STOCKS GO NOWHERE, GOLD RALLIES: Here’s What You Need To Know

MYLES UDLAND

 NOV. 15, 2014

REUTERS/Arnd Wiegmann

Gold ended the week with a big day.

Stocks went nowhere to close the week while the price of gold rallied in a quiet Friday for the markets. For the week, each of the equity markets finished with modest gains, lead by the Nasdaq’s 1% advance.

First, the scoreboard:

• Dow: 17,622.1, -31, (-0.2%)
• S&P 500: 2,039, -0.4, (-0.02%)
• Nasdaq: 4,685.5, +5.4, (+0.1%)

And now, the top stories on Friday:

1. In what was otherwise a quiet week for economic data, we got two pieces of positive economic news regarding the health of the US consumer. Retail sales in October rose 0.3% from the prior month, beating expectations for a 0.2% increase, as sales at gasoline stations fell 1.5% against the prior month amid a major bear market for oil. The University of Michigan’s preliminary consumer confidence reading for November came in at 89.4, its highest reading since July 2007. 

2. Following the retail sales report, Ian Shepherdson at Pantheon Macro said that while sales beat expectations in October, any real boost to consumer spending from the declining price of gas will likely not show up until the November report, though that impact should be larger. Paul Dales at Capital Economics, said the consumer confidence reading indicates there’s a good chance “retailers’ holiday wishes will be granted.”

3. Oil prices keep falling, and Business Insider’s Tomas Hirst has the big outline of the three main reasons being cited for the drop in the commodity: slowing growth in Europe and Asia, more supply drive by the US shale boom, and increased global production. And the International Energy Agency said in a recent report, “a return to previous price highs may not be a close prospect, as it is increasingly clear that we have begun a new chapter in the history of the oil markets.”

4. Virgin America made its debut on the Nasdaq on Friday, and shares of the airline owned by Richard Branson rose more than 30% in their debut, giving the company a valuation of about $1.25 billion. The offering was priced at $23, and shares closed Friday’s session at $x.

5. Despite the lack of action in the equity markets, the “flight to safety” trade — which also saw bonds gain — had a little bit momentum on Friday, lead by the price of gold spiking more than 2% to around $1,190, the highest price for the precious metal since it breached $1,200 back at the end of October.  

6. Hertz shares fell more than 5% on Friday after the company disclosed that its net income will be reduced by $87 million over its fiscal years 2011, 2012, and 2013 after it restates its financial results following an internal review. The company said the biggest errors identified in its probe related to depreciation for some assets and accounts in Brazil, among other items. 

7. It was a quiet week in the markets, but don’t let that lull you to sleep. In a midday email, the NYSE’s Rich Barry said that markets are in “quiet consolidation mode,” but this is okay! “As we noted yesterday, the major indices are technically overbought,” Barry wrote. “This means the recent action we’ve witnessed since the October 15th six-month low has represented nothing less than a buying stampede into stocks. History tells us that ‘overbought’ scenarios are usually corrected either by an abrupt pullback in prices or by a period of boring, sideways consolidation. Today, we are seeing the latter, but our feeling is that next week we might be confronted with the former. Either way, it is okay.”

OIL PLUNGES, TWITTER TANKS: Here’s What You Need To Know

MYLES UDLAND

 NOV. 14, 2014

flickr/IFPRI

Stocks went nowhere, but still made a record high, on Thursday in a session that saw the averages rally early before selling off to trade nearly unchanged. The big story on Thursday was oil, which continued its recent tumble, falling below $75 for the first time since 2011. 

First, the scoreboard:

• Dow: 17,640.2, +28, (+0.1%)
• S&P 500: 2,039, +1, (+0.05%)
• Nasdaq: 4,676.3, +1.1, (+0.02%)

And now, the top stories on Thursday:

1. Crude oil got completely slammed. Again. West Texas Intermediate crude fell more than 3.5% on Thursday to well below $75 a barrel, its lowest level since 2011. WTI crude is now down about 30% from its highs earlier this summer, and in a note to clients economists at Capital Economics wrote that they expect Brent crude prices (which are used as the global benchmark and are currently around $78), to fall to $70 a barrel by 2016, four years earlier than the firm had expected. 

2. The latest report on weekly jobless claims showed claims rose about 12,000 last week to 290,000, though this level is still near 13-year lows. Following the report, Ian Shepherdson at Pantheon Macro said that, “absent any shove from tighter policy, claims can remain close to their current trend for an extended period.” 

3. The BLS also released its latest Job Openings and Labor Turnover Survey, or JOLTS report, which showed there were slightly fewer job openings in September than in August, though job openings are still near multi-year highs. The biggest piece of data from the report, however, was the quits rate, which showed a 2% quit rate from workers in September, up from 1.8% the previous month. The report showed 2.8 million workers left their job during September, which a number of Wall Street economists took as a positive sign for the labor market, with the idea being that workers are more likely to leave their job if they are confident they can find another one. 

