Better Euro Data, Solid Blue Chip Earnings Drive US Gains

Economic Data

- (TR) Turkey Central Bank (CBRT) left its Benchmark Repurchase Rate unchanged at 8.25%

- (BR) Brazil Sept Unemployment Rate: 4.9% v 5.1%e

- (US) Sept Chicago Fed National Activity Index: +0.47 v +0.15e

- (US) Initial Jobless Claims: 283K v 281Ke; Continuing Claims: 2.351M v 2.38Me

- (US) Aug FHFA House Price Index M/M: 0.5% v 0.3%e

- (US) Oct Preliminary Markit Manufacturing PMI: 56.2 v 57.0e

- (US) Sept Leading Index: 0.8% v 0.7%e

- (EU) Euro Zone Oct Advance Consumer Confidence: -11.1 v -12.0e

- (US) Weekly EIA Natural Gas Inventories: +94 bcf v +95-99 bcf expected

US equity markets are filling the gap from yesterday afternoon and ripping higher. Meanwhile the benchmark 10-year UST yield is zipping higher, at 2.275% as of writing, up nearly six points. The move in USTs follow on a move higher in the German bund yields, which were supported by improved preliminary euro zone and German manufacturing PMI data. The DJIA is up 1.57%, the S&P500 is up 1.45% and the Nasdaq is up 1.69%.

The preliminary Markit October manufacturing PMI data was a bit soft, in a reading that missed expectations and saw its lowest level since July. The series remains firmly in expansion territory, however Markit points out that the decline in new orders to 57.1, the lowest since January, weighed on the headline reading. Markit's chief economist said that The source of the slowdown appears to be weaker economic growth in key markets such as the Eurozone, China and other emerging markets. Weekly jobless claims rose slightly from the prior week, but still remain near multi-year lows.

After testing $80 yesterday for the second time this month, WTI crude has turned around on press reports about Saudi Arabia's September production figures. Reports citing an industry source asserted that the Kingdom pumped 9.7 million bpd in September, slightly higher than the 9.6 million rate in August. However, the amount of crude oil Saudi supplied to export markets actually declined in September, to 9.36 million bpd from 9.69 million bpd in August. WTI is around $81.80 and Brent has climbed back above $86.

Both General Motors and Caterpillar are up after disclosing strong third-quarter results. CAT is up 5% after crushing earnings expectations and raising FY14 guidance. Gains in the firm's construction and energy equipment sales are seeing good growth, offsetting the steep declines in mining hardware. GM is up 2% on good results.

Major US airlines American, Southwest and JetBlue are up 2% a piece in the early going on solid third-quarter results. United dropped as much as 5% in the premarket before recovering most of its losses in cash trading. United doubled its profits over the prior year's period and saw modest revenue growth. The firm beat expectations and saw a nice decline in operating costs.

Looking Ahead

- 13:00 (US) Treasury to sell $7.0B in 30-Year TIPS Reopening

- 15:00 (AR) Argentina Aug Economic Activity Index M/M: No est v 0.1% prior; Y/Y: -0.4%e v 0.0% prior

- 19:00 (KR) South Korea Q3 Preliminary GDP Q/Q: 0.9%e v 0.5% prior; Y/Y: 3.3%e v 3.5% prior