Yields for one month US Treasury bills spiked as investors
backed away in fear of a default. On Tuesday, the T-bills traded
near 0.16 percent, up 14 basis points from last week.
With the US government in its second week of a shutdown, markets
are becoming increasingly worried about the possibility that
Congress will not come to an agreement by the October 17 deadline.
Failure to reach a deal and raise the government's borrowing limit
would lead the US to default on its debt, something that would have
far reaching consequences.
In other news around the markets:
The Wall Street Journal reported that confidential documents from
the IMF showed that Greece's 2010 bailout package was approved
despite objections from nearly a third of the fund's board members.
The report comes just a week before finance ministers from around
the world are set to attend the IMF annual meeting in Washington,
where a revision of Greece's bailout plan is expected to be high on
the agenda. Critics of Greece's current aid package insist that the
nation's European creditors must take on some of the burden through
debt forgiveness. Tension between the US and North Korea ratcheted
up on Tuesday after a North Korean military spokesman warned that
the US and South Korea would face "disastrous consequences" due to
the movement of ships into a South Korean port. A private survey
out on Tuesday showed that China stumbled in September as growth in
the nation's services sector declined. Chinese Markit/HSBC services
PMI fell to 52.4 in September from 52.8 in August. The drop
indicated that the nation is finding it difficult to maintain
forward momentum; however the reading was well above the 50 point
line that indicates expansion. Alcatel-Lucent is expected to
announce that it will trim 15,000 jobs as it attempts to reshape
its business. The company is trying to cut down on older
technologies in order to focus on a small number of core
Asian markets were up across the board with the exception of
Australia's ASX 200 and New Zealand's NZ 50 which were down 0.23
percent and 0.37 percent respectively. The Japanese NIKKEI gained
0.30 percent and the Indonesian JSX composite was up 1.32
Europe's markets were down across the board on Tuesday. The UK's
FTSE lost 0.72 percent and the eurozone's STOXX 600 was down 0.47
percent. Italy's MIB was down 0.45 percent and the German DAX
fell 0.23 percent.
Energy futures picked up with Brent futures up 0.15 percent and
WTI futures up 0.39 percent. Gold lost 0.35 percent and silver fell
0.45 percent. Industrial metals fared better with copper up 0.46
percent and Aluminum up 0.61 percent.
The euro continued to trade above $1.35 but the pound lost 0.22
percent to the dollar. The yen was down 0.40 percent against the
No notable earnings were released on Monday
Stocks moving in the pre-market included:
Citigroup Inc (NYSE:
) recovered a bit from Monday's 1.95 percent loss and gained 0.79
percent in pre-market trade Perrigo Co (NYSE:
) was up 0.61 percent in pre-market trade after gaining 4.72
percent over the past week. Proctor & Gamble CO. (NYSE:
) gained 0.34 percent in pre-market trade after a week of choppy
trading Carnival Corp (NYSE:
) continued to struggle through a tough year and lost 0.81 percent
in pre-market trade Macy's Inc (NYSE:
) fell 0.51 percent in pre-market trade after dropping 2.45 percent
Earnings reports expected on Tuesday include:
Yum! Brands, Inc (NYSE:
) is expected to report EPS of $0.93 per share, compared to last
year's EPS of $0.99 Alcoa Inc. (NYSE:
) is expected to report EPS of $0.06, compared to last year's EPS
Tuesday's economic calendar will be packed with a host of
Canadian data including trade balance, exports, imports and housing
starts. Other notable releases from around the world include,
French trade balance, Spanish industrial production, German trade
balance and Swiss retail sales and unemployment rate.
Happy trading and good luck!
For a recap of Monday's market action, click
Tune into Benzinga's pre-market info show with Dennis Dick and
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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