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| US Market | ||||||||||||
| The
major U.S. index futures are pointing to a mixed opening on Wednesday,
with sentiment likely to turn cautious after the strong advances in the
past two sessions. The Syrian threat has been mitigated to some extent
after President Obama announced that he is in favor of a diplomatic
solution to the crisis and has put a Congressional vote on military
action on hold. Domestically, there are very few catalysts the markets
can react to both on the economic and corporate fronts. The markets are
most likely to bounce around current levels, albeit with a downside
bias. U.S. stocks advanced yet again on Tuesday, thanks to another batch of upbeat data from China and signs of abatement of the Syrian crisis. The major averages opened higher and moved roughly sideways till early afternoon trading. After seeing a leg down, the indexes advanced steadily before closing moderately higher. The Dow Industrials ended up 127.94 points or 0.85 percent at 15,191, the S&P 500 Index closed 12.28 points or 0.73 percent higher at 1,684 and the Nasdaq Composite Index closed at 3,729, up 22.84 points or 0.62 percent. Twenty-six of the thirty Dow components closed higher, while the remaining four stocks declined. Disney (DIS), General Electric (GE), Microsoft (MSFT), United Technologies (UTX) and JP Morgan Chase (JPM) were among the biggest gainers of the session. Transportation, semiconductor and financial stocks advanced notably, while gold stocks came under selling pressure. Tuesday’s advance took the Dow Industrials above its 100-day MA (currently at 15,149). In the eventuality that the index sees a pullback, it is likely to find strong support around this level. The other noteworthy support levels for the index are 15,069, its 21-day MA (currently at 15,017), 14,977, 14,927 and 14,835. On the upside, the index has resistance around its 50-day MA (currently at 15,255). | ||||||||||||
| US Economic Reports | ||||||||||||
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| The
Commerce Department is scheduled to release its wholesale inventories
for July at 10 am ET. Economists expect a 0.3 percent month-over-month
increase in wholesale inventories for July. In June, wholesale inventories edged down 0.2 percent month-over-month, while inventories were up 2.9 percent. At the same time, business sales rose 0.4 percent month-over-month and increased 5.6 percent from the year ago period. The inventories to sales ratio was at 1.17 compared to 1.20 in the year-ago period. The Energy Information will release its petroleum inventory report for the week ended July 6th at 10:30 am ET. Crude oil stockpiles fell by 1.8 million barrels to 360.2 million barrels in the week ended August 30th. Inventories were near the upper limit of the average range for this time of the year. Gasoline stockpiles declined by 1.8 million barrels yet were in the upper half of the average range. Meanwhile, distillate inventories rose by 0.5 million barrels, remaining near the lower limit of the average range. Refinery capacity utilization averaged 90.8 percent over the four weeks ended August 30th compared to 90.6 percent over the four weeks ended August 23rd. | ||||||||||||
| Stocks in Focus | ||||||||||||
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| Texas Instruments
(TXN) narrowed its third quarter guidance range and now expects
earnings of 51-55 cents per share compared to its previous estimate of
49-57 cents per share. The company also tightened its revenue guidance
to $3.15 billion to $3.29 billion. Analysts currently expect earnings of
53 cents per share on revenues of $3.23 billion. Coldwater Creek (CWTR) reported a second quarter adjusted loss of 72 cents per share, wider than the loss of 62 cents per share reported for last year. Net sales fell to $149.7 million from $163.7 million last year. For the third quarter, the company expects an adjusted net loss of 55-75 cents per share. The results trailed expectations and the guidance was weak. Oxford Industries (OXM) reported second quarter adjusted earnings of $1.01 per share compared to 65 cents per share last year. Net sales rose to $235.02 million from $206.93 million last year. The earnings exceeded estimates, while the revenues were below estimates. The company lowered its full year adjusted earnings guidance to $2.90-$3.05 per share on net sales of $920 million to $930 million. The guidance was weak. International Paper (IP) announced that its board has