Now, bond markets throw taper tantrum as yields flutter
Interest rates are up again today; they began moving up after Philly Fed President Charles Plosser came on our air with a few hawkish comments, arguing he wanted a cap on the balance sheet of the Federal Reserve.
Yields on the 10-year Treasury have gone from 2.48 percent on Wednesday before the FOMC announcement to 2.58 percent today. Bullard also said that the likelihood of a taper will rise as the economy improves.
One of the factors helping the ISM Index is the boom in the U.S. oil and natural gas business. The shale revolution is not just helping manufacturing, or the energy industry, it's a big help to the engineering business. Fluor reported earnings a penny above consensus, though revenues were a bit short. But they boosted 2014 earnings due to increasing business from the oil and gas industry.
1) IPO at the NYSE: The Container Store (TCS)--which is, well, a container store--priced 12.5 million shares at $18.00. That was above the original expected range of $14 to $16 per share, which was subsequently raised earlier this week to $17 - $18. TCS was bought by private equity firm Leonard Green in 2007. They only have 63 stores now, but management has said they might reach 300 eventually; meantime they plan to add only six new stores in 2014.
That may sound ambitious--and it is--but other recent retail IPOs have been able to expand aggressively. Take teen clothing retailer Five Below (FIVE), which went public in July 2012 and is up about 170 percent, or Restoration Hardware, which went public in November 2012 and is up almost 200 percent since then.
2) Chevron's third quarter profit, at $2.50 per share, was far short of expectations. While lower refining margins are the issue (downstream profit is down 45 percent), CVX is having the same problems all the large integrated oil companies have: Higher costs, declining production, and they can't boost production fast enough to replace their depleting reserves.
The good news is they are investing a lot of money in liquid natural gas projects, while continuing to invest heavily in new oil production. The problem--the same as ExxonMobil --is that these projects take years to realize, and the returns are not there.
Yesterday XOM supporters were cheered by a very small increase in oil production. It's a good start--any increase is a step in the right direction--but a long way from where it needs to be.
3) Eastman Kodak is back at the NYSE. They are now an "imaging products" company but they are back.
4) Even options trading is flat. Despite a couple relatively strong weeks of trading, stock trading volumes remain below last year's, and last year's were below the year before. The one exception--prior to this year--was options, which continued to grow even as stock volumes declined.
No more. Buried in the Chicago Board Options Exchange quarterly earnings report is a comment from CEO Ed Tilly, who noted that trading in S&P 500 and VIX options was strong last quarter, "CBOE's average daily options volume for the quarter rose five percent over a year ago despite flat trading volume for the U.S. options industry as a whole," a statement read.
5) China Manufacturing grew at its fastest pace in 7 months, increasing from 51.4 from 51.1, above the 51.2 consensus. The 51.4 reading is the strongest since a 53.3 reading in April 2012 (18 mos).
—By CNBC's Bob Pisani