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Volcker Rule Passed by All Major Regulatory Agencies


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

The main story of the day was the passage of the final Volcker Rule in the morning by all five US regulators (the SEC, CFTC, FDIC, Federal Reserve, and OCC). US investment banks such as Goldman Sachs (GS), JPMorgan (JPM), and Morgan Stanley (MS) saw inflows as investors believed regulators' views on risk-mitigating hedging activities may not lower this group's trading revenues.

Utility sector stocks were the worst performers today in the S&P 500 (INDEXSP.INX) despite the third consecutive day of falling interest rates. Utility companies have been reporting over the last week that customers have been using a record amount of gas heating, which has caused natural gas to surge 11.34% over the same time frame. The top-performing sector was material stocks, thanks to the largest one-day gain in the past seven months from gold.

The 10-year Treasury yield fell four basis points to 2.79%, after peaking at 2.92% Friday afternoon. The Treasury sold $30 billion of 3-year notes at a high yield of 0.631%, in part due to abnormally large demand from foreign buyers.

Twitter (NYSE:TWTR) continued its rally today and is now up 15.84% over the past two days. There was unconfirmed "chatter" today that activist investor Carl Icahn was taking a position in the stock, though that seems unlikely given his reputation as a value investor.

The Senate will vote this afternoon at 5:00 p.m. EST to confirm the nomination of Representative Mel Watt as head of the FHFA. Watt is expected to push for principal modification on home loans and a one-year extension of HARP benefits to distressed homebuyers. Because the Senate altered its voting rules on filibusters after the original nomination vote failed, Watt is expected to be confirmed.

After the market close, Visa (NYSE:V) announced a 10 for 1 stock split, a $3.5 billion stock buyback, and an increase in its quarterly dividend to $1.10 (pre-split) from $0.60. The stock was up an additional 2% in post-market trading after climbing 0.67% in trading earlier today.

Tomorrow's Financial Outlook

The only economic data point from the US tomorrow will be the October Treasury budget statement. Economists forecast the monthly budget deficit will widen to $140 billion from $91.6 billion in the month prior. The Treasury is scheduled to auction $21 billion in 10-year notes.

The only notable global market-moving event will be the final estimate of Germany's consumer price index from November. The initial estimate showed that prices rose 1.3% from a year ago during the month.

Notable earnings reports for tomorrow will be Joy Global (NYSE:JOY), Costco (NASDAQ:COST), and Men's Wearhouse (NYSE:MW).

Twitter: @Minyanville

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