Every morning we put out a report with the latest on global markets, companies, and economic data. In focus today; GS, STT, JNJ, KO, HBC, BMW, UCG, RIO, FMG
Morning Market Update
- US: Dow Futures: 12695.00 (0.37%), S&P 500 Futures: 1353.10 (0.42%), NASDAQ Futures: 2585.50 (0.54%)
- Europe: CAC: 3193.19 (0.42%), DAX: 6594.56 (0.44%), FTSE: 5641.02 (-0.38%)
- Asia-Pacific: Australia: 4140.80 (0.87%), China: 2161.19 (0.61%), Hong Kong: 19455.33 (1.72%), India: 5192.85 (-0.08%), Japan: 8755.00 (0.35%).
- Metals: Gold: 1588.50 (-0.19%), Silver: 27.28 (-0.17%), Copper: 3.49 (0.01%)
- Energy: Crude Oil: 88.67 (0.27%), Natural Gas: 2.82 (0.64%)
- Commodities: Corn: 7.76 (0.55%), Soya Bean: 15.86 (-0.25%), Wheat: 8.95 (-0.31%)
- Currency: EUR/USD: 1.2281 (0.08%), GBP/USD: 1.5620 (-0.10%), USD/JPY: 79.1200 (0.33%)
- 10 year US Treasury: 1.486% (0.013)
Financial and Economic News Update
U.S. stock-index futures trading higher: U.S. stock index futures are pointing to a higher open on Tuesday following a slew of better than expected corporate earnings reports. U.S. consumer prices was also little changed in June, providing some scope for the Federal Reserve to ease monetary policy. Data from the Labor Department showed that the consumer price index was unchanged last month on a seasonally adjusted basis, in line with economists’ expectations. The Dow futures, the S&P futures and the NASDAQ future are all trading close to half a percent higher.
European markets mixed: European markets are trading mixed ahead of Federal Reserve Chairman Ben S. Bernanke’s two-day testimony before the Congress. The German DAX (INDEXDB:DAX) was trading up 0.4 percent at 6594.56, the FTSE 100 (INDEXFTSE:UKX) declined 0.4 percent to 5641.02, and the CAC 40 (INDEXEURO:PX1) rose 0.4 percent to 3193.19. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.60 percent.
Asian markets end higher: Asian markets closed higher on Tuesday amid investor optimism that weak U.S. retail sales and a lower that expected global growth forecast from the International Monetary Fund, will spur the Fed to provide further stimulus. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) rose 0.4 percent to 8,755.00, after the finance ministry hinted at the possibility of intervention in the currency market. The HANG SENG INDEX (INDEXHANGSENG:HSI) gained 1.8 percent, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed at 2,161.2. The S&P/ASX 200 (INDEXASX:XJO) index climbed 35.7 points to 4,140.8, led by the big banks. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index rose 0.01 percent to 17,105.30 points.
Stocks in Focus
- Goldman Sachs Group, Inc. (NYSE:GS) posted second quarter earnings, excluding certain items, of $1.78 per share, on revenue of $6.63 billion that easily beat the average analysts’ estimate of earnings of $1.12 per share on revenue of $6.41 billion.
- The Coca-Cola Company (NYSE:KO) reported second quarter earnings, excluding one-time items, of $1.21 per share that beat analysts’ expectations of $1.19 a share. Revenue for the quarter stood at $13.09 billion that also managed to better estimates of $12.98 billion.
- Johnson & Johnson (NYSE:JNJ) posted second quarter earnings per share of $1.30. Analysts had expected earnings of $1.29 per share. Revenue came in at $16.50 billion that fell short of analysts’ estimates of $16.69 billion.
- A U.S. Senate report has accused banking giant, HSBC Holdings plc (NYSE:HBC) (LON:HSBA) (HKG:0005), of failing to prevent billions of dollars worth of money transfers, that investigators believe were used to finance various terror and drug trafficking activities
- Microsoft Corporation (NASDAQ:MSFT) will face a European Union antitrust probe into allegations that it failed to take sufficient measures to open up the market for Internet browsers, under terms of a previous settlement with the regulators.
- State Street Corporation (NYSE:STT) reported a 4 percent decline in second-quarter profit to $480 million, or 98 cents a share, from $502 million, or $1.00 a share, in the same period last year. Revenue fell 3 percent to $2.42 billion from $2.49 billion. Separately, the Boston-based trust bank has agreed to buy Goldman Sachs Group, Inc. (NYSE:GS)‘s hedge-fund administration business for $550 million.
- Toy maker, Mattel, Inc. (NASDAQ:MAT), reported second-quarter profit of 28 cents a share, topping the average analyst estimate by 7 cents. Sales slipped 0.3 percent to $1.16 billion, slightly above analysts’ forecasts.
- Fertilizer producer, Mosaic Co (NYSE:MOS), posted fourth-quarter earnings that beat analysts’ estimates, and also doubled its quarterly dividend to 25 cents per share.
- Regional bank, Comerica Incorporated (NYSE:CMA), reported a 49 percent jump in second quarter profit to $142 million, or 73 cents per share, from $95 million, or 53 cents per share, a year earlier, amid an increase in commercial loans.
- Trucking and transportation company, J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) posted second quarter profit that Wall Street estimates while overall revenue growth was slightly less than expected.
- Thermal imaging products maker, Flir Systems, Inc. (NASDAQ:FLIR), said second quarter earnings and revenue will miss Street estimates. The company also lowered its financial guidance for the full year 2012. Analysts at Benchmark Co. have cut the share price target from $25 to $18.
