TradeTheNews.com Weekly
Market Update: Mixed data keeps central banks dovish, stocks plow higher in
anticipation of more stimulus
Fri, 26 Jul 2019 16:38 PM EST
US stock markets had another strong week as Fed rate cut expectations held
constant. A deluge of Q2 earnings reports revealed some firms were able to
handily top already tempered expectations, but many executives still cited
general uncertainty surrounding trade and growth as a lingering headwind. The
US economic data, outside of housing, remained stronger both at the margin and
relative to expectations. Overseas figures, on the other hand, were squishy,
underscored by weakening PMI figures in Europe. That dichotomy allowed the
dollar to move higher and UST yields to diverge further from other government
bond rates. The signs of economic strength did little though to shake
expectations that the Fed will cut rates next week. Thursday’s ECB meeting
clearly opened the door to rate cuts and other potential unconventional
measures in September. Draghi’s shift further into dovish territory, along with
a soft US PCE reading and revision on Friday all but confirmed the Fed will
offer up an ‘insurance’ rate cut next week. The US yield curve flattened while
gold and crude oil prices consolidated. The S&P500 hit record highs this
week, gaining 1.7%, while the DJIA edged up 0.1% and the Nasdaq rose 2.3%.
In corporate news, Google reported a surprise beat on the top and bottom line,
helped by its growing cloud business. Amazon opened lower after an earnings
miss, pointing to rising delivery costs as the tech giant shifts to one-day
shipping. Starbucks was a standout for the week as it raised its outlook and
saw much stronger than anticipated SSS growth. Caterpillar reported
weaker-than-expected earnings and cut guidance amid higher material costs and
further headwinds in China. Facebook had a better than expected quarter,
despite regulatory clouds forming on the horizon. Tesla earnings came in well
below consensus estimates, though the EV manufacturer did affirm its full-year
delivery guidance. Apple signed a deal to acquire the majority of Intel’s
smartphone modem business for $1billion. T-Mobile's acquisition of Sprint
finally received Justice Department approval, conditioned upon the sale of some
assets to DISH, although certain state attorneys general intend to have a say
as to whether the deal is ultimately finalized.
MONDAY 7/22
(KR) South Korea official: preparing plans for a semiconductor test bed
CON.DE Cuts FY19 Rev €44-45B, adj EBIT margin 7-7.5% (prior Rev €45-47B, Adj
EBIT margin 8-9%) due to decline in global light vehicle production
WHR Reports Q2 $4.01 v $3.80e, Rev $5.20B v $4.90Be
MAXR Chosen by NASA to integrate pollution monitoring payload on an upcoming
commercial satellite; slated for launch by 2022
TUESDAY 7/23
UBSG.CH Reports Q2 Net $1.39B v $960Me, Adj Pretax $1.79B v $1.82B y/y, Rev
$7.53B v $7.30Be
KO Reports Q2 $0.63 v $0.62e, Rev $10.0B v $9.79Be
*(UK) RESULTS OF CONSERVATIVE PARTY LEADERSHIP VOTE: Boris Johnson elected as
party leader (as expected); to become Prime Minister after May steps down on
Wed, July 24th
*IMF UPDATES ITS WORLD ECONOMIC OUTLOOK (WEO): cuts 2019 GLOBAL GDP GROWTH
FORECAST FROM 3.3% TO 3.2%
*(US) JULY RICHMOND FED MANUFACTURING INDEX: -12 V +5E (lowest since Jan 2013)
*(CN) US NEGOTIATING TEAM REPORTEDLY TO HEAD TO CHINA ON MONDAY FOR
FACE-TO-FACE TRADE TALKS - PRESS
TXN Reports Q2 $1.36 v $1.21e, Rev $3.67B v $3.60Be
V Reports Q3 $1.37 v $1.33e, Rev $5.80B v $5.70Be
