Ahead of the Bell: Dow futures are trading down 51 points and S&P futures are trading down 6.1 points after lower than expected Chinese trade data distressed markets. China’s July exports rose just 1 percent year-over-year. The International Energy Association also cut its oil demand forecast for 2013, citing the weak global economic backdrop.
- On the economic calendar today, the July Import Price Index will be out before the market opens and is expected to increase 0.2%. The Treasury Department’s monthly budget is due out at 2 p.m.; economists are forecasting a $71 billion deficit in July, against a $129.4 billion deficit in June.
- The dollar is up against the euro and the pound but down against Asian currencies. Gold is trading at $1,611. Crude oil is currently trading at $92 a barrel.
- Yesterday, stocks were mixed trading relatively flat for a second day, despite better than expected jobless claims data and a narrower than expected U.S. trade deficit. Investors remain hopeful that central banks will provide additional stimulus measures to address slowing economies and financial distress across the globe.
- On CNBC today, Barry Habib, Residential Finance Corp VP shared his views on the health of the mortgage industry. He notes that we’re now back to the standards where we should have been before the U.S. housing credit crisis. People can still get mortgages, but they have to qualify for that mortgage. If someone is looking to do a refinancing…don’t panic; he believes rates will go lower because initial jobless claims haven’t moved much lower and the crisis in Europe is still quite prevalent. Purchases vs. refinancing – refi’s are 70% of the market; rental market is tight and expensive, so it makes more sense to own; however, people are afraid. There is a “mobility premium” which people are willing to pay because they’re worried about losing their jobs. If rents continue to rise and rates continue to fall, you will see more people buying – if the jobs market improves and people are more confident about the security of their job.
- Congratulations to the U.S. women’s Olympic soccer team
- Happy Friday and have a weekend.
Wednesday’s Close
DJIA down 10.45 pts/-0.08% to 13,165.19
S&P up 0.58 pts/+0.04 to 1,402.80
Nasdaq up 7.39 pts/+0.25% to 3,018.64
Thursday’s Futures
Dow Futures down 51.00 pts
S&P Futures down 6.10 pts
Nasdaq Fut down 7.75 pts
Overseas Markets
FTSE -14.64/-0.25%
CAC 40 -29.52/-0.86%
NIKKEI 225 -87.16/-0.97%
HANG SENG -133.35/-0.66%
Overseas: World stock markets are lower across the board pressured by disappointing economic data from China.
Economic Reports: July Import Price Index is expected to increase 0.2%. The Treasury Department’s monthly budget is expected to show a $71 billion deficit in July.
Top Headlines:
- The Justice Department said that it will not bring charges against Goldman Sachs Group Inc. (GS) or any of its employees for financial fraud related to the mortgage crisis. After a yearlong investigation, the DOJ noted that the burden of proof to support criminal claims could not be made.
- JP Morgan Chase (JPM) is reportedly is planning to push back its plan to resume share buybacks in the wake of the “London whale” trading error.
- The Carlyle Group is reportedly planning to acquire asset manager TCW Group from Société Générale SA.
Commodities/Currency:
Gold: down $7.00 to $1,613.20
Oil: down 1.33 to $92.03
EUR/USD: -0.001 to 1.230
USD/JPY: -0.16 to 78.439
GBP/USD: -0.0038 to 1.559
Volatility Index (VIX): As of the close of business Thursday, August 9, the VIX is down 0.04 at 15.28
Companies Reporting Quarterly Earnings:
Harman International Industries (HAR) reported Q4 EPS of $0.67 beating estimates by $0.02. Revenue of $1.09B (+6% Y/Y) was in-line.
Bally Technologies (BYI) Gaming equipment revenue rose 33% year over year to $97M. The company expects EPS of $2.95-$3.30 for 2013 on strong growth in game sales and gaming operations.
J.C. Penney (JCP) comparable store sales for the second quarter declined 21.7%. Internet sales fell 32.6% to $220M. Sales were negatively impacted by the decision to significantly reduce marketing activities and re-approach pricing. Q2 EPS of -$0.37 missing estimates by $0.12. Revenue of $3.02B (-22.6% Y/Y) misses by $180M.
Today’s Opening and Closing Bells:
Manchester United executives will ring the Opening BellSM to celebrate the company’s IPO.
Verizon Communications, Inc. Director of Telecomm, Diane McCarthy and Vic Weston, Director of Road Builder, will ring the Closing BellSM in honor of 5 Years of 811 promoting safe drilling.
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