US stock futures were little changed as earnings and trade fears weigh

U.S. stock index futures were nearly flat Thursday morning as earnings season gathers momentum. ET, Dow futures indicated an implied positive open of less than 5 points, while the S&P 500 and Nasdaq also pointed to lower opens. As earnings season kicks into full gear, Railroad giant CSX posted weaker-than-forecast quarterly results on Wednesday, sending its stock plummeting, while Bank of America reported better-than-expected earnings but warned that lower rates would hit its net interest income


U.S. stock index futures were nearly flat Thursday morning as earnings season gathers momentum. ET, Dow futures indicated an implied positive open of less than 5 points, while the S&P 500 and Nasdaq also pointed to lower opens. As earnings season kicks into full gear, Railroad giant CSX posted weaker-than-forecast quarterly results on Wednesday, sending its stock plummeting, while Bank of America reported better-than-expected earnings but warned that lower rates would hit its net interest income
US stock futures were little changed as earnings and trade fears weigh Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: elliot smith
Keywords: news, cnbc, companies, fears, earnings, sp, lower, season, trade, reported, giant, stock, futures, changed, little, weigh, bank


US stock futures were little changed as earnings and trade fears weigh

U.S. stock index futures were nearly flat Thursday morning as earnings season gathers momentum.

Around 7 a.m. ET, Dow futures indicated an implied positive open of less than 5 points, while the S&P 500 and Nasdaq also pointed to lower opens.

Stocks closed at the day’s lows Wednesday after The Wall Street Journal reported that trade negotiations between the U.S. and China had faltered over restrictions on Chinese telecommunications giant Huawei, citing sources familiar with the talks.

This came after President Donald Trump on Tuesday made skeptical comments about the possibility of an imminent resolution to the ongoing trade war between the world’s two largest economies.

As earnings season kicks into full gear, Railroad giant CSX posted weaker-than-forecast quarterly results on Wednesday, sending its stock plummeting, while Bank of America reported better-than-expected earnings but warned that lower rates would hit its net interest income growth.

Both United Airlines and Cintas also beat expectations, indicating that the bleak outlook offered at the beginning of earnings season might have been overly pessimistic. However, only around 7% of S&P 500 companies have reported second-quarter earnings thus far, according to FactSet data.

Another flurry of earnings is due Thursday, with Morgan Stanley, UnitedHealth, Union Pacific, SunTrust, and M&T Bank reporting before the bell, while Microsoft is set to report after the bell.

—CNBC’s Fred Imbert contributed to this report.

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Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: elliot smith
Keywords: news, cnbc, companies, fears, earnings, sp, lower, season, trade, reported, giant, stock, futures, changed, little, weigh, bank


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Gold retreats from 2-week peak as investors lock in profits

Gold prices pulled back from a two-week high to trade lower on Thursday, as some investors took advantage of the last session’s gain to book profits. Spot gold was down 0.4% at $1,420.60 per ounce, as of 0736 GMT, after hitting its highest since July 3 at $1,428.40. U.S. gold futures edged 0.1% lower to $1,421.60 an ounce. Among other precious metals, silver was up 0.1% at $15.99 per ounce, after hitting its highest since Feb. 20 at $16.12. Platinum rose 0.6% to $848.11 an ounce and palladium ga


Gold prices pulled back from a two-week high to trade lower on Thursday, as some investors took advantage of the last session’s gain to book profits. Spot gold was down 0.4% at $1,420.60 per ounce, as of 0736 GMT, after hitting its highest since July 3 at $1,428.40. U.S. gold futures edged 0.1% lower to $1,421.60 an ounce. Among other precious metals, silver was up 0.1% at $15.99 per ounce, after hitting its highest since Feb. 20 at $16.12. Platinum rose 0.6% to $848.11 an ounce and palladium ga
Gold retreats from 2-week peak as investors lock in profits Cached Page below :
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Keywords: news, cnbc, companies, 01, profits, investors, ounce, lock, 2week, session, dollar, gold, trade, retreats, market, peak, rose, lower


Gold retreats from 2-week peak as investors lock in profits

Gold prices pulled back from a two-week high to trade lower on Thursday, as some investors took advantage of the last session’s gain to book profits.

