2:00 PM PT: Earnings drive equities higher.
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World markets got off to a shaky start despite a slightly better than anticipated October HSBC PMI for China. The Shanghai Composite lost nearly 1% after Reuters reported a stock link to Hong Kong might be delayed. European markets also began the day in the red, but better than expected Markit Flash Manufacturing PMI results for both Germany and the Eurozone as a whole helped improve the mood.
In the US, a string of positive earnings added to traders’ confidence and prices began to rally. Initial Unemployment Claims offered no surprise at 283K. September Leading Indicators came in at +0.8%, above expectations. The Flash PMI for the US was a little disappointing, but markets moved higher anyway.
After testing $80 yesterday, the positive economic news helped lift crude prices. 10-Year Note yields moved higher, closing in on 2.3%. With yields cross the world moving higher, too, the impact on the US$ was minimal. The global growth story did weigh on gold, which fell back below $1230.
By mid-morning, all the major averages were sharply higher and kept working higher into the afternoon until a report of a possible Ebola case in New York City slowed the rally somewhat.