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TradeTheNews.com US Market Update: Equities Enter the Pre-Thanksgiving Doldrums
Mon, 17 Nov 2014 11:47 AM EST
- (BR) Brazil Sept Economic Activity Index (Monthly GDP) M/M: 0.4% v 0.2%e;
Y/Y: 0.9% v 0.5%e
- (US) Nov Empire Manufacturing: 10.16
- (CA) Canada Sept Int'l Securities Transactions (CAD): 4.4B v 7.0Be
- (CA) Canada Oct Existing Home Sales M/M: +0.7% v -1.4% prior
- (PL) Poland Oct YTD Budget Balance Level (PLN): -27.3B v -22.4B prior; Budget
Balance: Performance 57.4B v 47.2% prior
- (US) Oct Industrial Production M/M:
-0.1% v +0.2%e; Capacity Utilization: 78.9% v 79.3%e; Manufacturing Production:
0.2% v 0.3%e
The Japan third-quarter GDP report
drove the Nikkei down 3% in Monday trading, but the response in European and US
markets has been more restrained. Europe opened in the red but major
indices rose back into positive territory and closed not too far off their
highs, with an assist from ECB President Draghi jawboning about sovereign QE.
In the US, the DJIA and the S&P500 have crept back into and then back out
of positive territory after two hours of trading. Trading volumes are on the
low side. As of writing, the DJIA is down 0.7%, the S&P500 is off 0.25% and
the Nasdaq is down 0.54%.
The October US industrial production report missed expectations and the
September numbers were revised somewhat lower. The biggest decline was the motor vehicle output component, which fell
1.2% after September's 1.9% drop, making for three consecutive months of
contraction in auto manufacturing.
USD/JPY fell hard from seven-year highs just above 117 down as low as 115.50
during the European session, but has gradually crept back up to 116.55. EUR/USD
nosed below 1.2450 mid morning. FX
traders are talking about a big bid in EUR/CHF around the 1.2010 level, on the
order of €10 billion, presumably from the Swiss National Bank. Last
Friday, WTI crude futures closed right around $76, while Brent crude was just
above $79, and both have moved incrementally lower in trading this morning.
ECB President Draghi provided his quarterly update to the EU Parliament this
morning and reiterated many of his familiar monetary policy talking points. Included in the speech were heavy suggestions
that sovereign bond buying by the ECB is still in the realm of possibility,
implicitly pushing back against comments out of the Bundesbank's Weidmann last
Two huge mergers dropped this morning: Actavis for Allergan and Halliburton for
Baker Hughes. After a week of rumors, Actavis reached a deal to acquire
Allergan for $219/shr in cash and stock, in a total deal valued around $66B.
Valeant said it could not justify matching the price, giving up the fight.
Baker Hughes agreed to a cash-and-stock deal valued at $78.62 a share, valuing
the firm around $34.6 billion. Each Baker Hughes share was valued at 1.12
Halliburton shares plus $19.00 in cash.
- 14:00 (AR) Argentina Q3 Unemployment Rate: 7.7%e v 7.5% prior
- 16:00 (US) Crop Progress Report
- 19:30 (AU) RBA Nov Minutes
- 20:30 (CN) China Oct Property Prices
- 21:30 (CA) Partial elections held to fill 2 Canada Parliament vacancies
- Bank of Japan (BOJ) policy meeting
(decision on Wednesday)
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