Reports » US

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

Contributed by Trade The News

- The Fed has fired off its latest round from the big QE bazooka and the market is responding as expected. The announcement yesterday afternoon lit a fire under global equity markets and helped the DJIA and S&P500 close at their highest levels since December 2007. This morning US equities were climbing even higher in the first hour of trading. Both Exxon and Apple are both right at all-time highs. There have been several big US datapoints out this morning, some of which play to Bernanke's argument that the US economy still needs generous support. For instance, the August industrial production data was very weak, even as CPI remains below the Fed's 2.0% target. Then again, the preliminary reading of the University Michigan Confidence survey was pretty good, hitting its highest level since May 2012. August retail sales had a second consecutive month of above-par growth. Front-month crude popped above $100 earlier this morning before trading down to around $99.50, while spot gold is still up around $1,760 after rising more than 2% yesterday afternoon. EUR/USD continues to shoot higher, with the pair nearly breaking above 1.3200 earlier this morning.

- UnitedHealth will replace Kraft Foods in the Dow Jones Industrial Average after the close of trading September 21. Kraft is being removed as a result of its decision to spin off its North American grocery business. Selected trucking stocks are in the red this morning thanks to the weak Q3 outlook offered by Werner Enterprises yesterday afternoon. The firm's Q3 earnings guidance was well below expectations, and executives cited higher maintenance and healthcare costs for the poor forecast. WERN is down 8%, while CNW and CVT are both in the red. YRCW, on the other hand, was up approx 5% on the news, before trading off a bit.

- In the tech sphere, Western Digital trimmed its Q1 revenue guidance due to much lower overall market demand for hard drives, driven in part by "inventory rebalancing." Profits should remain solid, given executives said the margin outlook remains intact for the September quarter. WDC also initiated a $0.25 dividend and a new stock buyback plan. Both WDC and STX gained ground on the news and were up as much as 4% in the first minutes of trade. Both were in the red after the first hour of trade, with WEC down nearly 3%.

- Just a few days after Steel Dynamics came out with weak Q3 guidance, AK Steel warned that it would rack up a huge loss in the third quarter. The firm warned that thanks to outages and planned maintainance, it would record a big non-tax charge in the quarter. Nevertheless, shipments will be about 3% higher in the quarter. Shares of AKS didn't suffer too much from the news and were up more than 3% after the open, before tumbling to below -3% in the early going.

***Looking Ahead***
- (MX) G20 Finance Ministers and Central Bankers meet in Mexico City
- 11:00 (US) Fed to buy $1.50-2.0B in bonds
- 13:00 (US) Fed's Lockhart at employment conference
- 13:45 (US) Fed's Raskin
- 14:15 (US) IMF official Lipton and Blanchard on financial crisis

***Saurday***
- 03:00 (EU) EU-27 Finance Ministers and Central Bankers meet in Cyprus

***Economic Data***
- (IS) Israel Aug Consumer Prices M/M: 1.0% v 0.6%e; Y/Y: 1.9% v 1.5%e
- (BR) Brazil July Economic Activity Index M/M: 0.4% v 0.3%e; Y/Y: 2.3% v 2.1%e
- (IN) India Forex Reserves w/e Sept 7th: $292.0B v $290.5B prior
- (IC) Iceland Aug Unemployment Rate: 4.8% v 4.7% prior
- (PL) Poland Aug M3 Money Supply M/M: 0.7% v 0.9%e
- (US) Aug Consumer Price Index M/M: 0.6% v 0.6%e; Y/Y: 1.7% v 1.7%e
- (US) Aug CPI Ex Food & Energy M/M: 0.1% v 0.2%e; Y/Y: 1.9% v 2.0%e
- (US) Aug CPI NSA: 230.379 v 230.626 prior; Core Index SA: 230.244 v 230.124 prior
- (US) Aug Advance Retail Sales: 0.9% v 0.8%e; Retail Sales Less Autos: 0.8% v 0.7%e; Retail Sales Ex Auto & Gas: 0.1% v 0.4%e
- (CA) Canada July Manufacturing Sales M/M: -1.5% v 0.4%e
- (BE) Belgium July Trade Balance: €1.4B v €0.3B prior
- (MX) Mexico Q2 Aggregate Supply & Demand: 4.1% v 5.3%e
- (US) Aug Industrial Production: -1.2% v 0.0%e; Capacity Utilization: 78.2% v 79.2%e; Manufacturing Production: -0.7% v -0.3%e
- (US) Sept Preliminary University of Michigan Confidence: 79.2 v 74.0e
- (US) July Business Inventories: 0.8% v 0.3%e