Markets closed slightly lower on Monday after the Federal
Reserve's two day policy meeting got underway. Although most
expected the bank to begin tapering its asset buying plan in March,
recent strong data coupled with a new budget deal has removed much
of the Fed's reasoning for continuing with the bond buying
On Tuesday, the US' bipartisan budget deal passed a Senate
procedural vote which means the new budget is likely to clear the
senate as early as Wednesday. The new budget would keep the US from
facing the political gridlock over the nation's fiscal future for
the next two years. Uncertainty about next year's budget was part
of the reason the Fed has been holding off on its taper.
The FOMC will release issue a statement following the meeting,
which is expected to finish on Wednesday afternoon.
In other news around the markets:
The United Nations reported that tension in South Sudan is
escalating and fighting in the African nation has left between 400
and 500 people dead and nearly 800 wounded. The staggering figures
are the result of an ongoing power battle between ethnic groups.
Protestors in Ukraine are planning mass rallies over the holiday
season in response to Ukrainian President Viktor Yanukovich's
bailout deal with Russia. Yanukovich turned away from a deal with
the EU and later accepted a $15 billion loan from Russia in order
to keep the nation's economy from crumbling. Ukrainians were
enraged, saying Yanukovich sold his country out to Russia. Eurozone
finance ministers are scrambling to make a year end deal on the
region's new system for winding down failing banks, but have found
it difficult to come to an agreement. Germany's Finance Minister
Wolfgang Schaeuble said they were making progress, but still had
conflicting ideas about some key points. The ministers will need to
reach an agreement in the next few weeks to ensure the new system
can be ratified by EU lawmakers before elections begin in May. A
report from the EU's statistics agency showed that the eurozone's
rate of inflation rose from 0.7 percent to 0.9 percent. The figure,
albeit modestly higher, is still far below the EU's target and is a
cause for concern for the nation's central bank. The agency also
reported falling consumer prices and declining energy costs, which
could be an indication of decreasing inflationary pressure.
Asian markets were mixed on Wednesday, the Japanese NIKKEI was
up 2.02 percent and the Hang Seng index rose 0.41 percent. However,
China's Shanghai composite lost 0.13 percent and New Zealand's NZ50
was down 1.10 percent.
Europe's markets were down across the board, the UK' FTSE lost
0.55 percent and the eurozone's STOXX 600 fell 1.24 percent.
Italy's MIB was down 1.63 percent and France's CAC 40 fell 1.24
Energy futures were mixed, Brent futures lost 0.07 percent and
WTI futures were up 0.22 percent. Gold gained 0.19 percent and
silver was up 0.30 percent. Industrial metals were mixed with
copper down 0.17 percent and aluminum down 0.25 percent.
The euro gained 0.04 percent against the dollar and the pound
was up 0.15 percent against the American currency. The dollar
gained 0.32 percent against the yen but lost 0.18 percent against
the Australian dollar.
Notable earnings released on Tuesday included:
Jabil Circuit, Inc. (NYSE:
) reported first quarter EPS of $0.51 on revenue of $4.61 billion,
compared to last year's EPS of $0.61 on revenue of $4.64 billion.
Verifone Systems, Inc. (NYSE:
) reported fourth quarter EPS of $0.27 on revenue of $432.00
million, compared to last year's EPS of $0.76 on revenue of $488.56
Stocks moving in the Premarket included:
Lennar Corp (NYSE:
) gained 3.27 percent in premarket trade after falling 1.54 percent
over the past week. General Motors Co. (NYSE:
) gained 1.06 percent in premarket trade after rising 2.80 percent
over the past five days Deere & Co (NYSE:
) gained 0.70 percent in premarket trade after losing 0.64 percent
on Tuesday Bank of America Corp. (NYSE:
) rose 0.46 percent in premarket trade after falling 2.44 percent
over the past week Jabil Circuit Inc. (NYSE:
) lost 13.79 percent in premarket trade after gaining 0.20 percent
Notable earnings reports expected on Wednesday include:
Oracle Corporation (NASDAQ:
) is expected to report second quarter EPS of $0.67 on revenue of
$9.18 billion, compared to last year's EPS of $0.64 on revenue of
$9.11 billion. FedEx Corporation (NYSE:
) is expected to report second quarter EPS of $1.62 on revenue of
$11.43 billion, compared to last year's EPS of $1.39 on revenue of
$11.11 billion. Lennar Corporation (NYSE:
) is expected to report fourth quarter EPS of $0.62 on revenue of
$1.88 billion, compared to last year's EPS of $0.56 on revenue of
$1.35 billion. General Mills, Inc. (NYSE:
) is expected to report second quarter EPS of $0.89 on revenue of
$4.96 billion, compared to last year's EPS of $0.86 on revenue of
The US FOMC interest rate decision and statement will be the
star of Wednesday's economic calendar as investors wait on pins and
needles to find out if the bank will taper sooner than expected.
Other notable economic releases include the British unemployment
rate, and Germany's LFO business climate index.
For a recap of Wednesday's market action click
Tune into Benzinga's pre-market info show with Dennis Dick and
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