Spot gold was down 0.4% at $1,420.60 per ounce, as of 0736 GMT, after hitting its highest since July 3 at $1,428.40. It rose nearly 1.5% in the previous session as the dollar slipped after weaker-than-expected U.S. housing data increased prospects for an interest rate cut by the Federal Reserve.

U.S. gold futures edged 0.1% lower to $1,421.60 an ounce.

“A slightly weaker dollar and a clear preference from investors over the last 24 hours drove safe-haven assets higher,” said Michael McCarthy, chief market strategist, CMC Markets.

“From gold’s point of view, it approached a key resistance level around $1,430, and having failed to push through it, it looks like short-term trading investors are taking advantage of gains.”

The dollar index was down 0.2% against a basket of major currencies on Thursday. It climbed to a one-week peak in the previous session on robust U.S. retail sales, but nudged lower as Treasury yields fell in the wake of weak U.S. housing market data and concerns about the unresolved U.S.-China trade conflict.

Meanwhile, the Fed is widely expected to lower interest rates by 25 basis points at its policy meeting at the end of the month, with some in the market even betting on a 50 basis point cut.

The Fed reported on Wednesday that the U.S. economy continued growing at a “modest” rate in recent weeks, with consumers continuing to spend and a “generally positive” outlook overall even in the face of disruptions caused by the U.S. trade policy.

Earlier in the week, U.S. President Donald Trump kept up the pressure on Beijing with a threat to put tariffs on another $325 billion of Chinese goods.

“Bullion is likely to see strong support after the Fed’s Beige Book emphasised policymakers’ concern on negative impact of trade uncertainty,” Edward Moya, a senior market analyst at OANDA, said in a note.

Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.48% to 803.18 tonnes on Wednesday from 799.37 tonnes on Tuesday.

Among other precious metals, silver was up 0.1% at $15.99 per ounce, after hitting its highest since Feb. 20 at $16.12. The metal was on track for a fifth consecutive session of gains.

Platinum rose 0.6% to $848.11 an ounce and palladium gained 0.1% to $1,538.95.


Company: cnbc, Activity: cnbc, Date: 2019-07-18
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First-time homebuyers could snag lower costs for FHA loans under House-passed bill

A bipartisan bill that cleared the House last week would let first-time homebuyers pay a bit less at closing if they go through homeownership counseling. Borrowers who go through the counseling — aimed at helping them be financially responsible homeowners — would get a discount on the upfront mortgage insurance that all FHA loans require borrowers to pay. Photo by Rolf Bruderer via Getty ImagesThe delinquency rate on FHA loans is close to 9%, compared with about 3% for conventional loans, accord


A bipartisan bill that cleared the House last week would let first-time homebuyers pay a bit less at closing if they go through homeownership counseling. Borrowers who go through the counseling — aimed at helping them be financially responsible homeowners — would get a discount on the upfront mortgage insurance that all FHA loans require borrowers to pay. Photo by Rolf Bruderer via Getty ImagesThe delinquency rate on FHA loans is close to 9%, compared with about 3% for conventional loans, accord
First-time homebuyers could snag lower costs for FHA loans under House-passed bill Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: sarah obrien
Keywords: news, cnbc, companies, fha, mortgage, loan, homebuyers, lower, housing, firsttime, housepassed, loans, upfront, snag, pay, costs, bill, insurance, borrowers


First-time homebuyers could snag lower costs for FHA loans under House-passed bill

A bipartisan bill that cleared the House last week would let first-time homebuyers pay a bit less at closing if they go through homeownership counseling. Called the Housing Financial Literacy Act, the measure would apply to first-time homebuyers who take out a mortgage backed by the Federal Housing Administration. Borrowers who go through the counseling — aimed at helping them be financially responsible homeowners — would get a discount on the upfront mortgage insurance that all FHA loans require borrowers to pay. “The idea behind the legislation is that counseling should improve loan performance and make people better borrowers,” said Pete Mills, senior vice president of residential policy for the Mortgage Bankers Association, which generally supports the bill.

