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ECB, BoE Hold Rates Steady, Apple Recovers


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

MINYANVILLE ORIGINAL The central bank releases in Europe this morning were a relative non-event, a departure from what they had been during the past year. The Bank of England chose to keep its main interest rate on hold as did the European Central Bank. ECB President Mario Draghi's commentary led some analysts to believe that the possibility of a rate cut in early 2013 was very likely. The BoE is likely on hold for now with QE, at least until mid-2013.

European economic data was inline to slightly better than expected. The first estimate of eurozone GDP fell -0.1% quarter-to-quarter, inline with expectations and the prior month. German factory orders rose 3.9% on a monthly basis, well ahead of 1.0% expectations and up from last month's decline of 2.4%. On a more sour note, French unemployment rose to 10.3% from last month's 10.2%, but this was less than the expected increase. Greek unemployment rose to 26% from last month's 25.3%.

The Challenger Job Cuts -- planned private layoffs -- rose 34% annually and noted a gloomy planned hiring outlook for December. Layoffs should continue to accelerate throughout the holiday season. Yesterday, the ADP private payrolls report noted a monthly increase of 118,000, down from last month's increase of 158,000.

In early trading, Apple (NASDAQ:AAPL) reached an intraday low of -3% before recovering at the open to close 1.5% higher on the day. The early sell-off could have been attributed to continued forced selling as the result of higher margins and momentum traders reaching for a stock that had dropped almost 9% in eight trading hours.

The weekly natural gas inventory report showed a decline of 74 billion cubic feet, more than the expected decline of 67 billion cubic feet. However, as natural gas futures had risen 4.3% yesterday, the better inventory report was rejected after natural futures briefly spiked intraday before declining to a loss on the day.

Tomorrow's Financial Outlook

Tomorrow the monthly nonfarm payrolls report will be released. Estimates are already factoring in a sharp decline due to Hurricane Sandy's disruptions. Economists are forecasting a monthly increase of 86,000, down from last month's increase of 171,000. The unemployment rate is expected to stay unchanged at 7.9%.

Globally, the UK and Germany will release industrial production information. German industrial production is expected to be unchanged from last month, after falling 1.8%. Given that German factory orders increased today, there is the likelihood that this could beat to the upside.

There will be no major US earnings reported.

Twitter: @Minyanville

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