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T3's Take 3: China Signals Support for Yuan


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

Today on T3 Live

The endless debate over when the Federal Reserve will raise rates is not only myopic, but misguided.  It needs to stop, and more serious analysis must be done on the current state of financial markets and the transmission of monetary policy to the real economy. Looking at the S&P 500, you would...

Click here to read more of Michael Gayed's thoughts on the Fed

Retail Sales Numbers

US retail sales numbers for July were released today. US retailers saw a 0.6% increase, with last month's numbers being revised up.

According to the report, 11 of the 13 major categories saw an increase due to rising employment, stronger personal finances, and cheap fuel.

The numbers were solid enough to extend the debate over when the Federal Reserve should raise interest rates. As of late, Fed Fund futures have indicated a lower likelihood of a hike in September.

World Equity Markets

China's central bank assured investors that there is no reason for its currency to continue devaluing, easing concerns over a currency war. Despite that, the yuan fell for a third day however.

On that note, US markets weren't able to keep up their early despite the positive retail sales numbers.

The S&P 500 closed down 0.1% after a modestly positive run mid-day.

Home construction, and consumer discretionary were among the day's best performing sectors. Energy stocks fell after crude oil hit a new low for the year below $42 per barrel.

European markets posted gains. The German DAX rose 0.8%, and the French CAC jumped 1.25%. 

Across the Pacific, Asian markets had a good day. Japan's Nikkei rallied 1.0%, while the Shanghai Composite surged 2.2%.

Tesla Rakes in $500 Million

Tesla (TSLA) said it will issue 2.1 million shares to raise $500 million in capital. The money gives Tesla breathing room until the company can efficiently product the Model X. Last month, the company lowered their expected sales numbers.

CEO Elon Musk stated in a conference call that the a raise in equity capital is a "risk reduction measure." He will buying nearly $20 million worth of common stock in the deal.

The SEC filing wrote that the proceeds will be used to expand retail operations, charging networks, developing its battery factory, and a more affordable product called the Model 3.

Tesla shares rallied 1.8%.

Friday's Financial Outlook

US economic data for tomorrow will include PPI, industrial & manufacturing production, capacity utilization, University of Michigan sentiment, and the Baker Hughes rig count.

Overseas economic data will include French, German, Italian, and euro-zone GDP.

JC Penney (JCP) will announce earnings before the open.
No positions in stocks mentioned.
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