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T3's Take 3: Fed Head Mania Ahead of Friday the 13th


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

Did You Miss the T3 Live Finance Festival?

If you couldn't join us in Miami last weekend for the T3 Live Finance Festival, click here to check out Jeff Saut's recap of the event.


The big economic news today was the unusually large number of Fed officials speaking at conferences today.

St. Louis Fed President Bullard said that it's time for a rate hikie because the labor market and inflation are near the Fed's goals.

Chicago Fed President Evans said that US economic fundamentals look "pretty good." He also noted that he sees a Fed funds rate in the  0.75%-1.00% range as appopriate for the end of 2016.

Richmond Fed President Lacker said that the Fed's ability to influence inflation remains intact, and that he doesn't see inflation staying far away from the Fed's 2% target.

NY Fed President and FOMC Vice Chair Bill Dudley said that liftoff conditions may soon be satisfied but declined to comment on whether he favors a December rate hike. Dudley also mentioned that the Fed is still falling substantially short of its inflation goal.

Fed Chair Janet Yellen made welcoming remarks at a monetary policy conference but did not comment on Fed policy.

While the overall picture of the Fed's strategy appears a bit muddled, traders still expect the Fed to move on rates soon. According to Bloomberg, Fed fund futures markets imply a 66% probability of a December rate hike. 

Around the Horn

Stocks were weak across the board today following mixed overseas action.

Cruide oil fell sharply following the release of inventory data this morning, which served to sour sentiment.

Additionally, following a brief flirtation with positive territory, the key biotechnology sector posted large losses in the afternoon, dragging down the indices.

The S&P 500 fell 1.4% to 2045.97. The Russell 2000 fell 2.0% as risky stocks fell out of favor.

The drop in crude oil prices drove down energy stocks hard, with the Energy Select SPDR ETF (XLE) dropping 2.3% to $66.25.

The NASDAQ Biotechnology Index ETF (IBB) fell 2.1% to $320.11, breaking the key 50 day moving average.

And even with lower US treasury yields, housing and utility stocks fell, giving back some of the impressive gains they posted earlier in the week.

China Credit Crunch

For the second day in a row, Chinese economic data raised questions about a slowdown.

Chinese banks issued 513.6 billion in new yuan loans in October, missing economists' expectations by 36%. That number also represented a huge slowdown from the 1 trillion yuans' worth of loans issued in September. 

The data miss was a contributor to the aforementioned drop in crude oil prices, and also hit copper, which fell 2.4% today.

The Shanghai Composite fell 0.5%.

China has indicated it is ready and willing to attack any economic weakness with monetary stimulus, which is likely reducing volatility in the region.

Friday the 13th's Financial Outlook

Tomorrow will be a busy day for US economic data. October retail sales and PPI detail will be reported at 8:30 a.m. ET, followed by business inventories and the University of Michigan sentiment report at 10:00 a.m. ET.

The Baker Hughes Rig Count will be released at 1:00 p.m.

JC Penney (JCP) reports earnings before the open.

Overseas, German and Euro-Zone GDP, and Swiss PPI numbers will be released.
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