In terms of data releases the week is only beginning now. Stocks have been rising this week led by the Dow hitting a 13-month high Tuesday and continuing to climb yesterday, but the drivers have been from outside the US economy. This morning the market is looking more cautious ahead of weekly jobless claims and the monthly deficit figures, as neither release is expected to be a harbinger of optimism.

Dow Futures have fallen 38 points to 10,221 in pre-session trading, while S&P 500 futures are 3.75 points lower at 1,092.50. In addition, WTI Crude oil remains below the $80 mark at $78.57 per barrel, and Spot Gold is down $2.14 to $1115.26 (about $9 below the record highs earlier in the week.) The dollar is weaker this morning as it continues the play the role of safe haven despite increased concerns about its long-term value.

Global news continue to make headlines this morning. Chinese Premier Wen Jiabao said China would continue cooperating in restoring global balance and growth, but he warned that recovery wouldn’t be as smooth as many expect. “The worst is over,” Wen said from a forum in Beijing, according to Bloomberg. “The global economy is starting to recover but a total recovery will be a slow and bumpy process.”

Meanwhile, Treasury Secretary Tim Geithner told CNBC the administration wants to reduce the budget deficit to 3% of GDP as the economy recovers. “We are likely to have to borrow substantially less than we initially anticipated to help repair the damage to our financial system,” he added.

In earnings, Wal-Mart beat expectations for the third quarter by posting $3.25 billion in profit, or 84 cents per share, a 3.2% gain from Q2. Later the day markets will hear from Walt Disney, which is expected to post earnings per share of 41 cents.

Key Events Today:

8:30 ― Initial Jobless Claims averaged 524,000 per week in October, an improvement from the 549k average in September but still a far cry from suggesting stabilization. The unemployment rate is 10.2% and the economy is now growing at a decent pace of 3.5%, yet lay-offs continue regardless. The first week of November is expected to see 512k new jobless claims. If there’s good news, it’s that continuing claims have been falling for seven consecutive weeks ― now at 5.886 million ― yet much of that decline can be attributed to benefits expiring rather than job creation.

2:00 ― Data from Bloomberg says the average deficit for October has been $61.7 billion over the past ten years. If only . . .  After a record-breaking deficit in fiscal year 2009, 2010 isn’t beginning on a hopeful note. The Treasury Budget Statement is set to begin the year with a monthly gap of $150 billion, more than triple the $46.6 billion deficit in FY October 2009.


  • Treasury Auctions:
  • 1:00 ― 30-Year Bonds ($16 billion)

Last but not least, the FHA will release the results of their internal audit today.