Thursday, August 5, 2010

A lot of moving pieces in the market today – some updates:Central banks -Retail same-store-sales-China's banking regulator issued a statement- Mortgage surprise coming from the White House

  •  Retail same-store-sales: same-store-sales for the month of Jul came in mixed; showing a clearer divide between the "winners" and "losers." Seeing some names get squeezed higher on inline to better results vs. low expectations. Biggest misses coming out of BIG, ARO, BKE, JCP and GYMB. KSS's guidance raise, Macy's stronger comp, TJX's better than feared print, GPS's better than feared guidance and ANF's better comp helping those names rally; 
  • Jobs - after a couple decent data points (the labor component of this Mon's manufacturing ISM and yesterday's ADP), today's jobless claims numbers came in worse than expected; 
  • Steel - mixed article on Reuters - overall cautious tone; says prices in Asia dwn from mid-week levels; a lot of the recent uptick in prices b/c of restocking but end market demand indications remain poor; 
  •  European banks remain resilient - Barclays is dwn 4% after earnings (expectations were high after UBS/Lloyds/HSBC) but rest of the Euro financials actually trading well (Lloyds extends its gains); RBS Fri morning the last major one to report;
  •  Life insurance - neg. earnings, inc. from the Canadian companies (MFC is dwn 8% and SLF off ~2-3%); in the US, HIG and PNX are trading lower (PRU makes small gains post earnings);
  • Media stocksup 1% and one of the best performing groups in the market today - earnings from the group acme in better than expected (while VIA is trading lower, others, inc. DTV, are higher); 
  •  Central banks - bunch of news on the tape, but on the whole all were right as expected…..BOE, ECB policy announcements and no change to outlook (ECB tone bit more pos. on eco outook); the PBOC released its qtrly monetary report and reiterated a lot of the same comments made by officials lately.  The big event will be next week's FOMC decision on Wed Aug 11 (this is becoming central event of next week following the WSJ article from earlier this week talking about Fed considering ramping up QE);
  • China property - China's banking regulator issued a statement (after Shanghai closed) and said the dwn 50-60% housing stress tests doesn't mean the gov't's assessment of market trends or policy has changed (the statement was issued in response to market fears that Beijing was growing more worried about housing); 
  • Food costs – stocks like TSN/SFD getting hit on worries that animal feed costs will rise as a result of the Russian wheat export embargo (this is also weighing on some beverage companies); on the flip side, fertilizer/ag stocks (IPI, MON, CF, AGU, POT, MOS) strong in part b/c of this export ban (also b/c of earnings from AGU and IPI); 
  •  Mortgage surprise coming from the White House?  A blog posting on Reuters (see this link: discussing FNM/FRE/FHA-directed housing relief coming in Aug is getting attention today (keep in mind spec of a Fannie/Freddie housing initiative has been talked about for a couple weeks now); this would have mixed implications for the banks (their MBS holdings could fall but the overall health of the consumer would improve); A TREASURY OFFICIAL JUST CAME OUT ON REUTERS AND DENIED THIS

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