US markets have been operating on the assumption that the US
Federal Reserve will continue with its bond buying plan until March
With the Fed meeting to come to a close on Wednesday afternoon,
most are hoping the bank won't have any surprises in store. The
recent rallies in stocks and bonds would be justified by the bank's
decision to delay a taper; however if the bank does make any sudden
moves then markets will be very vulnerable.
In other news around the markets:
After reports leaked by Edward Snowden showed that the NSA had been
collecting phone calls in both France and Spain, European
politicians angrily pointed fingers at the US. However, new
information shows that European intelligence had collected the data
and shared it with the US. The revelation will likely ignite anger
among Europeans who believed the spying was done solely by the US.
The Nasdaq Composite froze up for almost an hour on Tuesday due to
data transmission problems at Nasdaq OMX Group. Exchange officials
are blaming human error rather than computer problems for the
outage, but the incident still raised questions about the stability
of electronic market systems. The New Zealand Dollar was hit hard
after Moody's Vice President Steven Hess said the agency considered
cutting New Zealand's credit rating from AAA. Hess cited the
nation's reliance on overseas investors as well as its current
account deficit as reason to worry that the country could be more
vulnerable to external problems. Angela Merkel is set to hold
another round of coalition talks with the Social Democrats on
Wednesday. The meeting will likely center around implementing a
nationwide minimum wage of €8.50 per hour. The new wage would
increase salaries for about 20 percent of the nation's workforce,
but could have a negative impact on job growth.
Asian markets were higher on hopes that the Fed would continue
its bond buying plan. The Japanese NIKKEI was up 1.23 percent, the
Shanghai composite gained 1.48 percent and the Shenzhen composite
was up 1.73 percent. The Hang Seng Index had the largest gains, up
European markets were off to a good start, the UK's FTSE was up
0.63 percent and the eurozone's STOXX 600 gained 0.61 percent. The
Spanish IBEX gained 1.11 percent and Italy's MIB was up 1.16
Energy futures were mixed with Brent futures quiet, up 0.09
percent but WTI futures down 0.59 percent. Gold gained 0.17 percent
and silver was up 0.95 percent. Industrial metals were mixed with
copper up 1.16 percent but aluminum down 0.63 percent.
Ahead of the Fed meeting outcome, the euro gained 0.10 percent
on the dollar and the pound was up 0.13 percent against the
American currency. The yen lost 0.05 percent against the dollar and
the Australian dollar gained 0.39 percent against the
Notable earnings released on Tuesday included:
Pfizer, Inc. (NYSE:
) reported third quarter EPS of $0.58 on revenue of $12.60 billion,
compared to last year's EPS of $0.53 per share on revenue of $13.98
billion. Valero Energy Corporation (NYSE:
) reported EPS of $0.57 on revenue of $36.14 billion, compared to
last year's EPS of $1.90 on revenue of $34.73 billion. Aetna Inc.
) reported third quarter EPS of $1.50 on revenue of $13.04 billion,
compared to last year's EPS of $1.55 on revenue of $8.90 billion.
Johnson Controls, Inc. (NYSE:
) reported third quarter EPS of $0.95 on revenue of $11.05 billion,
compared to last year's EPS 0f $0.77 on revenue of $10.39 billion.
Stocks moving in pre-market trade included:
McDonald's Corp (NYSE:
) gained 0.50 percent in premarket trade after gaining nearly 1
percent over the past week. Berkshire Hathaway Inc. (NYSE:
) rose 0.40 percent in premarket trade after gaining 0.40 percent
on Tuesday Edwards Lifesciences Corp (NYSE:
) lost 2.02 percent in premarket trade after falling 10.57 percent
over the past five days. United States Steel Corp (NYSE:
) fell 1.06 percent in premarket trade after rising 8.75 percent on
Earnings reports expected on Wednesday include:
Facebook, In. (NASDAQ:
) is expected to report third quarter EPS of $0.18 on revenue of
$1.89 billion, compared to last year's EPS of $0.12 per share on
revenue of $1.26 billion. Comcast Corporation (NASDAQ:
) is expected to report EPS of $0.61 on revenue of $16.25 billion,
compared to last year's EPS of $0.46 on revenue of $16.54 billion.
Visa Inc. (NYSE:
) is expected to report third quarter EPS of $1.85 on revenue of
$3.02 billion, compared to last year's EPS of $1.54 on revenue of
$2.73 billion. Marriott International (NYSE:
) is expected to report third quarter EPS of $0.45 on revenue of
$3.05 billion, compared to last year's EPS of $0.44 on revenue of
The Federal Reserve interest rate decision and press conference
will be the most important item on Wednesday's economic calendar.
Other notable releases expected include US oil inventory data, US
CPI, German CPI, the German unemployment rate, the Spanish
unemployment rate, and eurozone consumer confidence.
Happy trading and good luck!
For a recap of Tuesday's market action, click .
Tune into Benzinga's #PreMarket info show with Dennis Dick and
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