- Target Corporation (NYSE:TGT) has been downgraded to “neutral” from “buy” by analysts at Citi, who have cut the target price to $68 from $69.
- Home improvement retailers, Lowe’s Companies, Inc. (NYSE:LOW) and The Home Depot, Inc. (NYSE:HD), were both lowered to “neutral” from “buy” by analysts at Janney Capital.
- Analysts at JPMorgan Chase have cut heavy equipment maker, Deere & Company (NYSE:DE) to “neutral” from “overweight.”
- French telecom equipment supplier, Alcatel Lucent SA (NYSE:ALU) (EPA:ALU) said it will miss its 2012 profit target after losing 40 million euros ($49 million) in the second quarter due to a dip in demand for phone gear.
- British building supplies group Wolseley plc (LON:WOS) is planning to sell its struggling French division as part of a restructuring plan to dispose off underperforming businesses.
- Europe’s biggest discount airline, Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA), tabled a 694 million euro ($854 million) bid for Irish rival, Aer Lingus Group Plc.
- Samsung Electronics has agreed to buy the mobile-technology business of UK-based chipmaker, CSR plc (LON:CSR), for $310 million in cash.
- Volkswagen AG (ETR:VOW) (FRA:VOW), Bayerische Motoren Werke AG (ETR:BMW) (FRA:BMW) and Daimler AG (ETR:DAI) (FRA:DAI) gained in trade today after a report from the European Automobile Manufacturers’ Association showed German car sales rose in the first half of 2012.
- Moody’s Investors Service downgraded the credit ratings of Italian banks, Intesa Sanpaolo SpA (BIT:ISP) and Unicredit SpA (BIT:UCG).
- French oil-services company, Technip (EPA:TEC) jumped 2 percent after it was awarded a contract by Marathon Oil Norge AS for ongoing expansion of sub-sea drill centers in the Alvheim area in the North Sea.
- Spanish utilities, Iberdrola SA (MCE:IBE) and Gas Natural SDG SA (MCE:GAS) jumped more than 2 percent after Morgan Stanley upgraded both the stocks. Iberdrola SA was lifted to “overweight” from “equal-weight”, while Gas Natural SDG SA was upgraded to “equal-weight” from “underweight.”
- German exchange operator Deutsche Boerse AG (ETR:DB1) (FRA:DB1) dropped 0.8 percent after analysts at Commerzbank AG and DZ Bank AG cut the share-price target.
- British security group G4S plc (LON:GFS) was downgraded to “neutral” from “buy” by analysts at Bank of America Merrill Lynch, following its recent announcement that it expects to incur a loss of between 35 million pounds ($54.5 million) and 50 million pounds ($77 million) in its London Olympic Games contract.
- Rio Tinto plc (NYSE:RIO) (LON:RIO) (ASX:RIO) reported flat second quarter iron ore production from a year ago; while sales fell marginally short of output. The global mining giant said that it was confident of achieving a rate of 283 million tonnes a year by the end of 2013, despite concerns about a slump in Chinese demand.
- Fortescue Metals Group Limited (ASX:FMG), Australia’s third-largest iron ore miner, is planning to raise as much as $1 billion, after expansion costs jumped 7 percent. The company, however, reported better than expected iron ore export figures for the June quarter.
- Thai energy company PTT Exploration and Production is all set to complete a $1.9 billion takeover of Cove Energy PLC (LON:COVE) after Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (LON:RDSA) dropped out of the race to acquire the company.
- Japanese telecommunications company, Softbank Corp (TYO:9984), ended 1 percent higher after Goldman Sachs raised its target price from 3,000 yen to 3,550 yen, and also lifted its fiscal 2013-2015 operating profit forecasts.
- Chinese insurers, China Life Insurance Company Ltd. (ADR) (NYSE:LFC) (HKG:2628) (SHA:601628) and China Pacific Insurance (Group) Co., Ltd (HKG:2601) (SHA:601601) reported strong June premium growth numbers. China Life ended 3.6 percent higher in Hong Kong, while China Pacific rose 3.7 percent in Hong Kong trading.
- Japanese utilities, Tokyo Electric Power Co Incorporated (TYO:9501) and Kansai Electric Power Co Inc (TYO:9503), plunged in trade today after the business daily, Nikkei, reported that the government is planning to cap its proposed electricity-rate increase.
- Chinese railway-construction companies, China Railway Group Limited (HKG:0390) (SHA:601390) and China Railway Construction Corp Limited (HKG:1186) (SHA:601186), ended significantly higher in Hong Kong after Bloomberg News reported that Beijing may increase investments in railway infrastructure in the second half of the year.
Economic Calendar for Tuesday, July 17, 2012:
07:45 A.M. ET: ICSC-Goldman Store Sales (Week ending Saturday, July 14, 2012)
08:30 A.M. ET: Consumer Price Index (MoM) (June)
08:30 A.M. ET: Consumer Price Index (YoY) (June)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (MoM) (June)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (YoY) (June)
08:55 A.M. ET: Redbook (Week ending Saturday, July 14, 2012)
09:00 A.M. ET: Net Long-Term TIC Flows (May)
09:00 A.M. ET: Total Net TIC Flows (May)
09:15 A.M. ET: Industrial Production (MoM) (June)
09:15 A.M. ET: Capacity Utilization (June)
10:00 A.M. ET: NAHB Housing Market Index (July)
10:00 A.M. ET: Federal Reserve Chairman Ben Bernanke speaks.
11:30 A.M. ET: 4-Week Bill Auction