The selloff of Visa shares in today’s early regular trade can be blamed for more than half of the loss of the Dow industrials. Visa's stock slipped 4.4% to $212.87 per share after the credit-card company announced late Thursday upbeat earnings for its fiscal 3rd-quarter, but provided a disappointing sales outlook. Futures on the Dow Jones Industrial Average fell as low as 16,899 points after Wall Street’s open.
Gold prices climbed slightly today, but remain below $1,300 a troy ounce on speculation their proximity to a technical level will discourage selling. A strong run for US equities continued to lower demand for the safe-haven commodity. Also, data on Chinese gold imports from Hong Kong released yesterday showed only 40.5 tons of gold were imported in June, down 23% from the prior month and 61% on a yearly basis, Commerzbank reported today. That’s the lowest level of those imports in 17 months and a 4th consecutive month of decrease.
The US stock market opened at lower levels today due to some disappointing earnings reports from companies such as Amazon. Still, the main indexes remain on track to finish the week with slight gains. Stock-market investors basically ignored stronger-than-expected June orders for US durable goods, released before the session’s start. Futures on the S&P 500 opened 0.4% lower at 1,972.15 points, retreating from the record close reached on Thursday. Contracts on the Dow Jones Industrial Average lost 0.5% to 16,899 after the opening bell, while those on the Nasdaq 100 are 0.4% lower at 3,945.5, weighed down by Amazon’s stock tumbling 12.1% to $315.19 per share.
Ahead of the expected release of Apple’s supersize iPhone this autumn, experts say Apple should worry about its potential negative impact on iPad sales. Apple is expected to launch the iPhone 6 in late September with larger screens of 4.7 and 5.5 inches, aiming at competing with Samsung’s “phablets”. Sales of traditional tablets already suffer from the rise of super-sized smartphones and experts’ concerns seem justified.
The euro fell further against the US dollar in the last hour to reach its lowest level this year. The final push came from stronger-than-expected US durable-goods orders in June. The EUR/USD pair is down 0.3% today to 1.3428, the lowest since 20 November 2013.
Orders for big-ticket US-manufactured goods jumped last month in a sign that stronger capital investment by firms could support US economic growth during the second half of 2014. Demand for durable goods, items such as planes, cars, machinery and appliances designed to last at least 3 years, surged a seasonally adjusted 0.7% in June from the prior month. Economists expected a gain of 0.4%, after May’s 1% slump. Orders for non-defence capital goods (excluding aircraft), a gauge of business investment, climbed 1.4% last month after declining in the two previous months.
June Durable Goods Orders are 0.7%, it was expected to be 0.4% versus -1.0% previously.
The stock of Amazon.com Inc. is set for a poor start of this week’s last regular session. Down more than 10% in pre-market hours due to weaker-than-expected quarterly earnings, the stock was now downgraded to ‘neutral’ by B. Riley. CRT Capital also reduced its estimate on Amazon shares to ‘fair value’, according to media reports.
Moody's Corp. announced its second-quarter profit and revenue jumped above analysts' forecasts. The rating agency posted earnings of $319.2 million, or $1.48 per share, much stronger than $225.5 million, or $1 per share, posted in the same period of last year. Revenue advanced 16% to $873.5 million. The company also raised its full-year guidance on revenue based on healthy market conditions and solid demand for its products and services.
The International Monetary Fund (IMF) lowered its projection for this year’s global growth as expansions faltered somewhat from China to the US and violent conflicts in Ukraine and the Middle Eats raise the risk of a rise in oil prices. The world economy will grow 3.4% this year, the IMF announced yesterday. That was less than the fund’s 3.6% prediction made in April and more optimistic than last year’s 3.2% forecast. Next year the global economy will expand 4%, IMF says, compared with its April estimate for a 3.9% growth pace.
Amazon posted a wider-than-expected loss in its 2nd quarter even as the company’s revenue surged 23%. The stock tumbled 10% in pre-market so far and is expected to slump in the regular session. Traders will also look at Starbucks today after the coffee chain reported a 23% increase in its quarterly earnings on stronger sales and customer traffic. Still, its shares fell 2.4% in pre-market on concerns that Starbucks’ plans to open more stores and rising prices of main ingredients for the business will curb profit.
The UK economy has managed to fully recover after the financial crisis and has posted its 6th consecutive quarterly growth. The nation’s gross domestic product (GDP) rose 0.8% in the period ended in June, exceeding the peak in the first quarter of 2008. This corresponded to economists’ forecasts and equals the growth in the previous quarter. The positive data may held Prime Minister David Cameron in seeking re-election in less than a year, and may prompt the Bank of England to commence rate hikes.
Facebook’s chairman Mark Zuckerberg has become wealthier than Google’s co-founders, Sergey Brin and Larry Page. He earned another $1.6 billion today after Facebook’s stock closed the last session at a record high of $74.96 per share, making his net worth $33.3 billion. This makes him richer than Brin and Page, as well as than Amazon’s CEO Jeff Bezos. Zuckerberg is No. 16 on the Bloomberg Billionaires Index, and Google’s founders are right behind him, while Bezos holds the 20th spot. Facebook’s shares have increased 183% over the past 12 months, which is the biggest rise in the S&P 500 Index, Bloomberg reports.
The US State Department said today that Russia is firing artillery into Ukraine, based on information acquired from “intelligence friends”, as the spokeswoman called them. According to a Pentagon spokesman, the Russian fire is at Ukrainian military targets. Russia denies to be helping the separatists in eastern Ukraine.
First estimate of Gross Domestic Product (GDP) for the second quarter is 3.1% on a yearly base, it was expected to be 3.1% versus 3.0% previously.
