New York:
May 23 21:51 | London:
May 24 2:51 | Tokyo:
May 24 10:51
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US Market Update TRADETHENEWS.COM STAFF
Impending China GDP Data Drives Flight to Safety
DJIA -65 S&P 500 -14 Nasdaq -40
Economic Data
- (IE) Ireland Q1 GDP Q/Q: -1.1% v -0.4%e; Y/Y: 1.2% v 2.8% prior
- (IE) Ireland June CPI M/M: -0.2% v 0.0% prior; Y/Y: 1.7% v 1.8% prior
- (ZA) South Africa May Manufacturing Production M/M: 2.7% v 0.2%e; Y/Y: 4.2% v 0.8%e
- (US) Jun Import Price Index M/M: -2.7% v -1.8%e; Y/Y: -2.6% v -1.5%e
- (US) Initial Jobless Claims: 350K v 370Ke; Continuing Claims: 3.304M v 3.30Me
- (CA) Canada May New Housing Price Index M/M: 0.3% v 0.2%e; Y/Y: 2.4% v 2.3%e
- (US) Weekly EIA Natural Gas Inventories
- European equity markets declined sharply overnight, following another round of central bank action in Asia. Commentators widely discussed the big decline in the use of the ECB's deposit facility, which pushed out to lows not seen since late December and drew laudatory comments from ECB members. Some questioned whether the data indicate that the extra liquidity is really finding its way to the real economy or not. All in all, the focus continues to be on the China GDP figures due later tonight. In the US session the weekly initial jobless claims fell to their lowest level since March 2008, although one analyst pointed out that continuing claims of 350K are the also same level seen back in March of 2008. In addition, major job cuts were announced by French firms Peugeot and Sanofi, suggesting Europe is far from recovery. The big US Treasury auction yesterday afternoon highlighted the continuing flight to safety, with the yield on the benchmark 10-year UST closing below 1.5% for only the second time ever; note that the 10-year UST is yielding 1.48% this morning, while the yield on the 10-year bund is 1.25% or so, below yesterday's closing level. Meanwhile spot gold continues its slow glide lower, with the contract down a bit more than 1% this morning, around $1,558. The euro also keeps declining, pushing out to fresh two-year lows against the majors. EUR/USD is trading below 1.2200.
- Shares of Chevron are up around 1% this morning following the firm's positive Q2 interim report issued yesterday. The firm's earnings forecast implied that profits would be a bit higher than expected thanks to to improved refining margins and some better downstream performance. Note that Exxon is down one percent in the early going. Gambling names are down sharply after the very weak Nevada casino revenue report for the month of May published this morning. CZR dropped as much as 7% before bouncing back a bit, while LVS, MGM and WYNN are all down 3% or so. Las Vegas strip revenue in May was $475M, -18.15% y/y.
- In earnings news, supermarket chain Supervalu is down a whopping 45% or so this morning after the firm disclosed disastrous profits for Q1 and suspended its dividend this morning. The firm warned that competitive price pressures are seriously impacting the business and said it would undertake a complete cost-cutting and strategic realignment to deal with the issues. Insurance name Progressive is down 4% after missing on the bottom line and reporting a big increase in its combined ratio. Marriott's Q2 numbers and Q3/FY12 earnings guidance was pretty solid. However, the firm cut its REVPAR outlook for outside of the US, spooking investors. MAR is down 4%.
