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T3's Take 3: Markets Rally Back on Earnings Power


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

Today on T3 Live

Option Strategist Doug Robertson executed a bear call spread on Monsanto (MON) and an iron condor on McDonald's (MCD) today. MON is under heavy pressure from critics and just posted a lackluster earnings report, so Doug expects the stock to decline. On MCD he sees a sideways trend that has little impetus to change, which along with a high IV, gives an edge for an iron condor trade. 

Click here to learn more about the Option Strategist

Western Markets Rally Back

Stocks regained their footing after nearly five days of losses.

European markets were pushed up on merger news and strong earnings beats. The German Zurich Insurance Group announced that it was considering a bid for British owned RSA Insurance Group, while French luxury brand Gucci posted a 4.6% increase in Q2 sales. The French CAC rallied 1.0%, and the German DAX gained 1.1%.

The S&P 500 finished up 1.2% on solid earnings from Ford (F) and UPS (UPS).

The Fed has begun a two-day policy meeting. While no rate hike is expected, investors will be looking for any hints from Yellen to see when a rate increase is likely.

Ford Is Built Tough

Ford posted $1.9 billion in net profit, an increase of 44% year-over-year. Steady demand for pickup trucks and sport-utility vehicles pushed sales higher, and the company achieved a 4.6% market share in China.The boost helped offset investor' fears over weakness in China and Europe.

The company still expects a full-year operating profit between $8.5 billion and $9.5 million.

Ford shares rallied 2.0% today.

UPS Brown Does a lot For You

UPS (UPS) shares rallied 5.1% on a better-than-expected earnings report this morning. While total revenue fell 1.2% year-over-year, in part due to a stronger dollar, increases in prices and volume helped boosted up margins.

However, the company said that US economic growth appears to be slowing. Chief executive David Abney said in the conference call that GDP forecasts were significantly decreased since January, from 3.1% to 2.3%. He also commented that retail was uneven and has softened a bit in June.

Wednesday's Financial Outlook

US economic data for tomorrow will include MBA mortgage applications, pending home sales, DOE oil reports, and the highly anticipated FOMC rate decision. Virtually all market observers expect no change in rate policy tomorrow.

Overseas economic data will include GfK German consumer climate, and Japanese industrial production.

Altria (MO), Exelon (EXC), General Dynamics (GD), Humana (HUM), Mastecard (MA), and ThomsonReuters (TRI) will report earnings tomorrow morning before the open. Facebook (FB), Marriott (MAR), McKesson (MCK), Metlife (MET), Western Digital (WDC), Whole Foods (WFM), and Wynn Resorts (WYNN) will release their earnings after the close.
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