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Caterpillar Warns of Further Economic Weakness


Today's financial recap and tomorrow's financial outlook.

Pre-market stock futures were slightly higher, bouncing up from the big negative day on Friday. Overnight economic data from Japan showed weakening exports, partially due to Chinese boycotts on Japanese imports. The US dollar rose to $79.92 vs. the Japanese yen on the day.

In the morning, Caterpillar (NYSE: CAT) released earnings that highlighted continually slowing growth and a weakening forward outlook. After removing one-time items, earnings-per-share were inline and revenues missed to the downside. Early action was met with selling as the market tried to revisit Friday's lows, but held onto these levels for the most part. Notably, dividend and bank stocks underperformed the market, while defensive sectors like utilities outperformed.

Apple (NASDAQ: AAPL) performed marvelously in preparation for the supposed unveiling of the iPad Mini at tomorrow's press event. Apple's stock rose over 3.5%, carrying the Nasdaq and NDX indexes higher due to its high index weighting.

Tomorrow's Financial Outlook

Facebook (NASDAQ: FB) will report earnings for the second time tomorrow after the close. Analyst expectations are for earnings of $0.11 per share and revenues of $1.23 billion. It is likely that any move after earnings will be highly volatile.

Economic data will be on the lighter side tomorrow. In the US, the Richmond Fed will report its monthly manufacturing index in the morning and the eurozone will report consumer confidence. The Federal Reserve's Open Market Committee will begin its two-day meeting to decide monetary policy for the US.

In earnings, Harley Davidson (HOG), Regions Financial (RF), Du Pont (DD), Coach (COH), Xerox (XRX), UPS (UPS), Whirlpool (WHR), Netflix (NFLX), Altera (ALTR), Juniper Networks (JNPR), Aflac (AFL), Broadcom (BRCM), and 3M (MMM) will report.

Twitter: @Minyanville

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No positions in stocks mentioned.

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