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S&P Ends the Day Up as US Equities Explode Higher

Posted
1/30/2014 4:40:00 PM
By: Minyanville
Referenced Stocks:FB;LNKD;MA;NOV;TWTR

The final gauge of Chinese manufacturing PMI for January showed the first contraction since July of last year. The HSBC/Markit index fell to 49.5 for the month from 50.5 in December 2013. This morning the Central Bank of Russia announced that it would continue to conduct unlimited forex market interventions as long as the ruble remained weak against other major currencies. The ruble had reached a new 5-year low vs. the US dollar earlier today.

Initial jobless claims rose to 348,000 in the last week, above the 4-week moving average of 333,000. The economist estimate had been for 330,000. The advance estimate of fourth quarter GDP rose 3.2% at a quarterly annualized rate, in line with the consensus economist estimate. In 2013, real GDP growth was 2.7%.

The December 2013 pending home sales showed a shocking drop-off in home sales activity during the month, which can be directly attributed to the extreme cold weather. Pending home sales contracts fell 8.7% month-over-month and 6.1% year-over-year, well below the -0.3% economist estimate for both.

US equities exploded higher today after holding critical technical support yesterday at SPX 1,772. However, emerging market stocks and currencies continued to be the main driver of risk assets. The S&P 500 (INDEXSP:.INX) rose 1.13% led by gains in health care and consumer discretionary stocks.

Natural gas continued to trade erratically. Natural gas futures for March delivery fell 8.25% in today's session after rallying 11.2% yesterday.

Facebook ( FB ) rose 13.62% after reporting significantly better than expected fourth-quarter results, including a 10% beat on the revenue line. The strength extended to the rest of the social media sector, with peers like LinkedIn ( LNKD ) and Twitter ( TWTR ) powering sharply higher.

Tomorrow's Financial Outlook

Tomorrow morning December 2013 US personal spending and income data will be released. Economists expect spending and income will rise 0.2% in the month. Additionally, the PCE deflator, the inflation gauge that shows what consumers lose from their purchasing power, is expected to rise to a 1.1% year-over-year rate. Also, the first major January manufacturing survey is due out from Chicago. Economists expect the Chicago PMI will remain near its multi-year high at 59.0.

A significant amount of data is due out overnight from Japan, which should influence the USD and US Treasuries. Japan's December 2013 jobless rate, CPI, vehicle production, and industrial production are scheduled to be released. Also due out is German retail sales, eurozone unemployment, and consumer price index.

Earnings will be a bit lighter since it is Friday. Notable reports include Weyerhaeuser (NYSE:WEY), National-Oilwell Varco ( NOV ), Mastercard ( MA ), Mattel (MAT), AbbVie (ABBV), Chevron (CVC), and Tyson Foods (TSN).

Twitter: @Minyanville