New York:
May 19 13:08 | London:
May 19 18:08 | Tokyo:
May 20 2:08
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US Market Update TRADETHENEWS.COM STAFF
Markets Read Deeply into ECB Draghi's Remarks, Equities Head Higher
DJIA +173 S&P 500 +14 Nasdaq +30
Economic Data
- (RU) Russia Gold & Forex Reserve w/e July 20th: $507.7B v $505.3B prior
- (US) Jun Durable Goods Orders: 1.6% v 0.3%e; Durables Ex Transportation: -1.1% v +0.1%e
- (US) Initial Jobless Claims: 353K v 380Ke; Continuing Claims: 3.287M v 3.30Me
- (DE) Germany July CPI North Rhine Westphalia M/M: + 0.4% v -0.1% prior; Y/Y: 1.3 v 1.3% prior
- (MX) Mexico Jun Preliminary Trade Balance: +$601.6M v -$100Me
- (BR) Brazil Jun Total Outstanding Loans (BRL): 2.167T v 2.136T prior
- (US) Jun Pending Home Sales M/M: -1.4% v +0.3%e; Y/Y: 8.4% v 12.1%e
- European equity markets surged and US futures rose this morning after comments by ECB President Draghi, who stated that dealing with surging yields on the debt of some euro zone governments is "part of the mandate" of the ECB. The comments were taken as evidence that the ECB is moving closer to either reactivating its SMP bond buying program or otherwise working to cap yields. Some analysts point out that Draghi has said very similar things in the past and that today's comments are nothing new, however yields on 10-year Spanish debt have fallen to 6.8% from well above 7.2% earlier in the morning and Italian 10-year yields are close to dipping below 6%. US data out this morning has been weak, with June pending home sales dropping 1.4% against expectations for a slight gain, although the NAR seemed to indicate the decline was due more to lower inventories as demand has held up nicely, and called for banks to release more foreclosed homes onto the market. The headline June durable goods orders looked pretty good, however ex transport it was a disappointment. EUR/USD rallied above the 1.23 handle but stalled at that level.
- Visa topped consensus expectations in its Q3 report, raised its FY12 outlook and beefed up its share buyback program, all of which helped send shares of V up 4%+ in early cash trading. Shares of MA and AXP have also benefitted, with both up 3% or more on the news.
- Dow Chemical was a big miss, with both earnings and revenue subpar. Dow saw sales declines in all its major geographical markets and warned that it saw marked deterioration in global economic activity throughout the second quarter. In addition, the firm said there would be no improvement in its earnings in Q3. 3M met expectations and reaffirmed its outlook. MMM was up as much as 3% in the early going before dipping lower, while DOW is at its lows of -4%. Fertilizer name Potash is in the red after offering very weak Q3 guidance, due to lower production on scheduled maintenance downtime. Bunge is up 3% thanks to optimistic comments about the rest of the year, despite some slightly worse-than-expected result.
- In tech earnings, Western Digital crushed estimates in its Q4 report thanks to good demand and excellent margins. Online games powerhouse Zynga widely missed expectations and then slashed its FY12 guidance in its Q2 report. The firm said its lower outlook to reflected delays in launching new games and a faster decline in existing web games due in part to a more challenging environment on Facebook. This drove a 40% decline in ZNGA and also raised eyebrows about Facebook, which is scheduled to report quarterly results for the first time as a publically traded firm today after the close. FB is down 5%.
- Consumer names Colgate and Dr. Pepper Snapple were right in line and reiterated their forward-looking outlooks. Las Vegas Sands is down nearly 6% after missing top- and bottom-line expectations due to slowing revenue from the firm's Asian operations. MetroPCS is up more than 30% thanks to stunning earnings performance, grounded in very good margin gains. Sprint is up nearly 15% on better guidance, despite continued dire-looking customer additions.
