Lots on the Calendar

Markets look poised to build on three days of rapid gains which have pulled markets up 6.1% since Monday. Futures are looking up this morning after JP Morgan posted Q2 earnings of 28 cents per share, well above expectations of just 4 cents. A better than expected GDP report from China (+7.9%) doesn’t hurt sentiment either.

Meanwhile, oil is down 1% to $60.90, spot gold is trading $2 lower at $937, and base metals have fallen around 1% across the board.

Earnings remain the focus: The 3-day rally has been helped by earnings from Goldman Sachs and Intel earlier in the week, and after the close today Google will post its results, followed by Bank of America and GE tomorrow. 

Lehman 2.0: Treasury has refused to extend aid to CIT Group, making it likely that the business lender will see the same fate as Lehman Brothers back in September. On Wednesday CIT Group said “there is no appreciable likelihood” it would receive government support. 

FOMC Minutes: Yesterday’s FOMC minutes showed central bank officials were confident that the Fed has the right tools to implement an appropriate exit strategy when the right time comes. More interesting was their discussion of why the Fed was purchasing Treasuries, an activity the bank conceded was not marketed well.

“Announcements of substantial additional purchases could add to perceptions that the federal debt was being monetized,” the minutes read. “While most members did not see large-scale purchases of Treasury securities as likely to be a source of inflation pressures given the weak economic outlook, public concern about monetization could have adverse implications for inflation expectations.”  

Key Releases Today:

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