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JC Penney CEO Johnson Resigns, Stocks Continue Two-Day Rally


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

Overnight economic data was better for Chinese stocks as annualized consumer inflation fell to 2.1% from last month's 3.2%. The sudden and immediate drop prompted speculation that the Chinese government was manipulating the data. However, the weaker data should ease the pain Chinese stocks have been under as the central government has looked to tighten lending standards. UK manufacturing production rose 0.8% MoM in February vs. the 0.4% expectations, up from a 1.9% drop the month prior.

US economic data was somewhat better, though today's reports don't generally have a major effect on market movement. The NFIB Small Business Optimism index fell to 89.5 from 90.8 the month prior and JOLTS job openings from February increased to 3,925 from 3,611 the month prior. For small businesses, most concerning was the decrease in economic expectations and positive earnings trends.

In market news, Herbalife (NYSE:HLF) delayed its opening after releasing news that its auditor, KPMG, was resigning due to improper disclosures of internal information that resulted in illegal trading. Herbalife's stock gave back 3.75% today, but that isn't an outsized move for the stock, all things considered. Sketchers (NYSE:SKX), also a client of KPMG's Los Angeles office, disclosed that KPMG was also resigning as its auditor due to similar circumstances.

Overnight, JC Penney (NYSE:JCP) CEO Ron Johnson resigned and was replaced by his predecessor, Myron Ullman. At one point during the day, shares of JC Penney had risen 13% as a sale looked to be a possibility, but with news of Ullman's appointment, they quickly turned lower.

Tomorrow's Financial Outlook

Tomorrow will see the release of the FOMC's March meeting minutes. Undoubtedly, the minutes will show discussion that suggests the benefits of QE outweigh the costs. The minutes may also feature an outline of some pre-conditions for an eventual slowdown of monthly asset purchases. This month's minutes shouldn't be as market moving as February's, however. Other data includes the Treasury's monthly budget statement, which is expected to narrow to -$107 billion from last February's -$198.2 billion.

A big chunk of global data will come from China, but it's all quiet on the European front. Chinese trade balance is expected to remain relatively unchanged from the month prior, but YoY exports are likely to have fallen, vs. an expected sharp increase in imports. New domestic loans are expected to rise to 900 billion yuan, up from 620 billion the month prior.

Earnings season begins to pick up tomorrow with Family Dollar (NYSE:FDO), Constellation Brands (NYSE:STZ), Bed Bath & Beyond (NASDAQ:BBBY).

Twitter: @Minyanville

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