ONLY 2 DAYS REMAINING FOR SPECIAL DISCOUNTED MEMBERSHIP RATES

Market Outlook
Monday, June 28, 2010

8:30 … Personal Income and Outlays

8:30 … Chicago Fed National Activity Index

10:30 … Dallas Fed Manufacturing Outlook

12:00 PM … Chicago Fed Midwest Manufacturing Index

12:45 PM … Fed's Warsh: "Financial Market and Economic Developments"

Also the following companies are reporting their quarterly earnings:-

• Barnes & Noble Inc. (BKS) and

• Micron Technology Inc. (MU)

Monday sees U.S. stock futures pointing to a higher opening after members of the Group of 20 nations pledged to cut budget deficits.

The modest gains come ahead of a big week of domestic economic data as well, culminating with the key monthly jobs report due out Friday. Investors will want to see private sector job growth because any signs of hiring would likely add confidence that the economy is improving.

Consumer Spending

The Commerce Department is expected to say Monday that consumer spending rose just 0.1 percent last month, though personal income jumped by its highest rate in nearly a year.

Incomes likely rose 0.5 percent, according to economists polled by Thomson Reuters. A bigger jump in income than spending means consumers are still unsure about their financial position and choosing to save their money. Weak spending could continue to hamper growth because consumer spending is the biggest driver of the economy.

G-20

At the end of their weekend conference in Toronto, leaders of the 20 largest economics pledged to stabilize or reduce their deficits or debt to their gross domestic product by 2016. This was the first G-20 meeting since the European debt crisis rattled markets earlier this year.

While pledges have no inherent backing and can be easily broken, stocks took the news positively. European markets were up as much as 1% in early trading.

The debate between spending to stimulate slowly growing economies and opting for fiscal austerity to quickly get ballooning deficits under control continued at the G20 meetings over the weekend. The G20, a group of rich and developing nations, agreed over the weekend that industrialized nations would slash deficits in half by 2013. But they could not resolve differences between stimulus spending and cost cutting measures.

World leaders did, however, say they would not pull back government support too quickly if they feared it would stagnate the global rebound.

Lars Christensen, chief analyst at Danske Bank, downplayed the importance of the G-20 commitments.

"I don't think the G-20 has changed a lot in terms of market sentiment," Christensen said. "The world picture is still one of caution. We saw a little bit of stabilization on Friday and that carries through today as there is a lack of much news."

He said that in the low-liquidity summer markets, the World Cup in South Africa appears to be dominating the news more than any other issues.

For markets, however, "The European sovereign debt crisis is still the story," Christensen said. "For now, Europe is the weak link in the global economy."

The Energy Sector

BP

Shares of U.K. energy giant BP Plc / (BP) (UK:BP.) rose 3.8% in London trading, reversing some of the steep losses posted in the previous session.

BP said Monday that the costs of cleaning up the oil spill in the Gulf of Mexico have soared to $2.65 billion, an increase of $300 million from its estimate last Friday.

The firm is currently drilling a relief well in an effort to stop the leak after numerous other strategies failed.

There are a few further points to the mornings trading which need to be considered:-

• The Dow Jones Industrial Average (DJIA) is staring up at stiff overhead resistance in the 10,300 area, as well as the 10,350 region, with the Dow's 200-day moving average residing in the latter area.

• The S&P 500 Index (SPX) is holding firm above the 1,065-1,070 area, which was home to the index's May lows. Resistance, however, resides at the 1,100 level, and near 1,110, which is home to the index's 200-day moving average.

• Gold futures are basically flat in London trading, with the front-month contract rising 70 cents to $1,256.90 an ounce.

• Economic uncertainty continues to weigh on crude futures this morning, with the lead contract down 65 cents at $78.21 per barrel in pre-market trading.

• Bonds: The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.10 percent from 3.11 percent late Friday.

