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FinNews for October 26, 2012 Top Stories DuPont, 3M, UPS, and Xerox missed revenue expectations and reported weak earnings, providing a catalyst for a sell-off in major indices. (1) A top federal prosecutor is suing Bank of America for mortgage fraud. (2) The Federal Reserve meeting ended with no major change to the current policies, reaffirmed keeping rates low through 2015. (3) Economic Releases & Statistics New home sales were up 5.7 percent in September, the most since April 2010, and slightly above median estimates. (4) Pending home sales fell short of analyst expectations, coming in 0.3 percent higher in September versus forecasts for a 2.1 percent rise in the index. (5) Goods orders were little changed in September signaling a spending slowdown that amplified economic concerns. (6) The US economy grew 2 percent in the third quarter. This was slightly better than forecasts. Without a 13 percent increase in defense spending, the rate would have been closer to 1.4 percent. (7) The jobless rate in Spain hit a new high of 25%. (8) The Thomson Reuters/University of Michigan final consumer sentiment index reached 82.6, just under the reading of 83 forecast by economists. The reading is the highest since September of 2007. (9) Stocks & Earnings Proctor & Gamble reported better than expected fiscal first-quarter earnings of $1.03 per share versus forecasts for a profit of 94 cents. (10) Apple's fourth quarter earnings missed forecasts, precipitating a drop in share price. Apple reported, "it earned $8.2 billion, or $8.67 per share, on sales of $36 billion in the fiscal fourth quarter. The earnings-per-share missed Wall Street's expectations, which had forecast $8.75 per share on sales of $35.8 billion." The tech giant is projecting holiday sales revenue of $52 billion versus expectations for about $55 billion. (11) Amazon.com also disappointed with third-quarter sales and earnings missing expectations. (12) Global Currencies The Bank of Canada left its 1 percent benchmark rate and economic outlook unchanged following a meeting. The latest policy statement included the following comment, "Over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2 per cent inflation target." (13) The British Pound gained following news that the United Kingdom's gross domestic product grew by 1.0 percent versus forecasts for 0.6 percent growth. (14) The euro currency fell following weaker data from Germany regarding business sentiment. (15) Oil & Energies This week's Energy Information Administration (EIA) release showed crude oil inventories increased by 5.9 million barrels. Analysts were expecting a build of 1.7 million barrels. Gasoline supplies added 1.4 million barrels compared to forecasts for a 1 million barrel draw. Distillates were down by 600,000 barrels versus expectations for a drop of 1.5 million. (16) Concerns over the impact of Hurricane Sandy on the Northeast helped boost crude oil and product prices as possible refinery slowdown or closures loom. (17) Natural gas supplies reached towards the all-time high, adding 67 billion cubic feet last week to a total of 3.843 trillion cubic feet in storage.(18) Grains & Field Crops Ukrainian Agricultural Minister confirmed on Wednesday that his country will look to ban wheat exports next month. (19) Corn harvest in the US has started to slow, but remains at a record pace with 87 percent completion. (20) US corn export sales fell short of analyst expectations at 142,300 metric tons through October 18. (21) Heavy rains have slowed soybean planting in Argentina with only 2% of the projected acres planted. (22) The "National Development & Reform Commission (NDRC) – an apex economic decision body of the Chinese government has announced that China" will not sell state cotton reserves in the new season. (23) Precious Metals Gold prices were spurred higher following news that Brazil added gold to its reserves and Turkey increased holdings. The International Monetary Fund's website data showed Brazil's central bank added 1.7 tons and Turkey added 6.8 tons. Ukraine also increased holdings by 0.3 ton. Russia's reserves dipped by 2.2 tons. (24) Other Commodities Somar Meteoreologia is forecasting more rains for coffee growing regions of Brazil, benefiting crop development with increased soil moisture. (25) According to industry professionals, the Ivory Coast cocoa crop for 2012/2013 looks to be "normal" despite concerns about moisture levels earlier this month. (26) The director of economic and market research at the Florida Department of Citrus is forecasting that a price drop for retail orange juice should boost sales next year. A price of $1.39 per pound solids is forecast - breakeven cost for Florida growers averages $1.30 per pound solids. (27) Nielsen data published by the Florida Department of Citrus shows that domestic retail sales of orange juice declined 4.8% by volume in September versus the same period last year. (28) Upcoming:
1. http://www.washingtonpost.com/business/dow-down-200-after-weak-corporate-earnings-reports/2012/10/23/794f53bc-1d1c-11e2-8817-41b9a7aaabc7_story.html 2. http://www.usatoday.com/story/money/business/2012/10/24/bank-of-america-mortgage-fraud/1654441/ 3. http://money.cnn.com/2012/10/24/news/economy/federal-reserve-decision/ 5. http://www.foxbusiness.com/news/2012/10/25/pending-home-sales-rise-modestly-in-september/ 11. http://www.usatoday.com/story/money/business/2012/10/25/apple-earnings-fourth-quarter/1657063/ 12. http://news.investors.com/technology/102612-630911-amzn-stock-rises-despite-q3-miss.htm 14. http://gantdaily.com/2012/10/25/uk-returns-to-economic-growth-in-third-quarter/ 15. http://uk.reuters.com/article/2012/10/24/markets-forex-idUKL1E8LO67S20121024 16. http://www.cbsnews.com/8301-505245_162-57539109/us-crude-oil-supplies-grow-by-5.9-million-barrels/ 17. http://www.reuters.com/article/2012/10/25/markets-oil-idUSL3E8LP13S20121025 18. http://www.reuters.com/article/2012/10/26/markets-nymex-natgas-idUSL1E8LQ36320121026 20. http://www.agriculture.com/news/crops/cn-harvest-pace-slowing-down_2-ar27028 21. http://online.wsj.com/article/DN-CO-20121025-017707.html 22. http://www.agriculture.com/markets/analysis/soybeans/argentinas-soy-plting-starts-slowly_10-ar27087 23. http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=117331 24. http://www.businessweek.com/news/2012-10-25/brazil-s-gold-reserves-rise-for-first-time-since-2008 27. http://www.newschief.com/article/20121026/NEWS/210265018?tc=ar 28. http://online.wsj.com/article/BT-CO-20121015-709045.html _______________________________________________________________________________________ Disclaimer: Trading and investing involve a substantial degree of a risk of loss and are not suitable for everyone. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. The publisher, and/or its affiliates, staff or anyone associated with FinNews, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Information provided is compiled by sources believed to be reliable. Financial Media Corp, and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of the publisher. |
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