TradeTheNews.com US Market Update: Equities Remain Flatlined Ahead of Fed and ECB
Tuesday, July 31, 2012
TradeTheNews.com US Market Update: Equities Remain Flatlined Ahead of Fed and ECB
DJIA flat S&P 500 -1 Nasdaq +9
***Economic Data*** - (ES) Spain Jun YTD Budget Balance: -€43.1B v -€36.4B prior - (US) ICSC/GS weekly chain store sales w/e Jul 28th: -1.7% w/w; +1.8% y/y - (PL) Poland July Central Bank (NBP) Inflation Expectations: 3.5% v 4.1%e - (ZA) South Africa Jun Trade Balance (ZAR): -5.7B v -5.0Be - (US) July NAPM-Milwaukee: 46.7 v 60.2 prior - (US) Q2 Employment Cost Index: 0.5% v 0.5%e - (US) Jun Personal Income: 0.5% v 0.4%e; Personal Spending: 0.0% v 0.1%e - (US) Jun PCE Deflator M/M: 0.1% V 0.0%e; Y/Y: 1.5% V 1.7%e - (US) Jun PCE Core M/M: 0.2% V 0.2%e; Y/Y: 1.8% V 1.8%e - (CA) Canada May Gross Domestic Product M/M: 0.1% V 0.2%e; Y/Y: 2.4% V 2.6%e - (CA) Canada Jun Industrial Product Price M/M:-0.3% V -0.1%e; Raw Materials Price Index M/M: -4.0% V -3.0%e - (BR) Brazil Jun Central Govt Budget (BRL): 1.3B v 4.0Be - (US) Redbook Retail Sales w/e Jul 28th: +1.1% y/y; Jul MTD: +1.6% y/y Jul MTD: -1.4% m/m - (EU) ECB Weekly Forex Reserves w/e July 27th: €246.7B v €242.9B prior - (CL) Chile Jun Unemployment Rate: 6.6% v 6.8%e - (US) May S&P/ CaseShiller 20 City M/M: 0.91% v 0.40%e; Y/Y: -0.66% v -1.40%e; Home Price Index: 138.96 v 137.55e - (US) July Chicago Purchasing Manager: 53.7 v 52.5e - (US) July Consumer Confidence: 65.9 v 61.5e - (BR) Brazil Jun Primary Budget Balance (BRL): 2.8B v 6.8Be; Nominal Budget Balance: -13.3B v -16.0B prior; Net Debt to GDP: % v 35.0%e
- US indices are mostly flat again this morning after a tepid day yesterday as traders continue to sit tight ahead of the Fed and ECB meetings later this week. There was a raft of US data out before and after the open of trading, although it is not having much of an impact. The June PCE report confirmed that consumer spending is sustaining a very sluggish upward trend, while the July consumer confidence reading rose higher from June, topping expectations. The July Chicago PMI data ticked higher on a m/m basis for its first gain in three months, reinforcing expectations for a better showing in the ISM manufacturing data tomorrow. The May S&P/Case-Shiller report is the latest housing industry data set to suggest incremental improvement in US housing.
- As the firm warned back in early July, Seagate's Q4 revenue was below expectations, and on the call the firm offered subpar guidance for Q1. Executives blamed slowing economic growth and poor PC sales from the shift to tablets and smartphones, in addition to a supplier issue. Shares of STX are down 4.6%.
- Anadarko reported a big loss in its Q2, thanks to a one-time impairment charge stemming from the steep declines in the price of natural gas. Before the charge, the firm beat analysts' expectations, and it also recording impressive gains in sales volumes and production. Marathon Petroleum's results were firmly in line. Shares of both MRO and APC are down 1% or so.
- Archer Daniels Midland widely missed consensus expectations due to the impact of a big reversal in the firm's ethanol margins and rising corn prices. Executives said that ethanol margins to turn positive in the current quarter. ADM is down nearly 4%.
- Humana's had a terrible Q2 showing thanks to an unexpected 18% jump in new Medicare Advantage enrollments. The firm also slashed its FY12 guidance due to the issue. Note that Humana has the biggest exposure to Medicare in the industry. HUM is -12%. Aetna's profits were down on a y/y basis, even as the firm's Q2 earnings beat expectations. The firm did not appear to be impacted by the Medicare related problems at Humana and only had positive things to say about the program's impact on the company. AET is flat on the day.
- Pfizer's top and bottom lines beat expectations in its Q2 report, although the firm's revenue was lower on a y/y basis. Executives blamed sharp competition from generics and the loss of the Lipitor patent for the softer revenue, although the company did reaffirm its FY12 outlook. PFE is up 2%
- The NY morning was choppy for the EUR/USD in thin, month-end trading. EUR/USD tested back above the 1.23 handle after French President Hollande reiterated the view that would do everything to implement EU Leader Summit decisions and strengthen the Euro Zone. However the pair plunged 40 pips after the German Finance Ministry stated that there were no secret discussions on ESM banking license.
**Looking Ahead*** - 11:00 (US) Fed to buy $4.25-5.00B in Notes - 11:30 (US) Treasury to sell $35B in 4-Week Bills - 12:00 (CO) Colombia Jun Urban Unemployment Rate: 11.5%e v 11.9% prior - 15:00 (US) Tsy Sec Geithner - 15:00 (AR) Argentina Jun Construction Activity M/M: No est v -0.9% prior; Y/Y: No est v -5.4% prior - 16:30 (US) Weekly API Crude Inventories - 21:00 (CN) China July Manufacturing PMI: 5054e v 50.2 prior
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