2:15 PM PT: The rally resumes, new all-time highs again.
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Yesterday’s Fed statement was well received in overseas markets. In Japan, the August trade balance unexpectedly fell, and the falling yen put a bid under exporters. The Nikkei 225 finished at an 8-1/4 month high. Other markets were mixed.
In Europe, markets continued to power higher. In a perverse, if unsurprising reaction, some participants suggested that weaker than anticipated participation in the first round of the ECB’s LTRO would spur the bank to engage in true quantitative easing sooner rather than later. Some of this week’s concern over the Scottish vote has also dissipated.
In the US, Initial Unemployment Claims were a low 280K. August Housing Starts (956K) and Building Permits (998K) were both disappointing although July numbers were revised upward slightly. The Philadelphia Fed Survey was strong at 22.5, but still below expectations. The employment component did climb to a 3 year peak and hiring intentions were at the highest level since 1983.
Yields on the 10-Year continued to edge higher while gold and crude oil resumed their paths lower. With several big items on agenda for tomorrow, markets spent the day in a narrow range and closed solidly higher.