BIG week ahead: Ed’s Daily Notes for July 29th   Leave a comment

Here is the monster list of events for the week ahead:

MONDAY: Pending Home Sales Index.
TUESDAY: Federal Reserve Open Market Committee (FOMC) meeting begins, S&P Case-Shiller Home Price Index, and these earnings reports: Pfizer (PFE) and Merck & Co. (MRK).
WEDNESDAY(month-end): FOMC Meeting Announcement, first guess at 2nd Quarter U.S. GDP, ADP Employment Report, and these earnings reports: Comcast (CMCSA) and Mastercard (MA).
THURSDAY(August 1st): Earnings reports: Exxon (XOM), Procter & Gamble (PG), ConocoPhillips (COP), and American International Group (AIG).
FRIDAY: U.S. Employment Report for June, and the Chevron (CVX) earnings report.

Bloomberg: New Wireless Upgrade Plans Could Boost IPhone Sales

U.S. wireless carriers are making it easier for customers to upgrade phones more often. That’s welcome news for consumers and could also provide a much-needed lift for Apple Inc. (AAPL) and Samsung Electronics Co.

Verizon Wireless is following AT&T Inc. (T) and T-Mobile US Inc. (TMUS), which earlier this month gave users an option to replace devices as often as every six months, rather than the typical two years in the U.S. Smartphone makers could use the help as they grapple with falling prices and a maturing market.

What you are seeing is a response to demand for older smartphone models. The wireless carriers know they can let their top customers upgrade, then turn around and sell their older smartphone models, which have seen increasing demand lately.

Bloomberg: Banks Poised to Lead S&P 500 as JPMorgan Beats Microsoft

Banks, brokers and insurance companies make up 16.8 percent of the S&P 500, almost double the level from 2009 and closing in on technology companies at 17.6 percent, according to data compiled by Bloomberg. Bank of America Corp. and Morgan Stanley are helping lead gains in the index this month after profits topped analyst estimates. Intel Corp. and Microsoft Corp. are among the worst after earnings trailed forecasts.

For bulls, the change signals banks will lead the economy even after the Federal Reserve begins to reduce stimulus. Bears say S&P 500 profits would be down this quarter if not for banks. They note that the last time financials were the biggest industry was in 2008 and the consequences were disastrous.

Caution is still advised:

Regulators are tightening rules to increase transparency and reduce risk in an effort to prevent another financial meltdown. They are requiring higher minimum capital requirements, a ban on proprietary trading and a mandate to push more swap trades through clearinghouses, which require upfront collateral.

We are still in the middle of the regulatory fallout from the last crisis. At the moment, the only bank I have on my watchlist is Wells Fargo (WFC), which is run quite differently than the other TBTF banks.

Fox News: White House doubles down on vow Obama won’t agree to more spending cuts

Let the sequester politics begin!

The Obama administration dug in Sunday on its vow to reject proposed spending cuts by congressional Republicans in upcoming budget talks but declined to say whether the president would veto their proposals or allow a government shutdown.

Treasury Secretary Jack Lew told “Fox News Sunday” that President Obama will neither sign government funding bills that slash domestic spending nor negotiate with Republicans over spending cuts to reduce the federal debt limit.

As we all know by now, both sides start the negotiations by playing to their respective bases. The silly thing about this statement is that no budget agreement could make it through both houses of Congress without Obama’s blessing.

Posted July 29, 2013 by edmcgon in Economy, Federal Reserve, Market Analysis, News, Politics

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