U.S. Building Permits at 1.24M vs expected 1.27M. Housing Starts at 1.20M vs expected 1.22M. Treasury yields ticked slightly higher following the minutes with the Fed-sensitive 2-yr yield and benchmark 10-yr yield each advancing two basis points to 2.88% and 3.18%, respectively. Following the minutes, the probability of a December rate hike ticked up to 83.0% from 79.5%on Tuesday, according to the CME FedWatch Tool. USDJPY up 0.34%.
Euro down -0.64%, $1.1501. U.K. CPI y/y at 2.4% vs expected 2.6%. PPI Input m/m at 1.3% vs expected 0.9%. RPI y/y at 3.3% vs expected 3.5%. Meanwhile, UK PM May is in Brussels trying to convince her European Union counterparts of her Chequers’ plan. Speaking before addressing the summit members, PM May said that a deal can be sealed “over the next days and weeks,” with a work from both parts, although hopes for a breakthrough in negotiations faded after weekend failed talks. Sterling down -0.64%, $1.3102.
Canadian Manufacturing Sales m/m at -0.4% vs expected -0.6%. WTI crude dropped -3.1% to $69.65/bbl, hitting a one-month low, after EIA petroleum data showed a build of 6.5 million barrels in crude oil inventories for the week ended October 12. USDCAD up 0.71%, $1.3026.
S&P 500 down -0.03%, 2,809.21. Nasdaq up 0.03%, 7,278.63. Nikkei up 1.29%, 22,841.12.
A late morning surge (EST) in the financials sector (+0.9%) lifted the benchmark index from its early depths, the S&P 500 was down as much as -1.0% and the release of the September FOMC minutes prompted another small bout of volatility in the afternoon (EST). The softer-than-expected data hit the consumer discretionary sector (-0.7%) in particular, with home improvement retailers Home Depot (HD 185.17, -8.41) and Lowe’s (LOW 102.44, -3.54) dropping -4.3% and -3.3%, respectively. The two companies were also downgraded to ‘Neutral’ from ‘Outperform’ at Credit Suisse. Investors initially had a muted reaction to U.S. Bancorp’s (USB 52.90, +1.93) better-than-expected earnings, but shares eventually started taking off, ending the day with a gain of 3.8%. Goldman Sachs (GS 228.28, +6.58, +3.0%) and Morgan Stanley (MS 47.19 , +1.25, +2.7%) also had strong performances, extending yesterday’s post-earnings gains.
In other earnings news, Netflix (NFLX 364.70, +18.30) climbed 5.3% after reporting higher-than-expected subscriber growth. The company added nearly seven million new subscribers last quarter, with six of the seven million coming from overseas. In addition, Netflix expects to add nine million more in the fourth quarter.
