Weak Chinese manufacturing data from January was the main
culprit for losses in global equities today. The preliminary
reading of manufacturing PMI declined to 49.6 from 50.5 the month
prior, below the 50.3 estimate. This was the first month that the
index had fallen below 50 -- which is considered contractionary --
since July of last year. In addition, the preliminary gauge of
January eurozone PMI showed strong growth in the month, reaching
53.9 from 52.7 the month prior.
A number of actions by central banks around the world jolted
foreign-exchange markets. The Turkish central bank made a surprise
intervention into the country's foreign-exchange market by selling
dollars and other major currencies in an attempt to stem sharp
losses in the lira. Elsewhere, the PBoC injected another $26.43
billion in funds to the country's financial system through reverse
repurchases and deposit sales. The moves were made to help ease the
seasonal cash crunch before the Lunar New Year holiday.
US equities experienced a day of outsized selling. The benchmark
(INDEXSP:.INX) declined by 0.89%, nearly breaching its lows of the
year. The sell-off was led by sharp losses in financial, material,
and industrial stocks. Notably, the USDJPY pair fell 1.48% in
today's trading, which undoubtedly was the culprit for some of the
losses in stateside equities.
The preliminary gauge of US manufacturing PMI for January fell to
53.7 from last month's 54.4, well below economists' estimates of
55.0. The index reflected a slowdown in output, new orders, and
employment. Also, December 2013 existing home sales rose to a
seasonally adjusted annual rate of 4.87 million from 4.82 million
in the month prior. The previous month was revised down to 4.82
million from the first estimate of 4.90 million.
) rose intraday after activist investor Carl Icahn announced that
he had purchased an additional $500 million worth of stock in the
company, bringing his ownership stake to $3.6 billion. Icahn also
released a letter to shareholders calling for a significant
increase in Apple's share repurchase program.
) rose an impressive 16.56% after reporting significantly
better-than-expected fourth-quarter results yesterday, including
very strong growth in its streaming video business.
Tomorrow's Financial Outlook
There will be no major US economic reports tomorrow. There will be
a significant number of earnings reports, however. Notable reports
Procter & Gamble
Black & Decker
There are only two global economic reports to note on tomorrow's
schedule: the UK BBA Loans Approved for House Purchase and the
December 2013 Canadian consumer price index. Economists estimate
Canadian consumer prices will be up 1.3% from a year ago.