The doves have been set loose and easing hopes have returned to the fore. The first of such hints attended yesterday’s release of the latest Fed FOMC meeting minutes that revealed Fed members more inclined than expected to meet adverse economic data with more accommodative actions, and then this morning as China’s weak manufacturing PMI post encouraged speculation that Beijing will soon lower banks’ reserve requirements, and later that the ECB may find greater encouragement from eurozone politicians to help resolve the region’s sovereign debt woes after today’s post showed economic activity contracted for the seventh month straight, including core nations, France and Germany.
Yesterday’s bout of profit-taking had taken the DJIA 83 points lower during the session before the afternoon’s FOMC minutes showed “many members judged that additional monetary accommodation would likely be implemented fairly soon,” a much more accommodative stance than the neutral tone anticipated, but still confusing, because the report reflects data already three weeks old. Since that time the macro posts have been surprisingly strong: a 0.8% jump in July retail sales, the first rise in four month; a greater-than-expected, 0.6% increase in industrial production; the addition of 163K new jobs in July, the most in five months; and a budding recovery in the housing sector, including yesterday’s print of a 2.3% rebound in July existing home sales. Uncertainty over the current direction of Fed intentions was not eliminated by yesterday’s release, instead heightening the significance of the Fed’s Jackson Hole monetary conference at month’s end, where Fed Chairman Bernanke has previously hinted at accommodation plans.
Both the S&P500 and NASDAQ achieved gains by day’s end, while the DJIA cut its losses to 31 points. The DJIA closed off 0.2% at 13,173. The S&P500 edged up 0.02%, virtually unchanged at 1413. The NASDAQ added 0.2% for a 3074 wrap as technology shares strengthened.
DJIA losses were spearheaded by Hewlett-Packard (NYSE:HPQ), which fell 3.7% after Dell’s (NASDAQELL) latest interims showed PC sale weakness had caused management to lower its full-year outlook, interims that cast a cloud on HP’s numbers, due out after Wednesday’s close. HP echoed Dell’s problems, posting a Q2 revenue miss, a disappointing full-year forecast, and increased job cut plans. Also lower, Caterpillar (NYSE:CAT) dropped 1.7%; Coca-Cola (NYSE:KO) 1.3%; Intel (NASDAQ:INTC) 1.5%. Leading the gainers, DuPont (NYSED) rose 0.8%; Alcoa (NYSE:AA) and Home Depot (NYSE:HD) both climbed 0.6%.
S&P500 ten industry sectors were evenly divided between gainers and losers. Gaining ground were: basic materials (+0.8%), consumer services (+0.3%), oil and gas (+0.2%), technology (+0.2%), and health care (+0.1%). Losing sectors included: industrials (-0.4%), telecommunications (-0.4%), consumer goods (-0.3%), utilities (-0.2%), and financials (-0.2%).
Housing shares added to their recent gains, with the PHLX Housing Sector up 2.0% on news that existing home sales had risen 2.3% in July, up from June’s 8-month low, printing at a 4.47 million pace, up from 4.37 million prior, although slightly off forecasts of 4.5 million. DR Horton (NYSEHI) rose 4.1%; Pulte Group (NYSEHM) was up 3.9%. Toll Brothers (NYSE:TOL) rose 3.8%, after posting FQ3 revenues the highest since 2008, a 46% surge in profits from a year earlier, and a 57% jump in new home orders. According to its CEO, “We are enjoying the most sustained demand we’ve experienced in over five years.”
There is more to come today on the health of housing. June’s FHFA Housing Price Index is set for 10:00 AM EDT release, along with July’s new home sales report. Home prices are expected to show a 0.5% gain on the heels of June’s 0.8% jump. New home sales are anticipated higher, reaching a 368K pace from 350K in June.
Also on today’s docket are weekly jobless claims (8:30 AM EDT), which are expected to show little change for the week ended August 18, printing at 365K versus 366K a week earlier. Continuing claims for the week ended August 11 may show a continuing decline, forecast at 3.298 million from 3.305 million previous.
This morning’s global macro prints, however, have painted a bleak landscape of global economic weakness, numbers that confirm Japan’s discouraging trade balance results, which showed a 25% tumble of eurozone-bound exports and a 5% decline in shipments to Asian markets.
China’s preliminary August manufacturing PMI hit a nine-month low of 47.8, down from July’s 49.3, below the neutral “50” level between expansion and contraction. The report raised expectations for additional easing measures from Beijing, confirmed by remarks from the PBOC governor Zhou Xiaochuan who remarked on the precipitous decline in the nation’s exports to developed economies.
The 17-member EU’s economic scorecard has grown increasingly dire, and according to Markit economists points to the region slipping into a “technical recession” in the first half, now anticipating a GDP decline of about 0.5%-0.6% for the second quarter. According to Markit’s preliminary composite PMI, economic activity in August contracted for the seventh straight month, coming in at 46.6 from July’s 46.5, only slightly improved. Forecasts called for no change in the numbers.
发表于 2012-8-23 13:13
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ELL) latest interims showed PC sale weakness had caused management to lower its full-year outlook, interims that cast a cloud on HP’s numbers, due out after Wednesday’s close. HP echoed Dell’s problems, posting a Q2 revenue miss, a disappointing full-year forecast, and increased job cut plans. Also lower, Caterpillar (NYSE:CAT) dropped 1.7%; Coca-Cola (NYSE:KO) 1.3%; Intel (NASDAQ:INTC) 1.5%. Leading the gainers, DuPont (NYSE
HM) was up 3.9%. Toll Brothers (NYSE:TOL) rose 3.8%, after posting FQ3 revenues the highest since 2008, a 46% surge in profits from a year earlier, and a 57% jump in new home orders. According to its CEO, “We are enjoying the most sustained demand we’ve experienced in over five years.”