Looking Ahead
- 13:00 (US) Treasury to sell $13B in 30-Year Bonds Reopening
- 14:00 (US) Monthly Budget Statement
- 15:40 (US) Fed's Williams Speaks in Portland, Oregon
- 22:00 (CN) China Q2 Real GDP Q/Q: 1.7%e v 1.8% prior; Y/Y: 7.8%e v 8.1% prior; Real GDP YTD: 7.9%e v 8.1% prior
- 22:00 (CN) China Jun Industrial Production Y/Y: 9.9%e v 9.6% prior; IP YTD: 10.55e v 10.7% prior
- 22:00 (CN) China Jun YTD Fixed Urban Assets Y/Y: 20.0%e v 20.1% prior
- 22:00 (CN) China Jun Retail Sales Y/Y: 13.4%e v 13.8% prior; Retail Sales YTD: 14.45e v 14.5% prior
Economic Data
- (IE) Ireland Q1 GDP Q/Q: -1.1% v -0.4%e; Y/Y: 1.2% v 2.8% prior
- (IE) Ireland June CPI M/M: -0.2% v 0.0% prior; Y/Y: 1.7% v 1.8% prior
- (ZA) South Africa May Manufacturing Production M/M: 2.7% v 0.2%e; Y/Y: 4.2% v 0.8%e
- (US) Jun Import Price Index M/M: -2.7% v -1.8%e; Y/Y: -2.6% v -1.5%e
- (US) Initial Jobless Claims: 350K v 370Ke; Continuing Claims: 3.304M v 3.30Me
- (CA) Canada May New Housing Price Index M/M: 0.3% v 0.2%e; Y/Y: 2.4% v 2.3%e
- (US) Weekly EIA Natural Gas Inventories
- European equity markets declined sharply overnight, following another round of central bank action in Asia. Commentators widely discussed the big decline in the use of the ECB's deposit facility, which pushed out to lows not seen since late December and drew laudatory comments from ECB members. Some questioned whether the data indicate that the extra liquidity is really finding its way to the real economy or not. All in all, the focus continues to be on the China GDP figures due later tonight. In the US session the weekly initial jobless claims fell to their lowest level since March 2008, although one analyst pointed out that continuing claims of 350K are the also same level seen back in March of 2008. In addition, major job cuts were announced by French firms Peugeot and Sanofi, suggesting Europe is far from recovery. The big US Treasury auction yesterday afternoon highlighted the continuing flight to safety, with the yield on the benchmark 10-year UST closing below 1.5% for only the second time ever; note that the 10-year UST is yielding 1.48% this morning, while the yield on the 10-year bund is 1.25% or so, below yesterday's closing level. Meanwhile spot gold continues its slow glide lower, with the contract down a bit more than 1% this morning, around $1,558. The euro also keeps declining, pushing out to fresh two-year lows against the majors. EUR/USD is trading below 1.2200.
- Shares of Chevron are up around 1% this morning following the firm's positive Q2 interim report issued yesterday. The firm's earnings forecast implied that profits would be a bit higher than expected thanks to to improved refining margins and some better downstream performance. Note that Exxon is down one percent in the early going. Gambling names are down sharply after the very weak Nevada casino revenue report for the month of May published this morning. CZR dropped as much as 7% before bouncing back a bit, while LVS, MGM and WYNN are all down 3% or so. Las Vegas strip revenue in May was $475M, -18.15% y/y.
- In earnings news, supermarket chain Supervalu is down a whopping 45% or so this morning after the firm disclosed disastrous profits for Q1 and suspended its dividend this morning. The firm warned that competitive price pressures are seriously impacting the business and said it would undertake a complete cost-cutting and strategic realignment to deal with the issues. Insurance name Progressive is down 4% after missing on the bottom line and reporting a big increase in its combined ratio. Marriott's Q2 numbers and Q3/FY12 earnings guidance was pretty solid. However, the firm cut its REVPAR outlook for outside of the US, spooking investors. MAR is down 4%.
Looking Ahead
- 13:00 (US) Treasury to sell $13B in 30-Year Bonds Reopening
- 14:00 (US) Monthly Budget Statement
- 15:40 (US) Fed's Williams Speaks in Portland, Oregon
- 22:00 (CN) China Q2 Real GDP Q/Q: 1.7%e v 1.8% prior; Y/Y: 7.8%e v 8.1% prior; Real GDP YTD: 7.9%e v 8.1% prior
- 22:00 (CN) China Jun Industrial Production Y/Y: 9.9%e v 9.6% prior; IP YTD: 10.55e v 10.7% prior
- 22:00 (CN) China Jun YTD Fixed Urban Assets Y/Y: 20.0%e v 20.1% prior
- 22:00 (CN) China Jun Retail Sales Y/Y: 13.4%e v 13.8% prior; Retail Sales YTD: 14.45e v 14.5% prior
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