US equities staged another rally today. Overnight economic data reports from Japan and China were lackluster, but a peculiar clarification from the People's Bank of China on its country's poor loan data led investors to believe that a further loosening of policy was possible in the case that conditions deteriorated further. The S&P 500
(SPX) finished the session up 0.67%. Utilities underperformed today, barely closing positive, despite the fall in interest rates. Trading volume was as equally as low as yesterday, which was the lowest non-holiday session of the year.
Retail sales growth for July was below expectations. Sales recorded no growth from the prior month despite 16 states having tax holidays in the final weekend of the month to encourage back to school sales. Economists had been expecting growth of 0.2%. After excluding sales to auto dealers and gas stations, growth was only 0.1%, below the 0.4% expected. Treasuries staged a rally today following the results and continued after the auction of $24 billion in 10-year notes in the afternoon. The 10-year yield closed down 3.4bps today.
(SEAS) earnings disaster was a frequent talking point during today's session. The company missed estimates by a wide margin, citing a major drop in attendance linked to a negative publicity generated by a number of animal rights group . Late day chatter that Blackstone was seeking to take the company private was enough to get a few shorts to cover, but the outlook for that idea is dim.
Tomorrow's Financial Outlook
There are only two economic reports scheduled in the US tomorrow: weekly initial jobless claims and the import/export price index from July. Claims reached their lowest 4-week average since 2006 last week. The Treasury will sell $16 billion of new 30-year bonds in the afternoon.
The main event for risk assets overnight will be the advance eurozone second quarter GDP, scheduled to be reported tomorrow morning. Earlier this month, Italy's failed to grow for a second straight quarter. The countries left to be reported are the two majors, France and Germany, which will be a big determinant for European investor risk appetite even though the ECB is clearly keeping its dovish bias.
Consumer giant Wal-Mart
(WMT) is scheduled to report earnings tomorrow, among others. Notable reports also include Advance Auto Parts (AAP), JCPenney
(KSS), Plug Power
(PLUG), and Applied Materials
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.