Federal Reserve taper speculation is beginning to take hold on
the markets ahead of the closely watched nonfarm payrolls data, due
out on Friday.
Most expect to see the nonfarm payrolls increase by 180,000 in
November. The figure would be lower than October's 204,000 increase
and slightly below the monthly average of 186,000, but most would
consider it a solid reading. Seasonal hiring could help buoy the
figure, but because Thanksgiving fell late in November, holiday
hiring isn't expected to play a huge role in the data.
Also on Friday, the US will release an employment report which
many see as tied to the Fed's taper plans. Some see strong
employment data from November as reason for the Fed to begin
tapering as early as December. However, the general consensus is
that the US central bank will wait until congress can agree on a
budget deal and evidence proves that the labor market's recovery is
Italy's Economy Minister gave an interview on Tuesday in which he
said that Berlusconi's exit from the Italian Parliament will likely
provide some much needed cohesion and help the nation's government
implement the reforms necessary to get Italy back on track. Without
Berlusconi, President Enrico Letta's government holds a stronger
majority and will find it easier to make changes. With tensions in
Asia running high due to China's newly declared air defense zone,
Vice President Joe Biden is set to visit Beijing on Wednesday to
try to smooth things over. Biden is expected to try to talk China
into de-escalating the situation during his visit. Biden's meetings
in China are also designed to send a message to Japan and South
Korea that the US is involved in hopes it will keep the two nations
from acting on their frustrations with China's new regulations. On
Tuesday, the Ukrainian government easily survived a confidence vote
with the opposition falling 40 votes short. The current government
backed away from an EU trade deal, which has sparked a wave of
protests as the nation's pro-Western citizens voice their
disappointment. Australian GDP released on Wednesday showed the
nation's economy expanded at a slower pace than expected. The
nation's third quarter GDP increased by 0.6 percent, slightly below
the expected 0.7 percent rise. The news could put pressure on the
Reserve Bank of Australia to take the Australian dollar lower and
could prompt a sooner than expected rate cut.
Asian markets were mixed on Wednesday. The Japanese NIKKEI lost
2.17 percent and the South Korean KOSPI was down 1.12 percent.
However, China's Shanghai composite was up 1.31 percent and the
Shenzhen composite gained 1.39 percent.
European markets were down across the board. The UK's FTSE fell
0.95 percent and the eurozone's STOXX 600 slipped 2.06 percent.
France's CAC 40 fell 2.65 percent and Italy's MIB was down 1.95
Energy futures were on the rise, Brent futures gained 0.03
percent and WTI futures were up 1.18 percent. Gold lost 0.12
percent, but silver was up 0.26 percent. Industrial metals were
mostly lower with aluminum down 0.20 percent and tin down 0.22
The euro lost 0.13 percent to the dollar and the pound fell 0.11
percent against the greenback. The dollar gained 0.26 percent
against the yen and 1.27 percent against the Australian dollar.
Notable earnings released on Tuesday included:
Bank Of Montreal (NYSE:
) reported fourth quarter EPS of $1.64 on revenue of $4.19 billion,
compared to last year's EPS of $1.65 on revenue of $4.18
OmniVision Technologies, Inc. (NASDAQ:
) reported second quarter EPS of $0.60 on revenue of $397.20
million, compared to last year's EPS of $0.33 on revenue of $390.14
billion. United Natural Foods, Inc. (NASDAQ:
) reported first quarter EPS of $0.46 on revenue of $1.69 billion,
compared to last year's EPS of $0.46 on revenue of $1.41 billion.
Stocks moving in the Premarket included:
Hewlett-Packard Co (NYSE:
) gained 1.38 percent in premarket trade after rising 0.66 percent
Verizon Communications Inc (NYSE:
) was up 0.81 percent in premarket trade after falling 0.66 percent
over the past week. The Coca-Cola Co (NYSE:
) gained 0.37 percent in premarket trade after rising 0.67 percent
on Tuesday AT&T Inc (NYSE:
) lost 0.78 percent in premarket trade after falling 1.89 percent
over the past five days.
Notable earnings expected on Wednesday include:
Brown Forman Corporation (NYSE:
) is expected to report second quarter EPS of $0.91 on revenue of
$1.04 billion, compared to last year's EPS of $0.80 on revenue of
Avago Technologies Limited (NASDAQ:
) is expected to report fourth quarter EPS of $0.82 on revenue of
$731.58 million, compared to last year's EPS of $0.71 on revenue of
$618.00 million. Aeropostale Inc. (NYSE:
) is expected to report a third quarter loss of $0.24 per share on
revenue of $520.04 million, compared to last year's EPS of $0.31 on
revenue of $605.92 million
There will be several important releases on Wednesday's economic
calendar including US new home sales, US crude inventories, the US
beige book, US ISM non-manufacturing PMI, eurozone GPD, Eurozone
retail sales, and services PMI from the eurozone, the UK, Germany,
France, Spain, and Italy.
For a recap of Tuesday'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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