Futures ~15bps lower as markets perhaps pause after six straight days of gains despite bullish earnings and commentary from technology bellwether Intel (INTC; +5.5%), which reported a record quarter and raised guidance. In other earnings news, restaurateur YUM Brands (YUM; -2.5%) beat by 4c but saw some weakness in
. Overseas, ASML Holding (ASML NA; +4.5%) beat by EU0.08 and beat on revenues. The BofE’s Sentance calls for rate hikes in the U.K., Thailand raised rates overnight, and Singapore raised its growth forecast to +15% from +13%. Samsung also announced a factory expansion to meet growing demand, and credit default costs against Greek debt default fell in China Europe. However, Eurozone June IP and U.K. Consumer Confidence disappointed, and the London Telegraph was cautious on the outlook for and Spanish banks. In economic news, June Import Prices were down 1.3% vs. the -0.4% estimate and the -0,5% prior reading. This marks the largest drop in oil, business equipment, and consumer goods (to name a few) since January of 2009. This lends ammunition to those who believe that deflation is currently the biggest risk facing our economy. June Advance Retail Sales were not as bad as last month (May was -1.1%) but still disappointed against the expectation at -0.5% vs. -0.3%/e. This morning’s lead WSJ story has the Fed in disagreement regarding a policy response for potential slower growth ahead. Recall that the most recent FOMC meeting’s minutes will be released at 2pm today. Business Inventory data due at 10am today. Treasury will auction $ Spain 25B in 56-day bills at 11:30am and $ 13B in 30-yr bonds at 1pm. Looking ahead, GOOG, JPM, C, BAC, and GE earnings are due later this week. Finally, note that the Basel Committee of banking supervisors meets in today and tomorrow to finalize bank capital and liquidity rules. Switzerland
Interesting to note that global shipper EXPD guided higher – recall that container shipper Maersk did the same last week. The WSJ’s Heard on the Street column is positive on banks ahead of earnings.
In political news, the FinReg vote is scheduled for tomorrow morning. Given that, I thought this blurb was interesting this morning:
Wall Street Fix Seen Ineffectual by Four out of Five in
2010-07-14 09:25:03.174 GMT By Chris Malpass U.S.
July 14 (Bloomberg) -- Almost 80% of Americans surveyed in a Bloomberg National Poll this month say they have just a little or no confidence that the finanical-regulation bill being championed by congressional Democrats will prevent or significantly soften a future crisis.
* More than 75% say they don’t have much or any confidence the proposal will make their savings and financial assets more secure
* 47% says the bill will do more to protect the financial industry than consumers
* 38% say consumers would benefit more
Regarding INTC, here’s the story from BBERG:
Intel Forecasts Add to Evidence of Stronger Economy 2010-07-14 07:12:43.563 GMT By Ian King
July 14 (Bloomberg) -- Intel Corp., adding to evidence that the global economic recovery is taking hold, boosted its profit forecast for the year to a record after corporations resumed spending on computers. The company, whose processors run more than 80 percent of the world’s personal computers, said yesterday that its gross profit margin will reach 66 percent this year. Intel’s second- quarter earnings and sales forecast for the current period also topped estimates. Intel’s upbeat outlook followed better-than-anticipated earnings from two industrial bellwethers, Alcoa Inc. and CSX Corp., that pointed to an improving economy. While consumers led the initial recovery from the recession, businesses are now spending more too, Intel Chief Executive Officer Paul Otellini said yesterday. That may allay the risk of renewed slowdown. “All of a sudden, you start questioning the double-dip,” said Pat Becker Jr., a fund manager at Becker Capital in
, which owns 1.5 million Intel shares as part of $2.2 billion under management. “It clearly makes some of the doubts that had crept into the tech sector vanish.” Portland, Oregon
Cramer positive NVDA & JBL. Barron’s positive FAST. Homebuilders cut to Neutral at GSCO. Chemicals cut to Neutral at GSCO. GSCO ups AKS. ADTN beats by 9c. NLY announces 60M share offering. MIPI announces phase 2 data. AMD, MRVL higher on INTC earnings. Nomura cuts CGV. JTX beats by 8c and beats on revs. MMP announces 5M offering. SHW, PX cut at GSCO. VVUS upgrade at Leerink. UBSS ups CRM, ENR. BARD cuts AMED.
