Written by Gary
US stocks set for a flat open as fresh earnings and data roll in (SPY -0.03%).
Here is the current market situation from CNN Money | |
European markets are mixed. The FTSE 100 is higher by 0.14%, while the CAC 40 is leading the DAX lower. They are down 0.10% and 0.10% respectively. |
What Is Moving the Markets
Here are the headlines moving the markets. | |
Review of Toshiba’s delayed British nuclear plant raises new doubtsDelays to the planned sale of Toshiba’s NuGen nuclear project in Britain have prompted a review of the roles of 60 direct employees, who are mainly based in Manchester, raising further doubts over its future. | |
Harley plans new launches, cost cuts in turnaround pushHarley-Davidson Inc said on Monday it would cut costs, launch new models including smaller light-weight motorcycles and revamp its dealer network in a plan to revive flagging sales in the face of rising global tariffs. | |
Caterpillar raises 2018 profit outlook, beats quarterly estimatesCaterpillar Inc on Monday upgraded the full-year profit outlook after earnings in the second quarter nearly doubled, beating market expectations, on the back of a robust global demand for its equipment. | |
Dow futures gain on Caterpillar earningsDow futures got a slight boost on Monday after an encouraging report from Caterpillar, a bellwether for global economic activity, while S&P and Nasdaq futures remained under pressure from technology stocks. | |
China tempts Britain with free trade, says door to U.S. talks openChina offered Britain talks on a post-Brexit free trade deal on Monday, reaching out to London as Beijing remains mired in an increasingly bitter trade war with Washington, even as a senior Chinese diplomat reiterated its door remained open for dialogue. | |
Air India seeks additional equity from government to pay vendors: sourceState-owned carrier Air India has sought 21.21 billion rupees ($309 million) of additional equity from the government for the fiscal year 2018-19 to make pending payments to its vendors, a source at the airline told Reuters on Monday. | |
Deutsche shifts chunk of euro clearing to Frankfurt from LondonDeutsche Bank has begun clearing a “large part” of new euro-denominated derivatives trades in Frankfurt instead of London, a spokesman confirmed on Monday as a key Brexit battleground in financial services heats up. | |
Exclusive: Russian steelmaker MMK changes tack after tariffs, Iran sanctionsMMK , one of Russia’s largest steel producers, has postponed the launch of a lucrative project in Turkey due to uncertainty created by global trade wars, Andrey Eremin, the company’s director for economics, told Reuters in an interview. | |
Walmart discovers why the ‘last mile’ is the hardestStanding before an audience of 14,000 people last year, Walmart Inc executives described a radical plan to help it fend off Amazon.com Inc and other online delivery services from stealing its customers. | |
Gold Bell Rings: Vanguard Throws In The Towel On ‘Precious Metals & Mining Fund’Authored by Mike Shedlock via MishTalk, Vanguard just threw in the towel on a Metals and Mining Fund. It morphs into a Global Capital Cycles Fund. Sentiment is not a timing mechanism, but gold bearishness is mounting in a market that has gone sideways for years. Vanguard … | |
Goldman Slams Tesla: “Customer Enthusiasm For Model 3 Is Waning”One month ago, following the latest negative note from Goldman’s auto analyst David Tamberrino, Elon Musk decided to take it personally and in a leaked memo to his employees, said that Goldman is “in for a rude awakening :)” With Tesla stock sliding 15% since then, it is not exactly clear who has had a more rude awakening, the bulls or bears, but in having kept silent for the past month, Goldman (which has a Sell reco and a $195 PT on TSLA), has come out with another negative note on Tesla, just two days before Tesla’s Aug. 1 earnings, in which Goldman details the key investor questions and recent debate on the stock from its conversations with clients. As Tamberrino writes, “the key focus areas revolve around (1) sustainability of Model 3 production, (2) pace and demand-variants of Model 3 order conversion, (3) margin improvement potential, and (4) FCF burn.” More importantly, for the first time, the Goldman analyst introduces a new analysis on Model 3 sentiment based off social media posts. “This stems from our work on Model 3 order conversion and customer reception.” And the punchline: “Ultimately, we believe the data potentially points to waning customer enthusiasm for the vehicle as order availability and test drives have increased.” We expect another very angry Elon Musk memo to be “leaked” shortly. * * * With that out of the way, here is Goldman’s Q&A on several key questions relating to the Model 3 roll out: 1. Post the 5k/week Model 3 production achievement in the last week of 2Q, how is the run-rate so far in 3Q?
