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Pre-Market Primer: Obama Makes a Bold First Gambit; Retail Sales Fall


The president set the bar high in his negotiations with House Republicans.

MINYANVILLE ORIGINAL After yesterday's declines, stocks are set to open higher today as Cisco (NASDAQ:CSCO) beat profit estimates.

President Barack Obama went into budget negotiations yesterday and demanded another $1.6 trillion in tax revenue over 10 years, much of which will come from expiration of tax cuts for upper-income earners. Last summer, the House Republicans rejected a revenue increase of $800 billion. Today, the president will host a talk with several corporate executives from companies such as General Electric (NYSE:GE), Ford (NYSE:F), and Wal-Mart (NYSE:WMT).

Retail sales fell 0.3% in October. This is a wider drop than the 0.1% slump that many economists expected. Preparations for Hurricane Sandy and Halloween helped some retailers last month, but auto dealers had a rough one. Not counting the drop in auto and gas sales, retail sales were dead flat from September. Producer prices fell 0.2% last month.

At 10:00 a.m. EST, business inventories data will be released. A monthly rise of 0.4% is expected after last month's 0.6% increase in inventories.. The Federal Reserve will release the minutes of its latest policy meeting today at 2:00 p.m.

Before the opening bell, futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) rose 0.19% to 12,741.00. S&P 500 (INDEXSP:.INX) futures gained 0.23% to 1,374.10, and Nasdaq (INDEXNASDAQ:.IXIC) futures climbed 0.40% to 2,570.75.

Cisco shares rose over 7% in the pre-market after surprising on earnings. Cost cuts helped net profit for the networking equipment company rise 18% from the year before to $2.1 billion. Adjusted earnings per share in its fiscal first quarter hit $0.39 per share, up from $0.33. Cisco is facing significant headwinds. Government sales are down 6% and sales in Europe, the Middle East, and Africa fell 10%, mainly a consequence of the European economic malaise.

Facebook (NYSE:FB) shares are down today since the lockup on 804 million shares expire this week.

Staples (NASDAQ:SPLS) shares rose nearly 6% this morning despite reporting a net loss of $569 million. A goodwill impairment came along with restructuring charges, weak sales in Europe and Australia, and taxes. Adjusting for one-off items, EPS beat analyst expectations at $0.46 per share.

Workers across Europe are holding strikes to protest austerity and unemployment. Transportation has been shut down in many cities and arrests are being made in 23 countries, but only Spain and Portugal are having general strikes.

It came out today that in the third quarter of this year, Portugal's economy shrank by 3.4% from last year. Greece's GDP is 7.2% lower than last year. Across the European Union, industrial production fell 2.3% on a yearly basis in September.

Twitter: @vincent_trivett
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