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Facebook Smashes Earnings, Caterpillar Misses Big


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

Overnight, China's manufacturing PMI continued to fall to 47.7 from the prior month's 48.2, the fifth straight month of declines and the third month of a sub-50 reading. On the other hand, European manufacturing indexes were better than expected. The first estimate of July eurozone manufacturing PMI rose to 50.1 from 48.8 the month prior, the first reading above 50 since July 2011. Eurozone services PMI rose to 49.6 from 48.3 the month prior.

In the US, the S&P 500 (INDEXSP:.INX) dropped 0.5% on the day. Market breadth remained highly negative, however, with declining stocks outnumbering advancing stocks by a 4:1 margin. Markit's preliminary July PMI manufacturing index topped estimates, recording a reading of 53.2 versus the 52.8 consensus. The index was highlighted by robust expansion in new home sales, which topped the expected 481K, coming in at an annual rate of 497K. However, last month's sales were revised down drastically from 476k to 459k.

Gold dropped 2% to $1,318 per ounce. The 10-year yield jumped 8 bps to 5.60%. Crude oil declined 1.8% to $105.16 per barrel after inventories declined 2.83 million barrels in the last week.The Treasury auctioned $35 billion of 5-year notes at a high yield of 1.410%, slightly below dealer expectations.

Apple (NASDAQ:AAPL) reported earnings that topped estimates after the close yesterday. Shares traded 5.5% higher on the day. Caterpillar (NYSE:CAT) delivered disappointing earnings this morning, sending shares down 2.5%.

One of Apple's major suppliers, Broadcom (NASDAQ:BRCM), missed revenue estimates and lowered guidance during its earnings release today. Shares traded down 14% on the news.

Facebook (NASDAQ:FB) released earnings after the close, smashing the estimates. EPS rose $0.19 vs $0.14 estimates and revenues blew the doors off at $1.81 billion vs $1.61 billion estimates. Mobile advertising for the quarter rose to 41% of total revenues, up from 30% the last quarter and total advertising revenue rose 61% from the prior quarter.

Tomorrow's Financial Outlook

Durable goods orders will be released at 8:30 a.m. EDT tomorrow morning. New orders are expected to rise 1.4% month over month, and orders ex-transports are expected to to rise by 0.5%. The weekly jobless claims report will be released at 8:30 a.m. EDT with economists expecting a slight uptick to 340,000 from the prior week's 334,000. Initial claims are expected to come in at 341K. The Bloomberg consumer comfort index will be released at 9:45 a.m. EDT. The Kansas City Fed manufacturing index will be released at 11:00 a.m. EDT.

Great Britain's GDP is due out tomorrow morning at 4:30 a.m. EDT.

Amazon (NASDAQ:AMZN), General Motors (NYSE:GM), and Under Armour (NYSE:UA) are a few of the major companies releasing earnings tomorrow.

Twitter: @Minyanville

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