Photo by Rolf Bruderer via Getty Images

The delinquency rate on FHA loans is close to 9%, compared with about 3% for conventional loans, according to data from the Mortgage Bankers Association. In 2009, in the midst of the housing crisis that caused the Great Recession, that FHA delinquency rate reached above 14%. Roughly 83% of all FHA loans (excluding refinanced mortgages) in 2018 went to first-time homebuyers. FHA loans, which come with less-stringent requirements than conventional loans, tend to be used by first-time borrowers with low or moderate incomes who often have lower credit scores than other borrowers. Due to that increased risk for lenders, borrowers are required to pay mortgage insurance to the FHA for many years or over the life of the loan (depending on the particulars of the terms), as well as an upfront mortgage insurance premium. That upfront amount currently is equal to 1.75% of the base loan amount, and it can be paid at closing or rolled into the loan. The proposed discount of 25 basis points would reduce that amount to 1.5%.


Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: sarah obrien
Keywords: news, cnbc, companies, fha, mortgage, loan, homebuyers, lower, housing, firsttime, housepassed, loans, upfront, snag, pay, costs, bill, insurance, borrowers


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Fed’s Williams hints at more aggressive rate cuts: ‘Better to take preventative measures’

Central bankers need to act quickly and forcefully when rates are low and economic growth is slowing, New York Federal Reserve President John Williams said Thursday. But not when interest rates are in the vicinity of the ZLB,” he said in prepared remarks. However, he said that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.” “The expectation of lower interest rates in the future lowers yields on bonds and thereb


Central bankers need to act quickly and forcefully when rates are low and economic growth is slowing, New York Federal Reserve President John Williams said Thursday. But not when interest rates are in the vicinity of the ZLB,” he said in prepared remarks. However, he said that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.” “The expectation of lower interest rates in the future lowers yields on bonds and thereb
Fed’s Williams hints at more aggressive rate cuts: ‘Better to take preventative measures’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: jeff cox
Keywords: news, cnbc, companies, better, zlb, lower, measures, feds, interest, cut, hints, rate, economic, central, rates, low, zero, williams, aggressive, preventative, growth, cuts


Fed's Williams hints at more aggressive rate cuts: 'Better to take preventative measures'

Central bankers need to act quickly and forcefully when rates are low and economic growth is slowing, New York Federal Reserve President John Williams said Thursday.

The influential policymaker delivered a speech discussing what should be done when central banks are near the “zero lower bound,” or close to as low as rates can go.

“It’s better to take preventative measures than to wait for disaster to unfold,” he told the annual meeting of the Central Bank Research Association.

Rather than keep rates elevated to give central banks room to cut in the face of a crisis, Williams said the proper move is not to “keep your powder dry.”

“When the ZLB is nowhere in view, one can afford to move slowly and take a ‘wait and see’ approach to gain additional clarity about potentially adverse economic developments. But not when interest rates are in the vicinity of the ZLB,” he said in prepared remarks. “In that case, you want to do the opposite, and vaccinate against further ills. When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress.”

Williams spoke as the policymaking Federal Open Market Committee is expected to cut its benchmark interest rate during the July 30-31 meeting. Officials are worried about persistently low inflation, spillover from a global slowdown and the fallout from back-and-forth tariffs between the U.S. and China.

The Fed currently pegs the overnight funds rate in a range between 2.25% and 2.5% — above zero, but still well below normal levels that have prevailed during past economic expansions.

Williams did not directly address whether he favors a cut, though markets are pricing in a 100% chance of a quarter-point reduction and a 38% probability that the Fed might cut by half a point, according to the CME.

However, he said that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.”

“The expectation of lower interest rates in the future lowers yields on bonds and thereby fosters more favorable financial conditions overall. This will allow the stimulus to pick up steam, support economic growth over the medium term, and allow inflation to rise,” he said.


