July 29th 2014 – Ukraine Concerns Overtake Positive Earnings
Market View:
Another small leg down in what I expect to be a move higher soon. There are of course obstacles to that outcome, particularly with a fed statement tomorrow at 2pm, that usually causes some volatility.
I just think there has been enough selling to get rid of the weak hands allowing for another shot at 2000 on the S&P 500. This is still a trending market, so best not to fight the trend.
Market News:
U.S. stocks declined on Tuesday, pulling the Dow under 17,000, as the United States and European Union joined in expanding sanctions against Russia, highlighting a geopolitical crisis that overrode investor enthusiasm for earnings from corporations including Merck & Co.
In a statement televised live Tuesday afternoon, President Barack Obama said the United States was expanding on measures announced two weeks, targeting Russian energy, defense and financial sectors as Russia has continued to support separatists in the Ukraine, and was still building up forces on its own border with Ukraine.
Obama’s statement followed European Union governments that announced sanctions earlier in the day to reduce Russia’s ability to tap into bank financing and advanced technology.
The EU sanctions, the most expansive so far over Russia’s support of rebels fighting in Eastern Ukraine, triggered what Greenhaus called a “knee-jerk” reaction to headlines related to the crisis in the Ukraine, with Wall Street erasing gains that came with another round of largely better-than-expected corporate results.
The Conference Board’s measure of consumer confidence came in Tuesday at 90.9 in July, the highest reading since October 2007.
U.S. single-family home prices climbed more than expected in May, although the pace of monthly increases showed signs of slowing, according to the S&P/Case-Shiller composite index of 20 metropolitan cities.
The Fed’s regular monetary policy announcement is due on Wednesday, with the central bank expected to cut monthly asset purchases by another $10 billion to $25 billion. U.S. second-quarter gross domestic product figures will also be announced during the day.
International markets: European stocks were doing well, with the Eurostoxx 50 index about 0.6% higher. Russia’s MICEX index, despite the impending arrival of new sanctions, also finished 0.6% higher. Asian stocks ended the day mostly higher, with Chinese stocks doing very well. Taiwan sticks out as an exception, finishing 0.3% lower.
Wednesday:
Earnings: Barclays, British American Tobacco, Goodyear Tire, SodaStream, Southern Co, Phillips 66, Thomson Reuters, Nextel, Valero Energy, Tesoro, Hess, Humana, AllianceBernstein, Booz Allen Hamilton, Carlyle Group, Samsung, Kraft Foods, Whole Foods, MetLife, Yelp, Weight Watchers, Shutterfly, Taubman Centers, AMC Entertainment, Boston Beer, Murphy Oil, Cabot, Western Digital, Whiting Petroleum, Agnico Eagle Mines, Allstate, Akamai, Hartford Financial
7:00 a.m. Mortgage applications
8:15 a.m. ADP
8:30 a.m. Q2 GDP
8:30 a.m. PCE Q2
11:30 a.m. 2-year floating rate note auction
1:00 p.m. $29 billion 7-year note auction
2:00 p.m. Fed statement
New Sources: CNN Money & CNBC