authorized a share repurchase program to buy up to $1.5 billion of its stock. The company’s board also approved a 17 percent increase in its quarterly dividend. Intersil (ISIL) announced the appointment of Richard Crowley as its CFO, effective September 23rd. Following the expiry of the Go-Shop period related to the merger agreement between Saks (SKS) and Hudson’s Bay, the companies noted that no other superior proposal emerged. The deal is expected to close by the end of the calendar year. Integrated Device Technology (IDT) announced the departure of its CFO, effective September 11th, 2013 and the appointment of company executive Brian White to the CFO position. Diodes (DIOD) said it maintains its third quarter revenue guidance at $220 million to $230 million and its gross margin guidance at 30.3 percent, plus or minus 2 percent. Analysts currently expect revenues of $225.87 million. | ||||||||||||
| European Market | ||||||||||||
| European
stocks opened on a mixed note after yesterday’s strong performance and
are currently continuing to see mixed sentiment. In corporate news, U.K. home improvement retailer Kingfisher reported that its first half adjusted pre-tax profits fell 1.6 percent to 365 million pounds, with the predicament blamed on the cold weather. Revised inflation data released by the German Federal Statistical Office showed that annual consumer price inflation measured on a harmonized basis came in unchanged at 1.6 percent in August. On a monthly basis, consumer prices were unchanged. The Office for National Statistics reported that the number of people claiming Jobseeker's Allowance in the U.K. decreased by 32,600 to 1.40 million, the lowest since February 2009. The unemployment rate for three months to July came in at 7.7 percent, down 0.1 percentage points from the February to April period and lower than the 7.8 percent rate expected by economists. | ||||||||||||
| Asian Markets | ||||||||||||
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| The
Asian markets closed on a mixed note, as traders took profits on recent
gains even as the Syrian concerns continued to ease. The Japanese
market ended little changed after weakness in the yen on account of
easing geopolitical concerns generated notable buying interest earlier
in the session. The Australian market benefited from firmer metal prices, while the Hong Kong market retreated. Japan’s Nikkei 225 average opened higher and moved roughly sideways until late morning trading. The index took a leg up and moved sideways once again until late afternoon trading before giving back most of its gains and closing up merely 1.71 points or 0.01 percent at 14,425. Construction-related stocks, which ran up strongly in the past two sessions on the news of Tokyo winning the bid for 2020 Olympics, retreated on profit taking. Real estate and resource stocks also saw weakness. Australia’s All Ordinaries opened higher and rose sharply in early trading. Thereafter, the average moved roughly sideways before closing up 31.70 points or 0.61 percent at 5,231. Most sectors advanced, with the exception of energy, telecom and utility stocks. Material stocks saw particular strength. Hong Kong’s Hang Seng Index closed at 22,937, down 39.51 points or 0.17 percent, while China’s Shanghai Composite Index added 3.28 points or 0.15 percent before closing at 2,241. On the economic front, sentiment among Australian consumers climbed to its highest level in nearly three years in September, according to the results of a survey by Westpac and the Melbourne Institute. The consumer sentiment index rose 4.7 percent to 110.6 in September from 105.7 in August. The index is now at its highest level since December 2010. The Bank of Japan reported that its index measuring corporate goods prices edged up 0.3 percent month-over-month in August. Economists expected a 0.4 percent increase. Annually, prices were up 2.4 percent, slightly above the 2.3 percent growth forecast by economists. | ||||||||||||
| Currency and Commodities Markets | ||||||||||||
| Crude oil futures are inching down $0.01 to $107.38 a barrel after declining $2.13 to $107.39 a barrel on Tuesday. An ounce of gold is currently-trading at $1,361.50, down $2.80 from the previous session’s close of $1,364. On Tuesday, gold fell $22.70. Among currencies, the U.S. dollar is trading at 100.22 yen compared to the 100.39 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.3266 compared to yesterday’s $1.3268. | ||||||||||||
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