Company: cnbc, Activity: cnbc, Date: 2019-07-18  Authors: jeff cox
Keywords: news, cnbc, companies, better, zlb, lower, measures, feds, interest, cut, hints, rate, economic, central, rates, low, zero, williams, aggressive, preventative, growth, cuts


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US Treasury yields lower amid weaker housing data, trade concerns

U.S. government debt yields fell on Wednesday amid weaker-than-expected housing data and following President Donald Trump’s Tuesday comments that there is still a “long way to go” on trade talks with China. ET, the yield on the benchmark 10-year Treasury note , which moves inversely to price, was lower at around 2.052%, while the yield on the 2-year Treasury note yielded 1.82%. The government said that housing starts decreased 0.9% to a seasonally adjusted annual rate of 1.253 million units last


U.S. government debt yields fell on Wednesday amid weaker-than-expected housing data and following President Donald Trump’s Tuesday comments that there is still a “long way to go” on trade talks with China. ET, the yield on the benchmark 10-year Treasury note , which moves inversely to price, was lower at around 2.052%, while the yield on the 2-year Treasury note yielded 1.82%. The government said that housing starts decreased 0.9% to a seasonally adjusted annual rate of 1.253 million units last
US Treasury yields lower amid weaker housing data, trade concerns Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: thomas franck
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US Treasury yields lower amid weaker housing data, trade concerns

U.S. government debt yields fell on Wednesday amid weaker-than-expected housing data and following President Donald Trump’s Tuesday comments that there is still a “long way to go” on trade talks with China.

At around 4:00 p.m. ET, the yield on the benchmark 10-year Treasury note , which moves inversely to price, was lower at around 2.052%, while the yield on the 2-year Treasury note yielded 1.82%.

The Commerce Department said in a report on Wednesday that U.S. homebuilding fell for a second straight month in June and permits slumped to a two-year low, hinting at a softer housing market despite lower mortgage rates.

The government said that housing starts decreased 0.9% to a seasonally adjusted annual rate of 1.253 million units last month as a plunge in multi-family homebuilding dragged on the data. The sector has hit a soft patch in recent quarters and likely subtracted from GDP in the second quarter.

Builder confidence, meanwhile, ticked up just one point in July to 65, according to a Tuesday report from the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

“Builders report solid demand for single-family homes. However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes,” said NAHB Chairman Greg Ugalde, a homebuilder and developer from Torrington, Connecticut.

Trade worries have also kept Treasurys in demand after President Donald Trump raised doubts on the trade progress between China and the U.S. and renewed threats to slap tariffs on another $325 billion of Chinese goods.


Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: thomas franck
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European stocks close lower as trade concerns weigh; Ericsson down 11%

European stocks lost value by the end of trade Wednesday as trade concerns continued to weigh on global markets while earnings season gathered pace. The pan-European Stoxx 600 provisionally traded 0.36% lower during the session, with oil and gas stocks slipping almost 2% but food and beverage stocks clawing a 0.5% rise. Trump’s comments came after both countries agreed not to ratchet up trade tensions in an effort to restart talks. Shares of Swiss watchmaker Swatch Group climbed after it issued


European stocks lost value by the end of trade Wednesday as trade concerns continued to weigh on global markets while earnings season gathered pace. The pan-European Stoxx 600 provisionally traded 0.36% lower during the session, with oil and gas stocks slipping almost 2% but food and beverage stocks clawing a 0.5% rise. Trump’s comments came after both countries agreed not to ratchet up trade tensions in an effort to restart talks. Shares of Swiss watchmaker Swatch Group climbed after it issued
European stocks close lower as trade concerns weigh; Ericsson down 11% Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: elliot smith ryan browne, elliot smith, ryan browne
Keywords: news, cnbc, companies, washington, tensions, earnings, tariffs, stocks, ericsson, 11, inflation, lower, group, close, trade, european, zone, shares, concerns, weigh


European stocks close lower as trade concerns weigh; Ericsson down 11%

European stocks lost value by the end of trade Wednesday as trade concerns continued to weigh on global markets while earnings season gathered pace.

