Dow sank 75, decliners over advancers 3-2 & NAZ dropped 14. More selling in MLPs brought the index down 3+ to 503 & the REIT index fell 1+ to 302. Junk bond funds continued to see selling & Treasuries pulled back. Oil fell for
the 6th time in 7 days amid forecasts that US refineries
reduced operating rates last week, allowing crude supplies at
Cushing, OK, to rebound from near 6-year lows. Gold drifted lower.
AMJ (Alerian MLP Index tracking fund)
US service industries expanded in Jul at the fastest pace since Dec 2005, showing the economy was building more momentum at the start H2. The Institute for Supply Management non-manufacturing index increased to 58.7 from the prior month’s 56. A reading greater than 50 shows expansion. The estimate was 56.5. A measure of orders climbed to an almost 9-year high. The pickup among service providers, combined with the strongest rate of growth in more than 3 years at factories, shows the economy was strengthening at the start of Q3. Faster payroll growth is helping fuel consumer demand, raising the odds a self-reinforcing cycle of increased hiring & spending is underway. The ISM services survey covers an array of industries including utilities, retailing, health care & finance that make up almost 90% of the economy. It also factors in construction & agriculture. The ISM’s measure of new orders among non-manufacturing industries surged to 64.9, the highest in 9 years, from 61.2 the prior month. The group’s employment gauge advanced to a 6-month high of 56 from 54.4.
Service Industries in U.S. Expand at Fastest Pace Since 2005
But China's service industries stagnated in Jul as a private index fell to a record low, suggesting gov stimulus measures are failing to gain traction outside of manufacturing. The services Purchasing Managers’ Index declined to 50.0, the dividing line between expansion & contraction, from 53.1 in Jun, HSBC Holdings & Markit Economics said. A similar official gauge released on Sun dropped to a 6-month low of 54.2. Today’s services report contrasts with the HSBC-Markit manufacturing PMI, which rose in Jul to an 18-month high of 51.7. The gov manufacturing PMI also increased to 51.7, signaling the fastest expansion in more than 2 years. Gov stimulus so far this year includes expedited railway spending, tax cuts & affordable-housing construction, as well as moves to free up money for lending for agriculture & small businesses. The HSBC-Markit services index report showed the weakest expansion of new business in more than 5 years, while unfinished work fell in Jul at the quickest rate in 20 months. At the same time, companies expanded employment “moderately,” they said.
China Services Index Falls to Record Low
Coach fiscal Q4 profit topped estimates as men’s goods & rising demand in China helped counter slumping sales of women’s bags & accessories in North America. EPS excluding restructuring costs were 59¢, topping the 53¢ prediction. Sales fell 7% to $1.14B, exceeding estimates for the first time in 5 qtrs. Under pressure in its main business, the company has been adding men’s leather knapsacks, sunglasses & clothing. COH is also producing more sophisticated bags & refurbishing stores after losing market share to the competition. North American sales at stores open at least a year dropped 17%. The 33¾¢ was maintained. CEO Victor Luis said in Jun that COH would close 1/5 of its North American locations (70 stores). Most of the planned closures will happen in the fiscal H1, with restructuring costs incurred in the fiscal year 2015. The retailer also plans to open new stores or remodel the main locations in its 12 biggest markets & reduce participation in online flash sales. 150 jobs were cut. Sales of men’s goods, at about $700M in the latest year, will reach $1B in fiscal 2017, Luis said. Last qtr, revenue in China jumped 20 %. Q4 EPS dropped to 27¢ from 78¢ a year earlier. Analysts predicted a drop in sales at North American stores open at least a year, anticipating $1.1B in total sales for the qtr The stock rose 1.56 in what has been a dreary year. If you would like to learn more about COH, click on this link:
club.ino.com/trend/analysis/stock/COH?a_aid=CD3289&a_bid=6ae5b6f7
Coach’s Man Bags Help Profit Top Analysts’ Estimates
Service industry data was inconsistent to say the least. The US data was favorable while China's data was not encouraging. Retailers are beginning to report & they should also give a glimpse of how the important back to school selling season is going. In a little over 2 weeks, Dow is down more than 600 from its record. Retailers may not bring back a bullish attitude for stocks.
