US stock future indexes are hugging the unchanged line (SPY -0.06%) as investors maintain a cautious tone ahead of a two-day FOMC meeting on interest rate policy. Markets are also feeling pressure with WTI crude slipping into the mid $42 level. Another round of second-quarter corporate earnings, the Dow component United Technologies and Dupont topped analysts 2Q estimates.
Here is the current market situation from CNN Money
European markets are mixed today. The DAX is up 0.86% while the CAC 40 gains 0.25%. The FTSE 100 is off 0.03%.
SAN FRANCISCO (Reuters) - The U.S. Federal Reserve is expected to keep interest rates unchanged this week, deferring any possible increase until September or December, as policymakers hold out for more evidence of a pickup in inflation.
LONDON (Reuters) - A buoyant yen and a fall in oil prices to their lowest since early May put stock markets on the defensive on Tuesday, as investors position for central bank meetings in the United States and Japan.
(Reuters) - Verizon Communications Inc reported a bigger-than-expected fall in quarterly revenue as the No. 1 U.S. wireless carrier's operations were disrupted by a strike involving its wireline workers and more customers opted for cheaper plans.
(Reuters) - Caterpillar Inc on Tuesday reported a lower quarterly net profit and lowered its full-year sales forecast as a weakened global economy combined with persistent political uncertainty to keep sales of new machinery sluggish.
LONDON/BRUSSELS (Reuters) - Anheuser-Busch InBev raised its $100 billion-plus bid for rival brewer SABMiller on Tuesday after a slide in the value of the pound following the Brexit vote made the offer less attractive for many investors, threatening to derail the deal.
(Reuters) - Yahoo Inc shareholders may be left betting on how quickly, if at all, the former web pioneer can cash in on its multi-billion dollar stakes in two Asian peers after Monday's deal to sell its core internet assets to Verizon Communications Inc.
With WTI now down over 17% from its mid-June highs, and energy stocks just beginning to wake up to the 2015-analog collapse, fears are rising that once again low oil prices are not 'unequivocally good' for stocks or the economy. Between record speculative long positioning in futures, the fundamental strength of the dollar and surge in gasoline inventories remain the big overhangs (along with rising storage levels at Cushing as demand begins to fade seasonally).
Sept 16 WTI is now down 17% from its recent highs...
Back to unchanged on the year at 3 month lows...
"It's the same things that have been driving it for the past few days now, gasoline inventories haven't declined as much as people thought they were going to," says Michael Hewson, analyst at CMC Markets.
And Energy stocks are catching down fast...
Tracking last year's pump-and-dump of hope perfectly.
Today's podcast is a little different. I speak with Raoul Pal and we cover a number of topics, running from one to another as they crop up. I hope you'll enjoy it as much as I always enjoy speaking with Raoul.
For those of you who've never heard of Raoul - he is first and foremost one of the most congenial, open minded, and thoughtful guys you could ever have the pleasure of discussing the truly mind boggling and fascinating world of global macroeconomics with.
He's also a world renowned global macro investor, an investment strategist, economic historian, traveler, rum drinker, and co-founder of Real Vision TV, together with Grant Williams who I spoke with some time ago. Here's some of the topics Raoul and I cover in the podcast:
The end of financialization of the economy. The era of doing nothing and get paid for it is over. Why Raoul thinks that's a good thing (especially if you're an entrepreneur) and he also lays out the way to profit from it.
Why markets around the world are so fragile today and why the investment environment is so dangerous, especially for less liquid investments.
Helicopter money - as Raoul said, "We're getti ...
One day after reporting another disappointing global retail sales report, posting 43 consecutive months of declining global sales...
... moments ago CAT reported Q2 earnings, which were modestly better than expected, with adjusted 2Q EPS of $1.09 vs est. 96c, above the highest est. of 99c on revenue of $10.34BN, also above the $10.13BN estimate.
However, the reason why the short squeeze was not triggered today is because in its earnings the company once again cut guidance, and now sees 2016 revenue of $40.0b-$40.5b, with the midpoint coming below the prior forecast of $40b-$42b, on "persistent economic risks." It also sees 2016 adj. EPS $3.55 excluding costs vs prior forecast $3.70, if still modestly above the consensus est. of $3.52. The reason, according to the company, is that "we're not expecting an upturn in important industries like mining, oil and gas and rail to happen this year."
The company's order backlog was $11.8bn at end of 2Q, down $1.3bn from the end of 1Q with two-thirds of decrease in Construciton Industries. Finally, the company now sees 2016 restructuring costs $700m vs prior forecast $550m; as a result of even more laoffs in the second half.
Here is the company's outlook.
World economic growth remains subdued and is not sufficient to drive improvement in most of the industries and markets we serve. Commodity prices appear to have stabilized, but at low levels. Global uncertainty continues, and the recent Brexi ...
It turns out that Donald Trump's proposed border wall is not such a bad idea after all. Though Mexico's current and former Presidents have both lambasted Trump for implying that a wall would curb immigration, it turns out that Mexicans like the idea.
There is one small caveat, however. Mexicans don't want to build the wall on the U.S.-Mexico border, but rather, they want to stem the tide of immigration into their own country by building the wall on their southern border with central America:
One of the largest newspapers along Mexico's border with Texas is calling for a border wall with Central America, similar to the one being promoted by Republican Presidential Candidate Donald J. Trump.
The editorial board of El Mañana, one of the largest newspapers in the border state of Tamaulipas, penned a piece called "Yes to the Border Wall ... but in Mexico's South." The piece praises the idea of border wall, not on the border with Mexico, but on the border with Central America.
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