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Maximum Boredom Follows New Year's Party


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

Following the biggest single-week gain in many years that took place last week, it was not surprising to see a drop in volatility and US stocks trade in a tight range throughout the day. S&P 500 e-mini futures traded in a 5.75 point range after 6 a.m. EST, mounting a minor rally into the closing bell. There was no US economic data released. On the earnings front, biotech companies such as Dendreon (NASDAQ:DNDN), InterMune (NASDAQ:ITMN), and BioMarin Pharmaceutical (NASDAQ:BMRN) pre-released information on their upcoming earnings at the 2013 JPMorgan Global Healthcare Conference.

It was a busy day for Bank of America (NYSE:BAC). In the morning, it announced that it had finalized a plan to repurchase $6.75 billion in loans from government sponsored mortgage agency Fannie Mae, totaling about 30,000 loans. The purchase would cost the bank $2.5 billion in the fourth quarter. Also making news this morning was BofA's sale of mortgage servicing rights (MSR) worth $308 billion. Mortgage financiers Nationstar Mortgage (NYSE:NSM) and Walter Investment Management (NYSE:WAC) acquired $215 billion and $93 billion of these rights respectively.

Overseas, the Bank of International Settlements (BIS) in Switzerland eased its requirements for global banks to raise capital and liquidity ratios by 2014. Now, banks must raise capital ratios to 60% of the previous regulations (11%) under the Basel III regulations by the end of 2015 and complete these capital ratios by the end of 2019, effectively extending the deadline by four years. This was particularly beneficial to European banks that had been struggling to raise capital that did not markedly reduce their value.

On the political front, President Barack Obama officially nominated Senator Chuck Hagel as Secretary of Defense and Obama's head counter-terrorism adviser John Brennan as head of the CIA, replacing recently resigned General David Petraeus.

Tomorrow's Financial Outlook

Tomorrow will not be as quiet as today was in the US. In the afternoon, the Federal Reserve will release consumer credit figures from the month of November. On a month-to-month basis, consumer credit is expected to rise $11.50 billion, down from October's $14.158 billion.

On the global economic data front, we will also see increased activity. The eurozone will release consumer confidence, retail sales, and unemployment figures from the month of November. Also, Germany will release factory orders and Italy will release its unemployment rate.

Lastly, Alcoa (NYSE:AA) will officially kick off US earnings season tomorrow after the close. The aluminum maker is expected to report $0.06 per share in adjusted earnings and $5.598 billion in revenues. Monsanto (NYSE:MON) and Apollo Group (NASDAQ:APOL) will also report.

Twitter: @Minyanville

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