4. New York Stock Exchange legend Art Cashin highlighted comments from hedge fund manager Paul Singer in his morning note on Thursday, including Singer’s recent commentary that “There is a current set of delusions that is powerful and dangerous: that monetary debasement can be infinitely pursued without consequences.” The New York Times’ Paul Krugman isn’t so sure. 

5. Warren Buffett is buying batteries. Buffett’s Berkshire Hathaway announced on Thursday that it would acquire the Duracell brand from Procter & Gamble, with P&G getting $4.7 billion worth of its own shares currently held by Berkshire. The deal is expected to close in the second half of next year. 

6. DreamWorks Animation shares gained more than 10% on Thursday after reports from both Deadline.com and The New York Times said the company is in talks with Hasbro regarding a potential deal. But Business Insider’s Kirsten Acuna, highlighting comments from analysts at Sterne Agee, reported that some in the investment community don’t think the deal makes any sense. Hasbro shares fell more than 4% following the news. 

7. Twitter shares fell more than 5% on Thursday, retracing most of their gains from Wednesday, as S&P assigned the company’s debt a ‘BB-’ rating, which is considered “speculative grade” or “junk” by the bond market. 

8. Apple shares gained more than 1% on Thursday, rising to a new all-time high and pushing its market cap to its highest-ever level of $663.2 billion. 

9. Alibaba disclosed that it plans to sell debt to US investors, in a deal that Bloomberg said could be worth $8 billion. 

10. Baker Hughes shares exploded higher late in the day Thursday after a report from The Wall Street Journal said Halliburton is in talks to acquire its oil-field services rival. The report made no mention of a potential price, but shares of Baker Hughes, which were halted for volatility after the news, logged gains of more than 15%. 

STOCKS GO NOWHERE, TWITTER SURGES: Here’s What You Need To Know

MYLES UDLAND

NOV. 13, 2014

Kimberly White/Getty Images

Twitter CEO Dick Costolo.

Stocks on Wall Street went nowhere on Wednesday, with the Dow and S&P 500 falling slightly and the Nasdaq gaining 0.3%. Shares of social media company Twitter were big winners on Wednesday, gaining more than 7% as the company held an analyst day for the investment community. 

First, the scoreboard:

• Dow: 17,611, -3.1, (-0.02%)
• S&P 500: 2,038, -1.2, (-0.06%)
• Nasdaq: 4,674.7, +14, (+0.3%)

And now, the top stories on Wednesday:

1. The economic calendar is light this week, but on Wednesday we got the latest report on wholesale inventories, which rose 0.3% month-on-month in September which was better than consensus expectations for a 0.2% rise. In a note to clients following this report, Jesse Hurwitz at Barclays said that the changes, which include slight downward revision to August’s data, “suggest a slightly stronger profile than previously estimated,” though Hurwitz and Barclays kept their third quarter GDP tracking estimate at 3%. 

2. The big stock mover on Wednesday was Twitter, which rose more than 7%, its best day since the summer, as the social media company held its first analyst day and made some bullish predictions about its future. Business Insider’s Jay Yarow has the full report on comments made by Twitter CEO Dick Costolo regarding some of the company’s future plans, but the big news out of its analyst day was this chart from Twitter CFO Anthony Noto. The chart shows Twitter’s revenue growing to $14 billion in ten years, and while Noto said this is not a forecast, Jay noted that this is an unusual, and risky, chart and puts a big target on Twitter’s back. 

3. Goldman Sachs announced its new partners on Wednesday, and Business Insider Julia La Roche has the full list of the firm’s 78 new partners. This brings the list of partners at Goldman to 467, or 1.6% of the firm’s full-time staff. 

4. A big loser on Wednesday were shares of SeaWorld, which fell more than 9% after the theme park operator again reported a decline in attendance. The drop in SeaWorld shares of Wednesday follows a more than 30% drop in the stock price seen back in August, as the company still struggles with the fallout from CNN’s documentary “Blackfish.” 

5. This morning, Macy’s cut its earnings and sales outlook for the year, while also reporting a disappointing 1.3% decline in revenue during the third quarter. “We knew we were up against very strong third-quarter sales growth for our company last year, and thus we had anticipated that our year-over-year comparison would be lower,” Macy’s CEO Terry Lundgren said. “Even so, sales did not live up to our expectations in the quarter.”

6. Wednesday marked four weeks since the stock market bottomed on October 15, and in an email on Wednesday morning, Jonathan Krinsky at MKM Partners highlighted some impressive facts about the recent stock snapback. Overall, the S&P 500 fell about 9% peak-to-trough through late summer to the October bottom, but rose 12% after bottoming out in just 19 trading days. In the fall of 2012, stocks fell by a similar amount, but didn’t rise 12% from the bottom for 49 days. And as of Tuesday, the S&P 500 had been trading above its five-day moving average for 18 straight days, one of the longest streaks since 1996, which indicates strong short-term momentum in the stock market. 

