本文发表在 rolia.net 枫下论坛Weekly Market Commentary for the week ending July 16, 2010
Mixed economic news sends markets slightly lower for the week
Markets retreated on Friday after advancing earlier in the week on strong corporate earnings results. Recent economic reports are leading to an outlook for a slowing pace of growth in certain sectors of the economy. Releases this week included; the Philadelphia Fed Index and the Empire State survey that show manufacturing is slowing, the semi-monthly University of Michigan survey that revealed consumer confidence slid in early July and a weaker-than-anticipated U.S. retail sales report that showed shoppers curbed their appetites for a second straight month. The U.S. Federal Reserve softened its expectations for GDP growth for the remainder of this year to 3% from 3.5 %. U.S. jobless claims that fell more than anticipated was positive news confirming economic recovery.
Corporate earnings season kicked off earlier in the week and was overall positive led by strong results from Alcoa and Intel. Alcoa Inc., one of the world’s largest aluminum producers is seen as a bellwether for the economy as many of its products are inputs to other industries. The aluminum company exceeded earnings expectations, gave positive guidance and a healthy profit forecast for the remainder of the year. Intel Corporation, the computer chipmaker, saw profits not seen since the halcyon days of technology a decade ago. They also raised guidance and offered a positive profitability picture for the remainder of the year.
The three largest U.S. banks also released second quarter earnings. JP Morgan Chase & Co., Bank of America Corp., and Citigroup Inc., posted earnings showing improving credit quality and lower loan loss provisions. Despite this, markets retreated on the news because investment bank profits were down from previous quarters in a more challenging market environment.
Strong earnings reports from General Electric Co., Marriott International, the largest U.S. hotel chain and CSX, an international railway company, also exceeded expectations and offered positive outlooks for the remainder of the year. Google Inc. marginally missed profit expectations on heavy reinvestment of revenue into research and development. Sales growth is an important measure of business strength as it means increasing revenues are not being driven by cost-cutting, but from an uptake in business. Despite solid earnings reflecting improving economic conditions, stocks markets were preoccupied by the more recent increasing consumer pessimism.
In other positive developments the U.S Securities and Exchange Commission announced a. $550 million settlement from Goldman Sachs ending a dispute regarding mortgage securities related to the U.S housing collapse. The U.S. Senate passed far reaching U.S. financial reform legislation.
It is not uncommon for the economy to hit a soft patch after the steepness of the recovery that has been experienced. Most recently, global markets have been assessing economic activity and pricing in a slower growth environment.
OTHER MARKET AND ECONOMIC EVENTS THIS WEEK:
• U.S. business inventories rose for a 5th consecutive month
• Home buying applications dropped 3.1%
• Jobless claims fell more than anticipated
• Canada’s leading indicator index signaled strength, up 1% in June
• Canada housing market cooled, and was off 1.9% in June
WHAT’S AHEAD NEXT WEEK:
Canada:
• Bank of Canada policy announcement
• Housing starts/building permits
• Retail sales
• Consumer Price index
U.S.:
• Second quarter earnings
• Housing market and price index
• Housing starts
• Existing home sales
• Leading indicatorss更多精彩文章及讨论，请光临枫下论坛 rolia.net
Mixed economic news sends markets slightly lower for the week
Markets retreated on Friday after advancing earlier in the week on strong corporate earnings results. Recent economic reports are leading to an outlook for a slowing pace of growth in certain sectors of the economy. Releases this week included; the Philadelphia Fed Index and the Empire State survey that show manufacturing is slowing, the semi-monthly University of Michigan survey that revealed consumer confidence slid in early July and a weaker-than-anticipated U.S. retail sales report that showed shoppers curbed their appetites for a second straight month. The U.S. Federal Reserve softened its expectations for GDP growth for the remainder of this year to 3% from 3.5 %. U.S. jobless claims that fell more than anticipated was positive news confirming economic recovery.
Corporate earnings season kicked off earlier in the week and was overall positive led by strong results from Alcoa and Intel. Alcoa Inc., one of the world’s largest aluminum producers is seen as a bellwether for the economy as many of its products are inputs to other industries. The aluminum company exceeded earnings expectations, gave positive guidance and a healthy profit forecast for the remainder of the year. Intel Corporation, the computer chipmaker, saw profits not seen since the halcyon days of technology a decade ago. They also raised guidance and offered a positive profitability picture for the remainder of the year.
The three largest U.S. banks also released second quarter earnings. JP Morgan Chase & Co., Bank of America Corp., and Citigroup Inc., posted earnings showing improving credit quality and lower loan loss provisions. Despite this, markets retreated on the news because investment bank profits were down from previous quarters in a more challenging market environment.
Strong earnings reports from General Electric Co., Marriott International, the largest U.S. hotel chain and CSX, an international railway company, also exceeded expectations and offered positive outlooks for the remainder of the year. Google Inc. marginally missed profit expectations on heavy reinvestment of revenue into research and development. Sales growth is an important measure of business strength as it means increasing revenues are not being driven by cost-cutting, but from an uptake in business. Despite solid earnings reflecting improving economic conditions, stocks markets were preoccupied by the more recent increasing consumer pessimism.
In other positive developments the U.S Securities and Exchange Commission announced a. $550 million settlement from Goldman Sachs ending a dispute regarding mortgage securities related to the U.S housing collapse. The U.S. Senate passed far reaching U.S. financial reform legislation.
It is not uncommon for the economy to hit a soft patch after the steepness of the recovery that has been experienced. Most recently, global markets have been assessing economic activity and pricing in a slower growth environment.
OTHER MARKET AND ECONOMIC EVENTS THIS WEEK:
• U.S. business inventories rose for a 5th consecutive month
• Home buying applications dropped 3.1%
• Jobless claims fell more than anticipated
• Canada’s leading indicator index signaled strength, up 1% in June
• Canada housing market cooled, and was off 1.9% in June
WHAT’S AHEAD NEXT WEEK:
Canada:
• Bank of Canada policy announcement
• Housing starts/building permits
• Retail sales
• Consumer Price index
U.S.:
• Second quarter earnings
• Housing market and price index
• Housing starts
• Existing home sales
• Leading indicatorss更多精彩文章及讨论，请光临枫下论坛 rolia.net