U.S. stocks are little changed and European equites finished mixed, with the global markets digesting a plethora of divergent earnings and economic data, as well as flared-up political uncertainty ahead of Friday's inauguration of President-elect Donald Trump. Energy stocks are being bogged down by falling crude oil prices while Treasury yields and the U.S. dollar are recovering from yesterday's drops. Gold is trading lower.
At 12:51 p.m. ET, the Dow Jones Industrial Average is dipping 0.2%, the S&P 500 Index is flat, and the Nasdaq Composite is ticking 0.1% higher. WTI crude oil is falling $1.14 to $51.34 per barrel, Brent crude oil is dropping $1.27 to $54.20 per barrel, and wholesale gasoline is off $0.04 at $1.56 per gallon. Elsewhere, the Bloomberg gold spot price is declining $4.12 to $1,212.95 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—is rising 0.4% at 100.74.
Dow member Goldman Sachs Group Inc. (NYSE:GS $234) reported 4Q earnings-per-share (EPS) of $5.08, above the FactSet estimate of $4.76, with revenues rising 12.3% year-over-year (y/y) to $8.2 billion, topping the projected $7.8 billion. The company said after a challenging first half, it performed well for the remainder of the year as the operating environment improved. Shares are lower in choppy action.
Target Corp. (NYSE:TGT $67) lowered its 4Q and full-year guidance after reporting that its same-store sales for the holiday period decreased 1.3% y/y. TGT noted early season sales softness and disappointing traffic and sales trends. Shares are solidly lower.
Citigroup Inc. (NYSE:C $57) posted 4Q EPS of $1.14, above the expected $1.12, as revenues declined 8.0% y/y to $17.0 billion, below the forecasted $17.3 billion. Net interest margin came in below the Street's forecasts. C is trading to the downside.
CSX Corp. (NASDAQ:CSX $37) announced 4Q earnings of $0.49 per share, one penny below the estimated $0.50, with revenues rising 9.0% y/y to $3.0 billion, above the projected $2.9 billion. Shares are losing ground.
United Continental Holdings Inc (NYSE:UAL). (UAL $74) reported 4Q EPS ex-items of $1.78, north of the estimated $1.73, as revenues ticked 0.2% higher y/y to $9.1 billion, slightly above the expected $9.0 billion. 4Q passenger revenue per available seat mile (PRASM), a key industry metric, declined 1.6% y/y. UAL is trading lower.
CPI matches forecasts, homebuilder sentiment dips and industrial production rebounds
The Consumer Price Index (CPI) (chart) was up 0.3% month-over-month (m/m) in December, in line with the Bloomberg estimate, while November's 0.2% increase was unrevised. The core rate, which strips out food and energy, rose 0.2% m/m, matching expectations and November's unrevised rise. Y/Y, prices were 2.1% higher for the headline rate, in line with forecasts, while the core rate was up 2.2%, matching projections. November y/y figures showed an unrevised 1.7% rise and an unadjusted 2.1% increase for the headline and core rates respectively.
The National Association of Home Builders (NAHB) Housing Market Index showed homebuilder sentiment this month dipped to 67 compared to expectations for it to remain at December's downwardly revised 69 level, which was still the highest since before the housing crisis. A 50 mark separates good and poor conditions.
Industrial production (chart) rose 0.8% m/m in December, compared to estimates of a 0.6% increase, and following November's downwardly revised 0.7% drop. Manufacturing production ticked 0.2% higher m/m and utilities output jumped, while mining production were flat. Capacity utilization rose to 75.5% from November's downwardly revised 74.9%, and compared to projections for a 75.4% rate. Capacity utilization is 4.5 percentage points below its long-run average.
The MBA Mortgage Application Index increased 0.8% last week, following the previous week's 5.8% gain. The increase came as the Refinance Index jumped 6.8%, more than offsetting a 5.2% drop for the Purchase Index. The average 30-year mortgage rate fell 5 basis points (bps) to 4.27%.
Treasuries are lower in afternoon action, with the yield on the 2-Year note rising 3 bps to 1.18%, the yield on the 10-Year note gaining 5 bps to 2.38%, and the 30-Year bond rate advancing 4 bps to 2.98%.
Treasury yields and the U.S. dollar are regaining some of yesterday's pullbacks that came courtesy of ramped up political uncertainty ahead of President-elect Donald Trump's inauguration this week and volatility in the currency markets following Brexit comments from U.K. Prime Minister May.
Today's robust economic calendar will culminate with the Fed in focus, courtesy of the 2:00 p.m. ET release of the Fed's Beige Book—an anecdotal look at national economic activity—used as a tool by the Federal Open Market Committee (FOMC) to prepare for its two-day monetary policy meeting scheduled to end February 1st. Finally, Federal Reserve Chairwoman Janet Yellen is scheduled to talk in the final hour of trading at the Commonwealth Club in San Francisco.
Europe mixed following yesterday's wild ride in the currency markets
European equities finished mixed, following some divergent earnings and economic data, while the British pound reversed some of yesterday's rally and the U.S. dollar gained back some of yesterday's slide. The volatility in the currency markets has come from comments from U.S. President-elect Donald Trump and U.K. Prime Minister (PM) May. Trump noted that the U.S. dollar was already "too strong," while U.K. PM May eased "hard" Brexit concerns, despite saying that the country will seek to exit the European Union's (EU) single market. May noted that the U.K. parliament will get a vote on the final Brexit deal and adding that she was confident a deal can be reached with the EU and will seek a "smooth and orderly Brexit." Eurozone consumer price inflation rose in line with forecasts for December, while U.K. employment fell by a smaller amount than anticipated in November. The euro was lower versus the greenback and bond yields in the region traded mostly to the upside. Shares of Burberry Group (LON:BRBY) PLC. (BURBY $20) gained solid ground after the U.K. luxury retailer offered upbeat 3Q results, while Pearson (LON:PSON) PLC. (PSO $7) tumbled after the British publisher cut its profit outlook.
The U.K. FTSE 100 Index was up 0.4%, Germany's DAX Index rose 0.5%, France's CAC 40 Index and Spain's IBEX 35 Index dipped 0.1%, Switzerland's SMI ticked 0.1% higher, and Italy's FTSE MIB Index advanced 0.3%.