S&P 500 Reaches 5-Year Highs
Today's financial recap and tomorrow's financial outlook.
Despite the early strength, equities sold off throughout the day while Treasuries remained weak. Early in the morning, the S&P 500 touched six-year highs and quickly retreated from that mark. Then, late in the day, stocks recaptured this level to close the day at six-year highs.
In the morning, the European Central Bank and Bank of England chose to keep their benchmark interest rates unchanged at 0.75% and 0.50% respectively. At the ECB's press conference, President Mario Draghi indicated that inflation may pick up in the coming months in Europe, though the European economics are likely to remain in a recession. German bunds reacted negatively to the comments on inflation with the 5-year note rising 7.4 basis points to 0.60%.
US economic data was a bit worse today. Initial jobless claims rose to a monthly rate of 371,000 versus an estimated rate of 365,000. Also, for the first time in over 18 months, the prior month's claims were revised higher.
After the close of market hours, American Express (NYSE:AXP) cut 5,400 jobs or the equivalent of 8% to 9% of its workforce. The company will take a charge of $287 million in the fourth quarter.
Tomorrow's Financial Outlook
The US will release the import price index in the morning. It is expected to rise slightly to -1.5% from last month's -1.6%. The US trade balance is also expected to narrow to a deficit of $41.2 billion, up from last month's deficit of $42.2 billion. On the earnings front, Wells Fargo (NYSE:WFC) will kick off bank earnings in the morning.
Globally, the UK will release manufacturing and industrial production figures and Switzerland will release inflation figures from last month. On a monthly basis, the UK's manufacturing is expected to grow slightly.
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