Although the latest round of earnings reports has come in broadly better than expected, US indices
are trading close to flat trying not avoid following their European counterparts lower this morning. The inability of broad markets to capitalize on positive news suggests that the major advances of the last six months have left major indices fully valued and exhausted for now and in consolidation/digestion mode. .
That being said, we could see significant action in selected stocks and sectors based on industry news. Biotech was active yesterday on the Teva/Mylan deal and could remain in focus today with Amgen beating the street on earnings and raising guidance. Boeing and Coca-Cola may also attract attention on their positive reports. Ryder System’s results show the positive impact of the oil price crash on transportation companies, cutting their fuel costs dramatically. Finally, we could see some interesting comparative action between McDonalds and Chipotle Mexican Grill as their contrasting results highlight changing consumer tastes.
English speaking currencies are outperforming in forex trading this morning. AUD is leading the way as consumer price inflation met expectations, taking pressure off the RBA to cut rates. GBP is breaking out today, clearing $1.5000 following the release of Bank of England minutes. CAD has shrugged off both the soft oil price and yesterday’s Canadian Federal budget.
Continental currencies have fallen to the bottom of the league table once again. Uncertainty continues to swirl around Greece and today’s announcements that the German GDP forecast for 2015 has been revised up while Greece’s outlook was revised downward. This news highlights the stresses within the Eurozone as Germany continues to rack up gains at the expense of its so-called partners. This may also be part of the reason the Dax and IBEX have been struggling today.
CHF has been hit particularly hard today after the Swiss National Bank reduced the number of accounts excused from negative interest rates, in what can be seen as an easing move as it appears to be designed to get cash off the sidelines and to work in the economy.
Crude oil has been pretty much flat overnight, shrugging off an increase in API inventories, but could be active later this morning when DOE inventories come out.
Boeing $1.97 vs street $1.80, maintains full year 2015 guidance $8.20-$8.40
Amgen $2.48 vs street $2.10 raises 2015 year guidance to $9.35-$9.65 from $9.05-$9.40
Coca-Cola $0.48 vs street $0.42
Ryder System $1.08 vs street $1.00, raises 2015 year guidance to $6.40-$6.55 from $6.25-$6.40
McDonalds $1.01 vs street $1.06
Chipotle Mexican Grill $3.88 vs street $3.65
Yahoo $0.15 vs street $0.18, sales $1.04B vs street $1.06B guides revenue ex TAC to $1.01-$1.05B vs street $1.04B
DR Horton $0.40 vs street $0.38
Economic reports released overnight and this morning include:
Bank of England minutes 9-0 to maintain current interest rate and QE level. Most members still think next move could be a rate hike but 2 members think it could go either way, wage growth weak, GBP decline could offset oil price impact on inflation
Swiss National Bank reduced the number of accounts exempt from negative interest rates
Germany GDP Government raises 2015 forecast to 1.8% from 1.5%
Greece GDP Greek IOBE foundation cuts 2015 forecast to 1.0% from 3.0%
US API crude oil inventories 5.5 mmbbls vs street 1.2 mmbbls and previous 2.6 mmbbls
Japan trade balance ¥229B vs street ¥44.6B
Japan exports 8.5% as expected
Japan imports (14.5%) vs street (12.6%)
Australia Q1 consumer prices 1.3% as expected vs previous 1.7%
Italy retail sales 0.1% vs previous 1.7%
Economic reports due later today include:
9:00 am EDT US house price index street 0.5%
10:00 am EDT US existing home sales street 5.03M
10:30 am EDT US crude oil inventories street 2.5 mmbbls