Breaking a seven-session losing streak, the market started the week on a positive note, with Warren Buffett’s Precision Castparts deal boosting investor sentiment. Institutional candour and Chinese economic commentary continued to weigh on certain stocks, with 734 NYSE issues recording losses throughout the Monday session. Interestingly a report from Thomson Reuters highlighted a 23% year-on-year rise in corporate cross border deal activity in July. This is one of the largest increases since the ’80s.
The Berkshire Hathaway deal overshadowed disappointing Chinese data on Monday, with the Dow Jones finishing the session 1.4% higher.
On the economic front, Atlanta Fed President Lockhart noted that interest rates would be rising in the short term. This fell in line with the September expectation. Labor Market Conditions softened slightly month on month.
- CVR Partners (UAN ) confirmed on Monday that they would be purchasing Rentech Nitrogen Partners for $533 million. The announcement pushed CVR shares into the red. UAN has a dividend yield of 13.98%.
- Dean Foods (DF ) reported better-than-expected earnings on Monday, with the company posting an EPS of 28 cents. Consensus was 26 cents per share. DF has a dividend yield of 1.68%.
- International Flavors & Fragrances (IFF ) traded lower after the company announced EPS for the year was 0.7% below a year ago. Earnings the quarter, however, exceeded analysts’ expectations. IFF has a dividend yield of 1.98%.
China’s strategy to devalue the yuan pushed Wall Street lower in trade on Tuesday, with the S&P 500 finishing at 2,092.44 (down 0.56%). Central bank officials confirmed that the devaluation was a “one off” scenario. Such a view was not shared by investors, with the offshore yuan retreating 2.9%. This was the biggest fall since 1994.
- China Yuchai International (CYD ) exceeded consensus estimates, with earnings per share rising to $0.76. This was 29 cents above analysts’ forecasts. Revenue for the quarter came in at $674.2 million. CYD has a dividend yield of 7.51%.
- Johnson Outdoors Inc. (JOUT ), the sporting goods manufacturer and supplier, confirmed an increase of 3% in net sales for the quarter. This came after the company released a new range of marine electronics products. EPS was $1. JOUT has a dividend yield of 1.24%.
Volatile session on Wednesday, with a late rally pushing Wall Street into the black. Falling 275 points earlier, investor reaction to China’s yuan devaluation was soon balanced out by a rise in energy and technology stocks, with the Dow Jones finishing one point higher.
On the economic front, JOLTS Job Openings for June fell from the previous period.
- Cisco Systems (CSCO ), which has a dividend yield of 2.91%, announced to the market on Wednesday a rise in their EPS for the quarter. Reporting revenue of $12.8 billion for the quarter, the company expects further strong growth.
Retail Sales slightly beat estimates in July, with a 0.6% rise recorded. This had little impact on the market, with the Dow Jones adding five points to finish at 17,408.25. Export and Import Prices in July were below consensus.
- Kohl’s Corporation’s (KSS ) stock price reacted to weaker-than-expected earnings, with an 8.8% fall posted. Net income for Q2 came in at $130 million. KSS has a dividend yield of 3.24%.
The Dow Jones reacted to better-than-expected PPI and Industrial Production figures on Friday, with the index rising 40 points in early trade. Reporting a 0.6% rise in July, the physical output metric was 0.3% above estimates. Capacity Utilization fell in line at 78%. The Producer Price Index came in at 0.2%.
- General Electric (GE ) agreed to sell their GE Capital Bank online platform business to Goldman Sachs late on Thursday. This falls in line with the strategy to reduce their footprint in the finance business. GE has a dividend yield of 3.57%.
Earnings season will be winding down next week. The following companies will report: Agilent Technologies (A ), Invesco Mortgage Capital (IVR ), Prospect Capital Corporation (PSEC ), Analog Devices (ADI ), China Ceramics Co. (CCCL ), Dick’s Sporting Goods (DKS ), FlexSteel Industries (FLXS ), Home Depot (HD ), La-Z-Boy Incorporated (LZB ), Sypris Solutions Inc. (SYPR ), TJX Companies (TJX ), Wal-Mart Stores (WMT ), American Eagle Outfitters (AEO ), Eaton Vance (EV ).
Please note that this is only a selection of companies.
The following economic data will also be released: Empire Manufacturing and Housing Market Index on Monday; Housing Starts and Building Permits on Tuesday; CPI, Core CPI and the FOMC minutes on Wednesday; Initial Claims, Existing Home Sales, and Leading Indicators, on Friday.