• The U.S. dollar is headed higher this morning, benefiting from a weakening euro in the wake of this weekend's Group of 20 meaning. The G-20 leaders reached agreement on goals for debt and deficit reduction, but did not discuss currency issues directly. The lack of attention benefited stronger currencies, and the U.S. Dollar Index has added 0.16% to trade at 85.45 as a result.

• Equity option activity on the Chicago Board Options Exchange (CBOE) saw 992,969 call contracts traded on Friday, compared to 645,656 put contracts.

Some European nations have been pushing for steep spending cuts to avoid problems such as those encountered by Greece in recent months. Greece needed a European Union-led bailout to avoid bankruptcy. Questions about the pace of growth in Europe have dragged down stocks in recent months and hurt the euro, the currency used by 16 European countries.

European share markets were mixed in morning trading.

• Britain's FTSE 100 rose 0.3 percent, Germany's DAX index gained 1.1 percent, and France's CAC-40 rose 1.1 percent.

• In Europe at midday, London +0.4%. Paris +0.8%. Frankfurt +0.9%.

• The Stoxx Europe 600 index was up 0.8% to 250 points.

The euro fell to $1.2331.

The dollar was higher against the euro, but down versus the British pound and Japanese yen.


Asian Concerns

• Earlier in Asia, markets ended mixed. Japan's Nikkei index lost 0.4%, while Hong Kong's Hang Seng index rose 0.2%.

• In Asia, Japan -0.5% to 9694. Hong Kong +0.2% to 20727. China -0.7% to 2535. India +1.1% to 17774.

Futures Trading

As of 7:05 a.m. in New York, the Dow Jones Industrial Average futures were up 21 points, or 0.22%, to 10126, the S&P 500 index futures were up 3.3 points to 1078.00 and the Nasdaq 100 futures added 7 points to 1846.50.

Futures: Dow +0.2%. S&P +0.3%. Nasdaq +0.2%. Crude -0.8% to $78.23. Gold +0.3% to $1259.80.

**Barnes & Noble Inc (BKS), Micron Technology Inc (MU) and Standard Microsystems Corp (SMSC) are all due to report results today.

**Noble Corp. (NE) announced that it is buying privately held FDR Holdings Ltd. in a cash deal valued at $2.16 billion. Noble said it expects the deal to close by the end of July. Separately, the company also signed two 10-year ultra-deepwater-drillship contracts with Shell and extended another one for three years.

**U.S. consumer products giants Kellogg Co. (K) and Procter & Gamble Co. (PG) both issued product recalls this weekend. Kellogg issued a voluntary recall on 28 million boxes of cereal, citing "uncharacteristic off-flavor and smell" that it blamed on package liners. Meanwhile, P&G recalled about 35,000 bottles of Scope mouthwash, citing faulty child-resistant caps.

• Bank of America (BAC) rose 1.6% in pre-market trading following news reports that the bank has established an Australian advisory board that will be overseen by Don Argus, ex-chairman of BHP Billiton Ltd. (BHP)

• G-20 sets deficit targets. Calling the global recovery "uneven and fragile," G-20 leaders agreed to specific deficit reduction targets, with advanced economies aiming to at least halve their deficits by 2013 and stabilize their debt-to-output ratios by 2016. Participants also agreed to pursue higher capital standards for banks once the economic recovery is firmly underway. Analysts weren't wholly impressed, noting it could be years before new capital rules go into effect and efforts to find a compromise between austerity measures and continued stimulus resulted in "a multi-purpose recipe with no enforcement mechanism.” The IMF suggested that deeper cuts now would lead to higher long-term growth.

• Sen. Robert Byrd dies at 92. Sen. Robert Byrd, a Democrat from West Virginia, died this morning at the age of 92, after 51 years of service in the Senate. Democrats had been counting on Byrd to help secure the 60 votes necessary to approve financial reform legislation; if Sen. Scott Brown votes against the bill, as he suggested this weekend that he might, Democrats will be one vote short of closing debate and moving to final passage.

