US Equities Continue Downward Trend After Yesterday's Bounce

By Minyanville Staff,

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European equities weakened significantly despite much stronger investor sentiment on the current economic situation and future expectations. The German ZEW survey of current conditions rose to 32.4 from last month's 29.4, and future expectations rose to 62.0 from 54.6. The expectations survey reading was the highest since 2004. The Italian FTSEMIB (INDEXBIT:FTSEMIB) was the worst performer, losing 1.63%, followed by the French CAC (INDEXEURO:PX1).

The Senate announced that it would hold a vote among all members on Thursday to confirm Janet Yellen as chair of the Federal Reserve. News reports indicated that Republican Mitch McConnell would not vote for her confirmation and Republican Rand Paul would attempt to block the vote.

US equities continued their downward trend for the most part after yesterday's oversold bounce. Telecom was the worst-performing sector in the S&P 500 (INDEXSP:.INX) today, led by declines in Verizon ( VZ ). The material sector was the strongest-performing sector even though precious metals and crude struggled. CF Industries ( CF ) and Alcoa ( AA ) were the stocks with the largest gains in the sector.

US Treasuries rallied throughout the day. The 10-year yield declined by four basis points to 2.84%. The Treasury auctioned $32 billion of 2-year notes at a high yield of 0.345% and received the largest dollar amount of total bids this year.

Channel Advisor reported this morning that Amazon's ( AMZN ) same-store sales had risen a "date shifted" 39% year-over-year for the period between November 28 and December 15. Additionally, eBay's ( EBAY ) sales were up 20.9% year-over-year for the same period, according to the research firm's data.

Tomorrow's Financial Outlook

Tomorrow afternoon the FOMC will release its monetary policy decision at 2:00 p.m. EST. Chairman Ben Bernanke's press conference will follow at 2:30 p.m. Currently, investors think there is an even-money chance the Fed will choose to taper its asset purchases at the meeting due to stronger economic growth in the fourth quarter. The Fed will also release its updated Summary of Economic Projections for 2013 through 2016.

The US will release September to November housing starts and November building permits in the morning before the market opens.

The Reserve Bank of India will release its monetary policy decision overnight. Economists are expecting a small increase in the central bank's repurchase and reverse repo rate. Additionally, the IFO Institute will release its survey results for German investors' future expectations and the current situation. Lastly, the UK will release the rolling 3-month ILO unemployment rate.

FedEx (FDX) will be the first major company to report its fourth-quarter earnings before the market opens. Lennar Corporation (LEN) is also scheduled to report in the pre-market. Oracle (ORCL), Paychex (PAYX), and General Mills (GIS) are scheduled to report after the market closes.

Twitter: @Minyanville

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: AA , AMZN , CF , EBAY , VZ

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