The pan-European Stoxx 600 provisionally traded 0.36% lower during the session, with oil and gas stocks slipping almost 2% but food and beverage stocks clawing a 0.5% rise.

Market focus early Wednesday was largely attuned to the U.S.-China trade spat. President Donald Trump on Tuesday said that the U.S. and China still have a “long way to go” on trade, adding that Washington could slap tariffs on an additional $325 billion in Chinese goods “if we want.”

Trump’s comments came after both countries agreed not to ratchet up trade tensions in an effort to restart talks. Washington and Beijing have slapped tariffs on billions of dollars’ worth of each other’s imports since last year.

Attention shifted briefly as euro zone inflation data showed improvement, but still fell short of European Central Bank (ECB) targets, rendering it unlikely to dampen expectations of monetary policy easing from the central bank

Euro zone inflation year-on-year for June came in slightly higher than initially forecast on Wednesday at 1.3%, but both headline and underlying inflation rates remain below the improvement sought by the ECB, which targets a rate of just below 2%.

British inflation matched the Bank of England’s 2% target for the second consecutive month.

Meanwhile, earnings are also in focus for investors. In Europe, Swedish Orphan Biovitrum shares rallied 10% after the company forecast full-year profit and sales growth. Shares of Swiss watchmaker Swatch Group climbed after it issued guidance for strong growth ahead despite a fall in first-half profits.

Swedish manufacturer Dometic Group saw its shares tumble 6.7% following disappointing second-quarter earnings, while telecoms equipment maker Ericsson dropped 11.2% after warning that the costs of winning new network business may negatively impact its profit margins in the second half of the year.

Swedbank also slipped sharply after it cut its dividend amid uncertainties over its exposure to a Baltic money-laundering scandal.

Elsewhere, finance ministers from the Group of Seven (G-7) met in France, with U.S.-Sino trade tensions, France’s digital tax and Facebook’s Libra cryptocurrency expected to be on the agenda.


Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: elliot smith ryan browne, elliot smith, ryan browne
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Buying stocks when they are this expensive has led to low returns in the future

But buying stocks when they are this expensive has historically led to lower future returns, data compiled by Ned Davis Research shows. Lower rates make stocks more attractive relative to bonds as it becomes harder to find yield in the bond market. After such a strong gain, “few would be surprised to see that stocks are expensive,” Clissold said. “For that reason, relative valuations provide a starkly different picture than absolute ones,” he added. “Comparing the S&P 500 GAAP earnings yield (in


But buying stocks when they are this expensive has historically led to lower future returns, data compiled by Ned Davis Research shows. Lower rates make stocks more attractive relative to bonds as it becomes harder to find yield in the bond market. After such a strong gain, “few would be surprised to see that stocks are expensive,” Clissold said. “For that reason, relative valuations provide a starkly different picture than absolute ones,” he added. “Comparing the S&P 500 GAAP earnings yield (in
Buying stocks when they are this expensive has led to low returns in the future Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: fred imbert
Keywords: news, cnbc, companies, returns, led, buying, fed, relative, stocks, expensive, future, lower, low, ned, yield, valuations, rates, sp


Buying stocks when they are this expensive has led to low returns in the future

Stocks recently notched all-time highs and with the Federal Reserve likely cutting rates later this month, the rally could keep going. But buying stocks when they are this expensive has historically led to lower future returns, data compiled by Ned Davis Research shows.

The S&P 500’s price-to-earnings ratio — one of the most widely used valuation metrics — is sitting at 21.5 on a GAAP basis, well within its historical top quintile. The index’s median return over a 10-year period when valuations are so high is 4.7%, when adjusted for inflation. The S&P 500’s median returns when valuations are at lower quintiles range between 5.4% and 11.6%, according to Ned Davis Research.

The market’s historically high valuation comes at a time when many investors are expecting easier Fed policy to further juice gains in 2019. It also comes at a time when stocks are historically cheap relative to bonds. Lower rates make stocks more attractive relative to bonds as it becomes harder to find yield in the bond market.