• BP costs hit $100M per day. BP's (BP) cleanup and containment efforts in the Gulf of Mexico are now costing the company $100M a day, with total expenditures at $2.65B and rising. BP executives, government officials and meteorologists are all keeping a close eye on Tropical Storm Alex, which has regained strength in the southwestern Gulf of Mexico and could become this year’s first Atlantic hurricane within 48 hours, wreaking havoc on BP's containment efforts. Gulf Coast states are considering filing major claims against BP, and lawyers advising the states said they will ultimately seek multi-billion dollar payouts, eclipsing the $305M BP has thus far paid out to affected states. Meanwhile, concerns have arisen that the two relief wells BP is drilling may not work on their first attempt, leading to unanticipated delays in the containment process. Premarket: BP +5.4% (7:00 ET).

• Greece to return to financial markets. Greece is set to return to financial markets next month with plans to raise around €4B ($4.9B). It will be the country's first borrowing attempt since being bailed out by the EU and IMF; the move is a potentially risky one, since a poor auction could hit sentiment hard.

• Boeing gets a boost from Air China order. Boeing (BA) gets some good news for a change, with the announcement that Air China will buy 20 of Boeing's 777-800 planes for $1.4B. Boeing was most recently in the news for discovering a problem in its fleet of Dreamliner test planes.

• Valspar buys Wattyl. Paint and coatings company Valspar (VAL) agreed to buy Australian paint maker Wattyl for around A$142M ($124M). The deal will help Valspar expand its presence in the Asia Pacific region.

• Infineon, Sistema not in talks. Germany's Infineon (IFNNY.PK) said it's not in talks with Russian conglomerate Sistema. Earlier media reports had indicated that Russian President Dmitry Medvedev and Prime Minister Vladimir Putin were pressuring German Chancellor Angela Merkel to let Sistema take a 29% stake in the semiconductor maker.

• Israel's MA buys Albaugh. Israel's MA Industries (MAIXY.PK) is buying privately-held U.S. firm Albaugh for around $1B. The move will bolster MA's position in the Americas and solidify its standing as the world's biggest generic agrochemical maker. The two companies combined would have had sales of $3.1B in 2009.

• Friday's failures. Three more bank closures on Friday brought this year's total failures to 86 so far. The closures in Florida, Georgia and New Mexico are expected to cost the FDIC's insurance fund $284.6M.

• Russian President Dmitry Medvedev called for a special levy on oil companies to finance a fund to help clean up environmental disasters such as BP Plc's (BP.L)(BP.N) oil spill in the Gulf of Mexico.

• Financial woes may force a state-owned Dubai firm to renegotiate about 220 aircraft orders with Boeing Co (BA.N) and Airbus (EAD.PA), a French newspaper reported.

* Separately, Air China (601111.SS)(0753.HK) said late Friday it will buy 20 Boeing 777-800 airliners for $1.4 billion.

• Miners will be in the spotlight after the Australian government's hopes of defusing a dispute over a planned mining tax hit a snag when one political party vowed to block any attempt to seriously water down the tax.•

Economic reports in recent months have painted a mixed picture about the pace of a recovery. A new report due out Monday is expected to show consumers are still nervous about the economy and holding onto their earnings.

The slow recovery has led some leaders to push for new stimulus measures to bolster growth, though a jump in government spending would make it difficult to control deficits.

Even as stock futures were set for gains, investors still showed some indecisiveness, sending bond prices slightly higher.

Stocks finished Friday's session mixed, completing a lower week for the three major indexes.

"We're coming off a bad week and we're still following on the heels of a terrible May," said Art Hogan, chief market strategist at Jefferies & Co. "But we've gotten to a point in the market where we've priced in a decent bit of bad news, so it won't take much to move the market higher."

A rally could be in store this week as confidence in the global economy picks up, he said.

"We had a G-20 meeting over the weekend that didn't cause anything to tip over the apple cart in terms of new developments, and it's seeming likely that we'll see financial regulation passed this week, so that's helping the financial sector rally," said Hogan.

As I have mentioned on numerous occasions this is the time to be making the most of the various market situations, whether volatile, moderate or however it comes, and trade options.