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US FINANCIAL MARKET

Wall St Near Flat After Two Days of Gains, Energy Falls

  • Uncertainty about the situation in Ukraine is keeping investors cautious, with energy shares being the biggest drag on the S&P 500
  • The S&P 500 energy index is down 0.5 % following sharp declines in oil prices, with shares of Exxon Mobil down 0.5 %
  • Shares of  Tekmira Pharmaceuticals were down 17 %
  • The company is developing an Ebola treatment that had been put on hold by U.S. regulators and then later released for treatment in certain patients
  • The largest gainer on the New York Stock Exchange is Fortegra Financial, which is up 40.31 %, while the largest decliner is Gain Capital, down 10 %
  • The broad S&P 500 index is posting two new 52-week highs and no new lows while the Nasdaq Composite is recording 16 new highs and 22 new lows
  • Intercept Pharmaceuticals Inc is soaring 46 % after the company said its drug to treat liver disease was effective in mid-stage trials

Gold Climbs in New York on Increasing Demand for Haven Assets

  • Gold prices climbed in NewYork as tensions between Ukraine and Russia boosted demand for the metal as a haven
  • Gold has rallied 9.4  % this year, defying bearish forecasts
  • Trading was 44 % below the average for the past 100 days for this time of day, according to Bloomberg

Schlumberger Sees 3Q Earnings Impact From Russian Sanctions

  • The world’s largest oilfield services provider said that Russian sanctions on oilfield technology, including fracking and deep-water drilling, may have 3 cents a share off Schlumberger’s third quarter earnings
  • Sanctions by the U.S. and European Union are lowering efficiency and increasing costs
  • According to RBC Capital Markets, Schlumberger gets 5 % to 6 % of their global sales from Russia
  • As of yesterday, shares had risen 21 % this year
  • Russia relies on companies including Exxon, BP, Halliburton and Schlumberger for the latest technology and expertise to develop approximately $7.58 trillion in oil and natural gas resources

Apple Suppliers Start Making New iPads

  • Apple’s suppliers have started manufacturing new iPads, after the company works to boost sales of tablets after two consecutive quarters of declines
  • Mass production of a full-sized iPad with a 9.7-inch screen is already under way, with an unveiling projected for the end of this quarter or early next
  • A new version of the 7.9-inch iPad mini is also entering production and will probably be available by the end of the year, according to people with knowledge of the matter
  • Output of the larger iPad may be restricted by manufacturing complications related to the use of a new anti-reflection coating, which the company plans to add to the tablet to make the display easier to read, said one of the people

 

US ECONOMY & POLITICS

Job Openings in U.S. Climbed in June to Highest Level Since 2001

  • Job openings rose in June to the highest level in more than 13 years
  • The number of unfilled positions rose by 94,000 to 4.67 million, the most since February 2001, from a revised 4.58 million in May
  • Payrolls rose by 209,000 workers in July, following an increase of 298,000 in June
  • Gains have passed 200,000 for six consecutive months, the first time that’s happened since 1997
  • The number of people getting jobs rose to 4.83 million in June from 4.74 million, pushing the hiring rate to 3.5 % from 3.4 %
  • Job openings in June increased at factories, retailers and professional and business services, with the rate of openings increasing to 3.3 % in June, the highest since June 2007
  • In the 12 months ended in June, the economy generated a net 2.4 million jobs, including 55.7 million hires and 53.3 separations

U.S. small business sentiment rises in July

  • According to the National Federation of Independent Business (NFIB), U.S. small business sentiment rose in July
  • The Small Business Optimism Index, considered a leading indicator for the economy, increased by 0.7 point to 95.7 last month
  • Six of the index’s 10 components increased, with modest increases in the number of firms increasing inventories, making capital investments and creating new jobs
  • There were, however, declines in the share of firms saying job openings were difficult to fill and those expecting higher sales growth

Home Price Gains Slow in Most U.S. Cities

  • Home-price gains moderated in most of the U.S. in the second quarter as appreciation reached its slowest pace since 2012
  • Inventory of all existing homes for sale rose 6.5 % in June from a year earlier to 2.3 million, an increase from a 13-year low of 1.8 million in January, according to the National Association of Realtors

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California’s Brown Reaches $7.2 Billion Drought Bond Deal

  • Governor Jerry Brown and California Democratic lawmakers reached tentative agreement on a $7.2 billion bond measure for water storage and delivery to drought-stricken cities and farms
  • The compromise includes almost $7 billion in new bonds and $200,000 from previous debt measures, according to an Assembly Speaker
  • The biggest allotment would devote $2.5 billion to storage, such as dams and reservoirs
  • According to the state Water Resources Department, three years of below-normal precipitation have reduced 10 of the 12 major reservoirs to less than 50 % of capacity
  • California’s borrowing costs for general-obligation bonds have decreased this year as a rebounding economy lifts revenue above Brown’s projections, with taxes and fees collected in July amounting to 4.5 % above expectations
  • According to Bloomberg, the extra yield that buyers demand to own 10-year California debt rather than top-rated securities narrowed to 0.23 percentage point yesterday, from 0.39 percentage point on May 12

Pimco Total Return cut U.S. government debt to 45 % in July

  • Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co, slightly reduced his holdings of U.S. Treasuries and government-related debt in July
  • Gross’s Pimco Total Return Fund, with $223 billion in assets, had 45 % of its assets in U.S. government-related holdings in July, down from 47 % in June
  • According to Morningstar, the fund had net outflows of $830 million in July, the first time its monthly outflow was less than $1 billion since the net cash withdrawals started more than a year ago

 

EUROPE & WORLD

German Investor Confidence Slumps on Ukraine Crisis

  • The euro weakened after German investor confidence fell more than economists forecast, with U.S. stock index futures paring gains while oil declined
  • According to the ZEW Center, German investor confidence dropped for an eighth month as the crisis in Ukraine and a sluggish euro-area recovery damped the outlook for Europe’s largest economy
  • The ZEW index of investor and analyst expectations, which aims to predict economic developments six months in advance, dropped to 8.6 in August from 27.1 in July, while economists were expecting a decrease to 17
  • The gauge has dropped every month since reaching a seven-year high in December
  • A gauge of current conditions declined to 44.3 in August from 61.8 the previous month, ZEW said

Maliki Bid to Block Successor Escalates Crisis in Iraq

  • Iraq’s political crisis deepened as embattled Prime Minister Nouri al-Maliki refused to hand power to designated successor Haidar al-Abadi

Israel Says No Gaza Talks Progress as Hamas Warns on Truce

  • Wide gaps remain between Israel and the Palestinians in reaching a long-term deal on the Gaza Strip, according to an Israeli official, as Hamas warned there would be no more truces beyond the one due to end midnight tomorrow

 

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg.

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