Dow shot up 98 on earnings reports, advancers over decliners better than 3-2 & NAZ gained 13. The MLP index climbed fractionally to the 258s & the REIT index had a modest gain to the 382s. Junk bond funds went up & Treasuries slid lower in price. Oil was off pennies in the 56s & gold added 1 to 1427.
AMJ (Alerian MLP Index tracking fund)
The IMF trimmed its forecast for global economic growth again as the US-China trade war continues, Brexit worries linger & inflation remains muted. The global economy is expected to expand by 3.2% in 2019, the fund said today. The revised economic growth figure is 0.1 percentage points lower than the IMF had forecast in Apr & is 0.3 percentage points below the fund's growth estimate at the start of the year. “Risks to the forecast are mainly to the downside,” the IMF said. “They include further trade and technology tensions that dent sentiment and slow investment; a protracted increase in risk aversion that exposes the financial vulnerabilities continuing to accumulate after years of low interest rates.” “Mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns, and make adverse shocks more persistent than normal,” the fund added. In May, China & the US hiked tariffs on Bs of $s worth of each other's goods, stoking fears of a more protracted trade war between the 2 economies. The IMF points out that global trade volume growth declined to around 0.5% on a year-over-year basis in Q1-2019. “Weak trade prospects—to an extent reflecting trade tensions—in turn create headwinds for investment,” the IMF said. “The silver lining remains the performance of the service sector, where sentiment has been relatively resilient, supporting employment growth (which, in turn, has helped shore up consumer confidence).” Another factor dampening the global growth outlook is the uncertainty around the UK's exit from the EU. In Apr, the EU & UK agreed to extend the Brexit deadline until Oct 31. Still, it is not clear whether the 2 parties will strike a deal to maintain some economic ties before the deadline or if these will be completely severed. “The forecast assumes an orderly Brexit followed by a gradual transition to the new regime. However, as of mid-July, the ultimate form of Brexit remained highly uncertain,” the fund said.
IMF lowers its global economic growth forecast again as risks remain to the ‘downside’
US existing home sales fell 1.7% in June, vs 0.2% drop expected
Dow stock Coca-Cola (KO) reported quarterly earnings & revenue that beat expectations, driven by sales of its namesake soda brand. “Our strategy to transform as a total beverage company has allowed us to continue to win in a growing and vibrant industry,” CEO James Quincey said. The beverage giant reported EPS of 61¢, up from 54¢ a year earlier. Excluding items, EPS was 63¢, topping the 61¢ expected. Net sales rose 6% to $10B, narrowly beating expectations of $9.99B. KO raised its full-year outlook for revenue & now expects organic revenue growth of 5% rather than 4%. “We think the dollar is towards the end of a strong cycle,” CFO John Murphy said. The company attributed its strong performance during the qtr to 4% volume & transaction growth in its namesake brand. The Zero Sugar line once again saw double-digit volume growth across the globe. Quincey said analysts that nearly 25% of revenue comes from new or reformulated beverages, up from 15% just 2 years ago. KO reiterated its fiscal 2019 earnings forecast, saying that EPS could fall or rise by 1%. The company had pointed to currency fluctuations, Fed rate hikes and changing tax rates as reasons for its gloomy earnings projection. Murphy said that “currencies have gotten worse,” but he expects a more “benign” currency environment in 2020. Net sales in the Asia Pacific & Europe, Middle East & Africa segments were flat for the qtr, largely due to the impact of currency. Revenue in Latin America fell 6% because of a 13% currency headwind, although it had strong performance in Mexico & Brazil. Quincey added that Mexico's economic growth is slowing, so the company is tweaking its strategy for the country. North America was the only region to reported net revenue growth. Price hikes & packaging initiatives helped propel revenue growth of 2%. The company said that it saw strong performance from soda, water, sports drinks, juices & dairy & plant-based beverages. The stock rose 2.64.
If you would like to learn more about KO, click o n this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7
Coca-Cola raises revenue forecast after earnings beat, sending shares higher
Strong earnings along with a budget agreement (which will mean more gov borrowing) is bringing out buyers today. Buying is based on gut reactions & those emotions may not last. The Dow is about 100 below the records set last week while gold & silver are also in demand.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 56.20 | -0.02 | -0.0% |
| GC=F | Gold | 1,425.90 | -1.00 | -0.1% |
The Dow opens nearly 100 points higher on strong
results from Coca-Cola (KO) & United Technologies (UTX) as Q2 results
come in ahead of expectations. Investors also
continue to brace for the Federal Reserve's 2-day meeting next week,
when the central bank is widely expected to cut interest rates at least
by 25-basis points. Meanwhile, the White House & Congress reached a deal
to suspend the debt limit through Jul 2021 & increase spending caps
for military & nonmilitary programs for the next 2 years.
