Chinese and eurozone manufacturing growth accelerated in October
according to surveys of purchasing managers. The Markit Chinese
manufacturing PMI rose to 50.4, beating the economist estimate at
50.9. Eurozone manufacturing PMI rose to 51.3, but was below the
51.4 estimate. Services growth slowed to 50.9 from 52.2 in
Chinese money market rates continued to rise as the government
chose not to inject cash back into the Chinese financial system.
Overnight interbank lending rates rose 0.31% to 4.09%. Two days ago
those rates were 3.05%. These rises in rates have increased tension
throughout Chinese markets because it is believed that the
government may rein in loose real estate lending, a strong driver
of economic growth in China.
(INDEXSP:.INX) futures were up eight points overnight, but sold off
in early trading. Markets did recover some of these early losses
and the the S&P finished up 0.29%. Consumer discretionary
sector stocks were the best performers today, led by gains from
). Delta and Southwest both beat on earnings and McKesson announced
it would buy German pharmaceutical wholesaler
(ETR:CLS1). Telecom sector stocks were the worst performers due to
) guidance that it was reducing capex spending through 2014.
Jobless claims fell to 350,000 from 362,000 in the last week. The
Labor Department noted that California is still working through a
backlog of claims following computer upgrades last month, which is
temporarily distorting claims higher. The Labor Department also
noted that 44,100 federal workers filed claims two weeks ago when
the government was partially shut down. A preliminary survey of US
manufacturing activity fell to 51.1 from 52.8 last month on
slowdowns in business activity and new orders.
(NASDSAQ:MSFT) released very strong earnings after the close.
Earnings per share were $0.62, beating the $0.54 estimate. Revenues
rose 16% from a year ago to $18.53 billion, more than the $17.77
billion estimate. The stock was up 7% in the post market.
Twitter released its S-1 filing saying that it would sell 70
million shares at an IPO price of $17.00 to $20.00. The company
will list its stock on the NYSE. The filing implies a value of
Tomorrow's Financial Outlook
Tomorrow morning the US will report September durable goods and
capital goods orders. Because the headline durable goods orders is
heavily influenced by large aircraft orders from
), economists frequently remove these large aircraft orders to get
a better sense of the real growth . Orders ex-transports are
forecast to rise 0.5% from the prior month. The second and final
estimate of the University of Michigan/Reuters consumer confidence
index is forecast to be little at 75.0 from the first estimate of
The UK will release its advance estimate of third quarter GDP
tomorrow morning before the US market opens. Growth from a year ago
is expected to accelerate to 1.5% from 1.3% in the prior quarter.
The IFO institute will release its sentiment reading of German
financial experts' feelings on the current and future economic
Sixteen major US companies will report earnings tomorrow morning
before the market opens. Notable reports include
Procter & Gamble