S&P 500 PreMarket 8:30am (last/% change prior close/volume):
INTEL CORP 22.12 +5.28% 5909875
LEXMARK INTL-A 33.65 -3.83% 2450
CA INC 20.16 +3.7 % 200
ADV MICRO DEVICE 7.77 +3.32% 350592
RADIOSHACK CORP 23.07 +2.95% 3900
JABIL CIRCUIT 15.10 +2.65% 19586
LSI CORP 5.08 +2.63% 4000
NVIDIA CORP 11.20 +2.56% 424294
Today’s Trivia: What was the first product made by Sony?
Yesterday's Answer: Live Aid opened on July 13th, 1985 in
London and . Philadelphia
By Tomoko Yamazaki
July 14 (Bloomberg) -- Hedge funds fell in the first half of the year amid concerns that the sovereign debt crisis in
Europe may hamper a global economic recovery.
The Eurekahedge Hedge Fund Index, which measures the performance of more than 2,000 funds worldwide, fell 0.5 percent in June and lost 0.02 percent in the first six months, Eurekahedge Pte said in a report on its website. More than 500 funds started globally in the first half, the Singapore-based research firm said.
Hedge funds, which returned an average 20 percent in 2009, are struggling amid signs of a global economic slowdown as governments pare stimulus measures, Europe faces surging budget deficits and
’s expansion slows. The funds’ six-month performance compares with an 11 percent drop by the MSCI World Index and an 8.8 percent decline by the Reuters Jefferies CRB Index, a commodities benchmark. China
“Simply outperforming the traditional market won’t be enough for hedge funds because they are expected to deliver absolute returns,” said Shinichiro Nagai, a senior manager at the investment group of Tokyo-based GCI Asset Management Inc., a Japanese hedge-fund firm. “Having said that, there are various factors that are affecting the market, and watching the trends in the macro economy as well as volatility has become ever so important.”
Four out of seven regional indexes declined in June, with the Eurekahedge Eastern Europe and Russia Hedge Fund Index losing the most with 2.3 percent. Latin American funds were the best performers, gaining 1 percent. The measure tracking North American managers declined 0.9 percent.
For year-to-June, the index tracking Latin American managers gained 1.5 percent, making it the best performer, while the gauge of
Asia ex-Japan managers fell 3.1 percent, the worst performance.
By strategy, managers of so-called equity long-short funds that trade on rising and falling stock prices were the worst performing group in June with a 1.1 percent drop, tracking losses in global equities, according to Eurekahedge.
Commodity trading advisers, or CTAs, which use computer programs to search for price signals in futures markets ranging from equities and bonds to oil and gold, were the best performers, returning 0.6 percent in June, according to the report. Funds that invest in fixed income benefitted from a rally in bond prices, returning 0.5 percent last month.
Managers investing in distressed debt were the best performers, gaining 6.4 percent, in the first half of 2010, followed by funds that invest in fixed income, it showed.
A separate report by Hennessee Group LLC showed hedge funds worldwide had their fourth-worst six-month start to a year since
1987 when the a New York-based investment advisory firm started compiling the data. The Hennessee Hedge Fund Index added 0.2 percent in the first six months of this year.
“Volatility and high correlation among asset classes have created a challenging investment environment,” E. Lee Hennessee, managing principal of Hennessee Group, said in an e-mailed statement. “While funds have not generated substantial positive performance, investors should be satisfied with lower drawdowns and lower volatility.”
Assets managed by so-called UCITS III funds surpassed $100 billion in the first half of 2010, according to Eurekahedge. The funds, known by an acronym for Undertakings for Collective Investment in Transferable Securities, comply with European Union rules and are allowed to use alternative investment strategies such as shorting and leverage to boost returns.
Eurekahedge’s preliminary report is based on 52 percent of funds reporting performances in June. The research firm plans to release a full report later this month.
Hedge funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall.