Charlie Munger: Invert And Use “Disconfirming Evidence”
Charlie Munger is considered to be one of the best investors and thinkers alive today. His thoughts and statements on investment research, investment psychology, and general rational behavior are often incredibly insightful. Anyone can learn something from this billionaire investor and philosopher. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More
- US: Dow Futures: 12942.30 (0.42%), S&P 500 Futures: 1367.82 (0.59%), NASDAQ Futures: 2910.56 (0.59%)
- Europe: CAC: 3259.74 (1.61%), DAX: 6641.72 (0.88%), FTSE: 5590.93 (0.32%)
- Asia-Pacific: Australia: 4209.80 (1.50%), China: 2128.77 (0.13%), Hong Kong: 19274.96 (1.98%), India: 5099.85 (1.13%), Japan: 8566.64 (1.44%).
- Metals: Gold: 1620.30 (0.32%), Silver: 27.50 (0.20%), Copper: 3.41 (0.28%)
- Energy: Crude Oil: 89.41 (0.02%), Natural Gas: 3.08 (-0.81%)
- Commodities: Corn: 7.84 (1.06%), Soya Bean: 15.89 (1.37%), Wheat: 9.09 (1.34%)
- Currency: EUR/USD: 1.2317 (0.28%), GBP/USD: 1.5722 (0.23%), USD/JPY: 78.3600 (0.18%)
- 10 year US Treasury: 1.482% (0.045)
Financial and Economic News Update
U.S. markets open higher: U.S. markets opened higher on Friday after economic growth slowed less than expected in the second quarter. Gross domestic product expanded at 1.5 percent during the second quarter, against consensus estimates of growth of 1.3 percent. First-quarter growth was also revised higher to 2.0 percent from the previously reported 1.9 percent. The Dow, the S&P 500 and NASDAQ are all trading close to half a percent higher.
European markets in the green: European markets are trading higher with the German DAX (INDEXDB:DAX) trading up 0.9 percent at 6641.72, the FTSE 100 (INDEXFTSE:UKX) gaining 0.3 percent to 5590.93, and the CAC 40 (INDEXEURO:PX1) jumping 1.3 percent higher to 3259.74. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 1 percent.
Asian markets end higher: Asian markets closed higher on Friday with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closing1.5 percent higher at 8,566.64. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed up 382 points at 19,275, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed up 0.1 percent on the day. The S&P/ASX 200 (INDEXASX:XJO) index rose nearly 62.1 points to 4,209.8. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index rose 1.2 percent to 16,839.19 points.
Stocks in Focus
· Chevron Corporation (NYSE:CVX) reported second quarter earnings that topped Street expectations, but revenue for the quarter came in below consensus estimates. Profit at its oil and gas production division dropped 18 percent, while refining business saw profit soar 80 percent.
· Merck & Co., Inc. (NYSE:MRK) posted second quarter earnings excluding special items of $1.05 per share, 4 cents above the average analysts’ estimate. Sales increased 1 percent to $12.31 billion, also topping estimates of $12.15 billion.
· Tech giant Apple Inc. (NASDAQ:AAPL) has agreed to acquire fingerprint-sensor chipmaker AuthenTec, Inc. (NASDAQ:AUTH) for $356 million.
· D.R. Horton, Inc. (NYSE:DHI) reported a big jump in third quarter profit to $787.8 million, or $2.22 per share, from $28.7 million, or 9 cents per share, a year earlier. Revenue increased 14 percent to $1.1 billion, while new orders increased for the fourth straight quarter, to 6,079 homes.
· Aon PLC (NYSE:AON), the world’s largest insurance broker, reported second quarter earnings excluding items of $1.02 per share on revenue of $2.81 billion. Analysts were expecting earnings of $1.01 per share, on revenue of $2.89 billion
· Coventry Health Care, Inc. (NYSE:CVH) posted second quarter earnings excluding items of 68 cents per share, 5 cents above the average analysts’ estimate. Revenue for the quarter increased 16 percent to $3.52 billion, and the health insurer reiterated its full-year earnings forecast.
· Detroit-based energy company DTE Energy Company (NYSE:DTE) said second-quarter profit fell 28 percent to $146 million, or 86 cents a share, from $202 million, or $1.19 a share, a year. Operating revenue fell 0.1 percent to $2.03 billion. The company also raised its quarterly dividend 5.5 percent to 62 cents.
· Helmerich & Payne, Inc. (NYSE:HP) reported third quarter adjusted profit of $1.37 per share, easily topping analysts expectations of $1.16 per share. Revenue increased 27 percent to $819.8 million, also beating Street estimates of $780.4 million.
