Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

US Equities Record Fourth Straight Day of Declines

By

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

PrintPRINT
Japanese and European equities came under severe pressure today. The Japanese Nikkei (INDEXNIKKEI:NI225) failed last night at a technical level of resistance that stretches back seventeen years following a bearish key reversal in the USDJPY. Following yesterday's sell-off, the French CAC-40 (INDEXEURO:PX1) fell 0.57% and is down 3.2% over the two days.

The preliminary estimate of third-quarter eurozone GDP showed the same rate of expansion as the last quarter. Year-over-year growth was down 0.4%, in-line with estimates, and growth rose 0.1% from the prior quarter. Industrial production showed the third straight month-over-month gain after a string of particularly disappointing data. Brazil's stock market is one of the worst-performing across the world this year, and this kind of growth could stem the negative tide.

There was unconfirmed speculation that the Congressional budget conference had come to a preliminary agreement on a budget deal for fiscal years 2014 and 2015. The deal would remove as much as $90 billion in headwinds from the budget sequester, adding about 0.27% to real GDP next year and 0.13% in 2015, according to data compiled by Minyanville. Senate Budget Committee Chairwoman Patty Murray confirmed that talks were ongoing, but a deal had yet to be reached.

November ADP private payrolls rose 215,000, ahead of the highest economist estimate and above the 170,000 consensus estimate. Additionally, the prior month was revised up to 180,000 from 130,000. Bond yields rose as a result and US equities initially traded down. Following the strong report, a number of economists and strategists raised their estimates for Friday's non-farm payrolls report.

New-home sales rose to the highest annual rate in 30 years in October. Sales were reported as 444,000 though many economists doubted the validity of the report due to builder comments during the month. The delayed reports for September and August's home sales drastically missed estimates.

US equities opened down for the fourth straight day and had a very volatile session. The S&P 500 (INDEXSP:.INX) spiked to above 1,800 on the budget deal speculation, only to drop more than 1% on news that Treasury Secretary Jack Lew would update his stance on financial regulation and reform in his speech tomorrow. Buyers emerged near the end of the session to push the major indices into the positive. However, the amount of declining stocks on the NYSE outnumbered advancing stocks throughout the day.

Tomorrow's Financial Outlook

The second estimate of third-quarter US GDP will be released tomorrow morning. Because of gains in wholesale inventories, economists estimate that real GDP will be revised up to an annualized rate of 3.1% from the preliminary estimate of 2.8%. Jobless claims are forecast to rise to 322,000 from last week's 316,000. The last piece of US economic data is October factory orders, forecast to fall 1.0% during the month.

Tomorrow the Bank of England and ECB will both issue their monthly monetary policy decisions. It is expected that the ECB will ease financial conditions through long-term loans or asset purchases, as has been hinted by a number of its officials over the past month. No change is expected from the BoE.

Notable earnings reports scheduled for tomorrow will come from Kroger (NYSE:KR), Conn's (NASDAQ:CONN), Dollar General (NYSE:DG), Jos A Bank (NASDAQ:JOSB), Smithfield Foods (NYSE:SFD), Toronto-Dominion Bank (NYSE:TD), Finisar (NASDAQ:FNSR), and Ulta Salon (NASDAQ:ULTA).

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
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.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE