Scotland Vote, Fed Stays in the Dovecote

Economic Data

- (MY) Malaysia Central Bank (BNM) leaves Overnight Policy Rate unchanged at 3.25%
- (US) Initial Jobless Claims: 280K v 305Ke; Continuing Claims: 2.43M v 2.47Me
- (US) Aug Housing Starts: 0.956M v 1.04Me; Building Permits: 0.998M v 1.04Me
- (ZA) South Africa Central Bank (SARB) leaves interest rate unchaged at 5.75%
- (US) Sept Philadelphia Fed Business Outlook: 22.5 v 23.0e

The rally continues apace this morning, fueled but the Fed's dovish tone, with the DJIA at record highs and the S&P500 is points away from a record high. As of writing, the DJIA is up 0.50%, the S&P500 is up 0.47% and the Nasdaq is up 0.54%.

Fallout from yesterday's Fed decision has impacted a wide spectrum of asset classes. EUR/USD hit 13-month lows in the wake of yesterday's Fed decision, bottoming out around 1.2834. The pair has retraced some of these losses, trading up to around 1.2915 this morning. Gold tumbled to its lowest level in 8.5 months earlier today as the dollar index jumped to a four-year peak. Spot gold fell to $1,216, its lowest level since early January, before paring losses to trade flat at $1,224. Crude wasn't too bothered by the Fed and is around yesterday's lows, trading $93.90 this morning.

The headline September Philadelphia Fed factory survey was right in line with expectations, and fell five points from the very strong August reading. The employment sub index was very strong, hitting its highest level since May 2011. Weekly claims continue their downward trend, with both the initial and continuing components lower than expected.

The August housing starts and building permits data was pretty soft, with most of the weakness confined to the multi-family home side of the industry. Overall housing starts fell 14%, with multi-family starts down 32% (after a 45% gain in July) and single-family starts down a mere 2.4%. Homebuilders are not moving much on the news.

Scots are at the polls today, voting on whether or not to remain part of the United Kingdom. Approximately 97% of the electorate are registered to vote and early reports suggest turnout has been massive. Polls are open until 22:00 local time (19:00ET) and UK press reports suggest the results will be officially announced on Friday around 06:30-07:30 local time (01:30-02:30ET). The final polls had seen a narrowing of undecided votes and a strengthening of the anti-independence no vote, but only time will tell.

Shares of Rite Aid are down 15% or so this morning after the firm cut its FY15 forecast. Ironically, Rite Aid reported a second quarter profit nearly four times higher than a year ago on decent comps. However, the company warned it would see a decline in the pharmacy margin in the second half of the fiscal year. Pier 1 Imports is off nearly 17% in the early going as multiple downgrades compound its earnings miss last night. 

Looking Ahead

- 12:00 (US) Q2 Household Change in Net Worth: No est v $1.490T prior
- 12:00 (CO) Colombia Q2 GDP Q/Q: No est v 2.3% prior; Y/Y: No est v 6.4% prior
- 13:00 (US) Treasury to sell $13B in 10-Year TIPS Reopening
- 15:00 (US) API Monthly Statistical Report