Stocks Off as Q4 Earnings Get Underway

The Q4 earnings session began on the wrong foot after the closing bell yesterday as Alcoa reported a worse than anticipated loss of $277 million. This morning equity futures are sharply lower, in part because of Alcoa but also in reaction to news from China that bank reserve requirements have been raised 50 basis points to 16%, which will constrain liquidity.

“In addition, China sold one-year bills at a higher yield, pointing to potential interest rate hikes,” explained analysts at BMO Capital Markets. “The tightening came somewhat earlier than most had predicted. Chinese authorities appear to have been spooked by the massive lending â€