Dow jumped up 126, advancers modestly ahead of decliners & NAZ went up 23. The MLP index lost 2+ to the 285s after its rise in the last month & the REIT index was little changed in the 358s. Junk bond funds fluctuated & Treasuries declined in price. Oil inched higher in the 69s (more below) & gold was flat at 1208.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.8116015171332475)
Office Depot (ODP) reported adjusted EPS of 5¢, beating estimate of 4¢. The company also reported $2.63B of revenue for the qtr, beating the estimate of $2.58B & 5% higher than the same qtr last year. "I am extremely pleased with our performance in the second quarter as the execution of our strategy is driving improved sales trends across all three of our operating divisions," said CEO Gerry Smith. "Sales in the Business Solutions Division were up an impressive 4 percent in the quarter driven by our acquisition strategy and growth in the adjacency categories beyond office products." "I'm also encouraged by the early success of our initiatives to increase services, which now represent 16 percent of total sales," Smith added. "In addition to the sales performance, our efficiency and cost control initiatives allowed us to deliver an increase in year-over-year operating income and cash flow for the Company in the quarter." ODP said that it has had free cash flow of $177M since the start of 2018 & repurchased approximately 3M shares, totaling $8M, in Q2. The stock rose a big 34¢.
If you would like to learn more about ODP, click on this link:
club.ino.com/trend/analysis/stock/ODP?a_aid=CD3289&a_bid=6ae5b6f7
Office Depot shares jump 12% after earnings beat
Consumer borrowing slowed in Jun after hitting a 6-month high in the prior month, according to the Federal Reserve. Total consumer credit increased $10.2B in Jun to a seasonally adjusted $3.9T. That's an annual growth rate of 3.1%. The forecast was for a $16B gain. Revolving credit, like credit cards, declined by 0.2% in Jun after an 11.2% gain in May. This is the 2nd drop in credit card use in the past 4 months. Nonrevolving credit, typically auto & student loans, rose 4.4% in Jun & has been rising at a relatively steady pace. Consumer spending was strong, rising at a 4% annual rate in Q2 after a sharp slowdown in Q1. And with the labor market tight & wages rising, economists are counting on the consumer to keep GDP growth near 3% over the remainder of the year. At the same time, consumers use of credit cards has been on a downward trend. The Fed reported yesterday that banks tightened standards on credit cards in Q2, which may account for some of the slowing trend. In addition, the gov revised its GDP data last month to show that Americans are saving more than previously thought. The savings rate was actually twice as high in 2017 at 6.7% than prior estimates.
Oil prices rose after US sanctions on Iranian goods went into effect, intensifying concerns that sanctions on Iranian oil, expected in Nov, could cause supply shortages. Brent crude oil futures rose 84¢ (1.1%) at $74.59 per barrel & West Texas Intermediate (WTI) crude futures ended the session up 16¢ at $69.17 per barrel. The first US sanctions against OPEC member Iran officially came into effect today. These sanctions did not include Iran's oil exports. The country exported almost 3M barrels per day (bpd) of crude in Jul. The reimposed sanctions target Iran's US $ purchases, metals trading, coal, industrial software & its auto sector. US sanctions on Iran's energy sector are set to be re-imposed after a 180-day wind-down period ending on Nov 4. Pres Trump tweeted today that the sanctions were "the most biting sanctions ever imposed," although those sanctions were originally devised & deployed by the Obama administration. "Anyone doing business with Iran will NOT be doing business with the United States," he added. Many European countries, China & India, oppose the sanctions, but the US gov said it wants as many countries as possible to stop buying Iranian oil. Saudi Arabia's crude production dropped about 200K bpd last month, 2 sources leaked on Fri, despite a pledge by the Saudis & top producer Russia to raise output from Jul, with Saudi Arabia promising a "measurable" supply boost. US crude stockpiles were also expected to have dropped last week. Data from the American Petroleum Institute for US inventories is due shortly, followed by the gov report tomorrow.
