Overnight, two different events pushed overseas markets lower. The Bank of Japan released its monthly rate decision. It made no change in its main interest rate, but the central bank did upgrade its assessment on the Japanese economy, saying conditions had stabilized and stopped weakening. Central bank officials also noted that a USDJPY between 90 and 100 was a normal equilibrium for its 2% inflation target.
The other overseas economic data that moved markets was eurozone GDP from the fourth quarter. The preliminary GDP data showed a 0.6% contraction during the fourth quarter, which was lower than the -0.4% economist estimate and reflected a 0.9% recession during 2012. Notable misses included Germany (-0.6%), France (-0.3%), and Italy (-0.9%).
In the US, weekly initial jobless claims fell more than expected, with last week's claims falling to 341,000 from 368,000 the prior week. Economists had been forecasting a slight drop to 360,000. Continuing claims fell to 3.114 million in the week prior, which was the lowest level since 2007.
Stocks were lower pre-market, but the dip was bought and the bounce held throughout the day, which was a positive note. Treasuries were also strong throughout the day, a notable divergence. The $16 billion 30-year refunding was met with strong demand and bonds continued to rally after its completion.
(BRK.A) completed a purchase of Heinz
(HNZ) for $28 billion today, or $72.50 per share, in cash with private equity firm 3G Capital. This was approximately 19.87% over yesterday's closing price. Berkshire Hathaway shares also rose to a record after the close of the deal.
Tomorrow's Financial Outlook
Tomorrow will be options expiration for monthly stock options, and there will also be a number of other US economic data points. On the schedule is Empire Manufacturing, foreign TIC flows, industrial production, capacity utilization, and the University of Michigan/Reuters consumer confidence statement. Most interesting is the confidence statement as it dropped sharply in January. Recent consumer confidence data has shown a modest improvement.
The overseas schedule is light with only Japanese industrial production and UK retail sales in the US pre-market.
Earnings reports include Kraft Foods
(KRFT), TRW Automotive
(TRW), VF Corp
. (VFC), IPG Photonics
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.