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US Markets Enter Hangover Mode From ECB QE Party


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


US equities moved a little slower on Friday following Thursday's powerful ECB QE-driven rally.

Following a short-lived dip down to 2052.91, the S&P 500 squeezed higher to finish at 2051.82, down 55.0%.

Economic news was mixed today. January manufacturing PMI's for China, Japan, Eurozone, and France came in in above expectations. And UK retail sales rose 0.4% in December. Economists expected a 0.6% decline.

In the US, December Existing Home Sales were slightly below expectations at 5.04 million. December Leading Indicators rose 0.5%, which was in-line. The preliminary January Markit US Manufacturing PMI was 53.7, missing the 54.0 consensus. And finally, the Chicago Fed national index was -0.05 in December, below the 0.6 expected.

Shares of shipper UPS (UPS) fell sharply after the company announced preannounced weak fourth-quarter earnings due to higher-than-expected expenses. UPS also said its 2015 outlook will fall below its growth targets due to higher pension costs and the drag from the US dollar.

General Electric (GE) fared better, putting in a modest rally on its own fourth-quarter results as its turbine and jet engine businesses offset weakness in oil and gas.

Online storage company Box Inc. (BOX) came public today and rose 66% from its $14 offering price due to strong demand from investors.

Semiconductor company Skyworks Solutions (SWKS) also had a big day after reporting first-quarter earnings and forward guidance that were well ahead of analysts' expectations. Skyworks is benefiting from its status as a key supplier for Apple's (AAPL) iPhone 6.

US Treasuries resumed their momentum today as the 10-year yield dropped to 1.825%. The US dollar also continued strengthening against the euro.

Monday's Financial Outlook

There are no major international or US economic reports coming out on Monday, though the January Dallas Fed Manufacturing Activity index will be released at 10:30 a.m. ET.

In earnings, DR Horton (DHI) Seagate Technology (STX), Norfolk Southern (NSC), and Microsoft (MSFT) are among the bigger names reporting on Monday.

The big question on traders minds will be whether there is enough momentum for follow-through in risk assets, particularly European ones, from the recent surge.

Volatility is likely to continue as earnings season has been a little shaky overall, with notable disappointments from the banks, and continued worries over the strong dollar.

Twitter: @Minyanville

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No positions in stocks mentioned.

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