Dow tumbled 264, decliners over advancers more than 3-1 & NAZ dropped 84 (going below 5K). The MLP index rose 3+ to the 256s & the REIT index lost 1+ to the 218s. Junk bond funds were weak & Treasuries advanced as stocks were sold, taking the yield on the 10 year Treasury to 2.1%. Oil bounced back to the 44s (see below) & gold continued climbing higher.
AMJ (Alerian MLP Index tracking fund)
Macy's reported lower-than-expected quarterly sales as a strong dollar "significantly" hurt spending by foreign tourists in the US & the company discounted to clear merchandise delayed due to the West Coast ports strikes. The company also said it had formed a joint venture with a Hong Kong-based company to explore online retailing in China. The company was also hurt by the removal of a major promotional event. Macy's same-store sales, including licensed departments, fell 1.5% in Q2. Analysts had expected a 1.3% rise. Macy's expects same-store sales to remain flat in the year ending Jan 2016 after it had forecasted a rise of about 2%. The retailer said it would start selling its products online in China later this year thru the Alibaba Group (BABA) Tmall Global. Macy's will own 65% stake in the joint venture. EPS fell to 64¢ from 80¢ a year earlier. Net sales fell 2.6% to $6.1B, the 4th drop in 6 qtrs. Analysts had expected EPS of 76¢ on revenue of $6.23B. The stock lost 2.34. If you would like to learn more about Macy's, click on this link:
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
AT&T, a Dividend Aristocrat, expects double-digit consolidated revenue growth for the rest of 2015, citing gains from its purchase of DirecTV. AT&T, which closed the acquisition of DirecTV in Jul, forecast 2015 adjusted EPS of $2.62-$2.68. Analysts were expecting a EPS of $2.60. AT&T also said it expected revenues, adjusted earnings & free cash flow to increase through 2018, helped by its purchases of DirecTV & Mexican wireless properties Iusacell & Nextel Mexico. The stock fell 1.05. If you would like to learn more about Macy's, click on this link:
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
Oil prices rose after an upbeat report from the IEA outweighed the bearish impact of a further weakening of China's yuan currency & disappointing Chinese industrial output data. The yuan hit a 4-year low after China allowed it to slide further following a mini-devaluation to support the slowing Chinese economy, where industrial output grew less than expected in Jul. China is the world's 2nd largest oil consumer & a weaker yuan erodes Chinese purchasing power for dollar-denominated imports like oil, potentially reducing fuel demand. While slowing demand from China has helped bring down oil prices at a time of oversupply by big producers in the MidEast, oil demand elsewhere is accelerating, the International Energy Agency (IEA) said. The world oil market had begun to rebalance as low fuel prices stimulated extra consumption, it said. "While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 - suggesting global inventories will pile up further," the IEA said. World oil production is running at up to 3M barrels per day (bpd) above consumption,, increasing stockpiles in all continents & depressing spot markets for crude & oil products such as gasoline & jet fuel. But sharp price falls are beginning to encourage demand. The IEA forecast world oil demand would grow 1.6M bpd this year, up 200K bpd from its previous estimate & "the fastest pace in five years." In the short term, the oil market is still worrying about the state of the Chinese economy, the largest consumer of most commodities, including many forms of energy such as coal.
Aug is becoming an ugly month for the stock market. Dow is down more than 500 so far & almost 1K in less than 3 months. There are plenty of problems out there for the market to worry about, starting with China. This has not been a good year for China & its troubles are bleeding over to the rest of the world. The Greek bailout is only stumbling along & oil related issues are suffering. The outcome of the Iran deal is unclear. Dow is on defense & this could be one off its worst months in some time.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLV15.NYM | ...Crude Oil Oct 15 | ....44.41 |  ...0.54 | (1.2%) |
| GCQ15.CMX | ..Gold Aug 15 | ......1,116.60 | ...9.00 | (0.8%) |
Macy's reported lower-than-expected quarterly sales as a strong dollar "significantly" hurt spending by foreign tourists in the US & the company discounted to clear merchandise delayed due to the West Coast ports strikes. The company also said it had formed a joint venture with a Hong Kong-based company to explore online retailing in China. The company was also hurt by the removal of a major promotional event. Macy's same-store sales, including licensed departments, fell 1.5% in Q2. Analysts had expected a 1.3% rise. Macy's expects same-store sales to remain flat in the year ending Jan 2016 after it had forecasted a rise of about 2%. The retailer said it would start selling its products online in China later this year thru the Alibaba Group (BABA) Tmall Global. Macy's will own 65% stake in the joint venture. EPS fell to 64¢ from 80¢ a year earlier. Net sales fell 2.6% to $6.1B, the 4th drop in 6 qtrs. Analysts had expected EPS of 76¢ on revenue of $6.23B. The stock lost 2.34. If you would like to learn more about Macy's, click on this link:
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
Strong Dollar Hits Macy's Foreign Spending
Macy's (M)
AT&T, a Dividend Aristocrat, expects double-digit consolidated revenue growth for the rest of 2015, citing gains from its purchase of DirecTV. AT&T, which closed the acquisition of DirecTV in Jul, forecast 2015 adjusted EPS of $2.62-$2.68. Analysts were expecting a EPS of $2.60. AT&T also said it expected revenues, adjusted earnings & free cash flow to increase through 2018, helped by its purchases of DirecTV & Mexican wireless properties Iusacell & Nextel Mexico. The stock fell 1.05. If you would like to learn more about Macy's, click on this link:
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
AT&T Forecasts Double-Digit Revenue Growth
AT&T (T)
Oil prices rose after an upbeat report from the IEA outweighed the bearish impact of a further weakening of China's yuan currency & disappointing Chinese industrial output data. The yuan hit a 4-year low after China allowed it to slide further following a mini-devaluation to support the slowing Chinese economy, where industrial output grew less than expected in Jul. China is the world's 2nd largest oil consumer & a weaker yuan erodes Chinese purchasing power for dollar-denominated imports like oil, potentially reducing fuel demand. While slowing demand from China has helped bring down oil prices at a time of oversupply by big producers in the MidEast, oil demand elsewhere is accelerating, the International Energy Agency (IEA) said. The world oil market had begun to rebalance as low fuel prices stimulated extra consumption, it said. "While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 - suggesting global inventories will pile up further," the IEA said. World oil production is running at up to 3M barrels per day (bpd) above consumption,, increasing stockpiles in all continents & depressing spot markets for crude & oil products such as gasoline & jet fuel. But sharp price falls are beginning to encourage demand. The IEA forecast world oil demand would grow 1.6M bpd this year, up 200K bpd from its previous estimate & "the fastest pace in five years." In the short term, the oil market is still worrying about the state of the Chinese economy, the largest consumer of most commodities, including many forms of energy such as coal.
Oil Steadies as Bullish IEA Balances China Slide
Aug is becoming an ugly month for the stock market. Dow is down more than 500 so far & almost 1K in less than 3 months. There are plenty of problems out there for the market to worry about, starting with China. This has not been a good year for China & its troubles are bleeding over to the rest of the world. The Greek bailout is only stumbling along & oil related issues are suffering. The outcome of the Iran deal is unclear. Dow is on defense & this could be one off its worst months in some time.
Dow Jones Industrials
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