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After Three Straight Days of Losses, US Equities Rebound


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

Consumer price inflation (CPI) growth in the eurozone fell to the second-slowest rate since 2009 in December 2013. Official data showed that prices rose 0.8% from a year ago, in line with economist estimates and down from 0.9% in the month prior. The number of unemployed people in Germany fell for the first time in five months, though the unemployment rate remained unchanged at 6.9%. Spanish stocks rallied strongly today. The IBEX 35 Index gained 2.93%.

US equities recorded a positive day after starting off 2014 with three straight days of losses. The S&P 500 (INDEXSP:.INX) gained 0.61% and retraced half of the prior three days' losses. Health care was the strongest performer in the index, gaining 0.99% as a sector. The materials sector was the only one to decline in the session.

The November 2013 US trade deficit narrowed to -$34.3 billion from -$39.3 billion in the month prior. Economists had been expecting -$40 billion. The large jump was helped by record exports to China, record imports of capital goods, autos & parts, and the lowest petroleum deficit since May 2009. The strong growth in exports caused many economists to revise their fourth-quarter GDP projections significantly higher. Many now see annualized growth in the quarter at greater than 3%.

Netflix (NASDAQ:NFLX) dropped 5.64% after Morgan Stanley downgraded the stock to an Underweight rating. According to Morgan Stanley, competition in digital streaming will increase in 2014, challenging Netflix's ability to grow its subscriber base and control marketing costs.

TrimTabs reported today that US-listed equity mutual funds and ETFs had a record $352 billion of inflows in 2013. Bond funds had record outflows of $86 billion. The prior records were $324 billion of inflows for equities in 2000 and $62 billion of outflows for bonds in 1994.

Tomorrow's Financial Outlook

Tomorrow morning the December 2013 ADP private payrolls will be released at 8:15 a.m. EST. Economists estimate that companies will have add 200,000 private payrolls in the month. The ADP report will give investors a better sense of what jobs growth was during the month before the government's official report is released on Friday morning.

The Fed will release the minutes of its December 2013 FOMC meeting at 2:00 p.m. EST. Recent speeches by Fed officials have indicated that the committee is firmly on the road to reducing its asset purchases to zero in 2014.

Tomorrow, data on November 2013 eurozone retail sales and unemployment rate will be released. Economists forecast that the unemployment rate will remain unchanged at 12.1% during the month. Also, German factory orders and trade balance will be released.

Some of the earliest fourth-quarter earnings reports are set to be released tomorrow. Notable reports include Family Dollar (NYSE:FDO), Constellation Brands (NYSE:STZ), Monsanto (NYSE:MON), and Bed Bath & Beyond (NASDAQ:BBBY).

Twitter: @Minyanville

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