REUTERS/Robert GalbraithFederal Reserve Vice Chair Janet Yellen
Good morning! Here’s what you need to know.
- Asian markets ended higher. Japan’s Nikkei gained 1% and Korea’s Kospi was up 0.4%. European markets were mostly higher, led by France’s CAC 40 at 0.5%. U.S. futures were pointing higher.
- Later today, current Federal Reserve Vice Chair Janet Yellen will be nominated as the next Federal Reserve Chair, succeeding Ben Bernanke. She is not expected to face strong opposition in her Senate confirmation hearing, and would become both the first woman to hold the job, as well as the most powerful woman in American history, given the Fed’s influence on global markets.
- Our Matt Boesler has described Yellen as “arguably the most dovish member of the Federal Open Market Committee,” and she is expected to draw out the Fed’s bond buying program until economic improvement is more evident. “With everything that is happening with the federal budget, the Fed is going to be even more cautious about doing anything,” Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University, told the AP. “The best approach they can take right now is stand pat and watch.”
- The minutes of the September FOMC meeting will be published at 2:00 p.m. ET. “Since the meeting, a number of Fed speakers indicated that the decision not to taper last month was a “close call” and Chairman Bernanke, along with other Fed policymakers, have indicated that fiscal uncertainty was a significant factor in their decision,” said Deutsche Bank’s Brett Ryan. “Market participants will look to see just how close the vote was, as well as attempt to glean information on how the tapering process could proceed.”
- Day 9 of the federal government shutdown begins today. President Obama and Speaker Boehner traded press conferences yesterday that our Brett LoGiurato says “seemingly left the door open to a short-term fix, in which the debt ceiling is lifted and the government is reopened — alongside a House-Senate deal that would establish a negotiating panel on fiscal issues.”
- Alcoa boss Klaus Kleinfeld called the standoff a “giant Taser” that’s stunning global economic confidence. The U.S. aluminium giant reported earnings and revenue Tuesday afternoon that both surpassed expectations.
- Yum! Brands reported softer revenues Tuesday. Quarterly same-store sales in China met analysts’ expectations, though September same-store sales missed by a wide margin at -11% versus consensus -5.7%.
- Q3 earnings season continues. Discount retailers CostCo (consensus EPS $US1.46) and Family Dollar ($0.84) report financial results today.
- Jos. A. Bank wants to buy Men’s Wearhouse, and has proposed paying a 36% premium for its shares, Reuters reports. Men’s Wearhouse is reviewing the proposal. Men’s Wearhouse’s market cap is $US1.68 billion versus Jos. A. Bank’s $US1.17 billion.
- India’s imports fell 18.1% in September, the most in four years, and in the process shrunk the country’s current account deficit to its narrowest point in two-and-a-half years. Indian 10-year bonds fell 4 basis points to 8.4% on the data, , the FT says.