On Tuesday, US policymakers announced a bipartisan budget deal
that could avoid another government shutdown in January when a new
budget must be decided.
The agreement softens the end of the year sequester by providing
some federal agencies and discretionary programs a $63 billion
cushion over the next two years. The proposed budget would also cut
the nation's deficit by $20 to $23 billion over the next 10
Despite the budget deal's praise in Washington, many worry that
it may have a hard time getting through Congress, but it has been
hailed as a good first step towards ending three years of impasse
On Tuesday, Spanish Budget Minister Cristobal Montoro said that the
nation is likely to see a primary budget surplus a year earlier
than expected, in 2015. Spain's recent exit from a nine quarter
recession helped brighten the nation's outlook. If the nation does
post a surplus in 2015, investors will likely return as it is a
good indication of healthy finances. Both Luxembourg and Austria
refused to sign on new information sharing rules aimed at cutting
down tax evasion within the eurozone on Tuesday. The region's
policymakers pledged to crack down on tax evasion by making banking
information more transparent before 2014. However, at the final
meeting of the bloc's finance ministers, Austria and Luxembourg
said they will only agree to the new rules if similar requirements
are passed on to Switzerland, Liechtenstein, Monaco, Andorra and
San Marino. Just hours after both EU Foreign Policy chief Catherine
Ashton and US Deputy Secretary of State Victoria Nuland visited
Kiev to call for a non-violent resolution to the country's worst
political crisis in almost 10 years, Ukrainian security forces
moved in on protestors gathered in the nation's capital. Secretary
of State John Kerry has deemed the incident "unacceptable" and
pledged US support to the Ukrainian people. The Volcker rule was
approved by five financial regulatory agencies on Tuesday, which
many believe will reduce pretax profits from the US' largest banks
by up to $10 billion. The new rule will limit big bank's ability to
make risky bets with their own money and will likely cause several
banks to overhaul their trading activities.
Asian markets were down across the board, the Japanese NIKKEI
lost 0.62 percent, China's Shanghai composite was down 1.49 percent
and the Shenzhen composite fell 1.18 percent. The Hang Seng index
had the largest losses, down 1.87 percent.
Europe's markets were also lower, the UK's FTSE fell 0.55
percent and the eurozone's STOXX 600 fell 0.93 percent. France's
CAC 40 was down 1.04 percent and the German DAX lost 0.88
Energy futures were quiet, Brent futures were up 0.02 percent
and WTI futures lost 0.12 percent. Gold lost 0.29 percent and
silver was down 0.15 percent. Industrial metals were mostly higher
with zinc posting the largest gains, up 1.67 percent.
The euro was steady at $1.37 and the pound lost 0.10 percent to
the dollar. The dollar fell 0.30 percent against the yen and gained
0.37 percent against the Australian dollar.
Notable earnings released on Tuesday included:
Toll Brothers Inc. (NYSE:
) reported fourth quarter EPS of $0.54 on revenue of $1.04 billion,
compared to last year's EPS of $2.35 on revenue of $632.83 million.
H &R Block, Inc. (NYSE:
) reported a third quarter loss of $0.42 per share on revenue of
$134.30 million, compared to last year's loss of $0.37 on revenue
of $137.26 million. AutoZone, Inc. (NYSE:
) reported third quarter EPS of $6.29 on revenue of $2.09 billion,
compared to last year's EPS of $5.41 on revenue of $1.99 billion.
Stocks moving in the Premarket included:
Hewlett-Packard Co (NYSE:
) fell 0.59 percent in premarket trade after dropping 3.87 percent
over the past five days. Perrigo Co. (NYSE:
) fell 0.39 percent in premarket trade after losing 0.32 percent
over the past week. Bank of America Corp (NYSE:
) was down 0.32 percent in premarket trade after falling 0.13
percent on Tuesday Alcoa Inc. (NYSE:
) lost 0.31 percent in premarket trade after rising 1.49 percent
over the past week.
Notable earnings expected on Wednesday include:
Men's Wearhouse, Inc. (NYSE:
) is expected to report third quarter EPS of $0.86 on revenue of
$627.14 million, compared to last year's EPS of $0.95 on revenue of
$630.97 million. Costco Wholesale Corporation (NASDAQ:
) is expected to report third quarter EPS of $1.04 on revenue of
$25.47 billion, compared to last year's EPS of $0.95 on revenue of
$23.72 billion. Joy Global Inc. (NYSE:
) is expected to report third quarter EPS of $1.11 on revenue of
$1.12 billion, compared to last year's EPS of $2.05 on revenue of
Wednesday will be another quiet day for economic data. Notable
releases include US crude oil inventory data, US Federal budget
balance data, and German and French CPI.
For a recap of Tuesday's market action, click .
Tune into Benzinga's pre-market info show with Dennis Dick and
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advice. All rights reserved.
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