In the news there are no reports or censuses being announced today so we will move right along to the stock market. The S&P 500 is up 0.27% while 10-year treasuries are down 2.63%. Oil is taking a hit as well, down 1.74%. The dollar holds strong at an increase of 0.50%
Today the dispute between Viacom and DirecTv was finally settled. DirecTv customers will now get 17 channels such as Comedy Central and MTV back.
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A downbeat round of economic data kept a lid on the market’s gains. The number of Americans filing for jobless benefits jumped to 386,000 last week, the Labor Department reported, more than expected by economists polled by Dow Jones Newswires. The prior week’s reading was revised higher but remained at the lowest level since 2008.
Factory activity in the Mid-Atlantic region contracted, albeit at a slower pace, for a third straight month in July, according to the Federal Reserve Bank of Philadelphia’s index of manufacturing activity. The Conference Board’s leading economic index fell further than forecast.
European markets were broadly higher, with the Stoxx Europe 600 rising 1.1% as strong earnings and Germany’s expected approval of the aid plan for Spanish banks buoyed sentiment. Asian markets rallied on the back of strength in the U.S. and in resource stocks, which were boosted by continued gains in oil prices. China’s Shanghai Composite rose 0.7%, Australia’s S&P ASX 200 ran up 2%, and Japan’s Nikkei Stock Average advanced 0.8%.
Crude-oil futures rose 3.1% to settle at $92.66. Gold futures gained 0.6% to finish at $1580.10. The dollar ticked higher against the euro but fell versus the yen.
Existing homes sales took a nosedive to $4.37 million from $4.62.
S&P 500 futures rose 4.75 points to 1372.00, NASDAQ futures rose 30 points to 2650.00 and Dow Jones Industrial Average futures rose 16 points to 12876.00.
Commodities were dealing with different crisis across the world. WTI crude futures rose on tensions in the Middle East. WTI was up $2.44 to $92.31 and gold futures rose $16.20 to $1587.00.
Corn and soybean futures continued their July climb, rising 11 and 39.20 cents respectively. 95% of the number 2 largest corn and soy state of Illinois was in what is considered a severe drought, up from 65% last week.
Morgan Stanley (MS) released weak earnings after reporting the lowest stock and bond trading revenue on Wall Street. Profit was $591 million and 29 cents a share Shares were trading at $13.37, down 62 cents or 4.43% on the day.
Nokia Corp. (NOK) also released a weak set of earnings due to its premier telephone handset missed sales expectations. Although earnings were weak, they did boast a healthy supply of cash.
J.M. Smucker, the jam company released earnings of 52 cents a share, an increase of 8%. Maybe people flock to jam based sandwiches in difficult economic times?
David Cornes holds a degree in economics from the University of Montana.
Mellanox Technologies posted quarterly earnings numbers that beat last year’s and analysts numbers. The Israeli semiconductor connectivity company posted a profit of 80 cents a share, 25 cents higher than expected and over double last year’s earnings. Revenue was $133.5 million, shooting the $128 million projection out of the water. EPS increased by 267% and sales grew 111%. Gross profit margins increased to 70.5%, higher than 68.9% at the same time last year.
MNLX remains optimistic about their guidance with Q3 sales estimates in the range of $150-155 million. Their growth is mostly based in Web 2.0, cloud, database and financial services sectors. It is nice to see that the European crisis in not negatively affecting every industry.
David Cornes holds a degree in economics from the University of Montana.
The Hang Seng climbed 1.7% with some help from the banks and a positive MBA report from the US. China Construction bank added 2.7% and the Industrial & Commercial Bank of China followed with 2.5%. Real estate also lagged today in China with China Overseas Land & Investment losing 1.4% and China Resources Land down .1%, two of only 4 that posted losses in the index today.
European shares advanced to 11 week highs as the FTSEurofirst is currently up .4%, on track for 7 straight week of gains, its longest since 05’. Electrolux jumped 4.4% and AkzoNobel gained 5% after their earnings beat forecasts. Tool maker Sandvik grew 6% lifted by earnings above market expectations for Q2. So far 64% of European large and mid-cap firms beat or met expectations and have had profits increase an average of 3.4% year over year, according to Reuters Starmine data.
Deutsche Bank plans to cut 1000 investment-banking positions as activity in the capital market slows down due to the Eurozone Crisis.
Nokia Siemens returns to profitability with pre-market shares up 5.8%.
The Home Depot plans to close 10 of its 52 branches across Israel, looking to lower rental costs.
Commodities are benefiting from the upbeat data with crude, natural gas, gold and silver all showing gains to begin the session.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu
As for the economy today there are quite a few announcements, here is the schedule: • 8:30am Jobless Claims – There was an increase in jobless claims this week. • 9:45am Bloomberg Consumer Comfort Index • 10:00am Existing Home Sales • 10:00am Philadelphia Fed Survey • 10:00am Leading Indicators
In the stock market today the S&P 500 is up 0.67% as well as 10-year treasuries at 1.33%. Crude oil is up 1.47% while the dollar is down 0.34%.
Regarding the stock market the topic everyone won’t stop talking about is the Libor scandal. Barclays and numerous other banks were found to be fixing the rates. But other than fine the companies what can the government do? Bernanke says it is up to the FSB find a solution.
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