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Alcoa Posts Big Revenue Increase, Japan Seeks to Devalue Currency


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

The headline story for early trading was the slight declines in European economic data. But as the day's trading opened, the market turned quickly negative. One catalyst for the downturn was Investor Business Daily and TechnoMetrica's gauge of Economic Optimism. While the index rose last month to 46.5 from 45.1 the month prior, it was below analyst expectations of 47.3 this month.

Pre-market, the eurozone released retail sales and unemployment figures from the month of November. Retail sales rose 0.1% on a month-to-month basis, up from the prior month's decline of 0.7%, but a bit below the 0.3% economist estimate. Euro-wide unemployment rose to 11.8% from the prior month's 11.7%, inline with the estimate of 11.8%. Lastly, Germany released factory orders from the month of December. The release showed a decline of 1.8% from November's jump of 3.8% and a bit below the -1.4% estimate.

In Japan, Finance Minister Taro Aso stated that Japan would seek to purchase European sovereign debt and debt of the region's bailout fund, the European Stability Mechanism (ESM), with the country's foreign exchange reserves in order to reduce the value of the Japanese yen. Also during the day was a release from the Nikkei newswire stating that the Bank of Japan would begin targeting 2% inflation, up from its current target of 1%. However, it is worth noting that this was not the first mention of such a target, so there was little to no market reaction.

Aluminum manufacturer Alcoa (NYSEAA) reported earnings after the close. Typically viewed as the start of the quarterly earnings cycle, the company reported earnings-per-share of $0.06, which was inline with estimates, but beat handily on revenues at $5.90 billion versus the $5.60 billion estimate. The stock rose 2% or more in post-market trading. Before market open, Monsanto (NYSE:MON) reported a much better-than-expected quarter. Earnings per share came in at $0.62, better than the $0.36 estimate, and revenues also beat at $2.94 billion versus the $2.64 billion estimate. Forward guidance for the year was also raised. Monsanto finished up 2.63% on the day.

Tomorrow's Financial Outlook

Tomorrow will be void of any economic releases in the US, but busy elsewhere. China will release its monthly trade balance from December, with exports expected to rise markedly from the month prior. This should be a big moment for Chinese stocks, which have gained 16% since the beginning of December. Last week, preliminary Chinese economic data showed stabilization after climbing over the prior two months.

Also on the global slate are Australian retail sales and German industrial production.

Earnings season will continue with Texas Industries (NYSE:TXI) and Constellation Brands (NYSE:STZ) tomorrow.

Twitter: @Minyanville

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