|Markets Work Off Oversold Conditions|
By Minyanville Staff FEB 26, 2013 5:45 PM
Today's financial recap and tomorrow's financial outlook.
After yesterday's swift sell-off, US markets worked off their oversold conditions and meandered higher for the majority of the day. In the morning, Federal Reserve Chairman Ben Bernanke gave testimony to the Senate Finance Committee. While he didn't deviate much from what has been discussed by other Fed officials over the past week, he discussed the potential issues that could arise from a Fed exit from federally guaranteed asset markets and reiterated that the Fed's easy monetary policy would continue until there was substantial improvement in unemployment. Regardless, US stocks sold off and reached the day's lows shortly after the speech.
US economic data for the day showed continuing resurgence in January and rebounding social mood. New home sales for January rose to an annual pace of 437,000 from 378,000 last month, higher than the 380,000 estimate. The Conference Board's reading of consumer confidence in February rose to 69.6 from 58.4 in January, well above the 62.0 estimate. The boost was driven by a large jump in confidence over the present and future situation.
Italian elections continued to dominate the news as the two leading contenders, Berlusconi and Bersani, looked to form a coalition to lead the government. European stocks struggled, but since much of the damage done yesterday in US stocks was done after the European equity close, this was simply catching up to that weakness. In particular, though, the Italian FTSE MIB fell 4.89% while Italian sovereign credit struggled.
Tomorrow's Financial Outlook
The rapid pace of US economic data continues tomorrow. Durable goods orders from January and capital goods orders will be released in the morning; economists estimate that after the large inflow of airplane orders in December, durable goods orders will show a large drop. However, excluding transports, the index should show a small gain month-to-month. Pending home sales from January will also be released with a large gain expected. If these sales are anything like what we've already seen, they should beat to the upside.
On the global front, the UK will release its first estimate of 4Q GDP. The initial estimate from the NIESR institute earlier this month showed that UK GDP probably rose to 0.0% from -0.3% in the 3Q and economists expect continued weakness at -0.3% quarterly growth. Elsewhere, the eurozone will release consumer confidence figures from February.
On the earnings front, Cincinnati Bell (CBB), Target (TGT), Joy Global (JOY), Stillwater Mining (SWC), Starwood Property Trust (STWD), Fortress Investment Group (FIG), JC Penney (JCP), Liberty Media (LMCA), Sturm & Ruger (RGR), Monster Beverage (MNST), Universal Display (PANL), and Groupon (GRPN) are set to report.