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Reports US

US stock market, economy and companies update (November 14, 2012)

November 14, 2012, Wednesday, 17:00 GMT | 12:00 EST | 21:30 IST | 00:00 SGT
Contributed by Trade The News


- Coming into the US session equity futures were ticking higher thanks to strength from some decent corporate results. However indices slid lower from the open and were well into the red after the first hour of trading. Speculation and commentary about the fiscal cliff is dominating headlines and smothering any positive sentiment. Overnight there were reports that President Obama would call for $1.6T in additional tax revenue over the next 10 years, which is well above his prior positions and the GOP stance, however analysts say this represents merely a high initial bargaining position. Some Republican aides say that there could compromise related to about $1T in new tax revenues (although this would likely involve deductions and loopholes rather than raising tax rates). Obama is expected to hold a press conference later today to outline his position. In geopolitical news, Israel assassinated the Hamas military chief in the Gaza strip, sparking what is expected to be several days worth of violence in the region. WTI crude futures are holding steady around $85, right where they have been for a week.

- Cisco saw modest growth in earnings and revenue in its Q1 and forecasted flat growth for Q2. The bar has not been set high for the firm after several quarters of declining outlook for IT in general and network hardware in particular. CEO Chambers said that he is seeing a slightly better environment in the US and in Asia, while also warning that Europe would get worse before it got better. Shares of CSCO have managed to sustain +6% gains in lousy mid morning trade.

- Shares of apparel retailer Abercrombie and Fitch are up more than 28% this morning after the firm's profit growth widely outpaced expectations. In addition, Abercrombie hiked its full-year guidance sharply and said comps would return to positive growth in Q4. Note that shares of Abercrombie competitor Aeropostale are up 8% in sympathy this morning. Staples quarterly results were solidly positive, although the firm is still seeing both North America and international sales slowing. SPLS is up about 3%.

- EUR/USD continued yesterday's trend and headed higher through the first half of the European session until stalling out around 1.2759. There were reports before the US open that EU Commissioner Rehn was preparing to make a statement on Spain later in the morning, sparking wild speculation that Spain was poised to ask for a full bailout. However, Rehn was addressing an EU excessive deficit procedure for the country, and merely warned Spain that its 2014 budget measures fall short of what is required. EUR/USD dropped off its session highs to trade around 1.7272. The USD/JPY pair continued to move higher but contained below the pivotal 80.70 level that has acted as resistance over the past month. Dollar buy stops were seen building above this level and could establish a broad-based trend into year's end.

***Looking Ahead***
- 11:30 (US) Treasury to sell combined $65B in 4-week and 52-Week Bills
- 14:00 (US) Fed Releases Minutes from Oct 23-24 FOMC Meeting
- 14:00 (US) Fed Releases Minutes from Oct 23-24 FOMC Meeting
- 14:00 (AR) Argentina Oct Consumer Price Index M/M: 0.8%e v 0.9% prior; Y/Y: 10.2%e v 10.0% prior
- 14:00 (AR) Argentina Oct Wholesale Price Index M/M: No est v 1.0% prior; Y/Y: No est v 12.8% prior
- 16:00 (KR) South Korea Oct Export Price Index M/M: No est v 0.3% prior; Y/Y: No est v -1.9% prior
- 16:00 (KR) South Korea Oct Import Price Index M/M: No est v 0.9% prior; Y/Y: No est v -2.4% prior
- 16:30 (US) Weekly API Crude Oil Inventories


***Economic Data***
- (US) MBA Mortgage Applications w/e Nov 9th: +12.6% v -5.0% prior
- (PL) Poland Oct M3 Money Supply M/M: 0.1% v 0.3%e; M3 Money Supply Level (PLN): 902.9B v 895.4Be
- (PL) Poland Oct CPI M/M: 0.4% v 0.4%e; Y/Y: 3.4% v 3.4%e
- (US) Oct Producer Price Index M/M: -0.2% v +0.2%e; Y/Y: 2.1% v 2.6%e
- (US) Oct PPI Ex Food & Energy M/M: -0.2% v +0.1%e; Y/Y: 2.1% v 2.4%e
- (US) Oct Advance Retail Sales: -0.3% v -0.2%e; Retail Sales Less Autos: 0.0% v 0.2%e; Retail Sales Ex Auto & Gas: -0.4% v +0.4%e
- (US) Sept Business Inventories: 0.7% v 0.6%e

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