Futures Lifted by ECB View The stock market rode a rebound in oil prices and the energy stocks to a new high yesterday. An effort to stretch those gains will be made today as the S&P futures are trading 0.3% above fair value. The futures were down earlier with participants waiting on the monetary policy press conference from ECB President Draghi. Both the Bank of England and ECB left their key lending rates unchanged at their respective policy meetings today, yet all ears are attuned to what Mr. Draghis press conference, which is currently under way. Specifically, participants are listening for hints of a QE program -- or the lack thereof. What he has said so far is that the ECB will begin its ABS purchases soon and that the ECB is committed to expanding its balance sheet. Aside from that, theyll be digesting another initial claims report, which fit the bill again of being nothing but encouraging. Claims for the week ending November 1 dropped to 278,000 from 288,000 in the prior week. That was better than the Briefing consensus estimate, which pegged the initial claims level at 285,000. Continuing claims for the week ending October 25 declined to 2.348 million from 2.387 million. This report wont have any direct bearing on the October employment report tomorrow, yet it is another marker that fits with expectations for nonfarm payroll gains to exceed 200,000. Separately, it was reported that third quarter productivity increased 2.0%. That was better than the 1.5% Briefing consensus estimate but down from an upwardly revised 2.9% increase for the second quarter. Unit labor costs, meanwhile, increased 0.3%, which was shy of the 0.7% Briefing consensus estimate. Market participants seemed to take the data in stride, yet there was a notable spike in the S&P futures following the assertion that the ECB is committed to expanding its balance sheet. The contingencies for that action, Mr. Draghi said, would be that its current actions are not enough and inflation continuing to run too low. The futures market is bouncing around a bit on the ECB headlines, but at this juncture, it appears that sellers are still not confident in forcing the action despite disappointing earnings and/or revenue guidance from the likes of Qualcomm (QCOM), Zillow (Z), and Tesla (TSLA). At some point, the market will relent to profit-taking interest. After all, the S&P 500 has risen 11.1% from its low on October 15 and is certainly due to take a breather. Source: Briefing
Posted on: Thu, 06 Nov 2014 14:14:46 +0000
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