US Markets Await Fed Chief Yellen's Testimony

By Minyanville Staff  FEB 10, 2014 4:25 PM

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

 


Japan's current account deficit widened to a record in December 2013 at -638.6 billion yen, which should put further pressure on the Japanese yen. Asian equities rallied for the fourth straight day, but emerging markets continued to be under pressure. The MSCI Emerging Markets Index declined by 1.33% in today's trading.

Markets remained largely on hold ahead of tomorrow morning's Humphrey-Hawkins testimony from new Fed chairperson Janet Yellen. The S&P 500 (INDEXSP:.INX) traded in a small seven-point range for the session and volume was light on the NYSE at only 84% of the 10-day average. Defensive health-care and utilities stocks were the leaders today; the industrial and energy sectors were the laggards. Treasury Secretary Jack Lew reported to Congress that he had undertaken extraordinary measures to prevent the US government from defaulting, though this did not appear to be a concern for investors today. Congress is currently attempting to pass a bill that would extend the US's borrowing authority until June 2015.

Renowned activist investor Carl Icahn announced today that he would stop harassing Apple (NASDAQ:AAPL) about his proposal to drastically increase the company's stock buyback plan and increase its dividend, which caused the stock price to surge. Apple rose 1.86% in today's trading.

Natural gas futures continued their erratic trading again today, dropping 4.26% at the close of floor trading. Following an inordinate amount of snowfall in the Northeast, weather forecasters are calling for milder conditions in the near future, which is negative for the price of natural gas.

Tomorrow's Financial Outlook

The main highlight for tomorrow's trading will be the testimony by Janet Yellen at 10:00 a.m. Typically, Fed members do not reveal any new direction on monetary policy at these testimonies, but rather tend to stay much more general. However, investors will be keeping a close eye on the chairperson's prepared remarks to see if there is any information to be gleaned about future policy direction.

The December JOLTS job openings survey and wholesale inventories report are scheduled to be released tomorrow morning. The inventories report should affect the fourth-quarter GDP report if there is any deviation from the expected growth. Economists estimate that inventories grew 0.5% month-over-month in December 2013.

The only global economic reports scheduled for tomorrow are December 2013 Australian home loans and NAB business confidence index.

Eighteen major US companies are scheduled to report earnings tomorrow. Notable reports include those from CVS Caremark (NYSE:CVS), Dean Foods (NYSE:DF), Sprint (NYSE:S), Mosaic (NYSE:MOS), Fossil (NASDAQ:FOSL), and FireEye (NASDAQ:FEYE).


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