MORNING COFFEE

Deficit To Reach New High.  President Obama plans to propose a $3.8 trillion dollar budget today for 2011, with deficit projections hitting a record $1.6 trillion this year. The 2011 deficit will surpass the current fiscal year's deficit of $1.4 trillion, in part because of new spending for a proposed jobs package "somewhere in the $100 billion range."

Toyota To Fix Pedals.  Toyota (TM) announced its plans to begin fixing accelerator pedals this week after last week's recall. U.S. regulators have approved the repair, and parts will ship as soon as February 8. The recall affects eight different models and comes just after a Lexus recall that was caused by floor mats causing pedals to stick.  Over the weekend PSA Peugeot Citroen recalled 90,000 cars that may have the same gas-pedal flaw and that were made in a factory where Toyota and Peugeot jointly manufacture small cars.

Disney To Sell Miramax.  Reports say Disney (DIS) is looking to sell of its Miramax film unit as it seeks to focus on big-budget, branded movies. Up to ten bidders have expressed interest in purchasing the Miramax name and its 700-film library.  The sale could bring in over $700 million.

Earning Releases Scheduled for today include the following:

Humana (HUM): Reported Q4 EPS of $1.48 which was in-line with estimates on revenue of $7.6 billion.

Sysco (SYY): Reported earnings of $0.45 which was better than the $0.42 street estimate.  Revenue fell 3 percent to $8.87 billion from $9.15 billion last year

ExxonMobil (XOM):  Reported earnings of $1.27 which was better than the $1.19 street estimate.  Revenue in the quarter rose 6 percent to $89.84 billion.

Todays economic reports include: Personal Income, Personal Spending, Construction Spending and the ISM Index.

·         Futures: Dow +0.4%. S&P +0.4%. Nasdaq +0.3%. Crude +0.4% to $73.18. Gold -0.15% to $1,081.40.

·         Asia, Nikkei +0.1% to 10,205. Hang Seng +0.6% to 20,244. Shanghai -1.6% to 2,941. BSE flat at 16,356.

·         Europe at midday, London +0.15%. Paris -0.15%. Frankfurt flat.