Thursday, July 23, 2015

Mixed markets on latest earnings

Dow fell 19, advancers slightly ahead of decliners & NAZ added18,  The MLP index rebounded 3+ to the 374s & the REIT index lost 2+ to 315.  Junk bond funds were higher & Treasuries fluctuated.  Oil is back in the 49s & gold remains under 1100.

AMJ (Alerian MLP Index tracking fund)

CLU15.NYM...Crude Oil Sep 15...49.47 Up ...0.28 (0.6%)

GCN15.CMX...Gold Jul 15.......1,094.90 Up ...3.50 (0.3%)

The number of Americans filing new applications for unemployment benefits last week fell to its lowest level in more than 41 years, suggesting job growth remained solid despite slowing in Jun.  Initial claims for state unemployment benefits declined 26K to a seasonally adjusted 255K, the lowest level since 1973, according to the Labor Dep.  However, last week's drop likely exaggerates the strength of the labor market as claims are volatile during summer when automakers usually shut assembly plants for annual retooling.  The 4-week moving average of claims fell 4K to 278K.  The 4-week moving average of claims has been below the key 300K mark, which is normally associated with sturdy job gains, for 17 straight weeks - an unusually long stretch.  The number still receiving benefits after an initial week of aid fell 9K to 2.21M.

Weekly Jobless claims Lowest Since 1973

McDonald's, a Dow stock & Dividend Aristocrat, expects global comparable sales to rise in the current qtr, after 4 straight quarters of decline, as its new initiatives to boost sales start paying off along with a recovery in China.   But global sales at its restaurants open at least 13 months fell a steeper-than-expected 0.7% due to a drop in traffic in all major markets.  This was the slowest decline in 4 qtrs by sales.  Analysts expected same-restaurant sales to fall 0.4%.  CEO Steve Easterbrook has reorganized the business with the aim of bolstering sales by offering all-day breakfast, tweaking menus to reflect regional tastes & experimenting with custom hamburger toppings.  The company expects these initiatives to pay off in Q3.  The company has also lost market share in the US, where smaller, nimbler rivals have adapted faster & better to consumers' increasing preference for healthier fare over processed fast-food.  Quarterly same-restaurant sales fell 2% in the US, the chain's top market for profit, as featured products & promotions failed to boost traffic.  However, same-restaurant sales rose 1.2% in Europe due to strong sales in the UK & Germany.  Analysts had expected sales to decline 1.5% in the US & rise 1.5% in Europe.  EPS of 1.26 was below 1.40 last year.  Total revenue fell 10% to $6.50B.  Analysts were expecting EPS of $1.23, on revenue of $6.46B.  The stock rose 26¢.  If you would like to learn more about MCD, click on this link:

McDonald’s Beats the Street, Profit Drops 13%

McDonald's (MCD)

Apple cut its capital-spending projection for this fiscal year by 8%, reducing what it plans to spend on purchasing manufacturing equipment, building data centers & retail stores.  It expects to invest $12B on capital expenditures this year.  In Apr, AAPL had projected $13B in capital spending--reiterating its forecast from the beginning of the year.  The company said AAPL lowered the forecast because it was able to spend more efficiently for tooling equipment & facilities.  "There are no changes in our product plans," AAPL said.  It pays for specialized manufacturing equipment & then leases the tools to suppliers producing Apple products.  The revised projection comes a day after AAPL reported its profit rose 38% for fiscal Q3, though it fell short of expectations for iPhone sales.  Capital spending can fluctuate based on the timing of new products or the business conditions of partner companies.  In retail, the company is expanding the number of stores it operates in China.  It plans to have 40 stores in China by the middle of next year, compared with 22 stores currently.  The stock went up 1.69.  If you would like to learn more about AAPL, click on this link:

Apple Cuts Annual Spending Forecast by $1 Billion

Apple (AAPL)

Earnings reports are coming in inconclusive, although there is emphasis on the negative side.  The Greek debt mess is stumbling along, one day at a time.  Stocks are looking for directions as the popular averages are close to their record highs.  MLPs finally found a few friends.

Dow Jones Industrials

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