This mornings market was shaken by the revelation that Lawrence Summers will take the Fed chair. The revelation came by way of a rumor in a Japanese newspaper, meaning there’s no reason to fully rust it just yet, but it adds weight to the idea that Summers is by far the most likely pick.
If Summers is put in charge at the Federal Reserve, it is expected that he will tune down quantitative easing quite quickly. That means that stock are likely to lose value as money returns to the bond market. Most of the world’s major indices went along with this early today.
Nomad Investment Partnership: Keep An Eye On The Unseen Risks
There are many ways to define risk. Warren Buffett has said that "risk comes from not knowing what you're doing." Q3 2020 hedge fund letters, conferences and more His mentor, Benjamin Graham, believed that risk should be measured as the chance of a permanent capital impairment of an investment. Seth Klarman also holds this view. Read More
On this morning’s market stocks that were particularly active in pre-market included Intel Corporation (NASDAQ:INTC), Facebook Inc (NASDAQ:FB), Apple Inc. (NASDAQ:AAPL), Yahoo! Inc. (NASDAQ:YHOO), Tesla Motors Inc (NASDAQ:TSLA), Micron Technology, Inc. (NASDAQ:MU), Stratasys, Ltd. (NASDAQ:SSYS), Ericsson (NASDAQ:ERIC), SolarCity Corp (NASDAQ:SCTY) and Marketo, Inc. (NASDAQ:MKTO).
The S&P 500 closed at 1,683.42 on Thursday, while Nasdaq closed at 3,715.97 and the Dow Jones Industrial Average ended the day at 15,300.64.
In international markets, the FTSE 100 was down a fraction this morning to 6,571.15, the Nikkei rose slightly to 14,404.67, Shanghai was down to 2,236.22 Eurostoxx traded down to 2,859.25, and the Hang Seng was down to 22,915.28.
On commodities, oil was trading flat on the Brent exchange this morning, with a barrel going for $112.62. Gold traded down by close to a full point to 1,317.70 per ounce. One U.S. Dollar was trading for 0.7530 Euro, 99.6200 Yen, and 0.6320 British Pounds.
Futures in the U.S. stock market were down a small amount before trading opened in New York. Nasdaq futures were the hardest hit, dropping 12.75 points, the S&P 500 lost 1.8 points and the Dow Jones Industrial Average lost a single point.
Lawrence Summers is going to be the next Chairman of the Federal Reserve, according to a Japanese newspaper. The Nikkei reported today that Summers was going to be the man picked by the Obama Administration. The White House denied the rumors, but the market was still shaken by the report.
The Nikkei did not name its source for the story. Current Federal Reserve Chairman Ben Bernanke will have to leave his post in the opening days of next year, meaning the White House will have to name his successor sooner rather than later.
Retail Sales missed expectations this morning when they were reported by the Commerce Department. Retail sales came in up 0.2 percent for August, but analysts had expected the increase to come in at closer to 0.4 percent. The lower than expected growth belies a weakening economy, and worries for third quarter earnings reports.
Stocks In Focus
Twitter is not a stock just yet, but the company revealed its plans to go public this morning. The social networking site has been rumored to be considering an IPO for a long time, but its plans have defied scrutiny. This morning the company tweeted that it had filed for an IPO with the regulator.
Intel Corporation (NASDAQ:INTC) announced this morning that it was laying off 700 employees and shuttering a plant in Maynard, Mass. The plant will be fully closed by the end of 2014. On this morning’s pre market, shares in Intel were trading up close to 2% on the cost cutting news.
Stratasys, Ltd. (NASDAQ:SSYS) announced the pricing of the shares it will offer in anew public offering this morning. The 3D printer maker says that it will offer an additional 4,500,000. The company said it would sell the shares for $93 each, driving the price of the company’s stock down to that level from yesterday’s close above $97.