But with the S&P 500’s absolute valuation being so high, investors should be more cautious moving forward, Ned Davis notes.

“Absolute valuations have done a better job than relative ones of identifying stocks as cheap or expensive in the long run,” Ed Clissold, chief U.S. strategist at Ned Davis Research Group, wrote in a note.

The S&P 500 is up around 20% in 2019 in part because the Fed has pivoted away from its initial stance on rate hikes. Entering 2019, the Fed had forecast it would raise rates twice this year. Since then, the Fed brought down its rate-hike forecast to zero and has increased expectations for lower rates as soon as July.

Fed Chair Jerome Powell reaffirmed those expectations last week. In his testimony to Congress, Powell said “crosscurrents ” stemming from slower economic growth and lingering U.S.-China trade tensions were dampening the U.S.’ outlook on the economy.

Stocks and bonds have rallied side by side as a Fed rate cut becomes more likely. The benchmark 10-year Treasury note yield has fallen nearly 60 basis points in the past six months (yields move inversely to prices). The S&P 500 is up more than 14% in that time.

After such a strong gain, “few would be surprised to see that stocks are expensive,” Clissold said. But “if stocks are so expensive, should investors put their money elsewhere? Central banks have left few options in the fixed income asset class.”

“For that reason, relative valuations provide a starkly different picture than absolute ones,” he added. “Comparing the S&P 500 GAAP earnings yield (inverse of the P/E ratio) to the 10-year Treasury yield, stocks are in the cheapest quintile versus T-notes historically.”

But the strategist points out that one of the key reasons stocks are so cheap relative to bonds is because of the sharp plunge in yields. “With the Fed poised to cut rates on July 31, the prospect for higher rates in the short term is dim, but history cautions against just relying on stocks being less overvalued than bonds.”

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Company: cnbc, Activity: cnbc, Date: 2019-07-17  Authors: fred imbert
Keywords: news, cnbc, companies, returns, led, buying, fed, relative, stocks, expensive, future, lower, low, ned, yield, valuations, rates, sp


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Dollar rises on upbeat retail sales data, euro falls

The greenback strengthened versus the euro due to data that pointed to a deterioration in confidence among German investors prompted by the trade conflict between China and the United States and political tensions with Iran. The U.S. Commerce Department said retail sales rose 0.4% in June, exceeding the 0.1% increase forecast among analysts polled. Traders also expect the European Central Bank to move policy rates deeper into negative later this year as the euro zone economy has been struggling.


The greenback strengthened versus the euro due to data that pointed to a deterioration in confidence among German investors prompted by the trade conflict between China and the United States and political tensions with Iran. The U.S. Commerce Department said retail sales rose 0.4% in June, exceeding the 0.1% increase forecast among analysts polled. Traders also expect the European Central Bank to move policy rates deeper into negative later this year as the euro zone economy has been struggling.
Dollar rises on upbeat retail sales data, euro falls Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-16
Keywords: news, cnbc, companies, lower, upbeat, falls, economic, rises, fell, versus, trade, interest, touching, retail, dollar, data, sales, rates, euro


Dollar rises on upbeat retail sales data, euro falls

The dollar rose against a basket of currencies on Tuesday as surprisingly strong growth in U.S. retail sales in June soothed jitters about the American economy and trimmed expectations the Federal Reserve may embark on a deep interest rate cut later this month.

The greenback strengthened versus the euro due to data that pointed to a deterioration in confidence among German investors prompted by the trade conflict between China and the United States and political tensions with Iran.

The British pound fell to six-month lows against the euro and a 27-month trough versus the dollar as Conservative Party members Boris Johnson and Jeremy Hunt, vying to be Britain’s next prime minister, were seen to be toughening their line on Brexit negotiations.

Investors are worried about the rising risk of a no-deal exit from the European Union.

“An improved U.S. economic outlook should provide some fuel for further dollar gains,” said Win Thin, global head of currency strategy at Brown Brothers Harriman & Co.

