Schacknow - Today's Brief - July 5, 2012

July 5, 2012
TODAYS PRIMER                            
Peter Schacknow, Senior Producer, CNBC Breaking News Desk

Wall Street resumes its holiday-shortened trading week this morning with the S&P 500 and the Nasdaq coming off gains in three straight sessions and five of six. The recent rise in the major averages has the Dow, the S&P, and the Nasdaq all at their highest levels since early May.

It’s a busy day for economic numbers as investors go back to work, with no less than three reports on the state of the nation’s labor market. At 7:30am ET, we’ll see the Challenger report on planned job cuts for June, followed by the ADP report on private sector employment at 8:15am ET, and the Labor Department’s weekly look at initial jobless claims at 8:30am ET.  Economists think the ADP report will show 108,000 new private sector jobs in June, compared to 133,000 in May, while jobless claims are expected to come in at 385,000 for the week ending June 30, down from 386,000 the prior week.

At 10am ET, the Institute For Supply Management’s non-manufacturing index should come in at 53.0 for June, according to consensus forecasts. That would follow a reading of 53.7 for May.

Also out today: the Mortgage Bankers Association’s weekly look at mortgage applications at 7am ET, the Energy Department’s assessment of natural gas inventories at 10:30am ET, and its report on oil and gasoline inventories at 11am ET. The reports on mortgage applications and oil and gasoline inventories were postponed from their usual Wednesday release by the July 4th holiday.

Investors will be paying closer attention than usual to interest rate announcements from the Bank of England (7am ET) and the European Central Bank (7:45am ET) this morning. The BOE is expected to announce a third round of economic stimulus measures, while the ECB is widely forecast to cut its benchmark interest rate 25 basis points to 0.75 percent.

Barclays (BCS) is once again a stock to watch, as Moody’s cuts its outlook for the bank because of the disruption caused by the Libor-fixing scandal. Barclays’ standalone financial strength has been lowered to “negative” from “stable”.

Apple (AAPL) has suffered a court defeat in a case involving Taiwan’s HTC, with a London court ruling that HTC’s devices do not infringe Apple patents.

Best Buy (BBY) is said to be testing a new design strategy for smaller stores that borrow heavily from the look of Apple’s retail outlets, according to the Journal. 

Ad agency stocks like WPP Group (WPPGY), Interpublic Group (IPG), Omnicom (OMC) and Monster Worldwide (MWW) might draw some interest, after French agency Publicis Groupe announced a deal to buy rival BBH and its partly owned Brazilian affiliate for an undisclosed price.