Dow lost 3 after opening higher, decliners over advancers 5-2 & NAZ was off 1. The MLP index sank another 7+ to the 381s & the REIT index fell 1+ to the 315s. Junk bond funds pulled back & Treasuries declined. Oil is below 51 & gold dropped off to a 5 year low.
AMJ Alerian MLP Index tracking fund)
Schlumberger results topped estimates for Q2 earnings, as executives pointed toward signs that oil production is poised to rebound. The world’s largest oilfield services company posted EPS of 88¢ to beat the 79¢ projected. Revenue fell 25% to $9.01B, better than the estimate of $8.97B. CEO Paal Kibsgaard said pricing will likely be under pressure through the rest of 2015. However, SLB believes oil supply & demand will “tighten” starting in H2. Kibsgaard reiterated that the oil industry’s large cuts to exploration & production investments “are going to show up” in crude inventories. “We’re not far from the bottom,” Kibsgaard added. “There’s not much left to cut.” Drillers responded by slowing production & reducing their budgets for 2015, leading to weaker demand for SLB services. Since the end of the Q3-2014, the company has eliminated 20K jobs. North America has shown the most significant drop in production activity, based on drilling investments. The company anticipates a 35% decline in spending by North American oil firms, up from a prior forecast of 30%. Internationally, spending is expected to fall more than 15%. Kibsgaard said exploration & production levels should be higher in 2016. Rig counts in North America appear to be hitting a bottom, signaling that drilling activity should begin to increase slowly in H2. He concluded that the company's performance is sustainable, saying Q2 “was not a fluke.” The stock slid back pennies. If you would like to learn more about SLB, click on this link:
club.ino.com/trend/analysis/stock/SLB?a_aid=CD3289&a_bid=6ae5b6f7
The Greek debt mess lingers on. Debts in arrears were paid & banks have reopened but there is a limit on withdrawals. Call that barely alive. Elections are coming in the fall, adding to the uncertainty. The Chinese stocks markets remain volatile. At the least the oil service companies had fairly decent reports given the collapse in oil prices. More earnings reports are coming this week & they should be telling.
Dow Jones Industrials
AMJ Alerian MLP Index tracking fund)
| CLQ15.NYM | ...Crude Oil Aug 15 | ...50.72 |  .....0.17 | (0.3%) |
| GCN15.CMX | ...Gold Jul 15 | ........1,111.80 | ...20.00 | (1.8%) |
Schlumberger results topped estimates for Q2 earnings, as executives pointed toward signs that oil production is poised to rebound. The world’s largest oilfield services company posted EPS of 88¢ to beat the 79¢ projected. Revenue fell 25% to $9.01B, better than the estimate of $8.97B. CEO Paal Kibsgaard said pricing will likely be under pressure through the rest of 2015. However, SLB believes oil supply & demand will “tighten” starting in H2. Kibsgaard reiterated that the oil industry’s large cuts to exploration & production investments “are going to show up” in crude inventories. “We’re not far from the bottom,” Kibsgaard added. “There’s not much left to cut.” Drillers responded by slowing production & reducing their budgets for 2015, leading to weaker demand for SLB services. Since the end of the Q3-2014, the company has eliminated 20K jobs. North America has shown the most significant drop in production activity, based on drilling investments. The company anticipates a 35% decline in spending by North American oil firms, up from a prior forecast of 30%. Internationally, spending is expected to fall more than 15%. Kibsgaard said exploration & production levels should be higher in 2016. Rig counts in North America appear to be hitting a bottom, signaling that drilling activity should begin to increase slowly in H2. He concluded that the company's performance is sustainable, saying Q2 “was not a fluke.” The stock slid back pennies. If you would like to learn more about SLB, click on this link:
club.ino.com/trend/analysis/stock/SLB?a_aid=CD3289&a_bid=6ae5b6f7
Schlumberger: Oil Market Nearing Bottom
Schlumberger N.V. (SLB)
Halliburton beat
estimates with better-than-expected results in North America, where
customers have cut spending the most since the crude market crash began a
year ago. The world’s largest fracking-services provider EPS was 44¢ in Q2, excluding certain items, beating the 29¢ estimate. Results in North America were better than expected due to
cost-cutting efforts & its ability to generate higher sales
than were forecasted. Profit margin in the region fell
to 4.9% from 18% a year earlier The company has seen sales fall 39% in the US & Canada
where the industry has reduced the number of operating drilling rigs by
more than half. Explorers have cut more than $100B from global
spending plans for the year after oil prices fell by half from a high in
Jun 2014. EPS plunged to 6¢ from 91¢ a year earlier & total sales fell 26% to $5.91B. One-time charges included $258M in asset
write-offs & severance costs. The company had previously announced
about 9K job cuts. The stock rose 66¢. If you would like to learn more about HAL, click on this link:
club.ino.com/trend/analysis/stock/HAL?a_aid=CD3289&a_bid=6ae5b6f7
club.ino.com/trend/analysis/stock/HAL?a_aid=CD3289&a_bid=6ae5b6f7
Halliburton Profit Drops on Lower Driling Activity
Halliburton (HAL)
20% of China’s stock market remains frozen as the number of companies resuming trading slows to a trickle. 576 companies were suspended on mainland exchanges, equivalent to 1/5 of total listings, & down from 635 on Fri. The halted firms are valued at
an average 243X reported earnings, compared with 164X for all
companies traded in Shanghai & Shenzhen. The ongoing suspensions are raising doubts about the sustainability
of a rebound in Chinese stocks. The Shanghai Composite Index has climbed
14% from its Jul 8 low, following a 32% plunge
that helped erase almost $4T yuan of value. The number of companies
with trading halts exceeded 1400 (50% of listings)
during the height of the rout as the gov took increasingly
extreme measures to shore up equities. The suspended companies have a combined value of 4T yuan
($644B), equivalent to about 9% of China’s total market
capitalization. The majority of halts were by shares listed on the
Shenzhen Composite Index, the benchmark gauge for the smaller of China’s 2 exchanges. The Shanghai Composite rose 0.9% on Mon, while the Shenzhen gauge added 1.8%. Chinese policy makers have gone to
unprecedented lengths to put a floor under the market as they seek to
bolster investor confidence & prevent soured loans backed by equities
from damaging the financial system. Over the past few weeks, they’ve
banned large shareholders from selling stakes & ordered state-run
institutions to buy shares.
China Stock Resumptions Dwindle as 20% of Shares Stay Halted
The Greek debt mess lingers on. Debts in arrears were paid & banks have reopened but there is a limit on withdrawals. Call that barely alive. Elections are coming in the fall, adding to the uncertainty. The Chinese stocks markets remain volatile. At the least the oil service companies had fairly decent reports given the collapse in oil prices. More earnings reports are coming this week & they should be telling.
Dow Jones Industrials
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