US markets are getting a nice tailwind this morning from more positive earnings and economic news. Results from JPMorganChase, Goldman Sachs and Johnson & Johnson all came in well above expectations indicating that Q2 has been good for business across multiple industry groups. Empire manufacturing was stellar indicating the economy continues to gain traction into the summer, while soft retail sales suggest there may still be enough slack to keep the Fed on hold for some time yet. This combination has propelled the Dow to another new high and the S&P ever close to its big 2,000 barrier. In Europe indices have been steadily trying to claw back overnight losses but are struggling with disappointing ZEW survey results for both Germany and especially the Eurozone which suggest that the continental economy continues to struggle. It’s a busy day for central banks that started quietly yesterday afternoon with testimony from ECB President Draghi. RBA minutes and the Bank of Japan decision along with comments from Governor Kuroda indicated that both of those central banks continue on their present courses. GBP is rallying today after Bank of England Governor Carney indicated that the timing of interest rate increases remains data driven and shortly afterward, UK inflation came in above expectations, indicating that inflation pressures continue to build. The main event comes later this morning with FOMC Chair Yellen delivering her twice yearly testimony to Congress. While she has generally been dovish to date, any change from that could bring a strong response from the street. At its last meeting the Fed moved up its timetable for the end of tapering to October from the December the street had expected. Since then, US job growth has continued to accelerate and an increasing number of FOMC members have been calling for earlier action on interest rates. Yahoo! and Intel report earnings after the close so we could see some positioning through the day. Later tonight, at 10:00 pm EDT, 7:00 pm PDT China 2Q GDP is due which could have a significant impact on trading in Asia Pacific and global commodity markets. Corporate News The Farnborough Air Show continues today with orders for new aircraft continuing to roll in. Yesterday Airbus jumped out to a big lead but Boeing has been catching up today. Most of the orders have been coming from leasing companies rather than individual airlines. Bombardier has received a number of new orders for its Q400 turboprops after adding several small orders for its CSeries jet yesterday. JPMorgan Chase $1.46 vs street $1.31 Goldman Sachs $4.10 vs street $3.09 Comerica $0.80 vs street $0.76 Johnson & Johnson $1.66 vs street $1.55 Economic News Economic reports released overnight and this morning include: Bank of Japan decision no change to interest rates or QE target as expected US retail sales 0.2% vs street 0.6% US retail ex auto 0.4% vs street 0.5% US Empire manufacturing 25.6 vs street 17.0 UK same store sales (0.8%) vs street 1 0% UK consumer prices 1.9% vs street 1.6% UK retail prices 2.6% vs street 2.5% UK producer input prices (4.4%) vs street (4.5%) UK producer output prices 0.2% vs street 0.5% Germany ZEW current 61.8 vs street 67.4 Germany ZEW expectations 27.1 vs street 28.2 Eurozone ZEW expectations 48.1 vs previous 58.4 Italy consumer prices 0.2% as expected Norway trade balance NOK17.8B vs previous NOK 26.8B China new Yuan loans 1,080B vs street 955B China M2 money supply 14.7% vs street 13.6% China foreign direct investment 0.2% vs street (7.0%) Singapore retail sales (6.0%) vs street (8.2%) Singapore retail ex auto 0.1% vs street (1.0%) Economic reports due later today include: 9:00 am EDT Canada existing home sales previous 5.9% 10:00 am EDT FOMC Yellen testimony to Congress