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Financials Lead the Market Higher

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

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MINYANVILLE ORIGINAL Overnight, Chinese inflation fell slightly to 1.9% from last month's gain of 2.0%, but was inline with expectations of 1.9%. In the morning, US retail sales data showed strong growth from last month, rising 1.1% compared to estimates of a gain of 0.8%. Last month's figures were also revised up to 1.2% from 0.9%. It is worth noting that much of the gain vs. the consensus number was due to increased sales from the iPhone 5, as the "electronics" category far outpaced any other.

Later this week, EU finance ministers will meet to discuss better ways to utilize the region's new bailout fund, the European Stability Mechanism (ESM). Earlier today, a news article from Reuters pointed towards November as the time for Spain to ask the EU and the ECB for an aid package to reduce borrowing costs for the nation.

Mortgage REITs (real estate investment trusts) continue to get hammered as prepayment speeds increased as the result of the Fed's MBS purchase program and increased housing activity. Notable decliners included Annaly Capital Management (NYSE:NLY) and American Capital Agency (NYSE:AGNC). mREITs typically carry higher dividends, but falling interest rates for mortgage loans have caused market speculation over whether or not these companies can continue to pay 13% dividends.

Citigroup (NYSE:C) reported earnings before market open, earning $1.06 per share last quarter, beating estimates of $0.97. The company reported revenues of $19.41 billion, topping estimates of $18.75 billion. Despite investor uneasiness over many of the one-time items that attributed to Citigroup's earning beat, the stock rose over 5% today.

Tomorrow's Financial Outlook

The pace of economic data and earnings will not abate tomorrow. In the morning, the US will report the consumer price index (inflation) and capacity utilization. Economists are expecting the inflation index to rise to 1.9% from 1.7% annually. Increased industry capacity utilization is an integral part of increasing employment and manufacturing growth.

Later in the morning, the National Association of Home Builders (NAHB) will report its monthly home index. The index, which tracks builder and agent confidence in new home production and sales, is expected to rise to a reading of 41 from last month's 40, the highest point since mid-2006.

This week will be busy in terms of earnings Coca-Cola (NYSE:KO), Goldman Sachs (NYSE:GS), and Johnson & Johnson (NYSE:JNJ) will report before market open tomorrow. After market close, Intel (NYSE:INTC), State Street (NYSE:STT) and CSX (NYSE:CSX) will report.

Twitter: @Minyanville

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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