Overnight, European finance ministers concluded their meeting in Brussels with a solution to the financing gap that faces Greece. Finance ministers agreed to freeze interest payments on Greek loans for 10 years, extend the final maturity for these loans to 20 years and longer, and engineer a buyback plan. While this was initially viewed as positive, further examination of the deal showed that many controls were built into the deal to protect creditors.
US economic data was better than expected in the morning. Durable goods orders -- a volatile index measuring new orders of manufacturing and electronics goods -- were unchanged on a month-to-month basis, down from last month's gain of 9.2%. This was ahead of the expectations for a decline of 0.7%, though the prior month's orders were revised lower from 9.9%. Consumer confidence also rose to 73.7 from the prior month's 73.1, ahead of the 73.0 consensus.
The French OECD institute lowered its global growth forecasts to 2.2% from 2.4% in May for 2012. For the coming year, growth was lowered to 2% from the prior 2.6% estimate. Notable was the downgrade to eurozone growth. Eurozone growth is expected to decline to -0.4% this year, down from the prior estimate of -0.1%. Next year's growth is expected to decline to -0.1%, lower than the previous estimate of 0.9%.
What had been a slightly positive day turned negative when Senate Majority Leader Harry Reid issued a statement saying, "We only have a couple weeks to get something done so we have to get away from the happy talk." He also stated that he is "disappointed" in the lack of progress.
In the afternoon, the Federal Reserve released household debt levels from the third quarter. Student loan debt rose to $956 billion from last quarter's $911 billion. The more alarming statistic was the level of borrowers who were more than 90 days delinquent. This figure rose to 11.1% of all borrowers, up from 8.9% a year ago.
After the close, Green Mountain Coffee Roasters
(NASDAQ:GMCR) beat on earnings per share of $0.64 vs. $0.48 estimates. Revenues also beat at $946.7 million vs. $904.7 million estimates. Earnings-per-share guidance for the coming quarter and full-year were also raised well above estimates. Green Mountain shares climbed more than 26% in post-market trading.
Tomorrow's Financial Outlook
Tomorrow morning, the Commerce Department will release data from October on new home sales. It is unlikely that this data will be affected by Hurricane Sandy. Sales are expected to rise 0.3% from the prior month or at an annual pace of 390,000. Later in the day, the Fed will release its Beige Book, a summary of economic data and anecdotes from its 12 regional banks.
Globally, Germany will release its consumer inflation index, which is expected to decline to an annual rate of 1.9% from 2.0%. It is also possible that China will release its leading index of economic indicators overnight.
In earnings, Express
(NYSE:ARO), American Eagle
(NYSE:GES), and Workday
(NYSE:WDAY) will report.
No positions in stocks mentioned.
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