STOCKS HIT RECORD HIGH: Here’s What You Need To Know

SAM RO

 NOV. 8, 2014

REUTERS/Stringer

A resident looks into a newly-built giant trash can, partially buried underground, next to a street in Taiyuan, Shanxi province November 6, 2014.

We got the October jobs report today. It wasn’t spectacular. It wasn’t awful. It was good.

First, the scoreboard:

• Dow: 17,573.8, +19.3, (+0.1%)
• S&P 500: 2,031.8, +0.6, (+0.0%)
• Nasdaq: 4,632.5, -5.9, (-0.1%)

And now, the top stories on Tuesday:

1. US companies added 214,000 non-farm payrolls in October. That was a little lower than the 235,000 expected by economists. However, the net revision in the previous two reports was +31,000. So you could actually argue that payrolls beat expectations.

2. Pantheon Macroeconomics Ian Shepherdson believes that the jobs report might’ve actually been much stronger than what the BLS said. “The payroll shortfall in October is all about the seasonals and birth/death model, both of which were much tougher than in Oct. last year, for no apparent reason,” Shepherdson wrote. “The seasonal subtracted 137K more from private jobs than a year ago, and the birth/death hit was 22K. Had they been unchanged, the Oct number would have been 373K.We can’t make any sense of the seasonal/birth-death swing, and it will reverse in due course. In the meantime, the numbers as published are OK, with no standout weaknesses.”

3. It’s pretty clear that the pace of jobs growth is very healthy. For many economists, the number to watch in the jobs report was the wage growth number.Average hourly earnings climbed by just 2.0% year-over-year in October. This suggests there’s still some slack in the labor market and little inflationary pressure. And that means the Federal Reserve is unlikely to feel pressure to rush rate hikes. “Continued progress in labor markets will likely keep the Fed on a path to normalization, but it will likely remain patient during the transition, given modest wage and inflation pressures,” Barclays’ Michael Gapen said. “We maintain our view that it will raise rates in June of next year, with risks tilted toward September given the sharp decline in commodity prices.”

4. The S&P 500 set an intraday all-time high of 2,034.26. The Dow set a high of 17,575.33.

STOCKS HIT ALL-TIME HIGHS: Here’s What You Need To Know

MYLES UDLAND

NOV. 7, 2014

REUTERS/Lucas Jackson

Traders laugh as they work on the floor of the New York Stock Exchange as the market closes in New York.

Stocks gained ground to make new all-time closing highs on Thursday, with the Dow now over 17,500 for the first time and the S&P 500 climbing north of 2,028. These gains came on the final day before Friday’s October US jobs report, the first since the Federal Reserve ended its QE program last week. 

First, the scoreboard:

• Dow: 17,548.9, +64.3, (+0.4%)
• S&P 500: 2,030.4, +6.8, (+0.3%)
• Nasdaq: 4,637.3, +17.5, (+0.3%)

And now, the top stories on Thursday:

1. The European Central Bank announced its latest monetary policy decision on Thursday, keeping interest rates unchanged. ECB president Mario Draghi also held a press conference following the announcement, and as he did in October, reiterated that the ECB would look to expand its balance sheet back to 2012 levels. Draghi also added that ECB officials are “unanimous” in pushing for more monetary stimulus if it’s needed. Following the announcement and Draghi’s commentary, the euro plunged against the dollar. 

2. In the US, the latest report on weekly jobless claims showed that claims fell to 278,000 from last week’s 287,000. The four-week moving average of claims also fell further, to 279,000, the lowest level since this average was at 273,000 in April 2000. This latest labor market update comes ahead of Friday’s big jobs report, which is expected to show the economy added 235,000 jobs in October.

3. Oil prices fell again, this time as OPEC released its latest World Oil Outlook which showed that demand is likely to fall through 2017. OPEC’s report also showed that, in 2013 dollars, oil prices are expected to fall through 2035. 

4. One of the biggest stock losers on Thursday was Genworth Financial, which fell more than 37% after the company reported a quarterly loss of more than $800 million, largely related to a reevaluation of the company’s long-term care insurance unit. 

5. Apple earlier this week raised euro-denominated debt, and this debt is yielding considerably less than US government bonds.

6. Kate Spade shares went bonkers on Thursday, rising more than 15% after the company reported US sales that grew 36% during the quarter. 

7. An afternoon report from Reuters said that a number of “high-profile” brokers have been leaving Merrill Lynch’s wealth management unit and executives at the firm’s Bank of America parent company have begun asking Merrill Lynch head John Thiel to explain the departures. 

STOCKS RALLY, OIL JUMPS, GOLD TANKS: Here’s What You Need To Know

SAM RO

 NOV. 6, 2014

REUTERS/Carlo Allegri

A man who gave his name as “The Golden Child” remains motionless until people put a tip in his basket in the subway in the Manhattan borough of New York.

Republicans took control of Congress on Tuesday in what one Democratic strategist characterized as a “F—ing. Bloodbath.” Markets weren’t too fazed. In fact, the Dow actually hit a new high.

