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Trade Gap Widened
« on: July 12, 2011, 03:44:03 PM »
Daily Market Commentary for July 12, 2011

During April, the trade gap widened to a seasonally adjusted $50.2 billion from $43.6 billion - the biggest monthly deficit since October 2008. (read more at Millennium-Traders.Com)

Treasury Secretary Timothy Geithner said that time is quickly running out to get a deficit-reduction and debt-ceiling deal and the 'broad outlines' of a deal should be in place by the end of this week or next. “I think the leaders understand we don’t have a lot of time, and we want to wrap up the broad outlines of an agreement by the end of this week — certainly by the end of next week — so that we have time to legislate it and put it in place,” he said during a symposium on women in finance at the Treasury Department. The latest scheduled round of negotiations over the debt ceiling between President Barack Obama and congressional leaders is set for 3:45pm ET today. The government needs to raise the $14.3 trillion debt ceiling by Aug. 2 or face default, Geithner says. “After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office a real solution is probably unattainable,” said Senate Minority Leader Mitch McConnell (R., Ky.) on the Senate floor.

Asian markets moved lower again today as concerns over European debt crisis continues. Media reports citing Dutch Finance Minister Jan Kees de Jager are saying that a selective default of Greece was no longer excluded from the options being considered by the euro zone - losses increased after comments released. For its largest one-day percentage drop since May 2010, Hang Seng Index fell 3.1% to 21,663.16. The Shanghai Composite dropped 1.7% to 2,754.58. South Korea’s Kospi shed 2.2% to 2,109.73. Japan’s Nikkei Stock Average closed the day 1.4% lower at 9,925.92; Australia’s S&P/ASX 200 index fell 1.9% to 4,495.40 and Taiwan’s Taiex shed 2% to 8,491.01.

Radiant Systems (NasdaqGS: RADS) soared higher by 31% after buyout offer for $1.2 billion from NCR (NYSE: NCR)

Clean Diesel Technologies (NasdaqCM: CDTI) shares were higher by 53% into mid afternoon after a buy recommendation was issued on the stock.

Microchip Technology (NasdaqGS: MCHP) shares were off 13% in mid afternoon trading after company lowered earnings guidance for fiscal Q1.

Novellus Systems (NasdaqGS: NVLS) shares were down 11% in mid afternoon trading after issuing disappointing guidance.

Economic data released today:

U.S. ICSC/Goldman Sachs Chain Store Sales: +5.5% on year and +0.4% in week of July 9.

NFIB Small Business Optimism: U.S. NFIB June Small Business Index 90.8 vs. 90.9 in May.

Trade Balance: U.S. May Trade Deficit with China Jumps 15.6% on rising imports; May Exports $174.86B -0.5%; May Imports $225.09B +2.6%; April Trade Balance revised to Deficit $43.63B from Deficit $43.68B; U.S. May Trade Deficit $50.23B vs. Consensus Deficit $44.5B.

IBD/TIPP Economic Optimism: U.S. July IBD/TIPP Economic Optimism Index 41.4 vs. 44.6 in June; U.S. July IBD/TIPP 6-Month economic outlook 39.7.

FOMC Meeting Minutes: Fed officials agreed to adopt wait-and-see policy approach - June Minutes; Fed lowers forecast on economy, raises sights on unemployment; All but 1 Fed official agreed on key elements of exit strategy ; Fed officials expect to stop reinvesting securities as first step; Fed exit strategy discussion don't suggest unwinding will begin soon; Fed officials set concrete steps to take when exit strategy begins; A few Fed officials cited inflation risk as possible reason to tighten sooner; A few Fed officials raised possibility of further easing if growth slows.

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