Monday July 18th

18-07-2016

Wall Street gears up for earnings bonanza

U.S. stock index futures rose slightly on Monday, following Asian and European stocks higher after an $32 billion Japan-U.K. semiconductor deal boosted markets. Japan's Softbank announced on Monday it would pay £17 per share — a 43 percent premium on Friday's closing price — for ARM in an all-cash deal. London-listed shares of ARM rallied more than 46 percent early on Monday. The news may boost U.S. chipmakers when Wall Street opens. The heavy part of second-quarter earnings season will get underway on Monday. Bank of America reported quarterly earnings and revenue that beat analysts' expectations on Monday. The commercial banking giant posted second-quarter earnings per share of 36 cents, compared to 45 cents a share in the same period a year ago. Revenue for the quarter came in at $20.6 billion. Hasbro posted second-quarter earnings per share of 41 cents, up from 33 cents in the same period a year earlier. Analysts polled by Reuters had forecast earnings of 39 cents. Numbers are also expected from Charles Schwab, IBM, Netflix and Yahoo on Monday. Earnings growth for the S&P 500 companies is expected to fall by 4.7 percent in the second quarter, based on expectations and actual reports from the several dozen companies that have reported, according to Reuters. In addition, real estate data will be in focus on Monday, with the NAHB Housing Market Index for July due. Tensions were high in the U.S. after three police officers were shot dead in the city of Baton Rouge by a gunman on Sunday. President Barack Obama condemned the killings and called for a measured response ahead of party conventions. The U.S. dollar fell back slightly against the Turkish lira and traded flat against a basket of currencies early on Monday. This followed a failed military coup against Turkish President Recep Tayyip Erdogan late on Friday. The iShares MSCI Turkey ETF (TUR) fell up to 7 percent in extended-hours trading, before paring some losses to trade 4.8 percent lower early on Monday. Wall Street ended last week with better-than-expected retail sales data and bank earnings that failed to boost indexes much as a massive rally eased. The Dow Jones industrial average closed 0.05 percent higher at 18,516.55 on Friday. The benchmark S&P 500 and the Nasdaq Composite both closed 0.09 percent lower. Markets in Asia traded mostly up on Monday, ahead of a relatively data-light week in the region, shrugging off the failed military coup in Turkey. In Australia, the benchmark ASX 200 closed up 28.93 points, or 0.53 percent, at 5,458.50, with most sectors finishing in the green. The materials sub-index, however, closed down 0.13 percent, with major miners falling behind. Shares of Rio Tinto closed down 0.81 percent, Fortescue fell 2.6 percent and BHP Billiton shed 0.74 percent. South Korea's Kospi index added 3.85 points, or 0.19 percent, to 2,021.11. In New Zealand, the NZX 50 finished up 33.07 points, or 0.46 percent, at 7,105.95. Hong Kong's Hang Seng index gained 0.66 percent, or 143.93 points, to 21,803.18. Chinese mainland markets fell behind their regional peers, with the Shanghai composite closing down 10.38 points, or 0.34 percent, at 3,043.90, while the Shenzhen composite ended lower by 10.85 points, or 0.53 percent, at 2,027.87. Markets in Japan were closed for the Marine Day public holiday. Oil futures fell on Monday as Turkish authorities restored order following last week's failed coup, though upbeat economic data from the United States put a floor under prices. Brent crude futures fell 37 cents at $47.24 a barrel by 7:54 a.m. ET (1154 GMT) after closing up 24 cents in the previous session, having gained nearly 2 percent for the week. U.S. crude futures fell 32 cents to $45.63 a barrel after ending the previous session up 27 cents, gaining more than 1 percent for the week. Spot gold fell on Monday as European equities rose after investor jitters calmed following a failed coup attempt in Turkey. Spot gold fell earlier to a session low of $1,323.70 an ounce and was down 0.65 percent at $1,328.82. Bullion fell over 2 percent last week, its first weekly decline in seven weeks, as investors piled cash into riskier assets. U.S. gold was up 0.14 percent at $1,329.30 an ounce. Turkey widened a crackdown on suspected supporters of the failed military coup, taking the number of people rounded up in the armed forces and judiciary to 6,000. The government said it was in control of the country and economy.