Stocks made impressive gains on Tuesday following reassuring
Fed commentary, though most of us didn't see anything new in
Janet Yellen's first Congressional testimony as the Fed
Chairwoman. Positive trade data out of China and weak-looking
European numbers provide the backdrop for today's market action.
The debt ceiling issue appears to have been taken off the table
following Tuesday's House vote to raise it without preconditions.
China's January trade numbers came out surprisingly strong,
running counter to recent PMI surveys that showed the country's
factory sector moving into contraction mode at the start of the
year. The magnitude of the export strength -- up 10.6% from
January 2013, which itself was up more than 20% -- has reignited
questions about the country's trade. Chinese exporters have long
been suspected of resorting to over-invoicing as a away to
counter the country's tough capital controls and something along
those lines could be at play in this strong report as well.
China is now the second largest economy in the world, but
lingering questions about the quality of its economic data remain
a key hurdle in global markets getting a good read on the
country's outlook. The ongoing emerging market turmoil generally
gets blamed on the Fed's Taper plans, which incidentally Yellen
doesn't worry about much. But concerns about China's growth
outlook could be weighing on the region's prospects.
Doubts about Chinese data aside, the data could be indicative
of a favorable demand backdrop for Chinese goods, particularly
out of Europe, giving the country a much-needed helping hand.
With respect to Europe itself, we got an upgrade from the Bank of
England for the British economy, though today's December
industrial production numbers for the region as a whole paint a
picture of two steps forward one step back.
Not only did growth come short of expectations, but the prior
month's better looking growth numbers were revised down. The
region's economy was barely in the positive column in 2013 Q3 and
Q2 and the preliminary Q4 GDP figures coming out on Friday are
expected to be no better.
In corporate news, we got a string of positive earnings
announcements this morning from
Deere & Company
Dr. Pepper Snapple
) are on deck for releases after the close.
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