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TradeTheNews.com US Market Update: ECB Discord Hits Equity Markets
Tue, 04 Nov 2014 11:37 AM EST
- (RO) Romania Central Bank cut interest rate by 25bps to 2.75%, as expected
- (BR) Brazil Sept Industrial Production M/M: -0.2% v +0.2%e; Y/Y: -2.1% v
- (IE) Ireland Oct Consumer Confidence: 85.5 v 92.8 prior
- (US) ICSC Chain Store Sales w/e Oct 31st w/w: -1.6%; y/y: +1.8%
- (US) Sept Trade Balance: -$43.0B v
- (CA) Canada Sept Int'l Merchandise Trade: +C$0.7 v -C$0.3Be
- (SG) Singapore Oct Purchasing Managers Index: 51.9 v 50.5e; Electronics
Sector Index: 52.5 v 51.8e
- (US) Sept Factory Orders: -0.6% v
- (US) Nov IBD/TIPP Economic Optimism: 46.4 v 46.5e
US and European equity indices were trading sideways in a choppy, up-and-down
fashion this morning in heavy volume. Then just after 10:00ET, a story regarding deep discord on the ECB's governing
board dropped and sent equities on both sides of the Atlantic to their lows.
Note that the standout sectors have been Dow transports and utilities, both of
which saw record highs earlier thanks to the decline in crude. As of writing,
the DJIA is down 0.25%, the S&P500 is down 0.76% and the Nasdaq is down
Fed Governor told Fox News earlier this
morning that the FOMC has agreed to keep the Fed balance sheet at its current
size for now. The rate lift off will come first, and then the Fed will
consider reducing the size of the balance sheet, in a passive and gradual
There are reports of serious discord on the ECB governing committee this
morning. According to reports citing sources, committee members are planning to
challenge President Draghi and critique his leadership style at the governors'
dinner on Wednesday, Nov 5th. EUR/USD shot up from 1.2510 to nearly 1.2580 on
the report. The dispute may make it
more difficult for the ECB to "do whatever it takes" to fight the
crisis, and Draghi may have a difficult time politically pushing through QE
with only a slight majority of support.
WTI crude is down 2% on the session, to trade around $76.60. Weak data in the
US and the reductions in EU economic forecasts are not helping crude prices.
Note that yesterday, Saudi Aramco cut
its US prices and raised its prices for Asia and Europe, sending January WTI
delivery prices above December prices, sending the market into contango.
Among the big decliners are KORS (-8% after FY comp guidance was cut), HLF
(-18%, very weak guidance), S (-17%, weak earnings). Among the gainers are MWW
(+15% after good earnings) and ODP (+19%, new CEO).
- 16:30 (US) Weekly API Oil Inventories
- 19:01 (UK) Oct BRC Shop Price Index Y/Y: No est v -1.8% prior
- 20:45(CN) China Oct HSBC Services PMI: No est v 53.5 prior; Composite PMI: No
est v 52.3 prior
- (US) Midterm Elections
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