US Stocks Recover Much of Yesterday's Losses
(INDEXNIKKEI:NI225) fell 3.08% in last night's trading after being
closed yesterday. USD-denominated futures were down 2.17% in global
trading yesterday following losses in the US, so the decline was
only minor. Also in Japan, the government's November 2013 balance
of payments widened to the worst level on record at -592.8 billion
yen; this was due to rising energy costs.
December 2013 retail sales rose 0.2% from the prior month, slightly better than the 0.1% economist estimate. However, the November report was revised down to a 0.4% month-over-month gain from the prior 0.7% gain. Sales growth ex-auto was a robust 0.7% for the month. It is likely that strong Web-based sales during the month outweighed what have been generally dismal retailer reports from December.
US equities erased yesterday's losses and then some. The tech-based Nasdaq-100 (INDEXNASDAQ:NDX) gained 1.84% in today's session, climbing 0.41% above yesterday's open. A notable positive performer was Google ( GOOG ), which gained 2.43% after its acquisition of Nest Labs yesterday for $3.2 billion. All 10 of the basic sectors in the S&P 500 (INDEXSP:.INX) were positive, led by tech and materials stocks.
The Federal Reserve announced that it is looking to curb deposit-taking banks' commodities businesses. Currently, in accordance with US law, domestic banks are not allowed to own non-financial businesses, but banks that started businesses before 1997 have been operating on a special exemption. The deal would enact further restrictions on banks' warehousing of physical commodities and trading activities in order to prevent market manipulation.
Tomorrow's Financial Outlook
The US will release December 2013 producer prices data tomorrow morning. Economists estimate that prices rose 1.1% from a year ago after rising 0.7% in November. Also scheduled to be released is the New York regional manufacturing survey from January. This will be the first piece of leading economic data for the month of January. Lastly, the Fed will release its Beige Book of business conditions across its 12 districts.
Preliminary December 2013 Japanese machine tool orders are due to be reported overnight. In Europe, Germany's 2013 GDP will be released before the US market opens in addition to Swiss retail sales data. Lastly, Canadian existing-home sales data will be released at 9:00 a.m. EST.
The pace of earnings reports will increase tomorrow. Bank of America ( BAC ), Fastenal ( FAST ), and CSX Corporation ( CSX ) are all scheduled to report.