Ed’s Daily Notes for July 15th   Leave a comment

This week’s major corporate earnings reports to expect:

MONDAY: Citigroup (C)
TUESDAY: Johnson & Johnson (JNJ), Coca-Cola (KO)
WEDNESDAY: IBM (IBM), Bank of America (BAC), Intel (INTC)
THURSDAY: Google (GOOG), Microsoft (MSFT), Philip Morris (PM), Verizon (VZ)
FRIDAY: General Electric (GE)

That is just the top 11. This is a monster week for earnings, with at least 230 companies reporting.

Associated Press (via Yahoo): Markets shored up by China’s 7.5 percent growth

[China’s] economy grew 7.5 percent from a year earlier in the second quarter. Though the figure is down on the previous quarter’s 7.7 percent, there had been fears that it may have fallen below 7 percent in the wake of efforts by the country’s monetary authorities to clamp down on risky lending.

I read the rumors about this on Friday, but I took a “wait and see” approach to them, since any analysis of China is questionable, and Chinese rumors are even more questionable.

Bloomberg: Corporate Spending Set to Surge in U.S.

Good economic news:

Companies in the U.S. are beginning to empty their deep pockets and boost capital spending as they look past the specter of sequestration and global growth risks.

Orders for capital goods excluding aircraft and military equipment — an indicator of future business investment — increased 1.5 percent in May, a third consecutive advance and the longest streak since October 2011. Chief executive officers are more optimistic about the economy, based on the Business Roundtable’s quarterly outlook index, which rose to 84.3 in the second quarter, the highest in a year.

Spending on information technology is up 4 percent this year compared with 2 percent last year, according to the median in a survey of 203 businesses by Computer Economics, a research company in Irvine, California — helping businesses such as Microsoft Corp. (MSFT)

…Discount retailer Family Dollar Stores Inc. (FDO), which operates solely in the U.S., is opening 500 new outlets this year, and Rite Aid Corp. (RAD), a U.S. pharmacy chain, is remodeling 400 locations in fiscal 2014. Pier 1 Imports Inc. (PIR) plans $75 million in capital expenditures, including on stores and technology, Chief Financial Officer Charles Turner said during a June 20 conference call.

Bloomberg: Merkel’s Coalition Is Likely to Win Election, Polls Indicate

From a European market’s perspective, this is good news:

German Chancellor Angela Merkel’s government will probably be re-elected in September, two pre-election polls indicate.

CDU/CSU will get 40 percent of votes, coalition partner FDP 6.5 percent, according to a poll conducted by Institut fuer Demoskopie Allensbach on behalf of the Frankfurter Allgemeine Sonntagszeitung newspaper. The total of 46.5 percent compares to a combined 44 percent of the other parties moving into parliament, comprising the SPD that polled 25.5 percent, Greens with 12.5 percent and Die Linke 6 percent.

…CDU/CSU will get 41 percent of votes, one percentage point less than a week earlier and FDP 5 percent, one percentage point more, according to an Emnid poll on behalf of the Bild am Sonntag newspaper. The combined 46 percent compares to 45 percent of the other parties moving into parliament, comprising SPD with 26 percent, Greens polling 12 percent and Die Linke 7 percent.

There is just one problem:

Allensbach didn’t give data of earlier polls. It polled 1,583 people from July 1 to July 11 and didn’t provide a margin of error.

…Emnid polled 1,838 people from July 4 to July 10. It didn’t provide a margin of error.

No margins of error? I guess Germans never make mistakes…


Posted July 15, 2013 by edmcgon in Economy, Market Analysis, News, Politics

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