Hurricane Arthur May Rain On Your Plans, But Won't Drain Economy
Hurricane Arthur May Rain On Your Plans, But Won't Drain Economy
Chinese Stocks Tumble the Most in Four Months on Central Bank Moves
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Hurricane Arthur is continuing to intensify, with the National Hurricane Center predicting it to make landfall on the North Carolina coastline as a Category 2 hurricane before traveling up the East Coast, and raining on a lot of 4th of July plans in the process. But the storm shouldn't have too much of a negative impact on local communities, according to Lee Nettles, executive director of the Outer Banks Visitors Bureau in North Carolina. He says local businesses and tourism won't suffer badly from the quick-moving storm. That's echoed by research from the Hampton Roads Planning District Commission. The commission found that, "In general, those communities impacted by Category 1 and 2 storms are likely to experience little fiscal impact."
Chinese stocks tumbled by the most in 4 months. The problem was record turnover as brokerages tightened lending restrictions and the Central Bank in China drained cash from the financial system. The Shanghai Composite fell 6.5%, dragged by financial and commodity companies. However, the Chinese market has soared this year on speculation the Central Bank will cut interest rates and engage in other stimulus. JP Morgan Chase (JPM) CEO Jamie Dimon blasted some shareholders for blindly following advice from proxy firms like ISS and Glass Lewis. He called the shareholders "lazy". He says if they vote based on proxy advice, they probably aren't good investors either. ISS and Glass Lewis caused problems for Dimon earlier this year when they recommended shareholders reject the banks executive pay package.
Mortgage applications dropped 1.6 percent from a week ago, according to data from the Mortgage Bankers Association's weekly mortgage applications survey. Tiffany & Company (TIF) earnings and revenue fell less than expected in the first quarter as a key sales metric grew across nearly every region, despite the continued negative impact of the strong U.S. dollar. But Michael Kors (KORS) gave another disappointing forecast. It was helped by store openings and a lower tax rate but the retailer gave another disappointing forecast for the current quarter. Reuters reports that gourmet sub chain Jimmy John's is preparing for an IPO that could value the company at $2 billion. Widely followed investment advisor Bill Gross admitted in his June investment outlook that his bet against the German Bund market was well timed but not profitable.
In Thursday's What to Watch on Wall Street, TheStreet highlights the notable earnings reports due out along with the key economic data to keep an eye on throughout the trading day on May 28. The six companies reporting their latest quarterly financial results include teen apparel retailer Abercrombie & Fitch Company (ANF), Express Inc (EXPR), Pacific Sunwear of California, Inc. (PSUN), GameStop Corporation (GME), Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA), as well as analog semiconductor devices maker for smartphones Avago Technologies Ltd (AVGO). Avago is scheduled to release its second quarter earnings results after the market closes on Thursday. TheStreet’s Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio, says he’s watching Avago earnings, and calls it the bellwether stock that will help determine how the other higher performing chip stocks will do. The smartphone semiconductor company is expected by Wall Street analysts to rake in a profit of $2.01 per share on revenue of about $1.635 billion for its second quarter, according to Thomson Reuters data. On the economic calendar, we point out four key data to watch. They include the weekly jobless claims as well as the pending home sales index for April. The National Association of Realtors developed the pending home sales measure as a leading indicator of housing activity in the country. Specifically, it is a leading indicator of existing home sales, not new home sales. Additionally, the Energy Information Administration releases its weekly petroleum status report on petroleum inventories in the U.S. We also note the Fed balance sheet. The balance sheet report shows factors supplying reserves into the banking system and factors using reserve funds. TheStreet's Kurumi Fukushima reports in New York.
Broadcom (BRCM) spiked Wednesday on reports it is in advanced talks to be acquired by Avago Technologies (AVGO). That's the latest sign of further consolidation in the semiconductor industry. It was a battle among luxury goods brands on the S&P 500 with Tiffany & Co. (TIF) leading the index and Michael Kors (KORS) bottoming it out. Microsoft (MSFT) topped the Dow, one of the biggest winners of a high-momentum tech rally that led markets on Wednesday. Exxon Mobil (XOM) was the worst performer on the Dow. Stocks snapped back from yesterday's selloff on Wednesday, undeterred by a higher dollar, lower oil and mixed earnings.
Stocks rebounded in midday trading Wednesday from a selloff yesterday with the healthcare and technology sectors leading the way. Gains on Wall Street were fortified by a rally in Europe on news Greece could be close to sealing a deal with its European creditors. The two parties are reportedly at the stage of drafting a technical-level agreement for further debt relief. Tiffany (TIF) was boosting the S&P 500 after satisfying quarterly estimates. Hormel Foods (HRL) jumped after acquiring organic brand Applegate for $775 million. The deal is expected to contribute $0.07 to $0.08 in earnings per share by next year.
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