Market Wrap-up for August 07 – The Week in Review

Greek bailout talks continued to provide insight into the country’s financial position, with the government highlighting a 8.5% fall in tax revenues for the period. This was exacerbated by the recent five week closure of Greek banks.

Energy stocks weighed heavily on the market on Monday due to crude oil oversupply concerns and disappointing earnings released on Friday. Finishing 0.99% lower, the Dow Jones was the hardest hit index.

On the economic front, Personal Income for June came in at 0.4%, which was above initial estimates of 0.3%. Construction Spending and the ISM Index came in below consensus, making investors concerned that a Chinese slowdown could have a spillover effect on the manufacturing and property sectors.

• American International Group (AIG ) announced better than expected Q2 earnings, with the insurer seeing a 13% rise year over year. EPS was $1.39 for the period. Continuing its share buyback program, the company raised its target to $5 billion for the next quarter. AIG has a dividend yield of 0.79%.
• Tyson (TSN ) disappointed investors on Monday, with the food retailer reporting a net income of $344 million. This was below the 92 cents per share forecast supplied by analysts. TSN has a dividend yield of 0.95%.
• Apple (AAPL ) experienced a sharp pullback in its share price on Monday due to Chinese economic concerns. China is the biggest iPhone market for the technology giant. AAPL has a dividend yield of 1.80%.

Markets were unable to find support on Tuesday with the Nasdaq retreating 0.41% during the afternoon session. Apple continued its slide with the stock touching six month lows. On the interest rate front, Atlanta Federal Reserve President Lockhart reiterated Yellen’s recent comments telling reporters that a September shift in monetary policy could be needed.

Factory Orders for June came in at 1.8%. This was in line with market expectations.

• Allstate (ALL ) stock price traded 10.4% lower on Tuesday off the back of a disappointing earnings announcement from the previous session. Citing losses from underwriting, the company was confident that a rise in insurance premiums would increase profitability. ALL has a dividend yield of 1.94%.

New stock borrowing measures implemented by Chinese authorities had a muted effect on the markets on Wednesday with the Shanghai Composite finishing 1.65% lower. The S&P 500 and Nasdaq, however, managed to snap back from a 3-day losing streak, while the Dow was dragged down by Disney.

On the economic front, the Trade Balance deficit rose in June with the figure coming in at $43.8 billion.

• Disney (DIS) announced that its profit guidance for the next quarter would be lower than previously expected. This sent the share price 9.3% lower during the session. Q2 net income rose to $2.48 billion with a 5% revenue uplift. DIS has a dividend yield of 1.21%.

Earnings out of the media sector played on investors’ minds, with the S&P 500 finishing the session 0.78% lower at 2,083. It was quiet on the economic front, with only Initial and Continuing Claims reported.

• Viacom (VIAB) stock price fell 13.4% on Thursday, with Q3 earnings disappointing investors. The media company posted a revenue figure of $3.06 billion. VIAB has a dividend yield of 3.44%.

Non-Farm Payrolls sent volatility into overdrive on Friday, with the major currencies reacting to news that 215,000 jobs were created in July. Slightly below the consensus of 225,000, the unemployment rate was unchanged at 5.3%. The Dow Jones was 76 points lower during the morning session.

• Hershey Company (HSY ) disappointed investors early on Friday, with the confectionery maker reporting a Q2 net loss of $99.9 million. Citing a fall in Chinese demand, the company was bullish on US demand and growth. HSY has a dividend yield of 2.32%.

With earnings season in full swing, next week we will see reports from companies including : CenterPoint Energy (CNP ), Creditcorp Ltd (BAP ), Federal Agricultural Mortgage Corp (AGM ), International Flavors & Fragrances (IFF ), Landauer Inc (LDR), Medley Capital Corp (MCC), Nature’s Sunshine Product (NATR), Walter Investment Management Corp (WAC), Arcos Dorados Holdings (ARCO ), Bluerock Residential Growth REIT (BRG ), China Yuchai International Ltd (CYD ), Computer Sciences Corp (CSC), Johnson Outdoors (JOUT ), Adcare Health Systems (ADK).

Please note that this is only a selection of companies.

The following economic data will also be released: Productivity, Unit Labor Costs on Tuesday; The Treasury Budget on Wednesday; Initial Claims, Retail Sales, Export Prices and Import Prices on Thursday; PPI, Industrial Production, Capacity Utilization and the UOM Sentiment Index on Friday.