FOMC minutes released on Wednesday showed a much more optimistic
view of the US' economic progress than most had been expecting.
After incoming Fed chief Janet Yellen made a case for the bank's
continued quantitative easing, many were surprised to see that
several US central bankers were considering beginning the taper at
one of their next couple of meetings. Minutes from the Fed's
October meeting showed that Fed officials are interested in
shifting more toward forward guidance as a policy tool rather than
The news caused some to revise their taper estimates from March
2014 to as soon as December. Also on Wednesday St. Louis Fed
President James Bullard told investors that he was not ruling out
the possibility of a pull back at the bank's December meeting if
In other news around the markets:
On Thursday, the Bank of Japan decided to continue with its
accomodative monetary policies as was widely expected. The bank is
working to build up to 2 percent inflation over the next two years
with an aggressive asset purchasing plan. The bank noted that
exports from Japan have been on the mend, a sign that overseas
economies are also recovering. Meetings between Western leaders and
Iranian officials are heading into their second day on Thursday
with guarded optimism. A US official commented that although he was
hopeful for a breakthrough, striking a deal would be quiet
difficult. Western leaders are looking for Iran to make its nuclear
program more transparent in exchange for looser sanctions. Janet
Yellen will take another step toward becoming the next leader of
the US Federal Reserve on Thursday as her nomination will be put to
a vote at the Senate Banking Committee. Democrats who support Obama
occupy 12 out of 22 seats on the panel, which is expected to pass
her confirmation without difficulty. China's HSBC Flash
Manufacturing PMI came in below expectations at 50.4. Although
still above the 50 point mark which indicates expansion, the
reading showed slowing momentum from last month's PMI reading of
Asian markets were mostly lower, the South Korean KOSPI fell
1.16 percent, the Hang Seng index was down 0.51 percent and China's
Shenzhen composite lost 0.41 percent. Only the Japanese NIKKEI
gained, up 1.92 percent.
European markets also stumbled on Thursday, the UK's FTSE was
moderately higher, up 0.10 percent, the the eurozone's STOXX 600
fell 0.17 percent. The German DAX was down 0.25 percent and
France's CAC 40 lost 0.45 percent.
Energy futures fell slightly with Brent futures down 0.11
percent and WTI futures down 0.07 percent. Gold lost 0.78 percent
and silver was down 0.24 percent. Industrial metals were also lower
with aluminum posting the largest losses, down 0.72 perrcent.
In currency markets the euro traded steadily at $1.34 and the
pound lost 0.07 percent against the dollar. The dollar gained 0.84
percent against the yen and 0.77 percent against the Australian
Notable earnings released on Wednesday included:
J.C. Penney Company (NYSE:
) reported a third quarter loss of $1.81 per share on revenue of
$2.78 billion, compared to last year's loss of $0.93 per share on
revenue of $2.93 billion. Green Mountain Coffee Roasters (NASDAQ:
) reported fourth quarter EPS of $0.89 on revenue of $1.05 billion,
compared to last year's EPS of $0.64 on revenue of $946.74 million.
Limited Brands (NYSE:
) reported third quarter EPS of $0.31 on revenue of $2.17 billion,
compared to last year's EPS of $0.36 on revenue of $2.05 billion.
Lowe's Companies (NYSE:
) reported third quarter EPS of $0.47 on revenue of $13.00 billion,
compared to last year's EPS of $0.40 on revenue of $12.07 billion.
) reported third quarter EPS of $0.42 on revenue of $6.11 billion,
compared to last year's EPS of $0.46 on revenue of $6.35 billion.
Stocks moving in the Premarket included:
Bank of America (NYSE:
) gained 0.26 percent in premarket trade after climbing 3.42
percent over the past five days. Verizon Communications (NYSE:
) gained 0.20 percent in premarket trade after sliding 0.75 percent
on Wednesday. Abercrombie & Fitch (NYSE:
) lost 2.77 percent in premarket trade ahead of the company's
earnings report. Carnival Corp (NYSE:
) fell 0.50 percent in premarket trade after gaining 0.39 percent
Notable earnings expected on Thursday include:
) is expected to report third quarter EPS of $0.63 on revenue of
$17.37billion, compared to last year's EPS of $0.81 on revenue of
$16.93 billion. Gamestop (NYSE:
) is expected to report third quarter EPS of $0.57 on revenue of
$1.98 billion, compared to last year's EPS of $0.38 on revenue of
$1.77 billion. Abercrombie & Fitch (NYSE:
) is expected to report third quarter EPS of $0.45 on revenue of
$1.06 billion, compared to last year's EPS of $1.02 on revenue of
$1.17 billion. Gap Inc. (NYSE:
) is expected to report third quarter EPS of $0.71 on revenue of
$3.98 billion, compared to last year's EPS of $0.63 on revenue of
Notable economic releases on Thursday will include, US consumer
confidence, US manufacturing PMI, US PPI, US initial and continuing
jobless claims, and British mortgage approvals.
For a recap of Wednesday'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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