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Pre-Market Primer: Goldman Sachs Group Inc Doubles Profits; Inflation Still Slow


Coca-Cola missed expectations; CEO blames the weather.

Stocks are mixed this morning after blue-chip company earnings and a report that inflation is speeding up.

The consumer price index rose 0.5% on a monthly basis in June. From 12 months earlier, the index rose 1.8%. Economists expected a 0.3% rise in prices. Excluding food and energy costs, prices only rose 0.2%.

We'll get more economic data later this morning. Industrial production in June is forecast to grow 0.2% after staying flat in May. Capacity utilization is thought to have picked up slightly to 77.7% and manufacturing grew 0.2% over May. Economists predict that July's NAHB Housing Market Index will come in unchanged at 52.

European stocks turned lower today after the German ZEW economic sentiment indicator, which guages investors' optimism for the future, unexpectedly fell 1.2 points to 36.8. Sentiment about current conditions improved by 2 points to 10.6. Inflation in the eurozone rose 1.6% on a yearly basis last month, up from 1.4% in May, meeting economists' expectations. Greece saw 0.3% deflation while Romania and Estonia had more than 4% inflation. UK inflation was up 2.9%, still below expectations. European car sales fell 6.7% to 6.44 million, the lowest level since 1993.

Goldman Sachs (NYSE:GS) might see action today as the investment bank reported that profit doubled year-over-year in the second quarter. Adjusted earnings of $3.70 per share beat expectations by $0.82. Revenue of $8.61 billion also exceeded estimates. Goldman got a boost from some smart bond trades before interest rates started to climb in late May. It also sold its stake in Industrial & Commercial Bank of China (OTCMKTS:IDCBY), with timing that avoided a $100 million loss. Shares are up 1.3% in the pre-market.

Coca-Cola Co. (NYSE:KO) shares slid 2.7% after the company said that second-quarter adjusted income fell to $0.63, meeting estimates. Revenue declined 3% to $12.75 billion, which fell short of expectations. CEO Muhtar Kent blamed "ongoing challenging global macroeconomic environment and unusually poor weather conditions" for the disappointing performance.

Johnson & Johnson (NYSE:JNJ) reported better-than-expected profit and revenue for the last quarter. The world's second-largest health-care company saw earnings per share rise $0.04 from the previous quarter to $1.48. The New Jersey-based company also raised its full-year earnings outlook to $5.40-$5.47. Shares are up 0.65% in the pre-market.

US stock futures are mixed ahead of the opening bell. Dow (INDEXDJX:.DJI) futures are off 0.02% to 15,413 while futures contracts on the S&P 500 (INDEXSP:.INX) fell 0.06% to 1,676.50 and Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.06% to 3,074.75.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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