Sideways Action Continues After an Outside Day

By Minyanville Staff  DEC 04, 2012 4:50 PM

Today's financial recap and tomorrow's financial outlook.


MINYANVILLE ORIGINAL Today was relatively quiet with the S&P trading in a tight range, showing very little follow-through after yesterday's outside down day. There was relatively little major news or economic data of note. The biggest market-moving event for the day was President Obama's first post-election interview with Bloomberg TV. In the interview, Obama noted that if the budget talks were concluded, the US economy would be poised to take off and that the Democrats and Republicans were still at odds on the balance of the proposals. Initially, equities dropped, but this was short lived as they finished near unchanged for the day.

Netflix (NASDAQ:NFLX) jumped 15% after announcing a deal with Disney (NYSE:DIS) for exclusive first-run television rights for all Disney films. Previously, Netflix licensed these films through the Starz network. This deal comes after Disney announced the shuttering of its online streaming business. There were no terms disclosed for the deal.

Treasuries continued their rally with the 10-year yield falling 2 basis points to 1.60%. Equity internals showed mixed signals as financials fell 0.71%. Commodities fell on the day with gold futures declining $19.30 to $1696.70 and silver futures falling $0.73 to $32.93.

Intel (NASDAQ:INTC) sold $6 billion worth of five-, 10-, 20-, and 30-year debt in order to continue its $10 billion buyback plan started back in January 2011. Because Intel does not currently have a large amount of debt compared to its outstanding stock, this will do wonders for the company's balance sheet if it is able to buy back stock at an accelerated pace.

The Reserve Bank of Australia cut its main interest rate to 3% from 3.25%, as expected by economists. However, the market was pricing in a more severe cut, and the Aussie dollar rallied against the other major currencies. The cut was telegraphed from last month's meeting, when the central bank's committee said that further easing was necessary.

After the close, Pandora (NASDAQ:P) reported earnings, beating slightly on EPS at $0.05 versus $0.01 estimates and revenues at $120.0 million versus $117.1 million estimates, but lowered its forward earnings guidance. Though listener hours grew 58% to 1.27 billion, forward guidance on full-year earnings and revenues were lowered significantly. Pandora fell more than 20% in post-market trading.

Tomorrow's Financial Outlook

Tomorrow will be busier on the economic data front. In the morning, as the precursor to Friday's nonfarm payrolls release, the ADP will release its monthly private payrolls change. Economists are expecting a decline from 158,000 private payrolls to 130,000. Also in the morning is the ISM's non-manufacturing composite index will be released. As the US has migrated to a more services based economy, this index may give a better representation of the true economic activity in the US. The index is expected to decline to 53.5 from last month's 54.2.

Globally, China, the UK, and the eurozone will release their services PMI indexes. And though this has fallen in importance, Spain will issue debt in the morning.

In earnings, Finisar (NASDAQ:FNSR) will report after the close.

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