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US Equities Work Off Oversold Conditions


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

Overnight, the Indian rupee continued its slide against the US dollar, falling 3.6%. Indian stocks fared much better, however. The Indian Sensex (INDEXBOM:SENSEX) was up 0.16% for the day. UK and European governments met with the UN to finalize a resolution that would allow sanctioned military action in Syria in order to protect civilians. The German DAX (INDEXDB:DAX) finished down 1.03%, the worst performer in Europe, and the Italian FTSEMIB (INDEXFTSE:FTSEMIB) was up 0.98%.

US equities opened the day slightly lower and bounced back 12 points toward the prior low close at S&P 500 (INDEXSP:INX) 1642. Stock strength stalled there to finish up 0.54%. Energy stocks led the day's action, rising 1.84%, consistent with a continued rise in crude oil prices. Telecom and materials stocks finished in the red while copper and other basic materials were lower.

Crude oil touched a 2-year high at 112.24 today despite a bearish inventory report from the Department of Energy. Crude oil inventories rose 3 million barrels from the prior week. Last night's API inventory report showed a 2.47 million build in crude inventories. Gold futures fell 0.31% amidst a decline in all precious and industrial metals.

Joy Global (NYSE:JOY) reported earnings in the pre-market, beating for the current quarter and reaffirming guidance for the year. However, CEO Mike Sutherlin made very negative comments in the earnings release and conference call, stating that forward revenue was in jeopardy. Sutherlin believes that the current outlook makes it unlikely for the company to support more than $4 billion in annual revenues. Joy Global expects to have revenues of between $4.9 billion and $5 billion for 2013.

Tomorrow's Financial Outlook

The US will report the first revision of second-quarter GDP tomorrow morning before the market opens. Economists estimate that 2Q GDP will increase to a 2.2% annualized rate from the advance estimate of 1.7%. June's trade deficit narrowed to -$34.2 billion from -$44.1 billion in May. The other economic datapoint for tomorrow morning is initial jobless claims. Jobless claims are estimated to fall to 330,000 from 336,000 in the week prior. The 4-week moving average of claims fell to the lowest point since November 2007 last week at 330,500.

Market-moving economic data is due out from Japan overnight and Germany early tomorrow morning. Japan will release retail sales overnight and Japanese investors' purchases of foreign bonds and stocks from the week prior. Germany will release its July unemployment rate and consumer price index.

Earnings reports scheduled for tomorrow include Krispy Kreme (NYSE:KKD), (NYSE:CRM), and Splunk (NASDAQ:SPLK).

Twitter: @Minyanville

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No positions in stocks mentioned.

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