Its turning into one of those "You gotta know when to hold ‘em , know when to fold ‘em" periods as stocks slipped late yesterday on the banana skin of a Wells Fargo downgrade to a "sell" from CNBC regular Dick Bove who expressed concerns about "a serious erosion in the bank's loan quality". The stock lost 5% and dragged financials down in its wake. Amgen and eBay also disappointed after the bell. It really feels like the equity markets are starting to hit saturation point. Valuations looked stretched and despite more "better than expected earnings" it was the outlooks that are worrying me. The shock and awe of stronger-than-expected outcomes is dissipating and the onus is shifting back to the data.

The dive in US equities in the final hour of Wednesday is not an attractive set-up from a technical perspective either. Firstly, a new high for the year was made early in the day, and then the S&P500 index closed on its low, below the range of the previous day and in fact the low for the last week. This is a key day reversal pattern and suggests significant fatigue and portends a period of retracement. The market is also displaying fatigue in that earnings reports have generally been upbeat and yet the market fell.

As the earnings season reaches fever pitch, today began with a batch of better than expected earnings reports from AT&T, Merck, Kimberly-Clarke and McDonalds while Xerox and 3M raised guidance which gave futures an early boost, but they were pegged back by more dastardly data in the form of the weekly jobless claimants number which came in higher than expected. At 15.00, we got bullish news from the Leading Indicators which produced an upside surprise printing 1.0% versus an expected read of 0.8%. But more bad news from the house sector with the house price index falling an unexpected -0.3% against an expected rise of 0.3%.

Today's Market Moving Stories

• Overnight in Japan, exports fell 0.8% mom, the third straight decline, and 30.7% yoy in September (slightly worse than the consensus forecast for a 29.9% decline). So some signs that the strong Yen is beginning to bite.
• Goldilocks growth in China i.e. not too cold and not too hot, if you don't believe the numbers are a fairytale of course. GDP grew by 8.9% yoy in Q3, as expected, and was up from 7.9% in Q2 and 6.1% in Q1. Li Xiaochao, the spokesman of the National Bureau of Statistics said that "we can say with certainty that achieving 8% GDP growth this year is completely assured. Without doubt". He added that "according to my understanding, our policy won't change at the moment".
• Chen Daofu, an economist with the DRC think tank said that "maintaining the appropriately loose thrust, we should use monetary, regulatory and exchange rate tools to implement structural fine-tuning".