AMJ (Alerian MLP Index tracking fund)
| CLU14.NYM | ....Crude Oil Sep 14 | ...98.11 |  ...0.18 | (0.28%) |
| GCQ14.CMX | ...Gold Aug 14 | .....1,284.50 | ...3.20 | (0.3%) |
US service industries expanded in Jul at the fastest pace since Dec 2005, showing the economy was building more momentum at the start H2. The Institute for Supply Management non-manufacturing index increased to 58.7 from the prior month’s 56. A reading greater than 50 shows expansion. The estimate was 56.5. A measure of orders climbed to an almost 9-year high. The pickup among service providers, combined with the strongest rate of growth in more than 3 years at factories, shows the economy was strengthening at the start of Q3. Faster payroll growth is helping fuel consumer demand, raising the odds a self-reinforcing cycle of increased hiring & spending is underway. The ISM services survey covers an array of industries including utilities, retailing, health care & finance that make up almost 90% of the economy. It also factors in construction & agriculture. The ISM’s measure of new orders among non-manufacturing industries surged to 64.9, the highest in 9 years, from 61.2 the prior month. The group’s employment gauge advanced to a 6-month high of 56 from 54.4.
Service Industries in U.S. Expand at Fastest Pace Since 2005
But China's service industries stagnated in Jul as a private index fell to a record low, suggesting gov stimulus measures are failing to gain traction outside of manufacturing. The services Purchasing Managers’ Index declined to 50.0, the dividing line between expansion & contraction, from 53.1 in Jun, HSBC Holdings & Markit Economics said. A similar official gauge released on Sun dropped to a 6-month low of 54.2. Today’s services report contrasts with the HSBC-Markit manufacturing PMI, which rose in Jul to an 18-month high of 51.7. The gov manufacturing PMI also increased to 51.7, signaling the fastest expansion in more than 2 years. Gov stimulus so far this year includes expedited railway spending, tax cuts & affordable-housing construction, as well as moves to free up money for lending for agriculture & small businesses. The HSBC-Markit services index report showed the weakest expansion of new business in more than 5 years, while unfinished work fell in Jul at the quickest rate in 20 months. At the same time, companies expanded employment “moderately,” they said.
China Services Index Falls to Record Low
Coach fiscal Q4 profit topped estimates as men’s goods & rising demand in China helped counter slumping sales of women’s bags & accessories in North America. EPS excluding restructuring costs were 59¢, topping the 53¢ prediction. Sales fell 7% to $1.14B, exceeding estimates for the first time in 5 qtrs. Under pressure in its main business, the company has been adding men’s leather knapsacks, sunglasses & clothing. COH is also producing more sophisticated bags & refurbishing stores after losing market share to the competition. North American sales at stores open at least a year dropped 17%. The 33¾¢ was maintained. CEO Victor Luis said in Jun that COH would close 1/5 of its North American locations (70 stores). Most of the planned closures will happen in the fiscal H1, with restructuring costs incurred in the fiscal year 2015. The retailer also plans to open new stores or remodel the main locations in its 12 biggest markets & reduce participation in online flash sales. 150 jobs were cut. Sales of men’s goods, at about $700M in the latest year, will reach $1B in fiscal 2017, Luis said. Last qtr, revenue in China jumped 20 %. Q4 EPS dropped to 27¢ from 78¢ a year earlier. Analysts predicted a drop in sales at North American stores open at least a year, anticipating $1.1B in total sales for the qtr The stock rose 1.56 in what has been a dreary year. If you would like to learn more about COH, click on this link:
club.ino.com/trend/analysis/stock/COH?a_aid=CD3289&a_bid=6ae5b6f7
Coach’s Man Bags Help Profit Top Analysts’ Estimates
Coach (COH)
Service industry data was inconsistent to say the least. The US data was favorable while China's data was not encouraging. Retailers are beginning to report & they should also give a glimpse of how the important back to school selling season is going. In a little over 2 weeks, Dow is down more than 600 from its record. Retailers may not bring back a bullish attitude for stocks.
Dow Jones Industrials
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