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G7 Finance Ministers Express Concern Over FX Volatility


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

G7 finance ministers and central bankers released a statement this morning saying that they were against excessive FX volatility, noting that it can have adverse implications on financial stability. Later in the morning, another G7 official said that these comments were misinterpreted, and that the G7 was actually very concerned about excess yen depreciation.

The S&P's bias was higher today as financial and housing stocks led the market. Financial stocks, as measured by the BKX index, were up 1.13% today while housing stocks rose 3.78%. Overseas, Barclays (BCS) announced 3,700 job cuts to investment banking and consumer finance divisions as it seeks to reinvigorate its business.

Dell's (DELL) second-largest shareholder, T. Rowe Price (TROW), said that it would not support the company's effort to go private via an LBO with the help of Silver Lake Partners and Microsoft (MSFT). The stock traded above the $13.65 deal price as a result on speculation that the group would either raise its bid or another buyer might emerge.

The US Treasury showed a $2.88 billion budget surplus in January for the first time since 2008. The surplus was due to a 16.2%, or $34.97 billion increase in revenues, likely as the result of increased taxes.

Tomorrow's Financial Outlook

Tomorrow morning retail sales will be released. Consumer confidence has declined throughout January in conjunction with an increase in taxes. Because of this, economists have extrapolated that real spending will decrease in January. Economists are expecting a 0.1% seasonally adjusted gain from December's gain of 0.5%. Business inventories will also be reported in the morning, with a 0.3% gain expected in December, which should miss to the downside as we've already seen from manufacturing and GDP reports.

Globally, the eurozone will release industrial production figures while in the evening, Japan will release real GDP figures from the fourth quarter. Fourth-quarter GDP is expected to rise 0.1% from the third quarter's decline of 0.9%.

Tomorrow's earnings reports include Deere (DE), Dean Foods (DF), Duke Energy (DUK), Comcast (CMCSA), Lorillard (LO), Nvidia (NVDA), Avis Budget (CAR), Applied Materials (AMAT), Whole Foods (WFM), Cisco (CSCO), EOG Resources (EOG), NetApp (NTAP), Weight Watchers (WTW), Liberty Global (LBTYA), and Zillow (Z).

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