SNAP Reports Q2 -$0.06 v -$0.10e, Rev $388M v $356Me
WEDNESDAY 7/24
DBK.DE Reports Q2 adj Net €231M v €401M y/y, adj Pretax* €441M v €711M y/y, Rev
€6.20B v €6.20Be
*(FR) FRANCE JULY PRELIMINARY PMI MANUFACTURING: 50.0 V 51.6E (4th straight
expansion)
*(DE) GERMANY JULY PRELIMINARY PMI MANUFACTURING: 43.1 V 45.2E (7th month of
contraction and lowest reading since July 2012)
*(EU) EURO ZONE JULY PRELIMINARY PMI MANUFACTURING: 46.4 V 47.7E (6th straight
contraction and lowest since Dec 2012)
UPS Reports Q2 $1.96 v $1.93e, Rev $18.0B v $17.90Be
BA Reports Q2 -$5.82* v -$0.56e, Rev $15.8B v $18.0Be
CAT Reports Q2 $2.83 v $3.12e, Rev $14.4B v $14.5Be
*(US) Robert Mueller testimony: stressed to his staff that the probe needed to
be conducted fairly; Report did not exonerate Pres Trump
*(US) JULY PRELIMINARY MARKIT MANUFACTURING PMI: 50.0 V 51.0E (lowest since
Sept 2009)
*(US) JUN NEW HOME SALES: 646K V 658KE
DB1.DE Reports Q2 adj €1.58 v €1.55e, adj EBITDA €465.5M v €464.0Me, Rev
€724.8M v €725Me
FB Reports Q2 $1.99 adj v $1.90e, Rev $16.9B v $16.4Be
TSLA Reports Q2 -$1.12 v -$0.54e, Rev $6.35B v $6.38Be
*(KR) SOUTH KOREA Q2 PRELIMINARY GDP Q/Q: 1.1% V 0.9%E; Y/Y: 2.1% V 1.9%E
(JP) Japan Investors Net Buying of Foreign Bonds: ¥1.03T v ¥949.6B prior week;
Foreign Net Buying of Japan Stocks: -¥110.0B v- ¥93.1B prior week
THURSDAY 7/25
NOKIA.FI Reports Q2 non-IFRS Net €258M v €139M, Rev €5.69B v €5.44Be
ROG.CH Reports H1 (CHF) Net 8.90B v 7.52B y/y, Op 12.36B v 12.2Be, Rev 30.47B v
30.5Be
ABI.BE Reports Q2 Net $2.47B v $2.4Be, adj EBITDA $5.86B v $5.69Be, Rev $13.96B
v $13.9Be
BAS.DE Reports Q2 adj Net €6.46B v €6.40Be, Adj EBIT €1.05B v €966Me, Rev
€15.16B v €15.1Be
AZN.UK Reports Q2 Core EPS $0.73 v $0.60e, Rev $5.82B v $5.6Be
UNA.NL Reports H1 Net €3.21B v €3.23B y/y, Rev €26.1B v €26.1Be
DGE.UK Reports FY19 EPS 130.8p v 118.6p y/y, adj EBITDA £4.80B v £4.50B y/y,
Rev £12.87B v £12.16B y/y; Organic growth +6%
(CN) China Commerce Ministry (MOFCOM) spokesperson Gao: urges US to implement
Huawei commitment; reiterates China, US negotiators to meet Jul 30-31st
*(DE) GERMANY JULY IFO BUSINESS CLIMATE: 95.7 (lowest since Feb 2010) V 97.2E;
CURRENT ASSESSMENT: 99.4 V 100.4E
MMM Reports Q2 $2.20* v $2.04e, Rev $8.20B v $8.02Be
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED;
maintains guidance
*(US) JUN PRELIMINARY DURABLE GOODS ORDERS: 2.0% V 0.7%E; DURABLES
(EX-TRANSPORTATION): 1.2% V 0.2%E
(EU) ECB's Draghi: Reitereates guidance that interest rates seen at present or
lower level at least though H1 2020; seens need for accommodative policy stance
for a prolong period of time - Prepared Remarks
(EU) ECB's Draghi: Had broad agreement on assessment on economic outlook;
manufacturing outlook is worsening and needs to be taken into account - Q&A
INTC Apple to acquire majority of Intel’s smartphone modem business for $1B, as
speculated
AMZN Reports Q2 $5.22 v $5.29e, Rev $63.4B v $62.6Be
GOOGL Reports Q2 $14.21 v $11.50e, Rev $31.7B (ex $7.23B of TAC) v $30.9Be
FRIDAY 7/26
VOD.UK Reports Q1 Rev £10.7B v £10.9B y/y; Service Organic Rev -0.2% v -0.7%
q/q
CARBX U.N. Weather agency exec: recent European heatwave now heading for
Greenland, may take Greenland ice sheet to record low
*(US) Q2 ADVANCE GDP PRICE INDEX: 2.4% V 2.0%E; CORE PCE 1.8% V 2.0%E
*(US) Q2 ADVANCE GDP ANNUALIZED Q/Q: 2.1% V 1.8%E; PERSONAL CONSUMPTION: 4.3% V
4.0%E
AAPL Pres Trump tweets: "Apple will not be given Tariff wavers, or relief,
for Mac Pro parts that are made in China. Make them in the USA, no
Tariffs!"
