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Market Wrap-up for July 27th: China In Free Fall

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Market Wrap-Up for July 27: China in Free Fall!

Rupert Hadlow Jul 27, 2015


Global equity and commodity markets will be guided by Chinese investor sentiment this week, with concerns that disappointing manufacturing data, released on Friday, could push the Shanghai Composite into unchartered territory. Reacting to speculation that government intervention measures could be unsustainable, the Chinese equity market finished the session 8.48% lower.

Greek Prime Minister Tsipras came under fire over the weekend, with allegations that his party had initiated a ‘Plan B’ in the event that bailout talks with European officials were not successful.

On the economic front important GDP, Unemployment Claims, Consumer Confidence, and Durable Goods data will be released. The Federal Open Market Committee will confirm any changes to the funding rate on Wednesday. Economists expect no change.


Monday


The September Dow futures contract is pointing to a 61-point drop in the index, with Chinese fears expected to subdue any potential upside movements. Investors will be looking for comfort in earnings, with a number of financial companies expected to report.

Durable orders, which quantify shipments and demand, will be released at 8:30 am, with economists pricing in a month-on-month figure of 3% to 3.2%.

  • Cisco Systems’ (CSCO ) stock price could be affected on Monday, with the company announcing the closure of their data storage software division. Concentrating on their core business, the tech company did not disclose the savings attributed to the move. CSCO has a dividend yield of 2.96%.
  • Norfolk Southern (NSC ) is set to announce quarter earnings, with analysts forecasting an EPS of $1.42, which would be a 37 cent drop from the corresponding period in 2014. NSC has a dividend yield of 2.84%.
  • Hartford Financial (HIG ) will confirm their quarter earnings after market close, with a consensus EPS forecast of 77 cents. HIG has a dividend yield of 1.55%.


Tuesday


Greek and European officials will continue to discuss terms of the €85 billion bailout on Tuesday. Developments over the weekend could hamper negotiations and once again weigh on the markets.

Consumer Confidence will paint an important picture, with the index expected to hit 100 for the July period. This would be slightly below the previous period.

  • Anadarko Petroleum Corp. Liquid error: internal is set to release its quarterly earnings after market close, with the company expected to report a loss of 51 cents per share. Recently, the U.S. Supreme Court ruled that the oil and gas company could be subject to fines resulting from the Gulf of Mexico spill. AEUA has a dividend yield of 7.50%.
  • Corning (GLW ), a global leading supplier of ceramic and glass products for the scientific industry, will report Q2 results before market open on Tuesday. Analysts are expecting revenue to come in at $2.54 billion and EPS at 37 cents. GLW has a dividend yield of 2.58%.


Wednesday


Fed Chief Janet Yellen is expected to announce interest rates are unchanged at 0.25% on Wednesday, with the FOMC statement released at 2 pm. Pending home sales for June will measure the buoyancy of the real estate market and could rise by 1% to 1.5% for the period.

  • Churchill Downs (CHDN ), the thoroughbred track owner and host of the Kentucky Derby, is set to announce a $3.42 EPS Wednesday afternoon, according to consensus forecasts. CHDN has a dividend yield of 0.80%.
  • Garmin (GRMN ), which has a dividend yield of 7.53%, is expected to release earnings before market open, with an EPS estimate of $0.82. The company recently downgraded their future guidance in light of currency and competitive head winds.


Thursday


Gross Domestic Product estimates for Q2 could influence market movements during the morning session, with an expectation of 2.6%. Other economic data to be released includes Initial and Continuing Claims.

  • CME Group (CME ), who recently confirmed the closure of the open cry trading pits in Chicago and New York, will announce quarter earnings on Thursday. Analysts are expecting an EPS of $0.92. CME has a dividend yield of 2.07%.


Friday


Relatively quiet end to the week, with the Chicago PMI, Michigan Sentiment and Employment Cost Index expected to be announced. Consensus forecasts for July manufacturing data indicate a rise from 49.4 to 50.5.

  • Chevron (CVX ) will release its quarterly results on Friday, with estimated earnings of $1.12 per share. CVS recently rolled out apple pay functionality at a number of its U.S. pump locations. The company has a dividend yield of 4.72%.


The Bottom Line


Greece could once again be a sticking point for investors this week, with fresh concerns that political infighting in the ruling Syriza party could cause delays. Officials are expected to meet in Athens today to discuss the technicalities of the third bailout tranche.

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