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27Jul2016 Pre-Market Commentary: Apple Up 7%, Wall Street Expected To Open In The Green, Durable Goods Plunge 4%, Key Corporate Earnings On Tap

Written by Gary

U.S. stock futures point higher ahead of Fed outcome, Apple jumps 7%, the Fed is expected to stand pat at its meeting today. WTI crude prices remain steady in the high $42's and the US dollar is showing some weakness before the opening bell.


Here is the current market situation from CNN Money

European markets are broadly higher today with shares in France leading the region. The CAC 40 is up 1.60% while Germany's DAX is up 0.89% and London's FTSE 100 is up 0.67%.

What Is Moving the Markets

Here are the headlines moving the markets.

European stocks rise, Asia lifted by Japan stimulus

LONDON (Reuters) - Stocks rose in Europe and Asia on Wednesday while the yen sank against the dollar, after Prime Minister Shinzo Abe said his government would present a $265 billion stimulus package to reflate the Japanese economy.

Fiat Chrysler second-quarter operating profit hit by recall costs

MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) on Wednesday reported a 14 percent drop in second-quarter operating profit after charges related to recall costs and capacity shifts in North America, sending its shares more than 3 percent lower.

Coca-Cola's revenue misses estimates; shares fall

(Reuters) - Coca-Cola Co reported lower-than-expected quarterly revenue, citing difficult conditions in many of its emerging and developing markets.

Boeing posts first quarterly loss in almost seven years

NEW YORK (Reuters) - Boeing Co on Wednesday reported its first quarterly loss in nearly seven years, hit by charges related to the 787, 747 and KC-46 tanker aircraft programs.

Anthem profit beats estimates as Medicaid memberships rise

(Reuters) - U.S. health insurer Anthem Inc reported a better-than-expected profit as enrolments rose in its Medicaid plans, which cater to low-income Americans.

Apple sells more iPhones than expected, shares jump after hours

(Reuters) - Apple Inc sold more iPhones than Wall Street expected in the third quarter and estimated its revenue in the current period would top many analysts' targets, soothing fears that demand for the company's most important product had hit a wall.

Apple CEO touts future technology amid iPhone worries

SAN FRANCISCO (Reuters) - As iPhone sales declined for the second straight quarter, Apple CEO Tim Cook peeled back the curtain ever so slightly on its work in artificial intelligence and augmented reality, aiming to reassure investors that the company is ready to ride the next wave of technology.

Nintendo posts first-quarter loss, delays launch of accessory for Pokemon GO

TOKYO (Reuters) - Japan's Nintendo Co Ltd booked a quarterly operating loss on a sharply stronger yen and delayed the launch of an accessory for Pokemon GO, but hopes for long-term growth are running high on the mobile game's success.

Tesla's Musk sees 'modest' capital raise for next strategic turn

SPARKS, Nevada (Reuters) - Tesla Motors Inc's next strategic turn could cost the electric car maker "tens of billions" of dollars over the long term, but will likely require only a "modest" capital raise, Chief Executive Elon Musk said on Tuesday.

Dan Loeb Compares Managing Money In 2016 To A "Game Of Thrones" Slaughter

After a poor start to the year, Dan Loeb's Third Point redeemed itself in the second quarter, in which it posted a 4.6% return, bringing the YTD net P&L to +2.2%

True to his narrative form cultivated during his early activist "Mr.Pink" days, Dan Loeb second quarter letter starts off where his infamous Q1 "Carnage" story left off, and starts of with an almost literal bang, providing the most vivid visual of what it means to run money in 2016. As he puts it, "watching Jon Snow's epic "Battle of the Bastards" scene in the penultimate episode of this season's Game of Thrones gives investors a sense of how it has felt to manage money during some periods over the past year. Surging enemies forming a seemingly impossible perimeter, a crush of fellow soldiers on the field, arrows coming in overhead, and the need to avoid panic and deftly use sword and shield to fight your way out of a seemingly impossible situation is a good analogy for the emotional experience of managing assets since last summer."

He continues:

Nearly one year into this market cycle, a few truths of hedge fund investing are evident: 1) portfolio positioning matters as much as stock picking skill; 2) factor risk, not beta, has driven hedge fund underperformance in an up market; 3) crowded trades are a symptom of the prevalence of copycat investment frameworks practiced by hundreds of funds formed over the past decade to mimic the success of many of their investing legend mentors and ...

Deutsche Bank Profit Plunges 98% And The Worst Is Yet To Come

The latest confirmation that Germany's troubled banking giant Deutsche Bank is unable to navigate the troubled waters of NIRP came on Wednesday when the bank announced that its second-quarter net income fell 98% from a year earlier, hurt by weaker performances in trading, investment banking and other core areas. The lender said net income tumbled to 20 million ($22 million) from 818 million a year earlier, modestly better than the 22mm loss expected, while net revenue dropped 20% to 7.4 billion.

