Eurozone and Japanese economic growth decelerated in the third
quarter. The preliminary estimate of Q3 GDP in the eurozone rose
0.1% from the prior quarter. Japanese GDP rose 0.5%
quarter-over-quarter, better than the 0.4% rate estimated by
economists. The Japanese
(INDEXNIKKEI:NI225) finished 2.12% higher, though some of the gains
were likely attributable to the late day gains by US equities
yesterday. European stock indices were generally higher.
Federal Reserve Chairwoman-Elect Janet Yellen gave testimony today
before the Senate Banking Committee. Her comments largely stuck to
the existing rhetoric that the FOMC led by Ben Bernanke has
adopted, though Treasuries and US stocks did rally during the
hearing. The Senate committee will vote to confirm her nomination
as early as next week.
US equities opened at the flatline and drifted higher throughout
the day. The
(INDEXSP:.INX) closed up 0.45%, led by linear gains in materials,
utilities, financials, health-care, and consumer-related stocks.
The tech sector was the sole decliner, undoubtedly due to tertiary
damage from the sizable earnings miss from
) last night.
It is worth mentioning that there is a large amount of open
interest in the SPX 1800 calls expiring tomorrow, which could be
causing the 1800 strike to act as a magnet.
Weekly jobless claims fell to 339,000 from last week's 341,000.
Economists had been looking for 330,000. The US September trade
deficit expanded to $41.8 billion, largely due to an increase in
net real goods imports. This was $2.8 billion more than economists
had estimated. All else equal, the updated data should cause US
third quarter annualized GDP to be revised lower by 0.3%.
President Obama announced changes to the Affordable Care Act to
allow consumers to keep cancelled plans for one year while problems
were worked out with the existing system. The insurance industry
cautioned that the change could lead to higher premiums for
) reported earnings before the market opened, beating earnings by
$0.01 at $1.14 and missed revenues at $115.69 billion vs $116.82
billion estimates. The company said that US comp sales growth would
be zero for the current fiscal year 2014. Additionally, the
company's earnings and revenue growth were below estimates.
Wal-Mart initially traded down 2%, but recovered all of the losses
to close in positive territory.
Tomorrow's Financial Outlook
The Federal Reserve will publish October industrial and
manufacturing production figures in the morning. Thus far, October
economic data has not been measurably worse despite the government
shutdown. Economists are expecting industrial production to grow
0.2% from the prior month.
) options will open for trading tomorrow on the CBOE. The options
will list between $35 and $50 with $1 intervals between the
The only notable global economic data release is the eurozone's
October consumer price index.
There are no major earnings reports scheduled for tomorrow.