Oil prices rise as US sanctions on Iran stoke supply worries
Don't get too excited by the big rise in the Dow today. Market breadth was drab & the Dow finished off the highs. Some of the performance was due to the Aug doldrums caused by little interesting news. The biggest driver for today's buying may have come from a lack of disturbing trade news. That can not be counted on to continue, even in Aug. However the Dow closed only 1K below its Jan record.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Office Depot (ODP) reported adjusted EPS of 5¢, beating estimate of 4¢. The company also reported $2.63B of revenue for the qtr, beating the estimate of $2.58B & 5% higher than the same qtr last year. "I am extremely pleased with our performance in the second quarter as the execution of our strategy is driving improved sales trends across all three of our operating divisions," said CEO Gerry Smith. "Sales in the Business Solutions Division were up an impressive 4 percent in the quarter driven by our acquisition strategy and growth in the adjacency categories beyond office products." "I'm also encouraged by the early success of our initiatives to increase services, which now represent 16 percent of total sales," Smith added. "In addition to the sales performance, our efficiency and cost control initiatives allowed us to deliver an increase in year-over-year operating income and cash flow for the Company in the quarter." ODP said that it has had free cash flow of $177M since the start of 2018 & repurchased approximately 3M shares, totaling $8M, in Q2. The stock rose a big 34¢.
If you would like to learn more about ODP, click on this link:
club.ino.com/trend/analysis/stock/ODP?a_aid=CD3289&a_bid=6ae5b6f7
Office Depot shares jump 12% after earnings beat
Consumer borrowing slowed in Jun after hitting a 6-month high in the prior month, according to the Federal Reserve. Total consumer credit increased $10.2B in Jun to a seasonally adjusted $3.9T. That's an annual growth rate of 3.1%. The forecast was for a $16B gain. Revolving credit, like credit cards, declined by 0.2% in Jun after an 11.2% gain in May. This is the 2nd drop in credit card use in the past 4 months. Nonrevolving credit, typically auto & student loans, rose 4.4% in Jun & has been rising at a relatively steady pace. Consumer spending was strong, rising at a 4% annual rate in Q2 after a sharp slowdown in Q1. And with the labor market tight & wages rising, economists are counting on the consumer to keep GDP growth near 3% over the remainder of the year. At the same time, consumers use of credit cards has been on a downward trend. The Fed reported yesterday that banks tightened standards on credit cards in Q2, which may account for some of the slowing trend. In addition, the gov revised its GDP data last month to show that Americans are saving more than previously thought. The savings rate was actually twice as high in 2017 at 6.7% than prior estimates.
Consumer credit growth moderates in June
Oil prices rose after US sanctions on Iranian goods went into effect, intensifying concerns that sanctions on Iranian oil, expected in Nov, could cause supply shortages. Brent crude oil futures rose 84¢ (1.1%) at $74.59 per barrel & West Texas Intermediate (WTI) crude futures ended the session up 16¢ at $69.17 per barrel. The first US sanctions against OPEC member Iran officially came into effect today. These sanctions did not include Iran's oil exports. The country exported almost 3M barrels per day (bpd) of crude in Jul. The reimposed sanctions target Iran's US $ purchases, metals trading, coal, industrial software & its auto sector. US sanctions on Iran's energy sector are set to be re-imposed after a 180-day wind-down period ending on Nov 4. Pres Trump tweeted today that the sanctions were "the most biting sanctions ever imposed," although those sanctions were originally devised & deployed by the Obama administration. "Anyone doing business with Iran will NOT be doing business with the United States," he added. Many European countries, China & India, oppose the sanctions, but the US gov said it wants as many countries as possible to stop buying Iranian oil. Saudi Arabia's crude production dropped about 200K bpd last month, 2 sources leaked on Fri, despite a pledge by the Saudis & top producer Russia to raise output from Jul, with Saudi Arabia promising a "measurable" supply boost. US crude stockpiles were also expected to have dropped last week. Data from the American Petroleum Institute for US inventories is due shortly, followed by the gov report tomorrow.
Oil prices rise as US sanctions on Iran stoke supply worries
Don't get too excited by the big rise in the Dow today. Market breadth was drab & the Dow finished off the highs. Some of the performance was due to the Aug doldrums caused by little interesting news. The biggest driver for today's buying may have come from a lack of disturbing trade news. That can not be counted on to continue, even in Aug. However the Dow closed only 1K below its Jan record.
Dow Jones Industrials
No comments:
Post a Comment