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Pence Wealth Management Financial Markets Reports

US FINANCIAL MARKET

U.S. Stocks Advance as Retail Data Fuels Fed Rates Bets

  • Retail sales were little changed in July, the worst performance in six months, as car demand slowed and wage growth restrained U.S. consumers
  • The slowdown in purchases followed a 0.2 % advance in June
  • Amazon.com Inc. climbed 3.1 % after ChannelAdvisor Corp. said the retailer’s same-store sales rose 40 % in July
  • FleetCor Technologies Inc. rose 5.3 % after it agreed to acquire Comdata Inc. for $3.45 billion
  • King Digital Entertainment, the maker of the Candy Crush Saga video game, plummeted 23 % trading after posting worse-than-forecast sales and cutting its 2014 outlook
  • Macy’s Inc. lost 4.3 % after profit fell short of estimates
  • Three-rounds of bond purchases and record-low interest rates have helped push stocks higher by as much as 194 % from a bear-market low in 2009

Macy’s Cuts Same-store Sales Forecast, Shares Drop

  • Macy’s Inc. (M) missed quarterly earnings estimates and trimmed its annual sales forecast
  • Second-quarter sales at stores open at least a year rose 3.4 %, while analysts were expecting a 3.9 % gain
  • According to Labor Department data, inflation-adjusted average weekly earnings dropped 0.2 % in the 12 months through June, the worst performance since October 2012, which left consumers with less money to spend
  • The company has been trying to recover from an unexpected sales decline in the first quarter, when harsh weather hurt revenue
  • The company said it expects same-store sales to increase 1.5 % to 2 % for the full year, down from its earlier forecasts of a 2.5 % to 3 % increase
  • Net income rose to $292 million, or 80 cents per share, from $281 million, or 72 cents per share, a year earlier
  • Sales rose 3.3 % to $6.27 billion, after declining about 2 % in each of the previous two quarters
  • According to Thomson Reuters, analysts on average had expected earnings of 86 cents per share on revenue of $6.3 billion

Amazon Unveils Mobile-Payment App and Card Reader

  • Amazon unveiled a new mobile payment service that could bring the online retail giant into local businesses and threaten rival companies, such as Square Inc and eBay’s PayPal
  • Amazon Local Register would allow businesses to accept credit and debit card transactions from smartphones or tablets
  • The company will aim to undercut competitors with aggressive pricing
  • Amazon said users who sign up before Oct. 31 will receive a promotional low transaction rate of 1.75% on swiped transactions until January 1, 2016
  • After that, users will pay a flat rate of 2.5% on all swiped transactions
  • In comparison, Square charges 2.75% per payment and PayPal charges 2.7% per credit card swipe

‘Candy Crush’ Stumbles, and King Digital Shares Fall

  • King Digital Entertainment PLC’s stock-market debut in March was among the worst in the U.S. this year, dropping 16% in its first day of trading
  • The company said its second-quarter bookings fell $30 million, or 5%, from the first quarter to $611 million
  • King said it expects bookings for the current quarter to decrease to between $500 million and $525 million—a drop of 14% to 18% from the second quarter
  • The company projected bookings of $2.25 billion to $2.35 billion for all of this year, down from a previous projection of $2.55 billion to $2.65 billion
  • Second-quarter profit rose 31% from a year earlier to $165.4 million, or 52 cents a share, up from $125.9 million, or 39 cents a share and revenue rose 30% to $594 million

Deere ‘Scaling Back’ Output as It Cuts Forecast

  • The world’s largest agricultural equipment maker cut its fiscal-year profit forecast, saying it will scale back production as record crops weigh on grain prices and deter spending by U.S. farmers
  • Deere said net income in the year through Oct. 31 will be approximately $3.1 billion, down from a May projection of about $3.3 billion
  • The company also said equipment sales are falling about 6 %, compared with a May prediction of a 4 % fall
  • Fiscal third-quarter net income dropped to $851 million, or $2.33 a share, from $997 million, or $2.56, which exceeded analysts’ estimates of $2.20 a share
  • Equipment sales fell to $8.72 billion, from $9.32 billion a year earlier, matching the average estimate
  • Agricultural machinery sales accounted for 78 % of Deere’s revenue in 2013

SeaWorld Drops as Killer Whale Controversy Hurts Sales

  • SeaWorld Entertainment Inc. (SEAS) dropped 26 % to a record low after reporting lower-than-estimated earnings and saying controversy over treatment of captive whales in its theme-park shows hurt attendance
  • The company said sales fell 1.5 % to $405.2 million in the second quarter, missing analysts’ estimates of $445.2 million

 

US ECONOMY & POLITICS

Worst Retail Sales Showing in Six Months in Slow Start to Third Quarter

  • According to the Commerce Department, the slowdown in purchases followed a 0.2 % advance in June
  • Retail sales, which were up 0.2 % in June, were held back by a second straight month of declines in receipts at auto dealers, as well as weak sales of furniture and electronics and appliances, according to the Commerce Department
  • Economists expected a gain of 0.2 %
  • Core sales, which exclude automobiles, gas, building materials and food services, edged up 0.1 % in July, compared with a 0.5 % gain the prior month
  • General Motors, Toyota, Ford, Nissan, and Chrysler reported gains of 9 % or higher in July from a year earlier, with industry-wide sales up 5 %, according to Autodata Corp

U.S. Mortgage Applications Fall in Latest Week

  • Applications for U.S. home mortgages fell last week as both purchase and refinancing applications declined, according to an industry group
  • The Mortgage Bankers Association (MBA) said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchases demand, fell 2.7 % in the week ended Aug. 8
  • The MBA’s seasonally adjusted index of refinancing applications fell 4.0 %, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 1.0 %

 

EUROPE & WORLD

World stocks Rise as Oil Plumbs 13-Month Low

  • World stock markets advanced on Wednesday, lifted by brighter corporate results and as oil prices plumbed 13-month lows with ample supply offsetting output disruption risks posed by tensions in Iraq and Libya
  • The FTSEurofirst 300 index of top European shares was up 0.3 %, with MSCI’s world stock index up 0.2 %
  • The biggest mover in currency markets was sterling, which fell 0.6 % against the dollar to a 10-week low after the Bank of England slashed its forecast for wage growth
  • Russian shares rose more than 1 %

Greece’s Recession Eases as Country Nears End to Slump

  • Greece’s economy contracted at its slowest pace in almost six years, adding to signs that the country is set for a 2014 exit from its deepest recession in half a century as it emerges from its debt crisis
  • Gross domestic product declined 0.2 % in the three months through June from the same period last year, its 24th straight contraction, after dropping a revised 1.1 % in the previous quarter, according to Hellenic Statistical Authority
  • The contraction is the smallest since the third quarter of 2008 and beats analysts’ median estimate of a 0.5 % drop
  • Greece’s central government, which excludes state-controlled enterprises and social security funds, posted a 2.28 billion-euro primary surplus in the first seven months of year, beating a target surplus of 800 million Euros, according to an e-mailed statement from the Finance Ministry

 

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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