US markets generally rebounded from two days of selling pressure. The S&P 500 (INDEXSP:.INX) rose 0.40% and increased its gains after the FOMC minutes were released. All of the index's 10 basic sectors were higher today, led by consumer discretionary stocks. Small cap stocks lagged, even though the tech-based Nasdaq-100 (INDEXNASDAQ:NDX) outperformed significantly. Treasury yields dropped on the FOMC news, which caused the US dollar to fall against all major currencies. Gold jumped more than 1%.
Early this morning, Portuguese sovereign bonds and the notes of its second largest bank Espirito Santo (BES) collapsed. A newspaper reported that the parent holding company had partially defaulted on its commercial paper. Outstanding senior bonds for its holding company collapsed by more than half of their value and prompted a ratings downgrade from Moody's.
Tomorrow's Financial Outlook
The only US report scheduled to be released tomorrow is weekly initial jobless claims. Claims are expected to remain unchanged from the prior week at 315,000, which is also their 4-week moving average and near the average for the last three months. Fed Vice Chairman Stanley Fischer is expected to address financial market reform in a speech after the market close. It will be his first time speaking since being elected to the Fed more than six months ago, and his first public appearance in 12 months.
Newly elected Indian Prime Minister Modi will release his first budget overnight. Modi was elected largely due to his potential ability to improve India's fiscal situation and has been a key driver of the 20%+ rally in his country's stocks year-to-date. Also scheduled to be released is China loan supply growth, Australia's unemployment data, and the Bank of England's monthly monetary policy decision. The Australian data will draw increased scrutiny because recent data showed an increasing dispersion between full- and part-time workers.
The only earnings report scheduled for tomorrow is Family Dollar (NYSE:FDO).
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