Commodities and earnings dominated the headlines this week, with the $1.3 billion gold sell off on Monday setting the tone. Speculation that Chinese divestment had caused the dramatic fall quickly led to investor reweighting, with volatility rising in other commodities, including oil. Greek Parliamentarians passed crucial bailout reform terms on Wednesday, with the €86 billion loan expected to be unlocked next week. The reforms will mean changes to the Greek banking and judiciary systems.
Investor commodity concerns were quashed by strong earnings on Monday, with a number of blue chips beating analysts’ estimates. Banking giant Morgan Stanley rose nearly 2% after announcing an EPS of 85 cents off $9.7 billion revenues. On the takeover front, aerospace contractor Lockheed Martin confirmed a $9 billion bid for helicopter manufacturer Sikorsky.
- Hasbro (HAS ) rose 6.3% during the session, with the company reporting strong sales from its movie-themed toys division. HAS has a dividend yield of 2.32%.
- IBM (IBM ) missed analysts’ earnings forecasts, with net income down 15% on $20.8 billion revenue. The market had priced in $20.9 billion for the quarter. IBM has a dividend yield of 3.22%.
Disappointing earnings from United Technologies and IBM weighed on the market on Tuesday, with the Dow Jones finishing 1.14% lower. Lexmark International announced that they would be cutting 4% of their total global workforce.
- Apple (AAPL ) reported strong quarter earnings after market, with the company announcing a 35% rise in iPhone sales. Surprisingly, the market reacted negatively to the news, with the stock falling 7.4% on Wednesday. Revenue for the period came in at $49.6 billion, with earnings of $10.7 billion. AAPL has a dividend yield of 1.66%.
- Microsoft (MSFT ) posted a $3.19 billion loss for the quarter, with the tech giant highlighting significant restructuring costs and write downs. The announcement came after the market had closed. MSFT has a dividend yield of 2.71%.
The hangover from Microsoft and Apple earnings pushed major indexes into the red, with the tech-heavy NASDAQ falling 0.7% to 5,171.77. Yields on long-term Treasuries continued to mirror interest rate sentiment, with investors pricing in a September rise.
Existing Home Sales in June rose to 5.49 million, with the MBA Mortgage Index coming in at 0.1%. Both figures were met with muted reactions.
- Baker Hughes’ (BHI ) stock price reacted negatively to rumours that the Halliburton acquisition may not proceed due to antitrust issues. BHI has a dividend yield of 1.14%.
- Boeing (BA ) reported a better-than-expected EPS of $1.62 for the quarter. The stock price rose a conservative 1% on the news. BA has a dividend yield of 2.49%.
Wall Street was unable to break its losing streak on Thursday, with the Dow Jones falling into the red for 2015. Disappointing earnings were cited as the main cause.
Initial Claims came in considerably lower than forecast, with 255,000 reported for the period.
- Caterpillar (CAT ) confirmed earnings of $1.27 per share on Thursday, with the company downplaying future growth. The stock closed at $76.88, down 3.6%. CAT has a dividend yield of 4.00%.
Economic data out of China extended market losses during the early session on Friday. The Purchasing Managers’ report, which isolates manufacturing activity in China, dropped to a 15-month low of 49.4 in June. Interestingly, the U.S. PMI rose to 53.8 in July off the back of strong order growth.
New Home Sales fell sharply in June, with 482,000 reported. The market had factored in between 540,000 to 550,000 for the period.
- Xerox’s (XRX ) earnings fell in line with consensus expectation, with the company reporting a 22 cent EPS. XRX has a dividend yield of 2.54%.
- AbbVie Inc. (ABBV ) was slightly weaker in early trade on Friday, with analysts concerned that weaker revenue growth could affect future earnings. The company announced an EPS of $1.08 for the quarter. ABBV has a dividend yield of 2.97%.
Next week will see earnings reports from: Agree Realty (ADC ), AvalonBay Communities (AVB ), Bank of Hawaii (BOH ), CTS Corp. (CTS ), Hartford Financial Group (HIG ), Harris Corp. (HRS ), UDR Inc. (UDR ), Wynn Resorts (WYNN ), Anadarko Petroleum (APC ), Corporate Executive Board (CEB ), EcoLab Inc. (ECL ), Ford (F ), Gilead Sciences (GILD ), Merck (MRK ), Pfizer (PFE ), Textron Inc. (TXT ), Baxter International (BAX ).
The following economic data will also be reported: Durable Orders on Monday, Consumer Confidence and the Case Shiller City Index on Tuesday, Pending Home Sales, MBA Mortgage Index and the FOMC Rate Decision on Wednesday, Initial Claims, Continuing Claims and GDP on Thursday and Chicago PMI on Friday.