Rougher Economic Data Continues Two-Day Slide in Stocks
Today's financial recap and tomorrow's financial outlook.
US equities got off to a rough start and continued to decline throughout the day as economic data was weaker than expected. Weekly initial jobless claims jumped to 362,000 from last week's 342,000, moving up the 4-week average to 360,800. The consumer price index (read: consumer inflation) fell to an annual rate of 1.6% in January from December's 1.7%, and the ex food and energy index was unchanged month-over-month at an annual rate of 1.9%. The most concerning report of the day was a noticeably weak Philadelphia Fed regional manufacturing outlook, which dropped to -12.5 from -5.8 last month. The downturn was attributed to a large downtick in unfilled orders and new orders.
The reaction to this weakness in economic data was met by continued selling in equities and precious metals. Copper finished the day down 1.48%, WTI crude finished the day down 2.11%, and gold stemmed its 4% loss from yesterday. Housing stocks again stumbled and have now lost 4.93% over the past two days. This morning's existing home sales saw sales decline to a seasonally adjusted annual rate of 4.92 million, which is a gain from December's lower revised 4.90 million rate. This was slightly above the 4.90 million economist estimate.
After the close, Hewlett-Packard (NASDAQ:HPQ) beat earnings with EPS of $0.82, better than the $0.71 estimate, and revenues of $28.36 billion, also better than the $27.80 billion estimate. Forward guidance for the coming quarter and full-year were much better, lifting the stock over 9.5% in the after hours.
Tomorrow's Financial Outlook
There will be no major economic reports tomorrow in the US and the only major earnings reports will be from Gardner Denver (GDI) and Abercrombie & Fitch (ANF).
Globally, China will release property prices for January. Last night, the Chinese government enacted curbs on real estate speculation, so expect some volatility here. Over in Europe, Germany will release the second estimate of 4Q GDP, which should see little change from last month's estimate. Lastly, the IFO Institute will release Germany's economic expectations for February
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