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Possible Fed Nominees Include Yellen, Cohn, Warsh, Powell

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Race for Fed chair heats up, it’s PMI day, and the EU hits Amazon with tax billHere are some of the things people in markets are talking about today.


Advisors to President Donald Trump have given him a final list of candidates to take over as Federal Reserve chair when Janet Yellen’s term ends early next year. Former Fed Governor Kevin Warsh – who has drawn fire from both the left and right – is among the leading candidates. Jeffrey Gundlach, the head of DoubleLine Capital, said that Federal Reserve Bank of Minneapolis President Neel Kashkari will get the job, which would no doubt catch markets off guard. 

PMI day

A composite Purchasing Managers Index for the euro area climbed to 56.7 in September, the strongest level in four months, according to IHS Markit. Services PMI for the region reached 55.8 as new orders rose at the fastest pace in more than six years. The service sector was also a bright spot in U.K. PMI data, coming in at 53.6 for the month after a disappointing construction print earlier in the week. Markit publishes services and composite PMI data for the U.S. at 9:45 a.m. Eastern Time.

Back taxes Inc. was hit by a European Union order this morning to pay 250 million euros ($294 million) plus interest in back taxes to Luxembourg. The company joins the list of multinationals to fall foul of EU Competition Commissioner Margrethe Vestager, who last year served Apple Inc. with a record tax bill. Ireland was rebuked by the EU today for failing to collect that sum, which could be as much as 15 billion euros. 

Markets mixed

While it was ‘another day, another record high’ for U.S. stocks yesterday, the momentum has not carried across the world. In Europe, the Stoxx 600 Index was down 0.2 percent at 5:50 a.m. as Spanish markets again led the losses, while S&P 500 futures also slipped. The 10-year Treasury yield was at 2.318 percent and gold was higher. Overnight, the MSCI Asia Pacific Index gained 0.3 percent while Japan’s Topix index closed unchanged.

Coming up...

The 6:30 a.m. Bloomberg TV interview with Vice Chair Stanley Fisher will be worth keeping an eye on as he prepares to leave the institution. At 3:15 p.m. Yellen speaks at an event at the Federal Reserve Bank of St. Louis. In data today, as well as PMIs, mortgage application figures are released at 7:00 a.m. and the ADP employment change at 8:15 a.m.

What we've been reading

This is what's caught our eye over the last 24 hours.

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