July 25th 2014 – No TGIF, Stocks Fall On Earnings
Market View:
Today was about an earning hangover from Amazon. In their conference call, they noted that they have not seen any substantial uptick in the economy and as a result of their earnings miss they plunged almost 10%!
There was good news fron Japan with a move towards growth led inflation. Their markets closed up significantly.
I expect to see a bounce back on Monday, however, we may see one more down day creating a higher low on the charts before we start waving back up again.
Market News:
U.S. stocks finished lower on Friday weighed by Amazon’s weak earnings and Visa’s disappointing outlook, in addition to ongoing worries over geopolitical unrest.
In the final hour of trading, markets briefly ticked lower after Goldman Sachs released a note saying they are “neutral” on equities over three months as it sees a slide in bonds leading to a temporary selloff in stocks.
Amazon shares dropped as much as 11 percent on Friday. On the Dow, Visa fell more than 4 percent on its lowered full-year revenue forecast.
So far, just under one half of companies in the S&P 500 have posted quarterly results, with 69 percent of firms topping earnings estimates and 63 percent beating revenue expectations.
Orders for long-lasting U.S. manufactured goods rose more than expected in June, pointing to momentum in the economy at the end of the second quarter. The report did not move stocks much in pre-market trading.
No major companies are reporting earnings on Friday, except for Xerox, which reported before the bell a profit that fell 1.9 percent in its second quarter and beat analysts’ expectations.
The Federal Open Market Committee meets next week, and economic data reports include second-quarter GDP and U.S. employment figures.
U.S. intelligence indicated that Russia could provide heavier and more sophisticated weaponry to Ukrainian separatists at any moment, a Pentagon spokesman said on Friday.
The European Union is mulling measures to curb Russia access to the capital markets, after the downing of the Malaysia Airlines passenger jet over eastern Ukraine last week. Adding to tensions, Ukrainian Prime Minister Arseniy Yatsenyuk announced his resignation on Thursday, after two parties pulled out of the governing coalition.
In the Middle East, authorities in Gaza reported that 15 people were killed on Thursday after Israeli forces shelled a shelter at a United Nations (UN)-run school, bringing the civilian death toll above 800. The UN warned that Israel may have committed war crimes in its near three-week offensive in Gaza.
International Markets: The Russian central bank had to raise interest rates to lure foreign investors amid sanctions related to its aggression around Ukraine and high inflation. The main RTS index closed down more than 1.6%.
Asian markets ended the day mixed, but Japanese stocks surged 1.13% after data shows inflation may finally be returning to the long-dormant economy. European stocks ended the day broadly down, with the FTSE 100 closing about 0.4% lower.
News Sources: CNBC and CNN Money