Stocks continue to rebound on signs/hopes of stabilizaton

Economic Data

- (IL) Israel Oct Manufacturing Production M/M: -1.2 v +0.8% prior
- (PT) Portugal Nov PPI M/M: -0.6 v -0.7% prior; Y/Y: -1.1% v -1.2% prior
- (RU) Russia Gold and Forex Reserve w/e Dec 12th: $414.6B v $416.2B prior
- (US) Initial Jobless Claims: 289K v 295Ke; Continuing Claims: 2.373M v 2.44Me
- (BE) Belgium Dec Consumer Confidence Index: -12 v -14.0 prior
- (MX) Mexico Oct Retail Sales Y/Y: 5.6% v 4.3%e
- (US) Dec Preliminary Markit Services PMI: 53.6 v 56.3e ; Composite PMI: 53.8 v 56.1 prior
- (US) Dec Philadelphia Fed Business Outlook: 24.5 v 26.0e
- (US) Nov Leading Index: 0.6% v 0.6%e
- (US) Weekly EIA Natural Gas Inventories: 64 bcf vs. -59 to -63bcf expected range

- US stocks continue to rebound aggressively as yesterday's post FOMC buying has followed through into today. Many are looking to place the equity markets performance at the feet of the fed, but it is more likely largely attributable to stabilization in several of the undercurrents that have plagued investor appetite recently. In the end the FOMC statement cemented expectations that Fed remains on course for a mid-2015 lift off, and at the very least, not to expect any type of hawkish surprise in the first quarter. US interest rates remain higher and the back-up remains more pronounced at the long end leading to general steeping along the US Treasury curve. The 2-10 yield spread has widened another 5 basis points on the day to 1.58%. Gold prices have stabilized around the $1200 mark. The Dow and the S&P are up 1.2% while the NASDAQ has gained 1.4%.

- Stocks began their rebound on Tuesday when oil prices, and the energy stocks in particular appear to have put in a bottom. The OIH and XLE are both up some 10% from the recent lows, while many of the smaller cap highly leveraged names have snapped back 20% or more. This in turn has taken some pressure off the high yield market. The HGY and JNK high yield ETFs have rebounded close to 5% from the recent 3-year lows. Feb WTI crude rallied all the way back above $59 before the NYSE open, but futures prices have since given back those gains and are in the red again after yesterday's rally. The oil stocks have retreated as well from the early highs and traders continue watch those Tuesday lows as key to overall market sentiment.

- Risk appetite is also likely getting a boost from some sense of relief surrounding Russia. The ruble is holding the yesterday's stabilization and is sitting just below the 60 mark. A 4-hour press conference with President Putin failed to ignite and fresh jitters and has allowed the RSX to hold onto a good portion of yesterday's gains. US ADS VimpelCom and Mobile Telesystems OJSC are snapping back by double digit percentages. Overall the emerging markets continue to gain traction too with EWZ Brazil +2% and EEM +1.25%. Europe is getting a nice boost too with the Dax up 3% heading towards the cash close.

- Tech investors were buoyed by two strong earnings reports. Oracle shares have surged 8% following Q2 results and guidance led by growth in cloud bookings that are expected to surpass $1B next year. Jabil Circuit has tacked on 2.5% after Q1 results handily topped expectations. JBL raised their FY15 eps outlook on improving margins. Zagg has popped for more than 15% after guiding higher benefiting from stronger than expected sell through of accessories for the recent iPhone and iPad launches.

- Overall the US Dollar has firmed in early NY trading, aided by rising US bond yields. The Euro is sitting near todays lowas at 1.2270 as talk that SNB's move back into negative rates is putting pressure on ECB to enact QE..

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent)
- 11:00 (BR) Brazil Nov Total Formal Job Creation: -32.0Ke v -30.3K prior
- 11:00 (US) Treasury 2-year, 5-year and 7-year note announcement (2-year FRN as well)
- 13:00 (US) Treasury to sell $16B in 5-Year TIPS Reopening
- 15:00 (US) API Monthly Statistical Report
- 19:05 (UK) Dec GfK Consumer Confidence: -2e v -2 prior
- (JP) Bank of Japan (BOJ) Monetary Policy Statement