STOCKS: COCA-COLA, UNITED TECHNOLOGIES HELP DRIVE DOW
The IMF trimmed its forecast for global economic growth again as the US-China trade war continues, Brexit worries linger & inflation remains muted. The global economy is expected to expand by 3.2% in 2019, the fund said today. The revised economic growth figure is 0.1 percentage points lower than the IMF had forecast in Apr & is 0.3 percentage points below the fund's growth estimate at the start of the year. “Risks to the forecast are mainly to the downside,” the IMF said. “They include further trade and technology tensions that dent sentiment and slow investment; a protracted increase in risk aversion that exposes the financial vulnerabilities continuing to accumulate after years of low interest rates.” “Mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns, and make adverse shocks more persistent than normal,” the fund added. In May, China & the US hiked tariffs on Bs of $s worth of each other's goods, stoking fears of a more protracted trade war between the 2 economies. The IMF points out that global trade volume growth declined to around 0.5% on a year-over-year basis in Q1-2019. “Weak trade prospects—to an extent reflecting trade tensions—in turn create headwinds for investment,” the IMF said. “The silver lining remains the performance of the service sector, where sentiment has been relatively resilient, supporting employment growth (which, in turn, has helped shore up consumer confidence).” Another factor dampening the global growth outlook is the uncertainty around the UK's exit from the EU. In Apr, the EU & UK agreed to extend the Brexit deadline until Oct 31. Still, it is not clear whether the 2 parties will strike a deal to maintain some economic ties before the deadline or if these will be completely severed. “The forecast assumes an orderly Brexit followed by a gradual transition to the new regime. However, as of mid-July, the ultimate form of Brexit remained highly uncertain,” the fund said.
IMF lowers its global economic growth forecast again as risks remain to the ‘downside’
US home sales fell more than expected in Jun as
a persistent shortage of properties pushed prices to a record high,
suggesting the housing market was struggling to regain its footing since
hitting a soft patch last year. The National Association of
Realtors said existing home sales dropped 1.7% to a
seasonally adjusted annual rate of 5.27M units last month. The forecast called for existing home sales slipping 0.2% to a
rate of 5.33M units in Jun. Existing home sales, which make up
about 90% of US home sales, decreased 2.2% from a year ago.
That was the 16th straight year-on-year decline in home sales. The weakness in housing comes despite cheaper mortgage rates & the lowest unemployment rate in nearly 50 years. Supply
has continued to lag, especially in the lower-price segment of the
housing market because of land & labor shortages, as well as expensive
building materials. The gov reported last week that permits for
future home construction dropped to a 2-year low in Jun. The
30-year fixed mortgage rate has dropped to an average of 3.81% from a
more than 7-year peak of 4.94% in Nov. Further declines are likely as the Federal Reserve is expected to cut interest rates next week for the first time in a decade. Last month, existing home sales rose in the Northeast & Midwest. They tumbled in the populous South & in the West. There
were 1.93M previously owned homes on the market in Jun, up from
1.91M in May & unchanged from a year ago. The median existing
house price increased 4.3% from a year ago to $285K in Jun, an
all-time high. At Jun's sales pace, it would take 4.4 months to
exhaust the current inventory, up from 4.3 months in May. A 6-7 month supply is viewed as a healthy balance between supply & demand.
US existing home sales fell 1.7% in June, vs 0.2% drop expected
Dow stock Coca-Cola (KO) reported quarterly earnings & revenue that beat expectations, driven by sales of its namesake soda brand. “Our strategy to transform as a total beverage company has allowed us to continue to win in a growing and vibrant industry,” CEO James Quincey said. The beverage giant reported EPS of 61¢, up from 54¢ a year earlier. Excluding items, EPS was 63¢, topping the 61¢ expected. Net sales rose 6% to $10B, narrowly beating expectations of $9.99B. KO raised its full-year outlook for revenue & now expects organic revenue growth of 5% rather than 4%. “We think the dollar is towards the end of a strong cycle,” CFO John Murphy said. The company attributed its strong performance during the qtr to 4% volume & transaction growth in its namesake brand. The Zero Sugar line once again saw double-digit volume growth across the globe. Quincey said analysts that nearly 25% of revenue comes from new or reformulated beverages, up from 15% just 2 years ago. KO reiterated its fiscal 2019 earnings forecast, saying that EPS could fall or rise by 1%. The company had pointed to currency fluctuations, Fed rate hikes and changing tax rates as reasons for its gloomy earnings projection. Murphy said that “currencies have gotten worse,” but he expects a more “benign” currency environment in 2020. Net sales in the Asia Pacific & Europe, Middle East & Africa segments were flat for the qtr, largely due to the impact of currency. Revenue in Latin America fell 6% because of a 13% currency headwind, although it had strong performance in Mexico & Brazil. Quincey added that Mexico's economic growth is slowing, so the company is tweaking its strategy for the country. North America was the only region to reported net revenue growth. Price hikes & packaging initiatives helped propel revenue growth of 2%. The company said that it saw strong performance from soda, water, sports drinks, juices & dairy & plant-based beverages. The stock rose 2.64.
If you would like to learn more about KO, click o n this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7
Coca-Cola raises revenue forecast after earnings beat, sending shares higher
Strong earnings along with a budget agreement (which will mean more gov borrowing) is bringing out buyers today. Buying is based on gut reactions & those emotions may not last. The Dow is about 100 below the records set last week while gold & silver are also in demand.
Dow Jones Industrials
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