After rebounding modestly on the beat, the bank's shares fell tumbled 5% on Wednesday morning, their lower level in 2 weeks; today's decline has dragged DB stock 45% lower in 2016, making it one of Europe's worst performers YTD (the Stoxx 600 is down 27% in 2016).

As the WSJ notes, the Frankfurt-based bank has been hit harder than most. It is cutting costs and clients and trying to satisfy new, more-stringent capital requirements over the next three years. Its turnaround strategy has eaten into trading and investment-banking revenue, and investors' concerns about the adequacy of its capital cushion have persisted. The bank also has been trying to settle regulatory investigations expected to result in big fines, another uncertainty for investors.

Chief Executive John Cryan said in a statement that the bank is making progress in a multiyear turnaround, but warned that if weak market conditions persist, it "will need to be yet more ambitious in the timing and intensity of our restructuring."

Frontrunning: July 27



Democrat Clinton makes history with U.S. presidential nomination (Reuters)

Democrats Achieve an Uneasy Détente at Convention (WSJ)

Obama Economy Left Behind the Backers That Clinton Needs to Win (BBG)

European stocks rise, Asia lifted by Japan stimulus (Reuters)

PM Abe's plan for $265 billion stimulus puts pressure on BOJ to ease (Reuters)

Abe's Unusual Stimulus Unveiling May Be Directed at the BOJ (BBG)

Oil falls close to three-month low as oversupply weighs (Reuters)

Deutsche Bank Profit Plunges Amid Turnaround Effort (WSJ)

Obama says it is possible Russia would try to sway U.S. election (Reuters)

Elon Musk Sees His Tesla Master Plan Costing Tens of Billions (BBG)

U.S. Seeks to Steer South China Sea Dispute Into Calmer Waters (WSJ)

Steven A. Cohen's Newest Bet: Do-It-Yourself C ...

For Those Who Slept Through The "Yen Rollercoaster", This Is What You Missed

As we started reporting last night, the yen suffered a rollercoaster ride for more than two hours today as investors chased various media trial balloons and reports - many conflicting - about prime minister Abe's stimulus package and debt-sale plans, ahead of this week's much anticipated BOJ announcement.

For those who slept through the night's fireworks this is what you missed.

Sequence of events:

Initially, the Yen was lower for the early part of the morning before extending decline by 0.6% to 105.93 vs USD after FNN reported Abe will give details of stimulus package this afternoon

USD/JPY buyers scrambled to cover positions on FNN report, with leveraged and intraday accounts leading rush to buy dollars, according to a trader

The Currency then extended the drop to 106.54, taking the day's losses to as much as 1.8% after the WSJ reported that the government was considering selling 50-year debt

A WSJ report of 50-year debt sale raised speculation of "helicopter money" policy again, according to Takenobu Nakashima, quantitative strategist at Nomura Securities

However, a prompt Ministry of Finance denial of the 50-yr bond-sale plan led yen to pare losses to 105.48, near levels before FNN report

Two-way price in USD/JPY on $50m trades widened to 5 pips from 3 pips by largest Japanese banks, according to an Asia-based trader

Clients and market makers were frustrated by the debt sale report as it was denied by MOF, the trader added

Yen briefly steadied as the market awaited Abe's scheduled briefing in southern Fukuoka

Initial headlines from Abe's speech didn't mention stimulus

Abe then said the measures would be compiled next week and the lack of details supported the yen briefly before the PM ...

Why Uncertainty Isn't the Real Threat for Markets

If there is one thing the world seems to be producing in abundance, it is uncertainty. It is said that markets hate uncertainty, but resolution might be the real problem.

Nintendo's Future After Pokémon Fever Breaks

Nintendo's dismal results for last quarter further strengthen the case for the company to double down on Pokémon-style mobile games.

LVMH Thrives on Selling Frenchness to Americans

Few brands are as exposed to European tourism as Louis Vuitton. Given the recent slew of terrorist outbursts on the continent, which have made wealthy Asians and Americans more reluctant to travel there, parent group LVMH Moët Hennessy Louis Vuitton is showing surprising resilience.

Earnings Outlook: What to watch for in Amazon earnings

Analysts will be looking beyond e-commerce to Prime and cloud service offerings in the second-quarter earnings announcement.

Tim Cook pronounces 'Pokemon' like a dad, but sees possibilities for Apple

Apple Inc. chief executive Tim Cook may not pronounce "Pokemon" correctly, but he definitely sees the potential suggested by a new mobile game based on the property.

The Tell: These 3 charts show the beginning of the end for Wall Street's big winners

Over the past couple of weeks, even though utilities and telecom are still leading the market on an absolute basis, on a relative basis they have underperformed the main benchmarks.

Earnings Summary for Today

Earnings Calendar provided by Investing.com.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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