Japan's Prime Minister Shinzo Abe published an editorial last
night on the World Economic Forum, stating that he sees Japan on
the precipice of strong wage gains after more than a decade of
stagnation. The PM feels strongly about this positive development
in Japan after recent meetings with government, business, and labor
leaders. Moreover, he feels that the 5-trillion-yen fiscal-stimulus
plan should far outweigh the negative effects of the planned
sales-tax increases in Japan.
Also overnight we heard comments from IMF Managing Director
Christine Lagarde. She stated that the Fund intends to upgrade its
outlook for global economic growth in the next three weeks.
Recently, Lagarde mentioned that the ongoing recovery in developed
markets may hamper additional capital investment in emerging
ADP reported that companies added 238,000 private jobs in December
2013, beating the estimate of 200,000. The November 2013 payroll
growth was revised up to 229,000 from 215,000. This positive report
implies Friday's nonfarm payrolls will be stronger than the
economist estimate of 195,000.
US equities mustered some strength early in the session, but failed
to hold onto these gains by the close of trading. The
(INDEXSP:.INX) declined by 0.02%. Telecom-sector stocks were the
worst performers today, losing 1.68%, partly due to the stocks
trading ex-dividend. Additionally, there was a block sale of 7
million shares of
) in the pre-market, which was worth $240 million. Energy stocks
also suffered due to losses of greater than 1% in both natural gas
and crude oil futures.
The Fed released the minutes of its December 2013 FOMC meeting.
There was a strong consensus by the committee to wind down asset
purchases this year in measured steps due to cumulative progress in
the labor market. Additionally, members had growing concerns that
the benefits of asset purchases were waning; some members had
pushed for a larger reduction in purchases at the December meeting.
Tomorrow's Financial Outlook
Tomorrow morning the weekly jobless claims report will be released
by the Labor Department for claims submitted in the week ending
Saturday, January 4. The report will likely be higher than
expectations, due to seasonal issues associated with the New Year's
Day holiday. Next week's report should begin to show the true trend
At 10:00 a.m. EST, the House's monetary policy subcommittee will
hold a meeting to discuss the Fed's bond-buying programs.
The ECB and Bank of England will release their monthly
monetary-policy decisions tomorrow morning before the US markets
open. Due to continually weak inflation readings in Europe, it is
very likely the ECB will continue to put its full efforts into
deflation-fighting measures. Also scheduled for release tomorrow is
German industrial production and eurozone consumer confidence data.
) will kick off earnings season with its report tomorrow after the
close. Also scheduled to report is