Economic data released in the US continued to show an increase in housing demand as housing prices rose for the eleventh straight month. The S&P/Case-Shiller Home Price composite showed a seasonally adjusted gain of 0.63% in November and is rising at an annual rate of 5.52%. In both cases, the final numbers were inline with economist expectations.
The Conference Board's Consumer Confidence Index showed a severe drop to 58.6 in January from 66.7 in December. The drop was largely attributed to the payroll tax increase at the beginning of the year as feelings toward the present situation and forward expectations fell off a cliff. Economists were forecasting a slight decline to 64.0 from December.
However, though economic data left much to be desired, equities bounced back from the day's lows to finish in the green on the day. Consumer discretionary stocks, normally a defensive sector, showed strength in the morning session, but lagged as the positive momentum increased. Additionally, Treasuries, which began to show strength in overnight trading, quickly rolled over and the 10-year yield again rose to near 2%.
(AMZN) reported earnings and missed on nearly every metric, including earnings and revenues for the current quarter and forward revenue. The company also predicted a loss for the coming quarter's net income. The online retailer also noted the slowest growth of physical book sales in 17 years. All of that being said, the stock rose over 5% after its earnings report.
Tomorrow's Financial Outlook
Tomorrow morning is Friday's nonfarm payrolls preview in the form of the ADP private payrolls employment change. The broader survey of business payrolls is expected to decrease to a monthly rate of 165,000 in January from 215,000 in December. Additionally, the first estimate of fourth quarter GDP will be announced. Estimates call for an annualized rate of growth of only 1.2%, down from the prior quarter's 3.1% growth as the large increase in government spending is expected to fall off.
Lastly, the FOMC will release its monthly rate decision at 2:15 p.m. EST. Last month the Fed increased its large-scale asset purchase plan to include $45 billion of Treasuries and it is unlikely that any of that is changed this month. However, it is possible that the Fed may embrace new qualitative goals for its asset purchase plans, but that is a long shot.
In earnings, Boeing
(BA), Phillips 66
(SWKS), Electronic Arts
(EA), JDS Uniphase
(FIO), and ConocoPhillips
(COP) will be the major reports for the day.
No positions in stocks mentioned.
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