Looking Ahead
- (GR) EU's Barroso to meet Greek PM Samaras in Athens
- 11:00 (US) July Kansas City Fed Manufacturing Activity: 4e v 3 prior
- 11:00 (US) Fed to purchase $1.50-2.00B Notes
- 13:00 (US) Treasury to sell $29B in 7-Year Notes
- 19:30 (JP) Japan Jun National CPI Y/Y: No est v 0.2% prior; Ex-food & Energy Y/Y: No est v -0.6% prior
Economic Data
- (RU) Russia Gold & Forex Reserve w/e July 20th: $507.7B v $505.3B prior
- (US) Jun Durable Goods Orders: 1.6% v 0.3%e; Durables Ex Transportation: -1.1% v +0.1%e
- (US) Initial Jobless Claims: 353K v 380Ke; Continuing Claims: 3.287M v 3.30Me
- (DE) Germany July CPI North Rhine Westphalia M/M: + 0.4% v -0.1% prior; Y/Y: 1.3 v 1.3% prior
- (MX) Mexico Jun Preliminary Trade Balance: +$601.6M v -$100Me
- (BR) Brazil Jun Total Outstanding Loans (BRL): 2.167T v 2.136T prior
- (US) Jun Pending Home Sales M/M: -1.4% v +0.3%e; Y/Y: 8.4% v 12.1%e
- European equity markets surged and US futures rose this morning after comments by ECB President Draghi, who stated that dealing with surging yields on the debt of some euro zone governments is "part of the mandate" of the ECB. The comments were taken as evidence that the ECB is moving closer to either reactivating its SMP bond buying program or otherwise working to cap yields. Some analysts point out that Draghi has said very similar things in the past and that today's comments are nothing new, however yields on 10-year Spanish debt have fallen to 6.8% from well above 7.2% earlier in the morning and Italian 10-year yields are close to dipping below 6%. US data out this morning has been weak, with June pending home sales dropping 1.4% against expectations for a slight gain, although the NAR seemed to indicate the decline was due more to lower inventories as demand has held up nicely, and called for banks to release more foreclosed homes onto the market. The headline June durable goods orders looked pretty good, however ex transport it was a disappointment. EUR/USD rallied above the 1.23 handle but stalled at that level.
- Visa topped consensus expectations in its Q3 report, raised its FY12 outlook and beefed up its share buyback program, all of which helped send shares of V up 4%+ in early cash trading. Shares of MA and AXP have also benefitted, with both up 3% or more on the news.
- Dow Chemical was a big miss, with both earnings and revenue subpar. Dow saw sales declines in all its major geographical markets and warned that it saw marked deterioration in global economic activity throughout the second quarter. In addition, the firm said there would be no improvement in its earnings in Q3. 3M met expectations and reaffirmed its outlook. MMM was up as much as 3% in the early going before dipping lower, while DOW is at its lows of -4%. Fertilizer name Potash is in the red after offering very weak Q3 guidance, due to lower production on scheduled maintenance downtime. Bunge is up 3% thanks to optimistic comments about the rest of the year, despite some slightly worse-than-expected result.
- In tech earnings, Western Digital crushed estimates in its Q4 report thanks to good demand and excellent margins. Online games powerhouse Zynga widely missed expectations and then slashed its FY12 guidance in its Q2 report. The firm said its lower outlook to reflected delays in launching new games and a faster decline in existing web games due in part to a more challenging environment on Facebook. This drove a 40% decline in ZNGA and also raised eyebrows about Facebook, which is scheduled to report quarterly results for the first time as a publically traded firm today after the close. FB is down 5%.
- Consumer names Colgate and Dr. Pepper Snapple were right in line and reiterated their forward-looking outlooks. Las Vegas Sands is down nearly 6% after missing top- and bottom-line expectations due to slowing revenue from the firm's Asian operations. MetroPCS is up more than 30% thanks to stunning earnings performance, grounded in very good margin gains. Sprint is up nearly 15% on better guidance, despite continued dire-looking customer additions.
Looking Ahead
- (GR) EU's Barroso to meet Greek PM Samaras in Athens
- 11:00 (US) July Kansas City Fed Manufacturing Activity: 4e v 3 prior
- 11:00 (US) Fed to purchase $1.50-2.00B Notes
- 13:00 (US) Treasury to sell $29B in 7-Year Notes
- 19:30 (JP) Japan Jun National CPI Y/Y: No est v 0.2% prior; Ex-food & Energy Y/Y: No est v -0.6% prior
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