• US stock market, economy and companies update (July 15, 2015)

    Steeper losses on the Shanghai Composite today contrasted with China's stronger-than-expected Q2 GDP numbers. In the US, focus has been on earnings and Fed Chair Yellen's testimony before the House. Later this afternoon, the Greek parliament votes on the bailout deal, and as of now it is expected to pass the measure. As of writing, the DJIA is +0.11%, the S&P500 is +0.16% and the Nasdaq is +0.29%.

    Fed Chair Yellen is on Capitol Hill for day one of her semi-annual Congressional testimony. Yellen basically repeated her well-known stance in prepared remarks, reiterating that it was the expected path of interest rates that really mattered, not the size or timing of the first hike. On the jobs front, Yellen again noted that labor market conditions are not yet consistent with full employment and said some slack remains in labor markets. Yellen reiterated the FOMC would most likely begin tightening rates later this year. EUR/USD had floated a bit higher through the European session, rising above 1.1030, but the pair has tested one-week lows after the release of Yellen's speech, stabbing as low as 1.0940.

    The June PPI report supported the narrative of accelerating US inflation levels, with all components of the report topping expectations. Note that the headline y/y PPI measure remains in negative territory, but the trend of a gradual uptrend toward positive growth remains on track. The New York Fed's Empire State manufacturing survey rebounded in July, rising to +3.9 from -2 in June. The new orders and employment subcomponents were notably weaker.

    The Bank of Canada cut interest rates by 25 bps to 0.50%, as expected. The BoC said the economy was undergoing significant and complex adjustments, requiring additional monetary stimulus. Recall that the April Canada GDP out at the end of June was negative m/m for the fourth consecutive month, raising fears of a mild recession on the back of a troubled housing sector and the continuing oil price crash. USD/CAD took out the prior 2015 high and tested six-year highs above 1.2900 from 1.2750 ahead of the decision.

    Crude prices remain pretty subdued as US and Iranian politicians make victory laps after the nuclear deal. This morning brought more pledges by GOP leaders to quash the deal, while Iran's Supreme Leader also remains a wildcard. Meanwhile, the weekly API and EIA inventory reports both saw very large supply drawdowns. The API data disclosed the biggest drawdown since May 2014 (-7.3M bbls v -1Me). Front-month WTI is -0.4% on the day at $53 and Brent is -1.2% at $58.

    Bank of America, US Bank and PNC Financial met expectations in second-quarter results disclosed this morning. BoA's profits were more than double the amount seen a year ago, aided by the very sizable decline in legal costs. A year ago, the bank was facing $4 billion in mortgage-related costs in its Q2. PNC's net interest margin saw a notable contraction in the quarter, even as expenses climbed. BAC and USB are up 3% each, while PNC is up 0.5%.

    Another day brings another giant pharma merger: Celgene reached a deal to acquire Receptos for $7.32 billion in cash or $232/shr, gaining drug candidates in multiple sclerosis and ulcerative colitis. Investors like the deal and shares of CELG are up more than 9% in cash trading this morning. Shares of both Fiat and General Motors are down slightly after Fiat's CEO said he would not make another GM takeover approach.

    ***Looking Ahead***
    - 12:00 (US) Fed's Williams (dove, FOMC voter) on economic outlook
    - 12:25 (US) Fed's Mester (Non-voter, hawk) speaks on Economic Outlook in Columbus, Ohio
    - 14:00 (US) Fed Beige Book
    - 15:00 (US) Fed's Williams (dove, FOMC voter) speaks on Outlook in Phoenix
    - 15:00 (AR) Argentina Jun National Urban CPI M/M: 1.0%e v 1.0% prior; Y/Y: 15.0%e v 15.3% prior
    - 15:00 (AR) Argentina Jun Wholesale Price Index M/M: No est v 1.4% prior; Y/Y: No est v 13.5% prior
    - 17:00 (CO) Colombia May Retail Sales Y/Y: +1.5%e v -1.0% prior
    - 17:00 (CO) Colombia May Industrial Production Y/Y: -2.1%e v -3.6% prior
    - 18:45 (NZ) New Zealand Q2 CPI Q/Q: +0.5%e v -0.3% prior; Y/Y: 0.3%e v 0.1% prior
    - 20:30 (SG) Singapore Jun Non-oil Domestic Exports M/M: No est v -3.1% prior; Y/Y: No est v -2.5% prior
    - 21:00 (NZ) New Zealand July ANZ Consumer Confidence Index: No est v 119.9 prior; M/M: No est v -3.25 prior
    - 21:00 (AU) Australia July Consumer Inflation Expectation: No est v 3.0% prior


    ***Economic data***
    - (US) MBA Mortgage Applications w/e July 10th: -1.9% v +4.6% prior
    - (ZA) South Africa May Retail Sales M/M: +0.1% v -0.1%e; Y/Y: 2.4% v 2.5%e
    - (PL) Poland Jun CPI M/M: 0.0% v 0.1%e; Y/Y: -0.8% v -0.8%e
    - (IN) India Jun Trade Balance: -$10.9B v -$10.4B prior; Exports Y/Y: -15.8% v -20.2% prior; Imports Y/Y: -13.4% v -16.5% prior
    - (US) Jun PPI Final Demand M/M: 0.4% v 0.2%e; Y/Y: -0.8% v -0.9%e
    - (US) Jun PPI Ex Food and Energy M/M: 0.3% v 0.1%e; Y/Y: 0.8% v 0.7%e
    - (US) Jun PPI Ex Food, Energy, Trade M/M: 0.3% v 0.1%e; Y/Y: 0.7% v 0.6%e
    - (US) July Empire Manufacturing: +3.86 v +3.25e
    - (CA) Canada May Manufacturing Sales M/M: 0.1% v 0.3%e
    - (PL) Poland Jun YTD Budget Balance Level (PLN): -26.2B v -19.6B prior; Budget Balance Performance: 56.7% v 42.6% prior
    - (BE) Belgium May Trade Balance: 0.4B v 0.7B prior
    - (RU) Russia Jun Industrial Production Y/Y: -4.8% v -4.0%e
    - (CA) Canada Jun Existing Home Sales M/M: -0.8% v +3.1% prior
    - (US) Jun Industrial Production M/M: 0.3% v 0.2%e; Capacity Utilization: 78.4% v 78.1%e; Manufacturing Production: 0.0% v 0.1%e
    - (CA) Bank of Canada (BOC) cut interest rates by 25 bps to 0.50%, as expected
    - (US) DOE Crude: -4.35M v -1Me; Gasoline: +0.06M v +0.5Me; Distillate: +3.82M v +1.5Me

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