Bank of Japan boosts stimulus, U.S. consumer sentiment up and Chevron (CVX) posts strong results

Bourbon & Bayonets / Friday, October 31st, 2014

Markets were headed higher on Friday after the Bank of Japan announced a new stimulus program. They said they are planning to expand their asset-buying program by $726 billion per year. The economy has been struggling with weaker growth and inflation. The Bank of Japan’s governor, Haruhiko Kuroda, said that it was a “critical moment for Japan to emerge from deflation.”

Consumer sentiment levels hit their highest point in nearly seven-years in October. The Thomson Reuters/University of Michigan’s reading on consumer sentiment came in at 86.9, a level not recorded since July of 2007. This was also up from the 84.6 reading in September. October’s reading also beat out analysts’ expectations of 86.4. The jump was partially attributed to stronger optimism on the overall economy and growing personal financial expectations. Director of the survey, Richard Curtin, said, “The gains in confidence over the past three months point toward improved holiday spending by consumers. Overall, five years after the start of the recovery, consumers have finally begun to adopt the expectations and behaviors that have driven past expansions.”

Shares of Chevron Corporation (CVX) were trading up slightly after the oil giant posted strong quarterly results. The company reported that profits were up 13%. Net income posted at $5.59 billion, or $2.95 per share. This was up substantially from the $4.95 billion, or $2.57 per share, this time last year. It also beat out analysts’ expectations of $2.55 per share. Production was down 1% to 2.57 million barrels of oil per day. John S. Watson, the company’s CEO, said, “Despite a decline in crude oil prices, our third quarter earnings were higher than a year ago. Overall downstream results improved, reflecting the benefits of lower feedstock costs and better refinery reliability, particularly in the U.S.”

That’s all for today,

Warren Gates, Normandy Research

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