First, the scoreboard:

• Dow: 17,484.5, +100.6, (+0.5%)
• S&P 500: 2,023.4, +11.3, (+0.5%)
• Nasdaq: 4,620.7, -3.4, (-0.0%)

And now, the top stories on Tuesday:

1. “It doesn’t get old, right?” NYSE floor governor Rich Barry said. “The Dow hit another all-time high this morning and the S&P 500 came within about a point from doing the same… For those of you keeping score, the Dow is on pace for its 20th record close of the year, while the S&P 500 is shooting for its 36th record closing high of 2014″

2. Today’s rally comes amid encouraging data on jobs ahead of Friday’s official jobs report. According to ADP, US companies added 230,000 private jobs in October. This was up from 225,000 in September, and it was stronger than the 220,000 expected by economists. “The job market is steadily picking up pace,” Moody’s Analytics’ Mark Zandi noted. “Job growth is strong and broad-based across industries and company sizes. At this pace of job growth unemployment and underemployment is quickly declining. The job market will soon be tight enough to support a meaningful acceleration in wage growth.”

3. The ISM services index slipped to 57.1 in October, which was a bit lower than the 58.0 level expected. Still, the number still reflects a healthy pace of growth. What really raised eyebrows was the employment sub-index, which jumped 1.1 points to 59.6, the highest level since August 2005. “This appears to be consistent with payroll growth of 450,000 per month, which is not going to happen,” Pantheon Macroeconomics’ Ian Shepherdson said. Shepherdson tweaked his model and estimated that the ISM report actually signaled about 300,000 new jobs in October, which is way ahead of the 225,000 forecast by economists surveyed by Bloomberg.

4. Gold prices settled at $1.145.70, down 1.9% for the day. The yellow metal got as low as $1.137.10, its lowest level since April 2010. This came as the dollar strengthened. The DXY climbed 0.5%.

5. Meanwhile, WTI crude oil prices jumped 2% after a report showing inventories climbed by less than expected. The EIA reported oil stockpiles increased by just 460,000 barrels last week. Analysts surveyed by Bloomberg were looking for 2.35 million barrels.

OIL PLUNGES AGAIN: Here’s What You Need To Know

Myles Udland

 Nov. 5, 2014

REUTERS/Scott Audette

Tuesday marked Election Day in the US.

Stocks went nowhere on Tuesday as oil tumbled again, falling to a three-year low overnight, and a report from Reuters indicated that there is growing discontent within the European Central Bank regarding Mario Draghi’s communication tactics. Tuesday also marked Election Day in the US.
First, the scoreboard:

• Dow: 17,383.2, +17, (+0.1%)
• S&P 500: 2,012, -6, (-0.3%)
• Nasdaq: 4,624, -15, (-0.3%)

And now, the top stories on Tuesday:

1. Crude oil fell again on Tuesday, settling near $77.20, its lowest level in three years as the bear market in oil continues. But Business Insider’s Shane Ferro writes that falling oil is not going to kill the US economy. Or at least, not yet. But if crude gets closet to $70, then Wood Mackenzie estimates the US could start to see supply disruptions. In the meantime, US consumers can enjoy gas prices that are now at their lowest price since 2011. 

2. In the US, we got economic data in the form of factory orders, which fell 0.6% month-on-month in September, a decline that was in-line with expectations. The latest report from the Census showed that new orders in September fell 1.1% and inventories rose 0.4%. 

3. The US trade deficit for September came in at $43 billion, wider than the $40.2 billion that was expected by economist and wider than the $40 billion reported in August. “The collapse in crude oil prices means that the trade deficit will narrow again before the end of this year,” Capital Economics’ Paul Ashworth said. “September was just a bit too early to pick up the change.”

4. Alibaba reported its first earnings report since going public in September, reporting earnings per share that were in-line with expectations on revenue that topped estimates. Shares of the Chinese e-commerce giant rose another 3.5% on Tuesday, moving to a new all-time high of more than $105 following the report. 

5. The European Commission released its growth forecasts for Europe, one of its bi-annual outlooks, and the Commission cut its overall growth outlook for the economic block to 1.1% from 1.7% earlier in the spring. Among other projections, the report see France growing just 0.3% this year while Italy is expected to fall into recession.

6. The decline in the European Commission’s outlook for the Europe also came on the same day that a report from Reuters said that there is growing discontent inside of the European Central Bank, with a number of euro area bankers reportedly growing discontented with ECB president Mario Draghi’s “secretive” management style and “erratic” communication. 

7. Among the biggest stock losers on Tuesday was Herbalife, which lost more than 20% after last night reporting earnings that disappointed and giving a revenue growth outlook that came in well below expectations. The decline in Herbalife was part of an overall terrible day for activist hedge fund manager Carl Icahn, whose Icahn Enterprises reported a $355 million net loss in the quarter. 

8. Stocks moved to near all-time highs late last week, and on Monday touched a new all-time intraday high, but according to Goldman Sachs’s risk model, there is only an average possibility that stocks will have a “bust” over the next 5 to 9 quarter. 

