Hello Newton! The Law of Gravity Catches Up With Apple
Today's financial recap and tomorrow's financial outlook.
In US economic data, the ADP private payrolls report showed a monthly increase of 118,000 from last month, a bit lower than the 125,000 estimate and down from a gain of 157,000 last month. Also, the ISM non-manufacturing index rose to 54.7 from last month's 54.2, higher than the 53.5 estimated. This is significant because the ISM's manufacturing index fell to 49.5 from 51.7 earlier in the week. Lastly, US factory orders showed a monthly increase of 0.8%, ahead of estimates of an unchanged month, and down from 4.5% the prior month.
The UK Chancellor noted in his annual Autumn Statement that the UK's economy would continue to slump for an additional year. The UK government is now forecast to run a budget deficit into 2016 rather than the previously forecast 2013. Because of this, UK growth was lowered to 1.2% from the previous estimate of 2% for the coming year.
Apple (NASDAQ:AAPL) tumbled more than 5.5% today. One news story that contributed to the fall was a margin hike at COR Clearing from 30% to 60%, which was likely due to the increased volatility over the past month. Though this is only one clearing firm's actions, this likely shook out some of the weak hands that bought near $580.
Freeport-McMoRan (NYSE:FCX), the world's largest copper producer, bought Plains Exploration (NYSE:PXP) and McMoRan Exploration (NYSE:MMR) for $9 billion in a cash and stock deal. The stock fell more than 15% on the fear that profit margins would suffer as the company moved away from a solely metals business into oil and gas.
Tomorrow's Financial Outlook
Two additional jobs statistics will be released tomorrow. The weekly initial jobless claims, which have continued to trend down for three weeks following the disruptions from Hurricane Sandy, will be released in the morning. Earlier in the morning, the Challenger Job Cuts, or announced corporate layoffs, will be released.
Globally, Australia and Switzerland will release employment figures and the eurozone will release its first estimate of 3Q GDP. The latter is very important as eurozone retail sales released today showed a sharp month-to-month drop.
In earnings news, Smithfield Foods (NYSE:SFD), Smith & Wesson (NYSE:SWHC), and Palo Alto Networks (NASDAQ:PANW) will report.
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