The Closing Look

Stocks rallied on Wednesday after the latest round of earnings data was announced. Morgan Stanley (MS) and Microsoft (MSFT) both rallied after announcing their results. According to the CME Group’s FedWatch tool, traders see a roughly 40% chance the Fed will hike rates by its December meeting, which was less than 20% a few weeks ago. The US Dollar edged higher on the news. Elsewhere, the S&P rating agency warned of a possible: ‘Crexit.’ The rating agency believes that corporate debt is projected to swell over the next several years, thanks in part to easy money from global central banks. The rating agency warned of a potential corporate debt crisis (a.k.a crexit) and said by 2020, business debt likely will climb to $75 trillion from its current $51 trillion level. That is a huge increase and they don’t believe it will become a problem as long as credit quality stays high, interest rates and inflation remain low, and the economy continues to grow.

Gary’s Thoughts: Earnings continue to stink but beta now picking up. Watch biotech off lows here. Trying to turn up!