• US stock market, economy and companies update (July 22, 2015)

    US equities are gliding lower again this morning, with weak earnings reports blamed for the overall risk-off tone. The US 10-year yield is falling further, down another two basis points to 2.30%. The DJIA is -0.47%, the S&P500 is -0.30% and the Nasdaq is -0.73%.

    The Greek parliament will vote imminently on whether to support the reforms demanded by the creditor nations as the condition for a third bailout. PM Tsipras is expected to win the vote, however there will likely be even more defectors from Syriza than the 32 members who abandoned him on the first vote. Separately, the ECB gave Greece's banks another 900M in emergency ELA funding.

    The softness in the greenback during yesterday's session has been blamed on Yen strength from the BoJ reiterating its policy stance, weak US earnings report and various data points, but major pairs are quickly reversing the move. USD/JPY bottomed out around 123.60 during the Asia session and retook 124 in the US session. EUR/USD tested 1.0965 earlier, before dropping back to around 1.0885. Note that gold prices were testing the lows seen on Sunday, with the spot price back below $1,100, while most other industrial and precious metals are seeing 1%+ declines.

    The weekly API inventories indicated the largest build in crude stocks in the last three months, also the first increase in stocks in three weeks. The weekly DoE report also showed a return to crude inventory drawdowns. Recent dollar softness has limited the downside in crude, however the front-month WTI contract is down about 1% on the day, hovering around $50 and Brent is around $56.50.

    Share of Apple fell around 7.6% in the post-market, wiping more than $60 billion off the company's market cap, after Cupertino's disappointing third-quarter report. Presently the shares are only down 4.7% as of writing as deal hunters step in and buy. As has been obsessively covered by financial media, the focus has been on Apple's lower-than-expected iPhone shipments, which were 47.5 million units in the quarter (up 35% y/y), compared to a ~50 million estimate.

    Microsoft disclosed its biggest quarterly loss ever with its fourth-quarter results, thanks to the staggering $7.5 billion Nokia write-down. After adjusting for Nokia, Microsoft comfortably beat earnings expectations. Licensing revenue from Windows continue to decline, even as the company continued adding cloud computing customers. MSFT is down 2.8%. In other tech earnings, Yahoo is down 1.6% after missing earnings expectations. EMC is up 3.3% on a decent quarterly report.

    In other major earnings, Coca-Cola beat the Street and maintained solid growth figures, although shares of KO are flat on the session. Boeing cut its FY15 outlook slightly, and despite beating expectations core earnings were down quite a bit y/y. BA rose as much as 2.7% in the premarket but is giving up altitude mid-session. AutoNation is up 2% on largely in-line numbers, while Abbott is off nearly 4% on very soft next-quarter guidance.

    Biogen's experimental drug for Alzheimer's disease failed to show a statistically significant cognitive benefit, complicating the company's quest to develop a treatment. Earlier data had demonstrated that the drug showed a better response at higher doses, but with harsher side effects, while today's results did not provide clear direction on dosage, although Biogen said it would still move into the next phase of trials. Shares of BIIB declined up to 7% in the premarket, however they are only -2.5% presently after trenchant defenses by top-tier analysts.

    ***Looking Ahead***
    - 12:00 (CA) Canada to sell C$3.3B in Sept 0.75% 2020 bond
    - 15:00 (AR) Argentina Jun Trade Balance: $0.6Be v $0.4B prior
    - 17:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to cut Official Cash Rate by 25bps to 3.00%
    - 19:00 (KR) South Korea Q2 Preliminary GDP Q/Q: 0.4%e v 0.8% prior; Y/Y: 2.3%e v 2.5% prior
    - 19:50 (JP) Japan Jun Trade Balance: 45.8Be v 217.2B prior (revised from -216.0B); Adjusted Trade Balance: -260.0Be v -182.5B prior; Exports Y/Y: 10.0%e v 2.4% prior; Imports Y/Y: -4.3%e v -8.7 % prior


    ***Economic data***
    - (IE) Ireland Jun PPI M/M: +0.3% v -2.4% prior; Y/Y: 6.3% v 6.3% prior
    - (US) MBA Mortgage Applications w/e July 17th: +0.1% v -1.9% prior
    - (BR) Brazil July IBGE Inflation IPCA-15 M/M: 0.6% v 0.6%e; Y/Y: 9.3% v 9.3%e
    - (US) May FHFA House Price Index M/M: 0.4% v 0.4%e
    - (MX) Mexico May Retail Sales M/M: 0.2% v 0.2%e; Y/Y: 4.1% v 4.7%e
    - (BR) Brazil Jun Current Account Balance: -$2.5B v -$2.1Be; Foreign Direct Investment (FDI): $5.4B v $4.5Be
    - (US) Jun Existing Home Sales: 5.49M v 5.40Me
    - (US) DOE Crude: +2.47M v -1.5Me; Gasoline: -1.73M v +0.5Me; Distillate: +0.24M v +2.0Me

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