US equities have snapped a three-day losing streak today, with strong gains despite the soft ADP jobs report. The 10-year UST yield is giving up more than five bps to trading around 2.275%, the DJIA is up 0.55%, the S&P500 is up 0.77% and the Nasdaq is gaining 1.36%.
The ADP private payrolls report came in at +185K for July, missing expectations. Meanwhile, the consensus forecast for the nonfarm payrolls report due on Friday is around +223K. The July ISM non-manufacturing index looked very good, rising to 60.3, its highest level since December 2004, from 56.0 in June. Both the new orders and employment components rose to their highest points since August 2005. ISM officials said the majority of the respondents continue to have a positive outlook on business and the overall economy.
Greece is very close to reaching a deal with its creditors to secure a €86B line of credit that will keep it afloat for the next three years and keep it within the Eurozone. Greek PM Tsipras said negotiations were making good progress and in the home stretch. European Commission President Juncker said the talks would like be wrapped up by August 20th. Greek bank shares have plunged for a third consecutive day, after falling the max 30% limit on Monday and Tuesday, after the exchange opened for trade on Monday.
Fed Governor Powell appeared on CNBC this morning and noted that he hasn't made up his mind whether or not to support a rate hike in September and highlighted that nothing has been decided as of yet on the FOMC. While the labor market continues to be strong, Powel said there is more slack in labor markets than is suggested by the 5.3% unemployment rate.
Shares of Disney collapsed in the post-market yesterday after revenue narrowly missed consensus expectations and on the call executives reined in expectations for TV subscribers as consumers move away from traditional cable packages. At their worst this morning DIS was down almost 10%, but has improved to -7% mid-morning. Time Warner Cable is down 7% in sympathy despite its substantial top- and bottom-line beats. Dish is giving up its modest gains despite very strong earnings. One winner from Disney's longer-term subscriber warning: Netflix, with shares of NFLX up as much as 6% at one point this morning after Disney's CEO said there may be opportunities to expand the relationship between the two companies.
In other earnings news, First Solar is up a whopping 17% after crushing expectations and offering very strong FY guidance. Shares of Lumber Liquidators are plummeting after the firm disclosed a huge quarterly loss and also said it has received two subpoenas from the SEC over issues related to its flooring scandal. Ralph Lauren has given up solid gains as investors concentrate on the weak margins and comp sales. In addition, miner Freeport McMoran trimmed its three-year capex spending outlook to account for lower oil and gas production.
***Looking Ahead***
- 12:00 (CA) Canada to sell 2-Year Bonds
- 15:00 (MX) Mexico Banamex Survey of Economists
- 17:00 (CO) Colombia Jun Exports: $3.3Be v $3.4B prior
- 20:00 (CO) Colombia July CPI M/M: 0.1%e v 0.1% prior; Y/Y: 4.4%e v 4.4% prior
- 21:30 (AU) Australia July Employment Change: +10.0Ke v +7.3Kprior; Unemployment Rate: 6.1%e v 6.0% prior
***Economic data***
- (ZA) South Africa July Sacci Business Confidence: 87.9 v 87.9
- (PT) Portugal Q2 Unemployment Rate: 11.9% v 13.7% prior
- (IE) Ireland July Unemployment Rate: 9.7% v 9.7% prior
- (IE) Ireland Jun Industrial Production M/M: -2.0% v -5.6% prior; Y/Y: +27.3% v -1.1% prior
- (US) MBA Mortgage Applications w/e July 31st: 4.7% v 0.8% prior
- (CL) Chile Jun Economic Activity Index (Monthly GDP) M/M: 1.1% v 0.5%e; Y/Y: 2.7% v 2.5%e
- (US) July ADP Employment Change: +185K v +215Ke
- (US) Jun Trade Balance: -$43.8B v -$43.0Be
- (CA) Canada Jun Int'l Merchandise Trade: -C$0.5B v -C$2.9Be
- (BR) Brazil PMI Services: 39.1 v 39.9 prior; PMI Composite: 40.8 v 41.0 prior
- (US) July Final Markit Services PMI: 55.7 v 55.2e; Composite PMI: 55.7 v 55.2 prelim
- (US) July ISM Non-Manufacturing Composite: 60.3 v 56.2e
- (US) DOE Crude: -4.4M v -1.5Me; Gasoline: +0.8M v -0.5Me; Distillate: +0.7M v 1.5Me
[I]Contributed by Trade The News[/I]
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