Markets were stagnant for the majority of the day but moved sharply lower after the release of the Fed’s June meeting minutes. The Fed’s minutes showed the committte split over the merits of further monetary easing on the economy. Results have shown that QE2, and potentially QE3, could have little effect on the economy, and much less effect that intended.
Leading the equity declines were Boeing, United Technologies, Microsoft, and Travelers. On the other hand, Chevron and Exxon Mobil were the biggest Dow performers. In global markets, Europe finished roughly flat on the day with Spain tacking on gains following more austerity measures in an effort to meet budget targets.
Before the release of FOMC minutes, S&P 500 futures were trading at 1336.75, up 1.25 points, DOW Jones Industrial Average futures fell 22 points to 12563.00 and NASDAQ futures fell 11.75 points to 2566.25.
Crude inventories came in weak, causing a rise in WTI crude futures of $1.41 to $85.32. Gold futures fell $3.20 to $1576.60.
Oil stocks followed crude’s gains with Chevron Corp. gaining 1.08% and Exxon Mobil Corp up .79%.
HHGregg (HGG) shares tumbled over 38% after poor guidance. Best Buy Co. Inc. (BBY) also fell over 6%.
Abercrombie & Fitch (ANF) gained over 7.5% after announcing a share buyback.
The hotel giant Marriott International (MAR) is set to release Q2 earnings today after the close.
VeriFone Systems Inc. (PAY) gained 9.87% after sealing a deal to process payments for Washington D.C. taxis.
OCZ Technology Group Inc. (OCZ) fell 19% after posting slower growth than analysts’ expectations.
David Cornes holds a degree in eonomics from the University of Montana.
Quarter 2 earnings were 43% weaker than last quarter due to decreased demand. Earnings fell to $21.1 million or 33 cents a share. Revenue fell .12% to $184 million. Analysts expected earnings of 35 cents a share and revenue of $190 million. ADTN declared a cash dividend of 9 cents a share.
Adtran provides services such as production, design, support and marketing products and solutions for networking communications. Although earnings contracted, certain sectors of the company showed growth. The broadband access sector grew 38% over the year, optical and internet gre 17% and account for 84% of revenues.
David Cornes holds a degree in economics from the University of Montana.
The Hang Seng bucked the trend rising .1% today due to strong infrastructure stocks. Investors are jumping into cement and railway stocks after Premier Wen Jiabao said China must maintain reasonable investment growth. China Railway Construction jumped 5.2% while Anhui Conch Cement rose 2.8%. Sun Hung Kai properties rose 3.6% after JPMorgan upgraded them to underweight from overweight and upped its target price 10%. China’s banks are still holding them down after a fresh report of bad debt fears.
European shares are timid, yet slightly up, with the FTSEurofirst adding .1% due to gains in defensive stocks. Luxury brands Burberry is feeling the strain down 5% pulling with it French rival LVMH who is down 2.5% due to reports of a slowdown in Burberry’s quarterly sales. The Spanish IBEX 35 index is looking top gainer so far today, up over 1.4%.
Best buy, who is down 4.4% in pre-market due to an HHGregg guidance cut, announced its new Canadian strategy to open smaller stores and go into non-core categories online, while also launching a new price-matching program.
BAC, down 1.1% in pre-market, announced it cutting jobs in its commercial banking unit to deal with the waning economy.
Commodities are beginning looking up this morning with crude, natural gas and silver all adding while gold is set to begin down.
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
Purchase applications were announced this morning and this week the report shows and increase of 3% while the refinance applications are down 3%. At 8:30am the International Trade report will be announced. April brought a decline in the trade gap but only because of a drop in imports. At 10am the wholesale inventory consensus will be announced. In April the inventories rose 0.6% but not enough to match the increase in sales of 1.1%.
At the close yesterday the S&P 500 was still down at 0.81% decline. There is hope for today though due to the stock index futures advance, according to Reuters. As for 10-year treasuries and oil they both closed on an increase of 0.35% and 1.19% respectively. The dollar on the other hand was down 0.19% at the close.
As for the earnings season today should be a positive day with 9 out of the 15 announcements projected to be positive. The big announcement to watch out for today is Marriott, the company is estimated to increase EPS by 13.52%.
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