9. Tuesday is Election Day in the US, and as Business Insider’s Brett Logiurato reports, experts are currently expecting Republicans to take the majority in the Senate and widen their advantage in the House of Representatives. 

STOCKS GO NOWHERE, OIL PLUNGES: Here’s What You Need To Know

Myles Udland

 Nov. 4, 2014

REUTERS/Amit Dave

We got a mixed read on the US manufacturing sector on Monday.

Stocks finished Monday little changed, with the S&P 500 hitting a new all-time intraday high before losing ground late in the day to close.
Crude oil was the big loser on Monday, with prices settling below $79 for the first time since the summer of 2012.
First, the scoreboard:

• Dow: 17,365, -25, (-0.15%)
• S&P 500: 2,018, -0.4, (-0.02%)
• Nasdaq: 4,639, +8, (+0.2%)

And now, the top stories on Monday:

1. Oil crashed. Again. Crude oil prices, which have been near $80 a barrel for the last few weeks or so took another leg lower late in the day on Monday, quickly dropping more than $2 to settle below $79 for the first time since June 2012. The drop in oil came late in the day, but about an hour after reports that Saudi Arabia cut its official price for deliveries. Crude oil, which is down more than 20% this year and is in a bear market, could also have an impact in the bond market. Business Insider’s Sam Ro noted that currently, about 15% of the high-yield, or “junk,” bond market is made up by energy companies. 

2. The pace of auto sales in October rose from the prior month. According to data from Wards Auto, the pace of auto sales climbed to 16.35 million in October, while AutoData statistics said sales came in at a pace of 16.5 million. September’s auto sales came in at an annualized pace of 16.34 million. In a note to clients Jesse Hurwitz of Barclays wrote that October sales were little changed from September, and while they came in “broadly in line” with expectations, sales were below the second quarter average of 16.8 million.

3. In the US, we also got three pieces of economic data. Manufacturing data from Markit Economics showed that manufacturing activity slowed to its slowest past since July, with Markit’s PMI reading coming in at 55.9 against expectations for a reading of 56.2. Meanwhile, the Institute for Supply Management’s manufacturing PMI came in at 59.0, better than the 56.1 that was expected by economists. 

4. Also on the economic data front, construction spending in September fell for a second straight month, dropping 0.4% to an annual rate of $950.9 billion. The report also showed that investment in both public and private projects declined in September. 

5. According to Bank of America Merrill Lynch’s latest Sell Side Indicator survey, Wall Street equity strategists are so bearish on stocks, it might be time to buy. In a note to clients Monday morning, Savita Subramanian and the equity strategy team at BAML wrote that that “we remain encouraged by Wall Street’s ongoing lack of optimism and the fact that strategists are still recommending that investors significantly underweight equities.” When the Sell Indicator has been this low or lower, BAML said, total stock returns have been positive over the next year 96% of the time. 

6. Bill Gross released his latest investment outlook, which talked about the need for not just central banking stimulus, but real fiscal stimulus from the government.

STOCKS SURGE TO RECORD HIGH: Here’s What You Need To Know

SAM RO

 NOV. 1, 2014

REUTERS/Lucas Jackson

The stock market is right back at all-time highs.

First, the scoreboard:

• Dow: 17,368.9, +173.5, (+1.0%)
• S&P 500:2.013.1, +18.5, (+0.9%)
• Nasdaq:4,625.1, +58.9, (+1.2%)

And now, the top stories on Wednesday:

1. The rally really began in Japan when two pieces of news crossed. First, Nikkei reported that Japan’s $1.2 trillion behemoth Government Pension Investment Fund would ramp up its exposure to foreign and domestic stocks. Second, the Bank of Japan unexpectedly announced a big boost to its quantitative easing stimulus program. The Nikkei went bonkers, surging 4.8% to close at a 7-year high.

2. The US had some good economic news. The University of Michigan’s consumer confidence index unexpectedly jumped to 86.0 in October from 84.6 a month ago. The Chicago PMI unexpectedly spiked to a 12-month high of 66.2 in October from 60.5 in September. “The bounceback in the Barometer marks a solid start to Q4 and suggests that against a backdrop of concerns about weakening growth in Europe and China, the US economy is still growing firmly,” ISM— Chicago said in its release.

3. In a sign of labor market tightness, the employment cost index jumped 0.7% in Q3. “This is the fastest pace of quarterly compensation that we have seen since late 2008,” BNP Paribas’ Bricklin Dwyer noted. “The measure popped up to 2.2% y/y, accelerating from the previous 10-month’s 1.8-2.0% range.”

4. The stock market has been on an absolute wild ride in the last two months. It went from its all-time intraday high of 2,019 on September 19 (all-time closing high 2,011.36 on September 18) down its October 15 low of 1,820.66. The Dow set an intraday all-time high of 17,395 today.

STOCKS RALLY, GOLD TUMBLES: Here’s What You Need To Know

SAM RO

 OCT. 31, 2014

REUTERS/U.S. Geological Survey

A slow-moving lava flow from the Kilauea Volcano burns vegetation as it approaches a property boundary in a U.S. Geological Survey (USGS) image taken near the village of Pahoa, Hawaii, October 28, 2014.

