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US Equities Show Eighth Straight Day of Gains


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

Overnight, Japanese markets were closed for a public holiday. Elsewhere in Asia, China's real GDP grew 7.5% year-over-year in the second quarter, in line with economists' expectations and down from a 7.7% rate last quarter. The drop-off in growth was due to a slower rate of expansion in industrial production and fixed asset investment. The Chinese Shanghai Composite Index finished up 0.98% on the day.

US retail sales fell short of expectations with month-over-month growth at 0.4% against the 0.8% expected. Additionally, 0.35% of this growth was from auto sales, which is typically viewed as the weakest form of consumption growth. The New York regional manufacturing general business conditions index recorded a reading of 9.46, topping the expected 5.00. Business inventories rose 0.1% in May from the prior month. As a result of the slower-than-expected pace of expansion, a number of forecasters drastically lowered their second-quarter GDP forecasts to 0.5%-1.0% from 1.0%-2%.

The S&P 500 (INDEXSP:.INX) closed at a new all-time high of $1,684. The homebuilders sector (NYSEARCA:XHB) was under pressure due to a steep 2.2% monthly decline in the building materials subset of retail sales. Prominent homebuilders like Lennar (NYSE:LEN) and Toll Brothers (NYSE:TOL) fell more than 2.5% while the broader sector was down more than 1%. Overall trading activity remained low today. Trading volumes for all US exchanges numbered 8.767 billion, below the 10-day average of 8.628 billion shares.

Citigroup (NYSE:C) reported net income growth of 26%, topping estimates. The company appeared to be well on its way to implementing the plans it announced late last year to reduce costs and boost profits. Shares rose 2.1% on the day. The Financial Select Sector SPDR (NYSEARCA:XLF) finished the day up 0.4%.

Crude oil finished up 0.2% to $106.15 per barrel. The 10-year Treasury yield fell 3 basis points to 2.55% due to the downward revisions in second-quarter GDP. The yield was 5 basis points higher before the retail sales data.

Tomorrow's Financial Outlook

Great Britain will be releasing CPI and PPI tomorrow morning. European Union HICP is expected to rise 0.1% month over month.

The weekly ICSC-Goldman store sales will be released at 7:45 a.m. EDT tomorrow morning. The consumer price index from June will be released at 8:30 a.m. EDT. Consumer inflation is expected to increase 1.6% from last year. Long-term capital foreign capital flows from May will be released by the Treasury at 9:00 a.m. EDT. Lastly, industrial production from June will be released at 9:15 a.m. EDT. Production and manufacturing are both expected to have risen 0.2% from last month.

On the housing side, the NAHB will release its index of prospective buyer activity at 10:00 a.m. EDT. The index is expected to record a reading of 51, down marginally from last month's results.

Charles Schwab (NYSE:SCHW), The Coca-Cola Company (NYSE:KO), Comerica Incorporated (NYSE:CMA), CSX Corporation (NYSE:CSX), Goldman Sachs (NYSE:GS), Interactive Brokers Group (NASDAQ:IBKR), Johnson & Johnson (NYSE:JNJ), Mosaic (NYSE:MOS), Packing Corp of America (NYSE:PKG), United Rentals (NYSE:URI), WestAmerica Bancorp. (NASDAQ:WABC), and Yahoo (NASDAQ:YHOO) will all be releasing earnings tomorrow.

Twitter: @Minyanville

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