Tuesday Morning Cheat Sheet: 3 Stories Moving Markets

Japan’s Nikkei hit the ground running after a long weekend, closing up 1.94 percent on the back of the yen, which weakened to 94.30 to the dollar. The Hang Seng gained 0.16 percent, while the S&P/ASX 200 was relatively flat, shedding 0.01 percent.

European markets were trading in positive territory heading into the opening bell in New York. Germany’s DAX was up 0.07 percent, London’s FTSE 100 was up 0.43 percent, and the STOXX 50 was up 0.40 percent.

U.S. futures at 8:10 a.m.: DJIA: -0.01%, S&P 500: -0.03%, NASDAQ: -0.13%.

Here are three stories to keep an eye on:Yen

1) “We reaffirm that our fiscal monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates,” reads a statement issued by the G7 Ministers and Governors. Not quite as emphatic as some would have hope, the statement addresses what some see as aggressive monetary policy that has brewed up some tension between major currencies.

Front and center in the conversation is the Bank of Japan and Prime Minister Shinzo Abe’s call for policies that would end years of deflation and spur domestic growth. This is, of course, in line with the country’s ambition to heal its economy, but a weakening yen dramatically steps up the pressure for any company that competes with Japanese exporters.

obama2) President Barack Obama will deliver his State of the Union address tonight, just over two weeks away from the March 1 deadline for the sequester. A Quinnipiac University national poll showed that a combined 55 percent of Americans would like the President to focus on either the economy or the deficit in his speech, and it seems like a good bet that he will give considerable attention to both. Some are also looking for Obama to signal his support for trade talks between the United States and the European Union.

Senator Marco Rubio (R-Fla.) will deliver the Republican response. The results of the national poll suggest that the GOP will be focusing on what Obama has to say about the federal deficit, and will weigh in on the subject themselves in their response.

3) “The Optimism Index barely budged in January,” comments National Federation of Independent Business chief economist Bill Dunkelberg. “The only good news is that it ‘budged’ up, not down. If small businesses were publicly traded companies, the stock market would be in shambles.”

The NFIB report for February strikes a fairly gloomy tone. The survey of over 10,000 small businesses suggests that people have little confidence that the U.S. economy is recovering fast enough to accommodate growth in small business. Building at least one bridge between small and big business, a survey conducted by Bank of America recently shows that just 39 percent of CFOs predict economic expansion in 2013.

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