Markets
For the week of Monday, July 22, 2013, through Friday, July 26, 2013:
- Standard & Poor’s 500 Index: -0.02%
- Dow Jones Industrial Average: 0.10%
- NASDAQ Composite: 0.71%
Stocks edged higher at the beginning of the week, as investors considered weak earnings news and signs of a pause in the housing recovery. Tuesday saw mixed markets in a quiet trading day. However, the Dow Jones Industrial Average eked out a new high, closing at 15567.74, which topped the previous record from July 18. Midweek, stocks declined as a result of mixed corporate earnings reports. The NASDAQ gained less than 0.1% despite a boost from strong quarterly earnings from Apple, Inc. (NASDAQ: AAPL). The S&P 500, however, suffered its biggest loss in nearly a month. The markets remained mixed on Thursday, with a mixed bag of earnings reports and readings on the U.S. economy. Stocks traded higher on Friday, with the three major indices closing out the week with slight gains. In economic news, the University of Michigan’s July consumer confidence reading hit the highest level since 2007.
Economic Data
- Existing Home Sales:
- Against consensus expectations, existing home sales fell 1.2% in June to 5.08 million annualized units.
- Sales increased for the eighth consecutive quarterly gain.
- Inventories increased 1.9% month-over-month.
- The median existing-home price is up 13.5% year-over-year.
- May’s sales were also revised down by 0.8%.
- Against consensus expectations, existing home sales fell 1.2% in June to 5.08 million annualized units.
- Chain Store Sales:
- The ICSC chain store sales index rose 1.4%.
- Year-over-year growth was 2.1%.
- MBA Mortgage Applications Survey:
- The mortgage application index fell 1.2%, marking the sixth consecutive weekly decline.
- Refinance activity was flat, while purchase applications fell.
- New Home Sales:
- In June, new-home sales reached an annual rate of 497,000.
- This is 8.3% above May’s revised rate of 459,000.
- The number of new homes available increased in June, but the months of supply fell to 3.9 months.
- The median price is up 7.4% from last year.
- In June, new-home sales reached an annual rate of 497,000.
- Jobless Claims:
- Initial claims for unemployment insurance rose 7,000 to 343,000.
- The previous week was revised up by 2,000 to 336,000.
- Continuing claims fell 119,000.
- Continuing claims were at 3 million for the week ending July 13.
- Initial claims for unemployment insurance rose 7,000 to 343,000.
- Durable Goods:
- New orders for durable manufactured goods rose 4.2%, down from May’s 5.2% increase.
- Excluding transportation, new orders were flat.
- Inventories grew 0.2%.
- Core capital orders rose 0.7%; however, shipments fell 0.9%.
- New orders for durable manufactured goods rose 4.2%, down from May’s 5.2% increase.
Earnings:
- McDonald’s Corp. (NYSE: MCD)
- McDonald’s reported earnings of $1.4 billion, or $1.38 a share, up from $1.35 billion, or $1.32 a share, last year.
- Analysts expected $1.40 a share.
- Quarterly profit rose 4%, but was also short of expectations.
- Revenue was in line with expectations at $7.08 billion.
- McDonald’s reported earnings of $1.4 billion, or $1.38 a share, up from $1.35 billion, or $1.32 a share, last year.
- Netflix, Inc. (NASDAQ: NFLX)
- Although Netflix’s profit quadrupled, investors still seemed unimpressed.
- Netflix beat expectations earning $29 million, or $0.49 a share.
- Netflix added 630,000 new streaming customers, sort of the 700,000 expected by The Street.
- Apple Inc. (NASDAQ: AAPL)
- Apple earned $6.9 billion, or $7.47 a share, compared to $8.8 billion, or $9.32 a share last year.
- The earnings beat analysts’ estimates of $7.31 per share.
- Revenue was $35.3 billion compared to $35 billion a year ago.
- iPhone sales were at 31.2 million for the quarter, 20% better than the same quarter last year.
- iPads sales decreased by 14% from last year.
- Apple earned $6.9 billion, or $7.47 a share, compared to $8.8 billion, or $9.32 a share last year.
- United Parcel Service, Inc. (NYSE: UPS)
- UPS earned $1.07 billion, or $1.13 a share, compared to $1.12 billion, or $1.15 a share, last year.
- Revenue rose to $13.51 billion just missing analysts’ expectations of $13.59 billion.
- The Boeing Company (NYSE: BA)
- Boeing earned $1.09 billion or $1.41 a share for the quarter.
- Excluding certain items, earnings were $1.67 a share.
- Analysts expected $1.58 per share.
- Sales rose 9% to $21.8 billion, beating analysts’ expectations of $20.78 billion.
- Boeing earned $1.09 billion or $1.41 a share for the quarter.
- PepsiCo, Inc. (NYSE: PEP)
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- Pepsi earned $2.01 billion, or $1.28 a share, compared to $1.49 billion, or $0.94 a share, one year ago.
- Excluding one-time items, Pepsi earned $1.31 a share, beating analysts’ estimates of $1.19.
- Revenue was $16.81 billion, barely beating the $16.8 billion analysts expected.
- Pepsi earned $2.01 billion, or $1.28 a share, compared to $1.49 billion, or $0.94 a share, one year ago.
- The Hershey Company (NYSE: HSY)
- Hershey earned $159.5 million, or $0.70 a share, up from $135.7 million, or $0.59 a share, last year.
- Revenue climbed 7% to $1.51 billion from $1.41 billion, meeting Wall Street’s forecast.
- Colgate-Palmolive Co. (NYSE: CL)
- Colgate-Palmolive reported profit of $561 million, or $0.60 a share, down from $627 million, or $0.65 a share, last year.
- Adjusted earnings were $0.70 a share.
- Net sales rose to $4.35 billion from $4.27 billion.
- Analysts expected $0.70 a share, on revenue of $4.39 billion.
- Colgate-Palmolive reported profit of $561 million, or $0.60 a share, down from $627 million, or $0.65 a share, last year.
Interest Rates
- The two-year Treasury rate inched up five basis points to 0.35%, just six basis points below the 2013 high.
- The five-year Treasury rate increased 14 basis points to 1.43%.
- The 10-year Treasury rate jumped 13.5 basis points to 2.62%.
- The 30-year Treasury yield increased 11 basis points to 3.67%, just below the 2013 high of 3.71%.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
