Chinese money markets continued to rise overnight; the Shanghai
Interbank Overnight Rate (SHIBOR) rose by 78 basis points to 5.23%
indicating further stress in Chinese lending markets. The central
bank has neglected to inject cash into the banking system over the
past two weeks as reverse repo contracts have matured.
The ECB's quarterly Bank Lending Survey found that banks were
likely to ease corporate lending standards in the fourth quarter
for the first time since the fourth quarter of 2009. Standards for
consumer credit and mortgage loans would also be reduced.
The main event today was the conclusion of the Fed's two-day
monetary policy meeting. The Fed's statement, released at 2:00 p.m.
EDT, indicated that the Fed saw growth in consumer spending and
business investment, in data that had been released since the
government shutdown ended. Additionally, the Fed also removed
language from the statement pertaining to tightened financial
conditions. The US dollar rallied and US Treasuries and equities
sold off in response, likely because market expectations had been
for a slightly more dovish statement.
(INDEXSP:.INX) sectors declined today, and market internals were
weak, though most of the losses suffered following the FOMC's
statement were recovered by the close of trading. More worrisome
was the decline in the small caps, which underperformed the S&P
500 by 0.90%. The worst-performing sectors were energy and consumer
The ADP released its October private payrolls report this morning.
The report indicated that there was a net gain of 130,000 payrolls
for the month. Economists had been expecting gains of 150,000. The
prior month was revised down to 145,000 from 166,000. September
Consumer prices rose 1.2% year-over-year, in line with economist
Social media giant
) reported fourth-quarter earnings that were significantly above
analysts' estimates as its mobile advertising business continued to
accelerate. The stock was up over 10% in extended trading.
Tomorrow's Financial Outlook
Tomorrow morning the Labor Department will release jobless claims
for the past week. Due to recent computer upgrades in California,
claims data has been distorted higher and should continue to trend
back to an average of 335,000. Also due out are the regional
Chicago and Milwaukee manufacturing surveys.
There will be a lot of economic data released tomorrow around the
world. The Bank of Japan will make its monthly monetary policy
statement, which is expected to turn a bit more dovish due to a
slower rate of growth in inflation and employment. Also due out is
Australian credit growth, German retail sales, Japanese housing
starts, and the eurozone's unemployment rate. Lastly, Canada will
release its advance estimate of third quarter GDP.
Fifty-three major US companies will report earnings tomorrow.
Notable reports include
Time Warner Cable