The stock market extended its rebound back toward all-time highs.

First, the scoreboard:

• Dow: 17,196.4, +222.1, (+1.3%)
• S&P 500: 1,994.6, +12.3, (+0.6%)
• Nasdaq: 4,554, +5.0, (+0.1%)

And now, the top stories on Wednesday:

1. The Dow far outpaced the rest of the market because of Visa, which surged 10% after its better-than-expected earnings announcement. Because it’s a price-weighted index, the 21-point rally in the Visa is adding a full 134 points to the Dow. (Currently, a 1-point move in the Dow translates to a 6.42195-point move in the Dow.)

2. US GDP grew at a 3.5% pace in Q3, beating expectations for 3.0% growth. Personal consumption climbed 1.8%, which was a bit lighter than the 1.9% expected. Real final sales (GDP less the change in private inventories) jumped 4.2%, up from 3.2% in Q2.

3. Notably, government spending jumped 4.6%, adding 0.83 percentage points to the GDP growth rate. “After being such a massive drag on the economy in recent years, the public sector is now a big positive,” Capital Economics’ Paul Ashworth said.

4. Different economists were surprised by different components of the GDP report. “The big upside surprise in the data is the residential investment component, where the 1.8% increase is impossible to square with the monthly construction data — we expected a 10% drop — and a downward revision in due course is a decent bet,” Pantheon Macroeconomics’ Ian Shepherdson noted.

5. Initial jobless claims climbed to 287,000 from 284,000 a week ago. This was a bit higher than the 285,000 expected. The four-week moving average sat at 281,000, the lowest level since 2000. “Looking past weekly volatility, trend initial jobless claims remain at extremely low levels and are consistent with our outlook for further improvement in labor markets,” Barclays’ Jesse Hurwitz said.

6. Gold fell below $1,200 again for the first time in a month. The yellow metal fell from around $1,215 to as low as $1,196.

STOCKS FALL AFTER THE FED ENDS OF QE: Here’s What You Need To Know

MYLES UDLAND

 OCT. 30, 2014

EUTERS/Lucas Jackson

Stocks fell after the Federal Reserve announced that it will end its quantitative easing program at the end of this month. The Fed also kept interest rates pegged at 0%-0.25% and said that it expects there will be a “considerable time” between the end of QE and its first interest rate hike.

First, the scoreboard:

• Dow: 16,970, -35, (-0.2%)
• S&P 500: 1,981.7, -3.3, (0.2%)
• Nasdaq: 4,547, -17.4, (-0.4%)

And now, the top stories on Wednesday:

1. QE is over. The Federal Reserve on Wednesday announced that at the end of this month, it will end its quantitative easing program, which included the purchase of Treasury and asset-backed securities. The Fed made its final purchase under the program, which was down to $15 billion a month, earlier this week, and now the countdown is on to the Fed’s first rate hike. In an email following the Fed’s announcement, Chris Rupkey, chief financial economist at MUFG, said he thinks the Fed could raise rates sooner than expected given the strength in the labor market. 

2. Following the announcement, markets sold off, but regained most of those losses and finished slightly lower on the day. The dollar, however, staged a big rally after the announcement, gaining against the yen, the euro, and the pound.

3. In stock news, Facebook was a big loser on Wednesday, falling more than 6% after saying on its Tuesday earnings conference call that 2015 would be a year of investment for the company with expenses expected to rise 50%-70% during the year. But as Business Insider’s Henry Blodget wrote on Wednesday, this is exactly what the company should be doing: investing for the long term. 

4. Also in tech news, IBM and Twitter announced a new partnership wherein IBM will help businesses use Twitter data to understand their customers and other business trends. The deal has three parts, and Business Insider’s Julie Bort has the full breakdown here. 

5. A big loser on Wednesday was Orbital Sciences, which fell more than 15% after its unmanned rocket set to bring supplies to the International Space Station exploded shortly after take off on Tuesday night in Virginia. No one was hurt during the accident, which Orbital said was caused by a “catastrophic failure.”

6. Alibaba shares fell about 1% on Wednesday, but a number of analysts initiated coverage on the stock on Wednesday, and most all of them were giving the Chinese e-commerce giant a big thumbs up. Business Insider’s Jay Yarow has the full rundown of who is saying what about Alibaba, but among the notable comments were those out of JPMorgan, which said the company could be worth up to $178 a share under its “best case” scenario. 

7. Fiat Chrysler shares gained more than 11% on Wednesday after the company said it would spin off its Ferrari unit. Business Insider’s Matthew DeBord has everything you need to know about the move here. 

DOW RALLIES BACK ABOVE 17,000: Here’s What You Need To Know

MYLES UDLAND

 OCT. 29, 2014

REUTERS/Brendan McDermid

Traders watched stocks go higher on Tuesday.

