Share This Story
TradeTheNews.com US Market Update: Suggested Taper Delay Saves the Day
Thu, 16 Oct 2014 11:29 AM EST
- (BR) Brazil Oct FGV Inflation IGP-10 M/M: 0.0% v 0.0%e
- (PL) Poland Sept CPI Core M/M: 0.0% v 0.1%e; Y/Y: 0.8% v 0.7%e
- (US) Initial Jobless Claims: 264K v
290Ke; Continuing Claims: 2.389M v 2.38Me
- (CA) Canada Aug Manufacturing Sales M/M: -3.3% v -2.0%e
- (US) Sept Industrial Production M/M:
1.0% v 0.4%e; Capacity Utilization: 79.3% v 79.0%e
- (US) Oct Philadelphia Fed Business
Outlook: 20.7 v 19.8e
- (US) Oct NAHB Housing Market Index:
54 v 59e
- (US) Weekly EIA Natural Gas Inventories: +94 bcf vs +88-92 bcf expected
- (US) DOE Crude: +8.92M v +2Me; Gasoline: -4M v -1.5Me; Distillate: -1.52M v
After plunging lower though the first hours of trading, European equities
reversed and moved higher after 06:00ET thanks to talk the ECB was looking to
make life easier for Greece. US futures
remained beaten down and the 10-year yield briefly dipped back below 2%,
however stocks zigzagged higher from the cash open, aided by soothing comments
from Fed's Bullard. As of writing, the DJIA is down 0.25%, the
S&P500 is down 0.30% and the Nasdaq is well off its lows, down 0.29%. Note
that earlier, the Nasdaq ticked to a level 10% below its highs in early
Better US data is also part of the story this morning. Initial weekly claims plunged to 264K from 287K a week ago, much lower
than expected, for the lowest reading since early 2000. Industrial
production climbed 1% in September, thanks to a big jump in utilities output.
The exception: the NAHB of homebuilder confidence slipped in October, although
it was coming off a nine-year high of 59 in September.
Fickle Fed Governor James Bullard sent
things higher after remarking in a TV interview that the Fed should consider
delaying the end of the QE taper this month to help stem the slide in inflation
expectations and give the Fed another month to gather the economic data on
which rate hikes would depend. If the economy remained strong, Bullard
said the taper could be completed in December. Bullard pointed out that the
volatility this week was largely due to European developments.
Separately, there were conflicting reports out during the European session
regarding ECB haircuts on Greek debt. A Greek official said the ECB would
loosen its collateral rules in order to give Greek banks access to more
liquidity, while another said the issue was only being discussed. Later the ECB clarified that it would adjust haircuts
on Greece government bonds and guaranteed bank bonds used as collateral for ECB
loans, but claimed it was unrelated to recent market stress.
WTI crude fell below $80 for the first time since June 2012. The front-month
contract briefly saw a $70 handle before bouncing back up to around $81. There were reports that Persian Gulf States
would continue to oppose any OPEC production cuts at the November meeting due
to fears they could permanently lose market share. Oil ministry
officials from the region are targeting crude prices around $70/bbl with the
aim of making US shale production uneconomic.
Goldman's third quarter results
demolished consensus expectations and the bank raised its dividend nearly 10%.
Revenue was up 25% y/y and net income rose a whopping 60% y/y, driven by solid
double-digit gains across the firm's segments and higher ROE. On the conference
call, executives said the firm's investment banking pipeline was at highest
level since 2007. Commenting on yesterday's market action, Goldman's CFO said
investors were "shooting first and asking questions later."
In other earnings, shares of UnitedHeath Group are up 4.5% after the firm's
third quarter earnings topped expectations and it raised its FY14 outlook.
Hospital firm HCA gained as much as 3.5% after disclosing excellent preliminary
third quarter results, but shares traded down to +1.5%. Netflix is among the
biggest losers, down 22% after forecasting its fourth quarter EPS would be than
half the expected amount. Baker Hughes was held back by a fall-off in Gulf
drilling plus geopolitical tensions, and shares of BHI are down 9.5%.
- 12:45 (US) Fed Chair Yellen in MA
- 13:00 (US) Fed's Bullard in
- 16:00 (US) Aug Net Long-term TIC Flows: No est v -$18.6B prior; Total Net TIC
Flows: No est v $57.7B prior
- 17:00 (CL) Chile Central Bank Interest Rate Decision: Expected to cut
Overnight Rate Target by 25bps to 3.00%
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."