Morning Report: Earnings season disappoints 11/4/15

Stocks are higher this morning after Tesla beat earnings estimates. Bonds and MBS are flat.

Mortgage Applications fell 0.8% last week as purchases fell 0.6% and refis fell 0.9%. Mortgage rates spiked after the FOMC decision, so that could have been a factor.

The ADP Employment Change report came in at 182,000 jobs, which is exactly the forecast for Friday’s jobs report.

The ISM services index rose to 59.6 from 56.9 in October, one of the bright spots economically.

There will be lots of Fed-Speak today, with Janet Yellen, Stanley Fischer, and William Dudley all speaking at various points today. Yellen testifies about banking regulation at 10:00 am before the House Financial Services Committee. New York Fed president William Dudley speaks at 2:30. and Stanley Fischer will speak after the market closes. I don’t expect Yellen’s testimony to be market moving.

What’s old is new again: Amazon is opening a bookstore.

We had numerous elections last night – as a general overview Republicans are cheering this morning, while Democrats are talking about low turnout..

Earnings season is in full swing, and so far the box scores are pretty dismal. This is the worst quarter for earnings since 2009. Blame low commodity prices for the most part – the energy patch is getting killed with oil at these levels. This will make the stock market even more vulnerable once the Fed starts pulling away the punch bowl.

Speaking of low energy prices, Transcanada has pulled its application for the Keystone XL pipeline, which inexplicably became a cause celebre for the environmental movement. Tar sands oil doesn’t make sense at sub-$50 oil prices.

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