New York:
May 20 0:58 | London:
May 20 5:58 | Tokyo:
May 20 13:58
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US Market Update TRADETHENEWS.COM STAFF
Mixed Earnings Reports Hold Back Indices
Economic Data
- (GR) Greece's Largest Unions ADEDY and GSEE hold strikes
- (FI) Finland presents 3rd supplementary budget to Parliament
- (RU) Russia Gold & Forex Reserve w/e Oct 12th: $526.0B v $528.0B prior
- (ES) Spain Q3 House Price Index Q/Q : -2.4% v -2.8%e; Y/Y: -9.3% v -8.3% prior
- (TR) Turkey Central Bank leaves Benchmark Repo Rate unchanged at 5.75% (as expected) while cutting its Overnight Lending Rate by 50bps to 9.50% (also as expected)
- (CA) Canada Aug Wholesale Sales M/M: 0.5% v 0.2%e
- (US) Initial Jobless Claims: 388K v 365Ke; Continuing Claims: 3.252M v 3.275Me
- (BE) Belgium Oct Consumer Confidence: -17 v -14 prior
- (US) Commercial Paper outstanding w/e Oct 17th; -$21.2B v $10.2B prior
- (US) Oct Philadelphia Fed: 5.7 v 1.0e (highest since April)
- (US) Sept Leading Indicators: 0.6% v 0.2%e
- (US) EIA Natural Gas Inventories: +51 Bcf v +44-49 Bcf expected
- US equity indices are under pressure this morning after four consecutive positive sessions. Yesterday the S&P500 came within a few points of recent five-year highs. Data and earnings from the US have been supportive, although analysts are nervously parsing the mixed Chinese data. Recall that China's Q3 GDP reading fell to a three-and-a-half year low of +7.4%, while September industrial production rose for the first time in four months and September retail sales were also very good. The weekly claims data lacked the drama that accompanied last week's unusual numbers. Initial claims were up a bit, while the four-week average remains pretty steady. The headline Philly Fed index returned to positive territory for the first time since April with an eight-point bounce, reversing a series that had been a persistent source of worry over recent months.
- Telecom giant Verizon saw a solid increase in profits in its Q3, although they were only just in line with expectations. Following the switch to multi-device data connections and a rise in rates back in June, Verizon Wireless now reports average revenue per account (ARPA) instead of average revenue per user (ARPU); the new APRA figure saw a nice boost for the firm. Net adds were solid. Third quarter smartphone sales included 3.4M Android devices and 3.1M iPhones, 21% of which were iPhone 5s. Share of VZ are up 3%.
- Morgan Stanley reported very strong income and revenue totals for Q3, both of which widely beat expectations and grew substantially on a y/y basis. Note however that these numbers were greatly impacted by the big $2.3B DVA adjustment; before the adjustment, the firm had a steep loss in the quarter. Morgan Stanley's trading business improved thanks to a boost in client activity, while investment banking revenue was up more than 20% y/y. MS is down 1%, off its earlier -2% level. Earnings and revenue from American Express in Q3 were in line with expectations and barely grew over last year. The rate of cardmember spending growth has moderated , and the firm saw big declines in international card services income. AXP is -3%.
- Both Steel Dynamics and Nucor managed to just top their dismal guidance calls from September in Q3 quarterly reports this morning. Revenue at both firms was disappointing. The decline in profits at Steel Dynamics was especially dramatic, as the firm's net declined nearly 80% y/y, for the third consecutive quarter of greater-than 50% y/y profit contractions. Executives warned that volumes could fall further in Q4. Both NUE and STLD were in negative territory at the open and both have returned to positive territory in mid morning trade. Vale said its iron ore output fell slightly in Q3 from the year-ago period as prices declined to three-year lows. This comes after both Rio and BHP somewhat mixed Q3 production reports; note that BHP's iron ore production actually was a up a bit.
- Shares of Noble are in positive territory, up more than 3% this morning, despite the earnings and revenue misses seen in its Q3 report. This morning Transocean disclosed that it was getting rig contracts with significantly higher dayrates in a fleet status update report. On Noble's conference call, executives said that it is seeing higher dayrates as well and expects the shortage of rigs to send them even higher.
Looking Ahead
- 11:00 (EU) EU Leaders begin Two-Day Summit in Brussels
- 11:00 (US) Fed to Purchase $1.75-2.25B in Notes
- 11:00 (US) Treasury 2-year, 5-year and 7-year refunding announcement
- 13:00 (US) Treasury to sell $7.00B in 30-Year TIPS Reopening
- 17:00 (CL) Chile Central Bank Interest Rate Decision: Expected to leave the Nominal Overnight Rate Target unchanged at 5.00%
- 17:00 (CO) Colombia Retail Sales Y/Y: 1.5%e v 1.3% prior; Industrial Production Y/Y: 1.1% e v 1.5% prior
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