U.S. stocks are poised to open lower today after disappointing results from technology heavyweights Apple Inc. and Microsoft Corp. Gold is still trending down, oil is testing support and the U.S. dollar is bravely trying to melt upwards.
Here is the current market situation from CNN Money
One week ago, when the after hours algos sent INTC stock soaring on headline-scanning euphoria by nearly 10% to over $32/share, we did a snap analysis showing that the only reason why Intel beat was because it literally used the oldest trick in the book: instead of its historical tax rate of 28.7%, the company "decided" that a 9.3% tax rate was more appropriate...
... as a result converting a 25% plunge in operating income into flat EPS. Subsequently the algos finally read what we posted, and as of this writing INTC stock was over $4 lower than those after hours peaks from last Wednesday.
Fast forward to today, when moments ago key Dow Jones component Coca Cola (KO) reported that non-GAAP EPS of $0.63, beating expectations of $0.60 and, sure enough, sending its stock higher.
So we decided to take a look at these better than expected earnings and much to our dismay, we found that KO used precisely the same gimmick and yes, the algos fell for it all over again.
TORONTO (Reuters) - BlackBerry Ltd said on Wednesday it is buying privately-held AtHoc, a provider of secure, networked crisis communications, as it moves to broaden its software offering and generate revenue from its BBM messaging service.
ATHENS (Reuters) - Greece's leftist government urged disgruntled lawmakers on Wednesday to back reforms required for talks on a rescue deal to start, as Prime Minister Alexis Tsipras faced his second major test in parliament in a week.
(Reuters) - Coca-Cola Co reported a 20 percent jump in quarterly profit as it raised prices in North America to offset the impact of a stronger dollar, which reduced the value of sales from overseas markets.
The Greek parliament will vote on a second batch of prior actions on Wednesday including EU rules on bank resolutions and civil justice reform amid protests from public sector union ADEDY which has pledged to "continue the battle so that the new barbaric bailout does not pass and is overturned," and so that Greece does fall under the "neocolonial control" of Brussels.
Although there will be a third vote during the first week of August on pension reforms and taxes on farmers (these issues were removed from Wednesday's bill with Brussels' blessing), formal discussions around a third program for Greece will begin immediately if, as expected, lawmakers approve today's bill.
Although Alexis Tsipras will likely get the votes he needs, Wednesday's proceedings will be watched closely for signs that Syriza has splintered further after the premier sacked dissenters in a cabinet "reshuffle" following last week's vote in which 39 Syriza MPs refused to support the new bailout deal. That cut Tsipras support within the coalition government down to 123, meaning he is heavily dependent upon opposition support for the new program and as Reuters notes, there's some speculation that if his support within the coalition drops below 120 votes, the PM would be forced to resign. Here's more:
Together with his coalition partners from the right-wing Independent Greeks, Tsipras has 162 seats in the 300-seat parliament. But last week's rebellion cut his support to just 123 votes and any further defections may be seen as undermining prospects for reform.
LONDON/DUBAI (Reuters) - A drop in oil prices this month is likely to be short-term and will not deflect OPEC from its policy of keeping output high to defend market share, delegates from Gulf OPEC members and other nations said.
CHICAGO/SAN FRANCISCO (Reuters) - Macy's Inc is expanding same-day delivery to several new U.S. markets this summer, one of the most aggressive pushes by a brick-and-mortar retailer in an area dominated by e-commerce giant Amazon , according to a Macy's official.
HONG KONG (Reuters) - Japan needs bolder measures such as harsher criminal sanctions for fraud and whistleblower protections to improve corporate transparency and prevent a repeat of the accounting scandal seen at Toshiba Corp, foreign investors and governance experts said.
While this week has been, and continues to be, devoid of macro updates, yesterday's flurry of mostly disappointing earnings releases both before and after the open, including some of the biggest DJIA companies as well as the current and previously biggest and most important companies in the world, AAPL and MSFT, both of which came crashing down following earnings and forecasts that were well short of market expectations, came as a jolt to a market that was artificially priced by central bank liquidity and HFT momo algos beyond perfection. Add to that yesterday's downward revision to historical industrial production which confirmed the US economy is a step away from recession, as well as last night's Crude API inventory build which is once again pressuring WTI lower and on the verge of a 49 handle, and perhaps the biggest question is why are futures not much lower.
Stocks in Europe traded mixed, with information tech and energy sectors underperforming, following less than impressive earnings by Apple and Microsoft after the closing bell on Wall Street, as well as lower energy prices. Of note, Apple's German listed shares traded lower by as much as 7%, with ARM Holdings down 4% after failing to meet revenue expectations.
Fixed income markets have seen light news flow during the European session, with Bunds opening higher amid soft equities before paring these gains throughout the morning.
Asian equities tracked the weakness seen on Wall Street, after Apple (AAPL) shares declined by 9.1% after-market following their iPhone sales missing expectations (47.5mln vs. Exp. 48.8mIn) and Microsoft posted a record quarterly net loss. Nikkei 225 (-1.2%) was dragged lower by softness in IT, firmer JPY and declines among Apple suppliers. ASX 200 (-1.6%) traded in negative territory amid losses sustained in large banks, following analysts revising their profit forecast downwards, while Chinese markets fluctuated between gains and losses with the Shangha ...
SEATTLE (Reuters) - Amazon said on Wednesday it would expand a marketplace that offers services from plumbing to fence repairs in 15 cities and help customers find contractors for more expensive home projects as it develops its role as a middleman for third-party vendors. Â Â Â The e-commerce giant said it now had more than 15 million unique services offered through its home services marketplace, up from 2 million when it launched in March.
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