Stocks staged a huge rally on Tuesday, with the Dow regaining the 17,000 level and the Nasdaq leading percentage gains among the major averages. The small-cap Russell 2000 was the day’s biggest winner, gaining 2.6%. The rally on Wall Street came ahead of Wednesday’s monetary policy announcement from the Fed, at which the Fed is expected to announce the end of its quantitative easing program.

First, the scoreboard:

• Dow: 17,005, +187, (+1.1%)
• S&P 500: 1,985, +23, (+1.2%)
• Nasdaq: 4,564, +78, (+1.7%)
• Russell 2000: 1,148, +31, (2.8%)

And now, the top stories on Tuesday:

1. We got a number of pieces of economic data on Tuesday, including the Conference Board’s latest Consumer Confidence survey which showed consumer confidence is at a seven-year high. The report jumped to 94.5 from 89.0 in September, marking the best reading since October 2007 and higher than the 87.0 expected by economists. “A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation,” said Lynn Franco of the Conference Board. 

2. Two pieces of housing data came in on Tuesday, with the August S&P/Case-Shiller home price index showing prices fell 0.2% month-on-month in August, but still rose 5.6% over the prior year, which was roughly in-line with expectations. Following the report, David Blitzer of S&P Dow Jones Indices said, “The deceleration in home prices continues. The Sun Belt region reported its worst annual returns since 2012, led by weakness in all three California cities — Los Angeles, San Francisco and San Diego. Despite weaker year-over-year numbers, home prices are still showing an overall increase, as the National Index increased for its eight consecutive month.” 

3. Data released from the Census Bureau on Tuesday showed that the homeownership rate fell to 64.4% in the third quarter of this year, down 0.9% year-over-year to the lowest level since first quarter of 1995. And while the story has often been that younger Americans are not buying home anymore, older adults have abandoned home ownership at a slightly higher rate.

4. Also in economic data, durable goods orders in September fell 1.3% over the prior month, missing expectations for a rise of 0.5%, while the Richmond Fed’s manufacturing index came in at 20 against expectations for a reading of 11 and up from last month’s 14. 

5. Among the big stock losers on Tuesday was Twitter, which fell 10% after the company last night reported results that were in-line with expectations. Following the report, analysts at RBC and Bank of America downgraded the stock, and as Business Insider’s Jay Yarow wrote, overall it is clear that analysts are worried about Twitter’s guidance, which suggests the social network could be looking at another weak quarter of user growth. Also in the social media sector, Facebook was expected to report earnings after the market close on Tuesday.

6. Chinese e-commerce giant Alibaba broke $100 for the first time on Tuesday, but failed to close above that level as the company, which made its debut the day after the S&P 500′s most recent all-time high, is set for its first earnings report as a public company next week. 

7. Another big equity mover was Madison Square Garden, which on Monday night announced that it would explore a plan to split itself in two, breaking into a sports and media company and an entertainment unit. Shares of the company rallied more than 10% following the announcement, which also included news that the company would add activist investor Nelson Peltz to its board of directors. 

8. Wednesday is Fed Day, and Business Insider’s Shane Ferro has the full preview here. Expectations are that the Fed will end its QE program on Wednesday, as the central bank has for a few meetings now signaled that if the economy continued to expand as expected, it would find the October meeting as the appropriate time to wind down this program. There has been a rash of “Fedspeak” since the Fed’s September meeting, with some Fed presidents suggesting that perhaps the Fed ought to consider putting off a full wind-down of its QE program considering some of the economic weakness out of Europe and the lack of inflation, particularly in wages, in the US. Business Insider will have full coverage of the announcement, which is set for tomorrow at 2:00 pm ET. 

STOCKS GO NOWHERE: Here’s What You Need To Know

MYLES UDLAND

 OCT. 28, 2014

REUTERS/Ueslei Marcelino

Brazil’s President and Workers’ Party (PT) presidential candidate Dilma Rousseff celebrates during a news conference after disclosure of the election results, in Brasilia Oct. 26, 2014

Stocks went nowhere to start the week after news out of the European banking on Sunday wasn’t much of a surprise while crude oil prices fell hard early in the session but recovered about $1 of their losses during the day.

First, the scoreboard:

• Dow: 16,825.2, +19.8, (+0.1%)
• S&P 500: 1,962.5, -2, (-0.1%)
• Nasdaq: 4,488, +4.1, (+0.1%)

And now, the top stories on Monday:

1. On Sunday, Brazilian President Dilma Rouseff was reelected, and the market did not take kindly to the news. Stocks on Brazil’s Ibovespa exchange fell 2.5% on Monday, though the ‘EWZ’ ETF that trades in New York and tracks Brazilian stocks lost about 5% following the news. Rouseff’s challenger, Aecio Neves, was considered the more business-friendly candidate. Among the notable losers following Rouseff’s election were shares of Brazil’s state-controlled oil company Petrobras, which saw shares trading in New York fall more than 13% on Monday. 

