The risk-off trade continued Wednesday, despite positive action in Apple
(NASDAQ: AAPL) and a massive rally in Facebook (FB), which delivered an upside surprise Tuesday after the close.
While the market wasn't down big, there was notable weakness in small caps, energy, and industrials.
In the morning, we saw earnings beats from AT&T
(NASDAQ: T), Boeing
(NYSE: BA), and Lockheed Martin
(NYSE: LMT), but misses from Bristol-Myers Squibb
(NYSE: BMY) and Delta Airlines
In fixed income, US Treasury bonds declined and the yield curve steepened on comments from the Fed that inflation was rising due to higher energy prices.
On the commodity side, crude oil broke the $86 level on an unexpected inventory build, while gold followed its recent bearish trend. The decline in gold may seem counterintuitive given that it is normally viewed as an inflation hedge. However, there has been speculation that the metal was simply overbought by funds around the QE3 high in early October, which in retrospect marked a logical near-term top.
Tomorrow's Financial Outlook
On Thursday, we will see a large number of earnings reports. Coca-Cola
(NYSE: KO) and Procter & Gamble
(NYSE: PG) will report before the open, and Apple and Amazon
(NASDAQ: AMZN) will report after the close.
In economics, we will receive the jobless claims, durable goods, and pending homes sales reports for September.
No positions in stocks mentioned.
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