An index that tracks the dollar against a group of six currencies was up 0.45% at 97.38 after touching 97.361, the highest in four sessions.

Recent U.S. economic data have on balance beat expectations. Concerns about the drag from global trade disputes and sluggish inflation among developed economies, however, have led policymakers to consider cutting interest rates and/or embarking on bond purchases to boost investor confidence and business activities.

The U.S. Commerce Department said retail sales rose 0.4% in June, exceeding the 0.1% increase forecast among analysts polled.

Last week, Fed Chairman Jerome Powell hinted in testimonies before Congress that the central bank was ready to “act as appropriate” to support the current U.S. expansion, which is the longest on record. U.S. interest rate futures implied traders fully expect the Fed to lower key lending rates by at least a quarter point at its July 30-31 policy meeting, according to CME Group’s FedWatch program.

Traders also expect the European Central Bank to move policy rates deeper into negative later this year as the euro zone economy has been struggling.

Earlier Tuesday, the ZEW Institute said its monthly survey showed economic sentiment among German investors fell to -24.5 in July from -21.1 the month before.

The euro was down 0.38% at $1.1215 and 0.09% lower at 121.35 yen. The single currency, however, was up 0.54% at 90.43 pence after touching a six-month peak at 90.43 earlier Tuesday.

Sterling fell below $1.24 for the first time since April 2017. It was 0.91% lower at $1.2403.


Company: cnbc, Activity: cnbc, Date: 2019-07-16
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The news on semiconductors is bad, and it will likely get worse

ASML Holding Semiconductor company logo seen displayed on smart phone. It’s led to a torrent of lowered guidance — and it’s likely about to get worse. Tuesday, Arrow Electronics, which makes electronic components and semiconductors, pre-announced lower earnings, citing deteriorating demand conditions particularly from Asia, and an inventory correction. Last week another semiconductor company, Vishay, pre-announced June sales well below expectations, also noting an inventory correction and pricin


ASML Holding Semiconductor company logo seen displayed on smart phone. It’s led to a torrent of lowered guidance — and it’s likely about to get worse. Tuesday, Arrow Electronics, which makes electronic components and semiconductors, pre-announced lower earnings, citing deteriorating demand conditions particularly from Asia, and an inventory correction. Last week another semiconductor company, Vishay, pre-announced June sales well below expectations, also noting an inventory correction and pricin
The news on semiconductors is bad, and it will likely get worse Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-16  Authors: bob pisani
Keywords: news, cnbc, companies, lower, asml, likely, global, bad, semiconductor, semiconductors, worse, growth, company, sales, street, earnings


The news on semiconductors is bad, and it will likely get worse

ASML Holding Semiconductor company logo seen displayed on smart phone. ASML is a Dutch company and currently the largest supplier in the world of photolithography systems for the semiconductor industry. (

Could the news get any worse for semiconductors?

First the global slowdown clobbered them at the end of last year, then the China trade war intensifying clobbered them again in May, then the Huawei ban, then Japan’s export restrictions against South Korea.

Did I mention that lower auto sales is also a problem? U.S. sales are down 3% year over year and China is down 10%, according to Mizhuo.

It’s led to a torrent of lowered guidance — and it’s likely about to get worse.

On Wednesday, semiconductor capital equipment company ASML reports earnings, and already the Street is gearing up for bad news: “We expect 2019 and 2020 consensus estimates for ASML to be revised lower following the June-quarter earnings report,” Cowen analyst Mehdi Hosseini wrote in a note Tuesday.

The bad news has already started. Tuesday, Arrow Electronics, which makes electronic components and semiconductors, pre-announced lower earnings, citing deteriorating demand conditions particularly from Asia, and an inventory correction.

Last week another semiconductor company, Vishay, pre-announced June sales well below expectations, also noting an inventory correction and pricing pressures.

