10 Things You Need To Know This Morning (SPY, DIA, QQQ, TOL, GS)

Matthew Boesler

Good morning. Here's what you need to know.

  • Markets in Asia were mixed in overnight trading as the Japanese Nikkei advanced 0.2%, the Hong Kong Hang Seng fell 0.7%, and the Shanghai Composite closed unchanged. European markets are in the red across the board, with Spain down 0.6%. In the United States, futures point to a negative open.
  • The Indian rupee is making new lows against the dollar today in what is shaping up to be a rough week for emerging markets. India is dealing with a balance of payments crisis that is compounding its currency troubles as a broader sell-off spurred by rising Treasury yields in the U.S. asserts itself across emerging markets.
  • Arguably the event of the week for market participants around the world is the release of the minutes from the Federal Reserve's July FOMC meeting on monetary policy, due out at 2 PM. "Recent public comments from various policymakers suggest that even notable doves, such as Bullard, Lockhart and Evans, are comfortable with—but not yet committed to—the taper commencing at the September meeting," says Deutsche Bank chief U.S. economist Joe LaVorgna.
  • A Bloomberg report identifies Goldman Sachs as the brokerage behind a flood of erroneous trade orders to U.S. equity options exchanges Tuesday morning. A programming error in an internal Goldman system that produced orders with inaccurate price limits before sending them to exchanges is said to be at fault.
  • Japan's nuclear regulator plans to upgrade the severity of the latest radiation leak at TEPCO's Fukushima power plant to "level three" (i.e., "serious incident"), making it the worst nuclear radiation issue since the earthquake that sent Fukushima reactors into meltdown in 2011. China's foreign ministry expressed "shock" over the leak in a statement.
  • Short sellers of U.S. equities are facing their worst losses in at least a decade, according to an analysis by the Wall Street Journal. The paper points out that the 100 most-shorted stocks in the Russell 3000 are up 33.6% this year, while the broader index is up only 18.3%. That is the largest performance gap between the two baskets in at least 10 years.
  • Moody's raised its outlook for the U.S. credit rating to "stable" from "negative," citing reduced uncertainty surrounding federal budget sequestration and improving fiscal balances at the state level. However, the rating agency also warned that "the regional divide in economic growth across the U.S. is delaying full fiscal recovery in some states."
  • Toll Brothers reported second quarter earnings of $0.26 per share, slightly better than the consensus forecast for $0.25. The U.S. homebuilder missed estimates on revenues, though, reporting sales of $689.2 million versus consensus of $694.0 million. Shares are rallying in pre-market trading.
  • Retailers continue to announce second quarter earnings results today. Lowe's, Target, Staples, Citi Trends, and American Eagle all report before the opening bell. Yesterday's reports took down shares of Home Depot, Barnes & Noble, and Dick's Sporting Goods while boosting Best Buy and J.C. Penney.
  • July existing home sales data are out in the U.S. at 10 AM ET. Economists predict sales rose 1.4% last month to 5.15 million units annualized after contracting 1.2% in June to 5.08 million units annualized. Follow the data releases LIVE on Business Insider »

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