Stock indexes around the world fell heavily overnight following
a string of negative days in the US. The Japanese
(INDEXNIKKEI:NI225) closed down 2.63% and the Chinese
Hang Seng Index
(INDEXHANGSENG:HSI) was down 2.2%. Weakness continued in other
emerging market nations like Indonesia, which was down another
3.21%. In South America, the Central Bank of Brazil fought back
against the financial markets, announcing that traders had pushed
interbank and swap rates too far. Additionally, the former head of
the Central Bank of Brazil announced that there was no bottom for
the Brazilian real in the short term and that the Central Bank of
Brazil should move to push up the overnight rate to above 10% from
its current rate of 8.5%.
US equities showed strength in the pre-market, which continued into
the opening two hours, working off oversold conditions after
falling 3.72% from the prior all-time high. The
(INDEXSP:.INX) reached an intraday peak of +0.78% before giving
away half of its gains in the final minutes. Notably, however, the
Dow Jones Industrials
(INDEXDJX:.DJI) finished in the negative for the day, held back by
Johnson & Johnson
). Homebuilder stocks led the day's rally, having been laggards for
much of the recent sell-off.
Crude oil had a very erratic day. In early trading, it fell as much
as 1.55% before rebounding to unchanged on the day. After failing
to hold these levels, the selling intensified and crude oil reached
lows of -2.09%. Analysts expect that crude stockpiles will decline
by 1.25 million barrels tomorrow to an 11-month low, according to
the EIA's weekly report.
Treasuries showed strong overnight gains and held onto much of
these gains throughout the US trading session. The 10-year yield
dropped by 7 basis points to 2.81% by 6:00 a.m. ET and remained
near this level for the rest of the day.
) rose 13% in today's trading following earnings in the pre-market
that were much better than expected. Earnings per share of $0.32
beat analyst estimates of $0.21 and revenue rose 0.4% from the
prior year to $9.3 billion. The other notable earnings report from
the day came from Home Depot, which beat earnings solidly, citing
strong gains in its home renovation business, and raised its
earnings and revenue guidance. However, after rising more than 3%
in the pre-market, it gave away all of its gains to finish down
Tomorrow's Financial Outlook
Tomorrow afternoon at 2:00 p.m. ET, the Federal Reserve will
release the minutes from its late July meeting. Following the
meeting, the Fed announced that it was troubled by the growing
signs of disinflation and would defend its mandate of 2% inflation.
July existing home sales will be released at 10:00 a.m. ET;
economists expect sales to grow 1.4% from the prior month to an
annual rate of 5.15 million.
Overseas market-moving data remains light. The UK will release July
public sector credit growth in the morning.
Notable earnings reports are due out from
Madison Square Garden