Daily Market Update – January 11, 2013

Top News Highlights

President Barack Obama nominated his chief of staff, Jack Lew, as the next Treasury secretary, praising him as an expert on the pressing national issues of U.S. government spending cuts and deficit reduction. If confirmed by the Senate as expected, Lew would succeed Timothy Geithner and take the lead on difficult negotiations with Congress on how to cut the nation's massive debt and rein in spending - a central challenge for Obama's second term. Lew, a 57-year-old New Yorker who has previously served as White House budget chief, is likely to face tough questions from Republicans in his Senate Finance Committee confirmation hearing after the bruising year-end battle over tax increases on the wealthy

Economic Highlights

Wholesale inventories in the U.S. increased by more than anticipated in the month of Nov, according to a report released by the Commerce Department, with the report also showing a substantial rebound by wholesale sales. The report showed that wholesale inventories increased by 0.6% in Nov vs. economist estimates for a 0.3% increase. However, the Commerce Department also said that the increase in inventories in Oct was downwardly revised to 0.3% from 0.6%. Wholesale inventories of durable goods rose by 0.4%. Wholesale inventories of non-durable goods increased by 0.8% in Nov after falling by 0.3% in Oct
European Central Bank President Mario Draghi said that the euro area may see a gradual recovery later in the year as there are some modest signs of stabilization. Speaking at the post-decision press conference in Frankfurt, Draghi said, "More recently several conjectural indicators have broadly stabilized, albeit at low levels, and financial market confidence has improved significantly." "Later in 2013 a gradual recovery should start," he added. In order to sustain confidence, it is essential for governments to reduce further both fiscal and structural imbalances and to proceed with financial sector restructuring, Draghi said