement the S&P 500 is coming off its largest gain in over two weeks.  The crisis over in Cyprus hasn’t even deterred the U.S. equities from moving higher.

However, traders today will be faced not only with a new wrinkle in the Cyprus bailout as they turn on their computers and learn that the European Central Bank (ECB) has threaten to stop emergency funding as soon as Monday with no plan in place and traders will be facing the busiest U.S. economic reporting this week.

U.S. Economic Reports On Deck

Time	Economic Report	Forecast	Previous
9:00am	Flash Manufacturing PMI	55.1	54.3
	HPI m/m	0.7%	0.6%
10:00am	Existing Home Sales	5.02M	4.92M
	Philly Fed Manufacturing Index	-1.6	-12.5
	CB Leading Index m/m	0.3%	0.2%
10:30am	Natural Gas Storage	-70B	-145B

 

Yesterday traders found that the FOMC voted to maintain current policy program of bond buying in place.  The statement did show that members have begun to extensively debate the cost of maintaining the policy and the benefits.  At the end the members agreed that further easing was necessary as the U.S. faces fiscal tightening.

Morning Coffee Break's Current Benchmarks

S&P 500 futures slipped to 1558.71

EUR/USD moved lower to 1.2915.

Italian 10-year government bond yields are at 4.6%

Gold ticked higher by 0.02% to $1,607.80.

 

Commodities

Overnight trading in the commodities saw directionally mixed moves with energy futures moving lower on concerns European manufacturing data while concerns of the euro zone and Cyprus crisis putting a cloud of uncertainty over the region continues to provide support to metals such as gold and silver.  Commodities sensitive growth such as WTI Crude futures are coming under pressure and dropped during the overnight hours by 0.52%.

Currencies Markets

Currency markets saw more of the same as the euro pushed lower on the Cyprus crisis and money flow into the U.S. Dollar, Yen and British Pound. A quick look at the graphical view of the currency markets from a U.S. dollar sets up the direction for traders this morning.

 

Morning Coffee Break's Stock Pre-Market Stock Watch

K.B. Home (KBH, quote) is scheduled to report quarterly earnings before the opening bell.  Timely earnings report as traders continue to watch the housing sector closely.

Oracle (ORCL, quote) is trending this morning, after reporting fiscal third quarter profit of $0.65 per share missing analysts’ expectations by a penny.

Jabil Circuit (JBL, quote) did not help the tech sector as it missed by penny when reporting its fiscal second quarter profit of $0.53 per share.  Its worth noting that revenues did exceed Street forecasts by a sliver.   Is this another sign that Apple is (AAPL, quote) positioning it’s self for another product transitions.  Remember JBL’s largest customer is Apple.

Today’s Earnings To Watch

Lululemon (LULU, quote) reports fourth quarter earnings today.

Nike (NKE, quote) reports third quarter earnings today.

Silver Wheaton (SLW, quote) reports fourth quarter earnings today.

These names should help paint a picture on the retail sectors as well as the precious metals.

Bottom Line:  Today’s economic calendar will help drive market direction and depending on the results could be find additional pressure if the U.S. economy continues to look weak from the move the ECB is putting on Cyprus. Watch the Currency Shares Euro Trust (FXE, quote) ETF as it moves lower we could see the U.S. markets follow….