Tuesday, July 16, 2013

Economic Journal - Tuesday, 7/16/2013

(As of 7:14 am PST)
 
Stocks are slightly lower this morning but continue to trade at record highs amid several earnings reports. Some big names reported Q2 earnings this morning including Goldman Sachs, whose second quarter net income doubled, far exceeding expectations. Johnson & Johnson beat on revenues, and lifted its full-year earnings guidance while Coca Cola reported declining revenues for Q2. On the data front, industrial production rose 0.3% in June, stronger than expected. Consumer prices also rose in June, led by housing, food, and gasoline prices. Core CPI (which is used by the Federal Reserve to measure inflation) advanced 0.2% in June. Finally, a report on the housing sector showed homebuilder confidence in July rising to the highest level in more than 7 years. Stocks recovered early losses after the housing report was released. In international news, Asian markets finished mostly higher following Wall St. gains from Monday. Europe is down after a report out of Germany showed economic sentiment declining. Gold prices are inching back, up another 0.5% to $1290/oz. while interest rates are slightly lower. At these market tops, investors seem cautiously optimistic, taking a “buy on the dips, sell on the rips” approach as earnings and Fed policy dictate market direction.

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