First estimate of Gross Domestic Product (GDP) for the second quarter is 0.8% on a quarterly base, it was expected to be 0.8% versus 0.8% previously.
The euro lost momentum after the July German Business Confidence Index of the Ifo Institute came in much weaker than expected at 108 points. Analysts expected only a slight drop to 109.4 from the 109.7 points logged in June. EUR/USD lost 0.2% to 1.3442 after the dismal report nearing yesterday’s drop to this year’s lowest level at 1.3438.
Vodafone Group PLC today announced some of its key European markets are beginning to stabilise, even as it posted weaker-than-expected rise in its quarterly revenue. The world's second-largest mobile carrier by subscribers after China Mobile reported revenue for the quarter through 30 June advanced 6.2% on a yearly basis to GBP 10.2 billion – lower than analyst expectations of GBP 10.35 billion. Still, shares in Vodafone climbed 4% after the session start to GBP 2.026 apiece.
July IFO (Ifo Institute for Economic Research) Business Climate index is 108.0 points, it was expected to be 109.4 points versus 109.7 points previously.
Royal Bank of Scotland Group Plc (RBS), the largest state-owned bank in the United Kingdom, said pre-tax profit probably almost doubled in the first half of the year. The lender also forecast to meet its target for GB 1 billion cost reductions this year. RBS’ pre-tax profit may have climbed to GBP 2.65 billion from GBP 1.37 billion in the same period a year ago, the bank said today. Operating profit probably surged to GBP 2.6 billion from GBP 708 million, RBS said. The stock jumped 14.9% to GBP 3.770 in today’s trade.
June Retail Sales are 3.3% on a yearly base, it was expected to be 3.2% versus 3.0% previously.
June Retail Sales are 0.5% on a monthly base, it was expected to be 0.4% versus -0.7% previously.
Chinese search engine Baidu said its 2nd-quarter profit surged 34%, thanks to its strength in the mobile segment. This marked the first period in which Baidu’s mobile revenue reached 30% of overall revenue, the Chinese company said. Baidu also released more upbeat 3rd-quarter revenue guidance that beat Wall Street estimates. American depositary shares of Baidu Inc. jumped 7% to $218.50 per share in after-hours trading.
Light, sweet crude headed for a 3rd weekly slump in July amid speculation that increasing US gasoline inventories suggest reduced demand for the commodity in the world’s biggest consumer. Futures were little changed today after slipping 1% yesterday. US gasoline supplies rose to the highest level since March 2014, while total US crude-oil supplies fell for a 4th week, data from the Energy Information Administration revealed on Wednesday. In the same time, the American President Barack Obama said he expects the downing of the passenger jet in Ukraine to push his European partners to impose harsher sanctions to Russia, which could potentially impact Russia’s energy supplies.
Japan's annual inflation rate marked its second month of slowdown in June, the government said. This casts doubts about whether the central bank will be able to meet its price target for the year. Inflation slowed as the result of the surge in import costs fades and as the effects of the April sales tax increase are still curbing household spending.
Amazon.com Inc.’s shares dropped over 11% after the company posted its biggest loss since 2012. The firm’s cloud-computing business is slowing, and revenues are being invested in new distribution warehouses and products, which defers profitability. Amazon’s second-quarter loss was $126 million, exceeding analysts’ forecast for $66.7 million. For the same period last year, the loss was $7 million. Sales rose 23% to $19.3 billion, and operating expenses grew 24% to $19.4 billion. After almost 10 years of being profitable, Amazon started posting losses in 2012. The company’s shares have fallen by 10% this year.
Gold prices headed for their second straight weekly fall as an improving economic outlook dampened the metal’s appeal as a safe investment. A Chinese manufacturing index surged to an 18-month high this month and the US jobless claims dropped to the lowest level since February 2006, reports showed yesterday. Meanwhile, the S&P 500 index climbed to record highs. Those factors pushed spot gold down 1.3% to $1,287.52 a troy ounce yesterday, the lowest since 19 June, and today hovers around that level. The metal is poised to decline 1.5% this week.
German consumer confidence reached its highest level in almost 8 years, according to data from a GfK survey. However, the institute warned that the Ukraine crisis and the recent Malaysia Airlines plane’s downing could negatively affect consumer mood over the next few months. GfK said the consumer-sentiment indicator for August increased to 9.0 points as compared to 8.9 in July, while analysts believe it will remain unchanged. The index reached its highest value since December 2006, when it was 9.1. GfK uses data from the current month to make projections for the next.
• Today, the Swedish Retail Sales will be published at 7:30 GMT. They are expected to climb 0.4% in June from the previous month when the indicator fell 0.7%. Retail Sales are an important gauge of the economic development and better-than-expected data would support the national currency.
• At 8:00 GMT the IFO Business Climate Index for Germany will be released. The median forecast is for a decrease to 109.5 points in July from 109.7 in the previous month. This is an important indicator of the economic health in Germany providing guidelines for its development in the coming months. Values above 100 points indicate a positive business outlook. Better data would support the euro.
• At 8:30 GMT the preliminary data of the UK Gross Domestic Product will be published. Analysts expect the UK economy to expand 0.8% in the second quarter on a quarterly basis, repeating the 0.8% growth recorded for the January-March period. A bigger expansion would support the British pound.
• At 12:30 GMT the US Durable Goods Orders will be released. The orders are expected to increase 0.4% in June from a revised 0.9% drop in the previous month. This index plays a key part in the total factory orders and shows their trend in advance. Better-than-expected values would support the US dollar.
August Gfk (Gesellschaft für Konsumforschung) Cosumer Confidence is 9.0 points, it was expected to be 8.9 points versus 8.9 points previously.