Worries over growth in other parts of the world have come and gone and come back again, but the US economy appears to be chugging along quite nicely regardless, judging by the healthy performance of corporations this earnings season, providing lift to stock indices that continue to set fresh record highs.
By Peter Martin
Tuesday, November 11, 2014
We are drawing near the end of the earning season, and better than 75% of all companies that have reported have beaten their earnings estimates, which compares very favorably with quarterly performances in recent years. Big names yet to report include Cisco Systems and Wal-Mart, both of whom we will hear from later this week. While today has been a slow day for domestic macroeconomic news, indications in general have been encouraging, with Friday’s non-farm payrolls report showing a healthy 214,000 in growth in October and alongside monetary policy that remains accommodative, this is a very benign environment for the stock market.
By early afternoon in New York, the Dow Jones was up 0.19% or 33 points at 17,607 and the S&P 500 index had gained 0.16% or 3.3 points to 2035.2. Both of these stock indices set new intraday records on Monday, the Dow Jones climbing as high as 17,618.46 and the S&P 500 reaching 2038.7.
Corn rebounds, energies drop
The US Department of Agriculture unexpectedly trimmed its forecasts for this year’s corn crop, helping to push corn futures for December up 0.5% to $3.693 a bushel, earlier hitting its highest price this month. The USDA now expects farmers to harvest 14.407 billion bushels of corn, compared with a projection of 14.475 billion made last month. Analysts had expected the USDA to raise its outlook. Despite today’s gain, the overall trend in corn prices has been downward this year, with the grain off by 13% so far in 2014.
Oil prices continue to drop, dampened by speculation that OPEC will resist pressure to reduce output targets at a meeting later this month. Kuwaiti oil minister Ali Al-Omair voiced his view this view at a conference today in the UAE, saying ‘I don’t think there will be any cut in the production,’ and adding that ‘We feel prices will settle down once surplus oil is absorbed.’ Crude oil has fallen into bear market territory this year, and US light crude oil futures gave up earlier gains to fall more than 1% to $77.48 a barrel.
Natural gas futures had made gains in the previous nine session straight, but retreated from a four-month high to slip back to $4.255 per million BTUs, a fall of more than 3% on the day. The December contract had been as high as $4.544, but ended the session near the day’s lows, despite forecasts for a cold snap for the next few days in the Midwest and Northeast . Inventory data from the Energy Department will be released on Thursday
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