After Tuesday’s vote put Republicans in a position of power in both the Senate and the House of Representatives, President Obama has a difficult path ahead as he will find it difficult to make changes for the remainder of his term. Republican Senator Mitch McConnell has had a historically rocky relationship with Obama, but the two have pledged to work together over the next two years as McConnell will become the leader of the Senate beginning in January. McConnell and Obama spoke on Wednesday to discuss what compromises they can make, but both men have said they will remain firm on major party issues.
In other news around the markets:
- In an effort to compete with its brick-and-mortar counterparts, Amazon.com Inc. AMZN is exploring every possible option to make deliveries cheaper and more reliable. The company suffered major setbacks during last year’s holiday shopping season after having massive delays due to delivery problems. Now the company is testing the use of licensed taxis in order to deliver packages. The company has been using Los Angeles and San Francisco cabs to study how effective this new method is before deciding whether or not it would be applicable in other major cities.
- Beijing is working to help boost China’s falling domestic demand through a series of easing measures that some say could be too little too late. Chinese officials are offering bank credits and tax relief in order to boost imports. The People’s Bank of China announced on Thursday that financial institutions will be encouraged to lend to companies that import high tech equipment while the government is preparing special tax breaks for imports of materials used in scientific research.
- Russian President Vladimir Putin is under more pressure from the West as the US has launched an investigation into his associate Gennady Timchenko for his involvement in a money laundering scheme. Timchenko is suspected to have used the US financial system to make transfers related to corrupt deals in Russia. The Wall Street Journal reported that US investigators are also looking into whether or not Putin’s money was involved as well.
- Pro-Democracy protesters in Hong Kong clashed with police early on Thursday as the demonstrations continued to block traffic and anger commuters. Police attempted to disband the student protesters at one of their three remaining sites, but fights broke out shortly after the police arrived. The group is planning a march on Sunday and has said it will announce its plans to take its pleas for full democracy to the Communist Party in Beijing on Thursday.
Asian Markets
Asian markets were mixed, the NIKKEI and the Hang Seng index lost 0.86 percent and 0.20 percent respectively, while most other indexes rose. The Shanghai composite was up 0.27 percent, the KOSPI rose 0.26 percent and the Shenzhen composite gained 0.53 percent.
European Markets
European markets were lower ahead of the ECB meeting as investors remained cautious. The FTSE lost 0.33 percent, the STOXX 600 was down 0.41 percent, the DAX fell 0.22 percent and the CAC 40 was down 0.33 percent.
Energy futures continued their losing streak; Brent futures were down 0.11 percent and WTI futures lost 0.03 percent. Gold and silver lost 0.15 percent and 1.00 percent respectively, and industrial metals were also lower with the exception of tin, which gained 0.36 percent. Copper lost 0.20 percent, aluminum was down 0.07 percent and zinc fell 1.38 percent.
Currency markets were relatively quiet on Thursday. The euro traded at $1.2509 and gained 0.13 percent against the yen and 0.24 percent against the pound. The dollar lost 0.08 percent against the yen and 0.23 percent against the Australian dollar, but gained 0.06 percent against the pound.
Earnings
Notable reports released on Wednesday included:
- Whole Foods Market, Inc. WFM reported third quarter EPS of $0.35 on revenue of $3.30 billion, compared to last year’s EPS of $0.32 on revenue of $3.98 billion.
- Prudential Financial, Inc. PRU reported third quarter EPS of $2.20, compared to last year’s EPS of $2.94 on revenue of $10.82 billion.
- Duke Energy Corporation DUK reported third quarter EPS of $1.40, compared to last year’s EPS of $1.46 on revenue of $6.71 billion.
- Genworth Financial Inc. GNW reported a third quarter loss of $0.64, compared to last year’s EPS of $0.24 on revenue of $2.34 billion.
Stocks moving in the Premarket included:
- Micron Technology MU was up 3.83 percent in premarket trade after rising 4.43 percent over the past week.
- Newmont Mining Corp NEM gained 1.12 percent in premarket trade after falling 14.32 percent over the past five days.
- Qualcomm Inc. QCOM was down 6.22 percent in premarket trade after gaining 0.12 percent on Wednesday.
- Citigroup Inc. C was down 1.57 percent in premarket trade after rising 1.56 percent on Wednesday.
Notable releases expected on Thursday include:
- Walt Disney Company DIS is expected to report fourth quarter EPS of $0.88 on revenue of $12.37 billion, compared to last year’s EPS of $0.77 on revenue of $11.57 billion.
- Astrazeneca PLC AZN is expected to report third quarter EPS of $1.04 on revenue of $6.28 billion, compared to last year’s EPS of $1.22 on revenue of $6.25 billion.
- Apacheorporation APA is expected to report third quarter EPS of $1.38 on revenue of $3.48 billion, compared to last year’s EPS of $2.32 on revenue of $4.41 billion.
- DIRECTV DTV is expected to report third quarter EPS of $1.30 on revenue of $8.30 billion, compared to last year’s EPS of $1.28 on revenue of $7.88 billion.
Economics
The focus of Thursday’s economic calendar will be the European Central Bank meeting as investors look for any indication of further easing to come in December. Other notable releases will include British industrial production, the Bank of England’s policy meeting, US initial and continuing jobless claims and German factory orders.
For a recap of Wednesday’s market action, click here.
<p>Tune into Benzinga’s pre-market info show with Dennis Dick and Joel Elconin <a> http://optionshouse.benzinga.com/pre-market-show/ />here</a>.</p>
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