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US to Become Top Oil Producer in 2015


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

The four-day Third Plenary session of the Chinese Politburo concluded today. Through comments to the official Chinese news agency Xinhua, the Chinese government announced that it plans to deepen fiscal and economic reforms, including a more balanced income distribution system. Ideally, the reforms would help the Chinese economy grow at double-digit rates.

Some investors were spooked by comments early this morning from Dallas Fed President Richard Fisher in Australia. Fisher stated that the Fed's monetary accommodation was growing riskier by the day and may be approaching a tipping point. In addition, Atlanta Fed President Dennis Lockhart was hesitant to respond about whether or not the Fed would aggressively defend its inflation goal given the persistently low readings.

US markets were lower overnight and continued to trade lower throughout the day. Some of the negative trading could be attributed to anxiety over tighter monetary policy. Financial, energy, and utility stocks were the hardest hit sectors in the S&P 500 (INDEXSP:.INX) today. All three sectors declined about 1%. Tech stocks were the top-performing sector, led by gains in semiconductor manufacturers.

Crude oil experienced an alarming 2.5% sell-off on news from the IEA that the US would be the top global oil producer in 2015 due to increases in shale production.

US Airways (NYSE:LCC) and American Airlines (NYSE:AAR) is expected to see its merger completed in December. Today, the US government settled its antitrust suit in federal court by forcing the newly formed airline to sell or transfer 104 slots at Reagan Airport in Washington. US Airways will still be the largest carrier at Reagan after the sale. The most likely airline to gain from the sale should be Delta (NYSE:DAL).

Tomorrow's Financial Outlook

The calendar remains light again tomorrow. The Treasury will release its October budget, which is estimated to show a deficit of $104.2 billion after a deficit of $120 billion in September. Also, the Treasury will sell $24 billion in new 10-year notes at 1:00p.m. EST.

Ben Bernanke will give a speech at a town hall meeting with educators in Washington. Even though Bernanke's term as chairman of the Federal Reserve ends on January 31, 2014, investors will still look for clues as to what the FOMC's December meeting may bring.

The UK will release information on its employment picture tomorrow morning before the US market opens. In addition, October eurozone industrial production is due out.

Only eight major US companies will report earnings tomorrow. Among those is Cisco (NASDAQ:CSCO), NetApp (NASDAQ:NTAP), Macy's (NYSE:M), ExOne (NASDAQ:XONE), and SeaWorld (NYSE:SEAS).

Twitter: @Minyanville

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