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US Stocks Rebound From Three Days of Losses


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

European and Chinese manufacturing growth rates slowed in November according to data provider Markit. The eurozone manufacturing PMI rose to 51.5 from last month's 51.3, in-line with economist estimates. German manufacturing growth remained strong, but France and periphery countries contracted. Markit noted that the rate of growth implied a modest 0.2% GDP growth for the eurozone in the fourth quarter. China's manufacturing PMI slowed during the month to 50.4 from 50.9 last month, short of economist estimates of 50.8.

The Bank of Japan left its monetary easing program on hold, stating that it stood ready to defend its 2% inflation goal if necessary. However, because of the slow rate of price growth, economists took this as a sign that the central bank would move to further defend its inflation target, potentially enlarging its expansion of the monetary base and pushing back the date of its inflation target from 2015 to 2016. The Japanese Nikkei (INDEXNIKKEI:NI225) rallied 1.92%.

US equities recovered from three straight days of losses led by strong gains in high-beta tech and pharmaceutical stocks. The S&P 500 (INDEXSP:.INX) closed up 0.81%. Financial stocks, particularly those of banks, showed the strongest gains out of all S&P stocks, closing up 1.42%.

Gold continued its decline, falling below $1,250 per ounce. Crude oil rebounded from two weeks of sideways trading to gain 1.41% at the close of floor trading. Weekly natural gas inventories fell by 45 billion cubic feet according to the EIA. Analysts had been expecting a decline of 34 to 38 bcf. Natural gas initially rallied by 2%, but eventually traded back down to the pre-inventory levels.

Jobless claims declined to 323,000 last week, below the estimate of 335,000. The prior week was revised up to 344,000 from 339,000. Producer price increases remained very muted and pointed to the high potential for disinflation next year. Producer prices rose 0.3% from a year ago and core prices rose 1.4%.

Tomorrow's Financial Outlook

Tomorrow will be a light day for economic data releases in the US. The Labor Department will release its Job Openings and Labor Turnover Survey for September. The survey is closely watched by economists because it typically reflects the true underlying strengths or weaknesses in the labor market. The Kansas City regional manufacturing survey is also due out.

In global market-moving news, Germany will release the final estimate of its third-quarter GDP. The initial estimate saw growth of 0.3% quarter-over-quarter. Also, Canada will release consumer price increases and retail sales from October.

The only earnings report scheduled for tomorrow is Foot Locker (FL).

Twitter: @Minyanville

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