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Market Focus Moves From Putin to Yellen


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

Russian President Vladimir Putin announced this morning that the Russian Federation would officially annex Crimea and the city of Sevastopol following the region's referendum vote. In the speech, Putin specifically said that Russia has no plans to split up Ukraine and is simply defending the interests of Russian-speaking citizens in Crimea. The US government broadly condemned the move by Russia, calling it a "land grab" and promised further sanctions.

Market participants took his speech as de-escalatory, however, and risk assets around the globe rallied strongly. S&P 500 (INDEXSP:.INX) futures rose 14 points in the pre-market and continued that rally to gain 20.25 for the day's session. The S&P 500 index rose 0.8% today. The yield on 10-year German government bonds rose by three basis points to 1.58% before settling the day unchanged. Lastly, the Russian ruble posted gains against the euro and US dollar.

Consumer prices rose 1.1% in February from a year ago, slightly below the expected increase of 1.2%. The deceleration in growth was largely attributable to slackening gasoline and transportation prices in the month. February housing starts declined to a seasonally adjusted annual rate of 907,000, marginally below the 910,000 expected. The prior month's figure was revised up to 909,000 from 880,000. New housing permits posted strong 7.7% month-over-month gains, rising to a 1.018 million annual rate, implying that housing activity will accelerate in the coming months.

Oracle (NYSE:ORCL) reported earnings after the close, missing estimate slightly. Earnings-per-share were $0.68 vs $0.70 estimates and revenues were $9.32 billion vs $9.36 billion estimates. The company noted the recent strength in the US dollar accounting for a 2% drag in its earnings, which would have put its results inline with estimates. The stock was down more than 6% in post-market trading.

Tomorrow's Financial Outlook

The FOMC's monthly monetary policy decision and first press conference from new Chair Janet Yellen will be the main events for tomorrow. The statement will be released at 2:00 p.m. EDT; Yellen will hold her press conference at 2:30 p.m. It is highly unlikely that the Fed will deviate from its plan to cut asset purchases by $10 billion at each meeting. Additionally, Yellen will look to begin laying out her monetary policy stance, though it is unlikely to be anything seismically different from the FOMC's existing framework.

It's a big day tomorrow in the UK. The minutes from the Bank of England's meeting two weeks ago will be released. Additionally, February's jobless claims figures and January's three-month unemployment rate are scheduled to be reported.

FedEx (NYSE:FDX) will be the first major company to report first-quarter earnings tomorrow. Other notable companies scheduled to report include General Mills (NYSE:GIS) and KB Home (NYSE:KBH).

Twitter: @Minyanville

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