2. Crude oil prices fell again on Monday, falling below $80 a barrel early on Monday for the first time since June 2012. Throughout the day on Monday, crude recovered most of its losses, but the early morning drop in crude followed a research report out of Goldman Sachs over the weekend that saw the firm take its price target for oil down to $70 a barrel by the second quarter of next year. 

3. On Monday, markets were still digesting the results of the European Central Bank’s stress tests, which saw 25 of 130 banks fail the test, with banks from Italy having heavy representation among the banks that could need a capital injection under the ECB’s adverse scenario. Among the questions still lingering for investors is why the ECB elected not to include deflation as scenario under an “adverse” scenario. 

4. In the US, we got some economic data from Markit Economics, which released its October flash PMI reading for the services sector,which came in at 57.3, a six-month low. Any reading above 50 for this report signals expansion. In a release, Markit said, “Service providers attributed higher levels of business activity to supportive domestic economic conditions and an associated upturn in incoming new work. However, in line with the trend for output levels, the rate of new business growth eased to a three-month low in October and was softer than the post-crisis high recorded in June.”

5. Pending home sales rose just 0.3% in September, up from a 1% decline in August, but a bit lighter than the 1% rise that was expected by economists. “Housing supply for existing homes was up in September 6% from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year,” said the National Association of Realtors’ Lawrence Yun. “Additionally, the current spectacularly low mortgage rates should help more buyers reach the market.”

6. In Europe, German business confidence fell to its lowest point since August 2012, with the October survey showing confidence falling to 103.2 this month, down from 104.7 in September and missing expectations for a 104.3 reading. Following the report, Claus Vistesen at Pantheon Macro said, “The headline German business confidence index continues to point to subdued growth ahead for the industrial sector in the euro area’s largest economy, with the decline in both the headline and expectations reinforcing the downtrend that began in April.”

7. GoPro shares were among the big losers on Monday, with the wearable camera company seeing its stock decline more than 9% on Monday, a move that follows a 9% decline on Friday. GoPro is set to release third quarter earnings after the market close on Thursday.

STOCKS RALLY TO END THEIR BEST WEEK OF THE YEAR: Here’s What You Need To Know

MYLES UDLAND

 OCT. 25, 2014

Arnd Wiegmann/Reuters

Stocks rallied on Friday to cap their best week of 2014, as the S&P 500 gained 4%, the Nasdaq gained 5%, and the Dow gained more than 2% after last week’s extremely volatile trading action. This week was also a busy week for tech earnings, with Apple, Amazon, Yahoo, and Microsoft all reporting their quarterly earnings, in addition to a number of Dow members including Caterpillar and 3M.

First, the scoreboard:

• Dow: 16,809, +131.1, (+0.8%)
• S&P 500: 1,965.1, +14.2, (+0.7%)
• Nasdaq: 4,485.1, +32.3, (+0.7%)

And now, the top stories on Friday:

1. Stocks rallied to finish the best week of 2014 for the markets, as the S&P 500 gained 5% and the Dow and Nasdaq also gained more than 2%. Stocks were bolstered by corporate earnings reports that the market, and as Rich Barry, floor governor at the NYSE wrote in an email this afternoon, “The market remains, ‘Strong like bull’… stocks are extending their rally because of solid earnings and because the U.S. is the absolute best economy in the world. Oh, and keep this point in mind: We are now entering a seasonally strong period of the year for stocks, and with most hedge funds underperforming the market this year, they are being forced to participate in the market as we get closer to year-end.”

2. The big loser on Friday was Amazon, which fell more than 8% after the online retailer reported a wider than expected quarterly loss on Thursday afternoon. And as Business Insider’s Jillian D’Onfro reported, the tone around Amazon has shifted significantly as analysts seem to be getting impatient with the company’s continued underperformance on the bottom line. 

3. New home sales in September came in at an annualized selling rate of 467,000, which was up 0.2% from August’s revised number. August’s number, however was revised down sharply, to an annualized rate of 466,000 from 504,000, an initial number that blew away expectations. The report also showed that at the current rate of sales, the US housing supply stands at 5.3 months. 

4. Sodastream shares were a big gainer on Friday, rising more than 15% after a report in trade publication Beverage Digest, citing a source, said that Pepsi would test flavored pods for Sodastream’s at-home soda brewing machine. In an emailed statement to Business Insider, Pepsi confirmed that it was participating in a trial with Sodastream, but added the the company is “one of several companies we’re talking to about potential ideas for the future.” Pepsi has long been rumored as a potential suitor to buy Pepsi outright, but nothing has ever come of that speculation. 

5. Ford reported earnings on Friday morning that beat expectations, but shares of the carmaker fell more than 4% as profits fell sharply from a year ago. 

6. European banks are set to get results from the European Central Bank’s required stress test on Sunday, and a report from Bloomberg on Friday said that 25 banks are in-line to fail the test. Bloomberg also said about 10 of these banks will have to plug capital shortfalls, though which banks might be faced with this task were unknown. 

7. The Russian ruble keeps falling against the dollar, with the falling price of oil and concerns that the country faces an imminent debt downgrade from ratings agencies continue to pressure the currency.