• US stock market, economy and companies update (August 19, 2015)

    European markets are closing at their lows this morning, with the CAC down 2%, the DAX and FTSE down 1.6% a piece, while US equities are only a few points off their lows. All sectors of the S&P500 are lower. Greece's bailout passed the German Bundestag earlier today, although the number of government MPs voting against the measure was larger than ever before. CPI was weaker than expected, while traders are headed for the hills in advance of this afternoon's FOMC minutes release. As of writing, the DJIA is down 1.27%, the S&P500 is down 1.0% and the Nasdaq is off 1.2%.

    The July core CPI fell short of expectations and declined slightly from the June reading. Analysts cited a 5.6% decline in airfares for the shortfall, although they also cautioned that the airfare component of the PCE index relies on PPI data, which were flat this month, suggesting that the fall in core CPI may not show up in the PCE data.

    Fed governors Kocherlakota and Bullard - both non-voters - made remarks this morning ahead of the minutes from the July 28-29 FOMC meeting due later today. Kocherlakota summarized his dovish case for holding off on tighter policy: he warned that raising rates by even 0.25% would not likely have a huge direct impact on the economy while even such a small increase would lead some to assume the Fed had implicitly lowered its inflation target from 2%. Bullard reiterated his support for a September rate hike and said the FOMC needs to be prepared to increase rates faster to counter bubbles as low rates may be fueling excessive risk taking.

    Front-month WTI crude is getting hammered after the DoE's mid-morning weekly inventory report. The contract had been trading in a tight $44.50/80 range after last night's API inventory numbers, which showed the fourth straight week of inventory drawdowns. But after the surprise build in the EIA report, the contract broke down swiftly, dropping below $43.80. Brent is down 2.4% around $47.70.

    Target has given up its gains after the conference call mid morning. The firm beat earnings expectations and raised its FY guidance, however on the call its outlook for current-quarter same-store sales was a bit weak. While American Eagle Outfitters may have beat top- and bottom-line expectations on an 11%-comp sales gain, broader market losses are hurting the stock. AEO is down nearly 9%, with less dramatic declines seen in all the major apparel names.

    Hard drive giant Seagate Technology reached a deal to acquire Dot Hill Systems for $694M cash, or $9.75/shr, a very wide 88% premium to the prior closing price. Dot Hill is a major manufacture of storage area network arrays and should bolster Seagate's cloud storage strategy, and the company also expects it to be accretive to its FY16 earnings per share.

    ***Looking Ahead***
    - 14:00 (US) Fed Minutes from July 28-29 FOMC Meeting
    - 20:20 (US) Fed's Kocherlakota speaks at Bank of Korea Event
    - 22:05 (NZ) New Zealand to sell NZD100M in 2.5% 2035 Linked Bonds
    - (IL) Israel July Leading 'S' Indicator M/M: No est v 0.4% prior
    - (CO) Colombia July Consumer Confidence Index: No est v 14.7 prior
    - (BR) Brazil Aug CNI Industrial Confidence: No est v 37.2 prior

    ***Economic Data***
    - (US) MBA Mortgage Applications w/e Aug 14th: +3.6% v +0.1% prior
    - (ZA) South Africa Jun Retail Sales M/M: 0.1% v 0.2%e; Y/Y: 3.5% v 3.3%e
    - (BR) Brazil Jun Economic Activity Index (Monthly GDP) M/M: -0.6% v -0.5%e; Y/Y: -1.2% v -1.3%e
    - (PL) Poland July M/M: -0.7%e v +4.7% prior; Y/Y: 4.7%e v 7.6% prior; Construction Output Y/Y: 0.0%e v -2.5% prior
    - (PL) Poland July PPI M/M: -0.4% v 0.0%e; Y/Y: -1.7% v -1.6%e
    - (PL) Poland July Retail Sales M/M: 2.1% v 3.7%e; Y/Y: 1.2% v 2.9%e; Real Retail Sales Y/Y: 3.5% v 5.0%e
    - (US) July CPI M/M: 0.1% v 0.2%e; Y/Y: 0.2% v 0.2%e
    - (US) July CPI Ex Food and Energy M/M: 0.1% v 0.2%e; Y/Y: 1.8% v 1.8%e
    - (US) July CPI NSA: 238.654 v 238.756e; CPI Core Index SA: 242.513 v 242.552e
    - (US) July Real Avg Weekly Earnings Y/Y: 2.2% v 1.8% prior
    - (RU) Russia July Real Retail Sales M/M: 3.3% v 1.7%e; Y/Y: -9.2% v -9.8%e
    - (RU) Russia July Unemployment Rate: 5.3% v 5.5%e
    - (US) DOE Crude: +2.6M v -1.0Me; Gasoline: -2.7M v -1.5Me; Distillate: +0.6M v +1.0Me

    [I]Contributed by Trade The News[/I]
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