Nobody is waiting for more evidence. Wall Street has been cutting estimates like mad. Pre-tax profits for semiconductors for just the second half is expected contract from 36% to 29.3% year over year, a 20% reduction. Margins are contracting as well, from 33.6% to 26.3%, according to Refinitiv.

And yet, the VanEck Semiconductors ETF, a basket of the largest players, is only 5% from its history high in late April.

What gives? Cowen admits it’s “a head scratcher to many investors.”

It shouldn’t be. If there is one belief investors have today, it is growth trumps all, and the best growth is almost invariably in semiconductors. Except when it isn’t.

Abhinav Davuluri, analyst at Morningstar, says investors are simply reflecting the belief that the semiconductor industry is only going to get bigger.

“We don’t see things getting healthy until early 2020, but these end-markets are going to be more diverse,” he told me. “It’s not just the PC space, or the smartphone space. It’s cloud computing, artificial intelligence, 5G, autos. These companies are bigger, there’s more consolidation, and they can better handle the peaks and troughs.”

Traders are also expecting lower global interest rates to come to the rescue: “[W]e look for global credit loosening to enable economic growth to re-accelerate in the coming 2-3 quarters,” Evercore ISI recently wrote.

Still even the bulls admit that the whole premise could fall apart very quickly. The same Evercore ISI note admitted, “We readily acknowledge that a simple tweet could upend everything, particularly with Semis at the center of all of the above.”


Company: cnbc, Activity: cnbc, Date: 2019-07-16  Authors: bob pisani
Keywords: news, cnbc, companies, lower, asml, likely, global, bad, semiconductor, semiconductors, worse, growth, company, sales, street, earnings


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Stocks fall slightly from records as investors cautious on upcoming earnings reports

Stocks slipped after reaching record highs on Monday as Wall Street remained cautious to start off the corporate earnings season. Citigroup kicked off the earnings season by reporting second-quarter numbersthat topped analyst expectations. Gains from the initial public offering of Tradeweb, an electronic bond trading platform, drove the bank’s results past Wall Street estimates. The outlook for this earnings season is bleak. Analysts expect S&P 500 earnings to have fallen by 3% in the second qua


Stocks slipped after reaching record highs on Monday as Wall Street remained cautious to start off the corporate earnings season. Citigroup kicked off the earnings season by reporting second-quarter numbersthat topped analyst expectations. Gains from the initial public offering of Tradeweb, an electronic bond trading platform, drove the bank’s results past Wall Street estimates. The outlook for this earnings season is bleak. Analysts expect S&P 500 earnings to have fallen by 3% in the second qua
Stocks fall slightly from records as investors cautious on upcoming earnings reports Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: fred imbert
Keywords: news, cnbc, companies, lower, stocks, upcoming, wall, record, earnings, fall, cautious, results, reports, sp, slightly, season, morgan, investors, street, records, traded


Stocks fall slightly from records as investors cautious on upcoming earnings reports

Stocks slipped after reaching record highs on Monday as Wall Street remained cautious to start off the corporate earnings season.

The Dow Jones Industrial Average traded 21 points lower, or 0.1%. The S&P 500 also lost 0.1%. The Nasdaq Composite hovered around the flatline. The major indexes notched fresh record highs at the open before pulling back from those levels.

Citigroup kicked off the earnings season by reporting second-quarter numbersthat topped analyst expectations. Gains from the initial public offering of Tradeweb, an electronic bond trading platform, drove the bank’s results past Wall Street estimates. Citigroup shares traded higher in the premarket after the results were released, but traded more than 1% lower shortly after the open.

Other big banks like J.P. Morgan Chase, Morgan Stanley, Bank of America and Goldman Sachs are expected to report quarterly earnings later this week.

The outlook for this earnings season is bleak. Analysts expect S&P 500 earnings to have fallen by 3% in the second quarter, according to FactSet data.


Company: cnbc, Activity: cnbc, Date: 2019-07-15  Authors: fred imbert
Keywords: news, cnbc, companies, lower, stocks, upcoming, wall, record, earnings, fall, cautious, results, reports, sp, slightly, season, morgan, investors, street, records, traded


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