· Money manager Legg Mason, Inc. (NYSE:LM) swung to a fiscal first-quarter loss of $9.5 million, or 7 cents per share, and said total assets under management fell to $631.8 billion from $643.3 billion as of March 31. Investors withdrew a total of $2.6 billion during the quarter.
· Newmont Mining Corp (NYSE:NEM) reported second quarter adjusted earnings of 59 cents per share on $2.2 billion in revenue. Analysts were expecting earnings of 93 cents per share on revenue of $2.52 billion. The world’s second largest gold producer also slashed its full-year production outlook.
· Weyerhaeuser Company (NYSE:WY) posted second quarter earnings excluding one time items of 9 cents a share on revenue of $1.79 billion. Analysts were expecting earnings excluding items of 10 cents a share on $1.75 billion in revenue.
- Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) reported better-than-expected first half profit of 4.23 billion pounds ($6.6 billion), and apologized for its role in the interbank lending scandal. The bank also said that the British Financial Services Authority has started a fresh investigation into allegations of insufficient disclosure of fees related to its capital raisings in 2008.
- EADS NV (EPA:EAD), parent company of European plane maker Airbus, posted better-than-expected second-quarter profit due to strong demand for its jetliners, and lifted its full-year earnings forecast.
- UK-listed diversified miner, Anglo American plc (LON:AAL) said first half profit dropped 38 percent to $3.7 billion amid falling commodity prices and rising production costs. Sales decreased 10 percent to $16.41 billion, compared with the same period a year before.
- French oil group, Total S.A. (ADR) (NYSE:TOT) (EPA:FP) said second quarter adjusted profit rose 2 percent to 2.86 billion euros, but oil and gas production during the quarter fell 2 percent amid poltical turmoil in the Middle-East and shutting down of its North Sea platform.
- Pay TV giant, British Sky Broadcasting Group plc (LON:BSY) has agreed to acquire international distribution company, Parthenon Media Group for an undisclosed amount.
- British education and publishing group Pearson PLC (ADR) (NYSE:PSO) (LON:PSON) reported a 10 percent fall in first half operating profit to £188 million, while revenue was up 6 percent to £2.6 billion.
- Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (LON:RDSA) fell 1 percent in London trading after analysts at Citigroup downgraded the European oil and gas industry to “underweight” from “neutral.”
- Unilever plc (ADR) (NYSE:UL) (LON:ULVR) slipped 1 percent after Societe Generale downgraded the stock to “sell” from “hold.”
- GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) was down in early morning London trading after analysts at Citigroup cut the European healthcare sector to “neutral” from “overweight.”
- Samsung Electronics said second-quarter profit jumped 48 percent to $5.9 billion, as rampant sales of its Galaxy S smartphone helped widen its lead over Apple Inc. (NASDAQ:AAPL).
- Democratic senator Charles Schumer has asked the U.S. government to block the $15.1 billion bid by China’s state oil producer Cnooc Limited (HKG:0883) for Canadian oil and gas company Nexen Inc. (USA) (NYSE:NXY) (TSE:NXY).
- Liquid-crystal display maker, LG Display Co Ltd. (ADR) (NYSE:LPL) posted wider-than-expected second quarter loss amid weak demand for television display panels and a hefty penalty to settle a U.S. price-rigging lawsuit.
- Japanese information technology company, Fujitsu Limited (TYO:6702) is reportedly in talks to sell its main semiconductor plant in northern Japan to chipmaker, Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) (TPE:2330).
- AIA Group Ltd (HKG:1299), Asia’s third-largest insurer, part owned by American International Group, Inc. (NYSE:AIG), reported a better than expected 10 percent rise in first-half net profit. Value of new businesses increased 28 percent to a record $512 million during the same period.
- Toshiba Corp (TYO:6502) ended 5 percent higher after the Nikkei business daily reported that that the electronics major is expected to double its quarterly operating profit to about 10 billion yen ($127.9 million).
- JFE Holdings, Inc. (TYO:5411), Japan’s second- largest steelmaker said net profit more than doubled in the fiscal first quarter, and forecast full-year earnings that was better than what analysts were expecting.
- ICICI Bank Limited (ADR) (NYSE:IBN) (NSE:ICICIBANK), India’s second-largest bank by assets, reported first-quarter earnings that beat the average analysts’ estimates, as bad loans decreased and lending operations became more profitable.
- Japanese chemical products company, Hitachi Chemical Co. raised its full-year profit forecast by 9.3 percent to 23.5 billion yen, topping analysts’ estimate of 20.9 billion yen.
Economic Calendar for Friday, July 27, 2012:
08:30 A.M. ET: Gross Domestic Product Annualized (Q2)
08:30 A.M. ET: Gross Domestic Purchases Price Index (Q2)
08:30 A.M. ET: Personal Consumption Expenditures Prices (QoQ) (Q2)
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (July)