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T3's Take 3: Unhappy Jobs Day


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

Special Announcement

T3 Live's Sean Udall is hosting a special webinar on tech stocks this coming Tuesday.

He's making a pretty bold case to get out of hot names like Netflix (NFLX) and Ambarella (AMBA), so you may want to consider hearing him out.

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Jobs Jobs Jobs

The highly anticipated jobs report for July was released this morning. The US economy added 215K jobs last month, a little below economicts' expectations of a 225K increase, but still indicative of moderate growth. Unemployment remained at 5.3%, the lowest level since April 2008. Wage growth remained sluggish however, rising only 2.1%.

As the Fed announced that it will only raise rates if it believes that the economy can handle it, investors were watching the report closely.

The numbers were not particularly impressive, but not weak enough to push out rate hikes.

World Equity Markets

US markets continued to fall lower today. The jobs data offered little reason for the Fed not to raise rates in September.

So the S&P 500 started the day very weak, reaching an intraday low of 2067.91 before crawling back up to finish at 2077.68, a 0.3% decline.

European markets traded lower today as German industrial output unexpectedly declined. That number, coupled with weak retail sales data, drove profit taking after a solid move up in German stocks. The DAX finished down 0.8%, while the French CAC closed down 0.7%.

Most major Asian markets rallied. The Shanghai Composite surged 2.2% as the Chinese government continues to fight market declines. Japan's Nikkei rallied 0.3% on solid earnings from companies like Toray and Softbank.

Q2 Earnings

FactSet released an update for the Q2 earnings season.

The report showed that Q2 earnings fell 1% year-over-year. However, at the start of the quarter, analysts were expecting a decline of 4.4%

73% of companies beat on earnings (on par with the five year average), whereas 51% of companies have beaten on sales (below the 57% five-year average). The biggest suprises are coming from the consumer discretionary sector (such as Amazon (AMZN)) and the health care sector (such as Gilead (GILD). Energy is posting the biggest miss in expectations.

Companies also continue to cite foreign exchange challenges. 233 of the S&P 500 mentioned that currency trends were a problem, up from 161 last year. Europe and China were also cited as concerns for companies. Just 39 companies mentioned Greece.

Monday's Financial Outlook

US economic data for Monday will include labor market conditions index change, MBA mortgage foreclosures, and mortgage delinquencies.

Overseas economic data will include China's New Yuan Loans & aggregate financing on Sunday, and Euro-Zone Sentix Investor Confidence on Monday.

Achillion Pharma (ACHN), CenterPoint (CNP), Dean Foods (DF), and Sysco (SYY) will announce earnings before the open on Monday. Kraft Heinz (KYC), Live Nation (LYV), Rackspace (RAX), and Vipshop (VIPS) will announce earnings after the close.
No positions in stocks mentioned.
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