The IMF lowered its global and developing country growth
forecasts yesterday evening. Global growth forecasts for 2013 were
lowered to 2.9% from the prior forecast of 3.1% in July. Forward
forecasts for 2014 were lowered to 3.3% from 3.6% in July. Lower
growth in China, Mexico, India, Russia, and Indonesia were seen as
the primary reasons for the reduction.
President Obama officially nominated Fed Vice Chairwoman Janet
Yellen to be Chairwoman of the Federal Reserve once current
Chairman Ben Bernanke's term ends on January 31 of next year.
Equity futures initially rallied when the news was announced last
night. Long duration US Treasuries sold off on the idea that dovish
monetary policy would be around for a longer period of time.
(INDEXSP:.INX) opened up a few points, but quickly fell to -9
points, its low of the day, before European markets closed. News
reports in the early afternoon indicated that some progress was
being made in Washington to raise the debt ceiling and reopen the
government, causing stocks to rise. Telecom sector stocks were the
top performers with large gains
). Consumer-related stocks were the worst performers, in large part
because of the earnings misses from
The Federal Reserve released the minutes of the September FOMC
meeting. Most members supported a tapering of purchases sometime
before the end of the year and an eventual winding down of
purchases by mid-2014. The minutes showed that the decision not to
cut purchases was a close call. Even though the market largely
expected the decision, mixed economic data and fiscal uncertainties
were enough to sway the committee to refrain from taking action.
Family Dollar reported fiscal fourth-quarter earnings, missing on
both earnings per share and revenues. Guidance on the full-year
earnings and the next quarter's comparable sales were much lower
than expected. The company commented that the economic environment
had been much more challenging than expected.
(COST) earnings missed analyst expectations slightly, but the stock
finished up 2% on the day.
Jos. A Bank Clothiers
(JOSB) announced that it was offering $2.3 billion in cash (or $48
per share) to take over its competitor
(MW). Men's Wearhouse rejected the offer, saying that the bid
significantly undervalued the company and wasn't in the best
interest of Men's Wearhouse. Both companies showed more than 10%
gains before the announcement and sold off modestly.
Tomorrow's Financial Outlook
The Labor Department announced that jobless claims would be
released tomorrow on schedule. However, August import and export
prices will not be released due to the government shutdown.
Economists expect jobless claims to rise to 310,000 from 308,000
last week, which would be more than the 305,000 four-week average.
The Bank of England will make its monthly monetary policy decision
tomorrow before the US market opens. Other global market-moving
economic data releases include Japanese consumer confidence,
Australia's unemployment rate, and Chinese credit growth. ECB
President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda
will give speeches.
Earnings reports on the calendar include