US Market Update: Dow -13 S&P +1 NASDAQ -7.4

***Economic Data***

– (US) MBA Mortgage Applications w/e Jul 15th: +15.5% v -5.1% prior
– (SA) South Africa May Retail Sales Constant M/M: -4.7% v -1.0%e; Y/Y: 0.0% v 7.2%e
– (BR) Brazil July IBGE CPI IPCA-15 M/M: % v 0.2%e
– (PD) Poland Jun Core Inflation M/M: % v 0.2%e; Y/Y: % v2.5%e
– (CA) Canada May Wholesale Sales M/M: 1.9% v 0.1%e
– (BE) Belgium July Consumer Confidence: -4 v -3 prior
– (MX) Mexico May Retail Sales: 1.0% v 3.1%e
– (EU) Euro Zone July Advanced Consumer Confidence: -11.4 v -10.2e
– (US) Jun Existing Home Sales: 4.77M v 4.90Me
– (US) Weekly DOE energy inventories: Crude: -3.7M v -1.5Me; Gasoline: +750K v -250Ke; Distillate: +3.4M v +1Me; Utilization: 90.3% v 84.9% w/w

– Continuing uncertainty about the debt issues in the US and Europe are trumping strong earnings reports this morning. US equity futures gained before the open this morning, although stocks have struggled to stay out of negative territory in the first few hours of trading. In the US, sales of previously owned US homes unexpectedly fell to a seven-month low in June as cancellations of pending contracts surged, countering the positive housing data seen in yesterday’s June housing starts and building permits numbers. Note that the Senate Gang of Six deficit proposals appear not to be gaining much traction in the house; House Speaker Boehner’s office stated that the plan falls short in certain important areas. Spot gold has sustained yesterday afternoon’s step lower, trading around $1,590. WTI crude is near the top of its recent July range, trading above $98. Treasury prices are declining erasing yesterday’s gains: the long bond offers a yield of 4.25% while the 10-year has backed up 5 basis points to 2.92%.

– Tech stocks were right in focus this morning after Apple crushed expectations in its Q3 quarterly earnings report. All of Apple’s key metrics were stunningly good, with iPhone shipments up 142% y/y and iPad shipments up 183% y/y, both way ahead of consensus expectations. The company’s revenue is getting closer to $30B a quarter. Analysts have boosted their price targets to around $460-500 a share. Shares of AAPL are up 3%. Virtualization leader VMWare also handily beat consensus views and raised its FY11 guidance slightly. VMW is up 2%. Cult tech stock Riverbed met earnings expectations but revenue was a bit soft, due to lower sales in the EMEA region. Some bearish analyst commentary is hurting Riverbed as well, with RVBD down more than 20%. Semi name Altera reported Q2 revenues right in the middle of its prior guidance range and met profit targets, while its Q3 guidance was very strong. Altera said the quarter marks a return to sequential growth following a mild correction. Additionally, the company acquired two small private rivals, Aptimize and Zeus Technology. Yahoo’s Q2 results were in line, although the company warned that the key display ad segment saw weakness and will not meet long-term growth targets this year. Both ALTR and YHOO are down more than 5%.

– A number of key industrial names have reported better-than-expected results. United Technologies came in a bit above expectations and raised its earnings outlook. Textron’s profits were a slightly stronger than projected, and the firm also said it expects a significant pick-up in demand in the second half of the year. Rail name CSX topped estimates by a hair, and said volumes should remain strong through the rest of 2011. Johnson Controls had very strong revenues, with strong growth in the firm’s backlog led by demand overseas. Shares of CSX, JCI and UTX are in the red, while TXT is up more than 8%. American Airlines parent AMR Corp was an exception, with the Q2 loss bigger than analysts had expected. AMR also slightly reduced its FY11 mainline capacity growth forecast. Additionally, the company confirmed plans for sizable narrowbody orders from Boeing and Airbus, for a total of 460 planes.

– FX action reflected hopes that tomorrow’s EU summit may provide some sense of closure to the euro zone debt crisis. There has been growing optimism that the EU will finally find political consensus on a plan to prevent contagion spreading to Spain or Italy. EUR/USD was off its best levels and little changed from opening levels of 1.4180 in Asia. There was some concern that the China flash Manufacturing Index could dip below the pivotal 50 level.

***Looking Ahead***
– (BZ) Brazil Central Bank (COPOM) Interest Rate Decision: Expected to raise the SELIC Target by 25bps to 12.50%
– 18:15 (US) Fed’s Sack to speak to Money Marketeers in NY
– 22:30 (CH) China July HSBC Flash Manufacturing PMI: No est v 50.1 prior

Similar Posts:

Share
July 19th, 2011 in Forex News

Leave a comment

Your comment