US stock market, economy and companies update (January 24, 2014)
January 24, 2014, Friday, 17:44 GMT | 12:44 EST | 22:14 IST | 00:44 SGT
- Risk is off as emerging market currencies melt down
- Potential commentary from Moody's on France after the close prompts weak downgrade rumors (back on Nov 19th, 2012 Moody's cut France's rating to Aa1 from AAA and maintained a negative outlook)
- Yesterday the DJIA dropped 225 points, for its biggest loss in nearly two months, and is down another 140 points this morning. The S&P500 has broken below its 50-day moving averages. Both indices have dropped to levels last seen in mid-December, racking up YTD lows. Yesterday's catalyst was big trouble in little China while this morning the perilous state of Argentina and many other emerging market currencies is in focus. As of writing, the DJIA is down 1.14%, the S&P500 has fallen 1.16% and the Nasdaq is down 1.7%
- European equities are looking to close at their lows, with the DAX and CAC down approximately 2.5% or so each. Gold is up a bit, but less than might be expected, with spot up a mere 0.30% after gaining nearly 2% yesterday. EUR/USD made a run higher after yesterday's big gains, briefly spiking to 1.3740 before dropping back 1.3680.
- Just ahead of the US session, Argentina said it would loosen capital controls that had been intended to keep money from leaving the country. Argentines will be allowed to trade in their pesos for dollars starting Jan 27th. This move comes after the central bank disclosed that foreign reserves had fallen to $29.4B (In 2013 alone, reserves plunged more than $12 billion to $31 billion, down from around $50 billion two years ago) and said it would abandon interventionist monetary policy, which caused the peso to dropped a breathtaking 10%+ against the dollar on Thursday. The ARS is down another two or three percent against the dollar today.
- Selected tech names are among the few names in the green this morning. Microsoft was up nearly 4% before the gravity of tanking markets pulled it lower. Earnings and revenue totals for the second quarter comfortably beat expectations and executives were very upbeat. Juniper Networks is up 10% at the highs of the day, after beating on earnings. Also, Jana Partners disclosed a big new stake in JNPR, and recommend new board members, cost cuts and capital returns.
- Consumer names Procter & Gamble and Starbucks are among the brightest stars this morning despite pretty inline results. PG is up 3.4%, although earnings and revenue totals for the company's second quarter only just met expectations and reaffirmed full-year guidance. SBUX slightly topped the consensus view and tweaked its full-year a bit higher. Honeywell is also holding up well, remaining in the green despite reporting merely inline results and reaffirming expectations.
- Rain name Kansas City Southern is among the biggest decliners, with shares of KSU down nearly 15% in the early going. The firm slightly missed expectations in its fourth quarter and its initial FY14 guidance was well below consensus. Nevertheless, executive had good things to say on the call, asserting that growth would hold up well in 2014.
- Chinese solar names are down 7% to 8% this morning despite the relative strength seen in Shanghai trading overnight. The US Department of Commerce disclosed that it has begun an anti-dumping investigation into imports of solar power products from China and Taiwan, just four days after China imposed tariffs on solar-grade polysilicon imports from the US and South Korea.
- (EU) Eurogroup chief Dijsselbloem in Davos
- 12:00 (EU) ECB's Draghi in Davos on path to stability
- 14:00 (AR) Argentina Dec Industrial Production M/M: No est v -3.4% prior; Y/Y: -3.7%e v -4.7% prior
- TBD (AR) Argentina Jan Consumer Confidence Index: No est v 46.15 prior
- (IN) India Forex Reserves w/e Jan 17th: $292.1B v $293.3B prior
- (CL) Chile Dec PPI M/M: +1.7% v -0.1% prior
- (RU) Russia Dec Unemployment Rate: 5.6% v 5.5%e
- (BR) Brazil Dec Current Account Balance: -$8.7B v -$6.8Be; Foreign Direct Investment (FDI): $6.5B v $5.5Be
- (CA) Canada Dec CPI M/M: -0.2% v -0.2%e; Y/Y: 1.2% v 1.3%e; Consumer Price Index: 122.7 v 123.0 prior
- (CA) Canada Dec CPI Core M/M: -0.4% v -0.4%e; Y/Y: 1.3% v 1.3%e
- (CA) Canada Dec CPI Seasonally adj M/M: 0.2% v 0.2% prior; CPI Core Seasonally adj M/M: 0.2% v 0.0% prior
- (BE) Belgium Jan Business Confidence: -5.6 v -5.7e
- (MX) Mexico Nov Retail Sales Y/Y: 1.9% v 0.8%e