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Caterpillar Surges After Reporting Record Earnings, Boosting GuidanceWhen it comes to industrial and global growth bellwethers, few companies are as closely followed as Caterpillar, and in a time when traders are especially concerned for the outlook facing the industrial sector as a result of rising tariffs and escalating trade wars, many traders were especially interested in today’s CAT earnings and whether, gasp, the company would reference another “high watermark.” Turns out they had little to be worried about, in what has been one of the best earnings reports released in company history when moments ago, CAT reported Q2 earnings that beat on the top and bottom line: Q2 Adjusted EPS of $2.97, vs $1.49 a year ago, beating exp. of $2.73 and matching the highest forecast. Q2 Revenue of $14.0BN, vs $11.3BN a year ago, beating exp. of $13.98BN Commenting on the result, CEO Jim Umpleby said that “Caterpillar delivered record second-quarter profit per share. Our team is doing a great job executing our strategy for profitable growth, focusing on operational excellence, expanded offerings and services.” The company reported that during Q2, Machinery, Energy & Transportation (ME&T) operating cash flow was $2.1 billion, and the company repurchased $750 million of Caterpillar common stock. In June 2018, the board of directors approved an increase to the quarterly dividend of 10 percent to $0.86 per share. The second quarter of 2018 ended with an enterprise cash balance of $8.7 billion. In July 2018, the board of directors authorized the repurchase of up to $10.0 billion of Caterpillar common stock effective January 1, 2019. But more important was the company’s surprisingly strong forecast: CAT now sees full year 2018 EPS of $10.50 to $11.50, and adjusted EPS of $11.00 to $12.00. This is a … | |
Futures Flat As Global Stocks Slump To Start Torrid WeekA “storm of news” may be coming this week ahead of the start of summer vacation season, but the overnight session has been surprisingly quiet, with the BOJ’s bond market intervention – the 3rd in the past week – the most notable event so far. “It’s been a somewhat slow start, but not surprising given the action-packed week that lies ahead which includes the BOJ, BOE, Fed, global PMI data, NFP,” said Oanda’s head of APAC trading, Stephen Innes. “Indeed, central bank policy is back at the forefront of market discussions and particularly the BOJ rate decision and outlook report July 31.” Among the most notable overnight moves, the JGB curve steepened again leading core rates markets, even as the BOJ’s latest YCC operation saw heavy offers accepted as BOJ buys above market price. Sparked by fears the BOJ may tweak its QE program, large futures blocks in gilts, USTs and bunds through early trading accelerated the selloff. Meanwhile, the USD slowly weakened across G-10; SEK spiked higher on strong domestic GDP data while TRY tumbled as Erdogan showed little concern for potential U.S. sanctions; the Chinese yuan initially slumped but is now broadly unchanged. European equity markets hold small losses with Heineken (-5.0%) sliding and dragging the food and beverage sector lower after poor earnings guidance; U.S. equity futures bounced from overnight lows however still at bottom end of Friday’s range. World stocks fell modestly, US equity futures were flat, the dollar dropped on Monday, 10Y yield rose as high as 2.985%, JGBs sold off before possible BOJ monetary policy tweaks, and most metals fell on continued concern over global trade and China’s economy as a busy week of central bank meetings and company upd … | |
Intel Serves Up an Opportunity for AMDMuch smaller chip maker will have a big head start with new data-center processors. | |
Economic Preview: Fed to send clear message that more rate hikes are comingThe Federal Reserve will issue a statement declaring strong growth and inflation moving to its 2% target, making clear more interest rate hikes are coming. | |
The Tell: His winning bet during the financial crisis garnered him fame—now, he’s betting against Elon Musk’s TeslaEisman says Tesla’s quarterly results could be pivotal for the electric-car manufacturer whose polarizing founder has been ensnared in a series of controversies in recent weeks and has been described by critics as a megalomaniacal distraction for Tesla. | |
Deep Dive: Fear the FAANG stocks? Here’s a better S&P 500 index fund for youFAANG stocks make up 14% of the S&P 500 by market value, a concentration that imperils investors; an equal-weighted fund lowers risks. |
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