Asian markets were up very strongly last night, as would be
expected after yesterday's plunge in the US dollar and massive
rally in precious metals. Notable performers included Japan's
Nikkei (+1.80%), China's Hang Seng (+1.67%), India's SENSEX 30
(+3.43%), and Thailand's SET (+3.47%). The Indian rupee rose 2.6%
against the dollar. In Europe, UK retail sales fell 0.9% in August,
below the +0.4% consensus. UK stocks struggled on a relative basis.
US equities digested yesterday's monstrous gains, trading higher in
the morning session before settling modestly lower for the day.
Stock breadth remained negative throughout most of the day,
indicating that the major indices were being held up by a
relatively small number of names. Regional bank stocks saw money
rotate out today. Investors believed that the potential gains from
an increased net interest margin (
) and regional banks' reduced balance sheet exposure to agency MBS
would see them outperform in a rising rate environment. Yesterday's
Fed decision changed that thinking.
Secretary of State John Kerry commented on the Syria situation this
afternoon in a press conference. He stated that the peaceful
removal of Syria's chemical weapons was possible and there was
clear evidence that Syrian forces and not resistance fighters had
conducted the rocket attack. He urged the UN Security Council to
come to a decision later this week.
US Treasury bonds retraced a third of their gains from yesterday.
Gold held steady for much of the day and crude lost 1.7%. Weekly
natural gas inventories rose 46 billion cubic feet (bcf) vs the
estimated gain of 56-60 bcf. Natural gas futures initially rallied
3.5%, but settled near unchanged implying negative price action
) announced an additional 1,800 mortgage-related job cuts by year
end. This comes after an announcement last month that 3,000 jobs
would be cut.
Bank of America
) have also announced job cuts in their mortgage businesses.
) announced overnight that it would cut 40% of its workforce by
year end equally across all of its businesses.
Tomorrow's Financial Outlook
Tomorrow is "triple witching" in the US -- when stock options,
index futures, and index futures' options expire on the same day;
this usually leads to intense volume. There will be no economic
data releases in the US. Three regional Fed presidents will be
giving speeches, however, which could move markets after the Fed
decided not to taper its asset purchase program yesterday.
The Bank of India will make its monthly rate decision tomorrow, the
first since assuming new leadership earlier this month. Thus far,
the new leadership has made sweeping changes, allowing domestic
companies to more easily do business internationally.
There will be no major earnings reports.
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