Markets
For the week of Monday, July 28, 2014 through Friday, August 1, 2014:
- Standard & Poor’s 500 Index: -2.66%
- Dow Jones Industrial Average: -2.75%
- NASDAQ Composite: -2.16%
Stocks started the week slowly, taking time to pause before the next Fed meeting and a slew of economic and earnings reports due during the week. Stocks opened lower, with selling fueled by another weak housing report, as pending home sales fell in June. Analysts expected a rise in the housing market. On Tuesday, stocks slipped on news the United States and the European Union adopted new economic sanctions against Russia.
The Fed offered a mixed view on the economy on Wednesday, which resulted in choppy trading. The central bank said it would reduce its purchases of mortgage and Treasury bonds to $25 billion monthly, as widely expected. This also left investors wondering when, and how, the Fed might raise short-term interest rates. Stocks opened lower on Thursday as a result of steep losses in European markets, a potential default by Argentina, and corporate news from Adidas, Yum Brands, Akamai Technologies, and Whole Foods. The tumble continued on Friday despite a Labor Department report showing the economy added 209,000 jobs in July, marking the sixth consecutive gain above 200,000, while additions for the previous two months were upwardly revised by 15,000. On another note, manufacturing activity increased in July. The Institute for Supply Management’s index hit 57.1, up from June’s 55.3 level. Elsewhere, consumer confidence was on the wane in July. The University of Michigan’s consumer sentiment index landed at 81.8, down from 82.5 in June.
Economic Data
Chain Store Sales Snapshot:
- The Chain Store Sales Index rose 0.2% last week.
- This was a rebound from the previous week’s 0.4% decline.
- Sales growth increased from 2.8% to 4.6% over last year.
Case-Shiller Home Price Index:
- For the three months ending in May, existing-home price appreciation decelerated on a year-ago basis.
- The 10-city composite index rose 9.4% year-over-year.
- The 20-city composite index increased 9.3% year-over-year.
- Non-seasonally adjusted month-to-month:
- The 10-city composite index rose 1.1% in May.
- The 20-city composite index increased 1.1% in May.
Conference Board Consumer Confidence:
- The Conference Board’s Consumer Confidence reading increased 4.5 points to 90.9.
- Brighter perceptions of buyers’ present situation and a more optimistic outlook were the main drivers.
- June’s reading was revised from 85.2 to 86.4.
- Despite the increased confidence, plans to purchase big-ticket items remained subdued.
MBA Mortgage Applications Survey:
- The MBA Mortgage application composite index fell by 2.4%.
- The purchase index rose 0.2%.
- The refinance index fell 4%.
Gross Domestic Product:
- Real GDP grew 4% in the second quarter, reversing the first quarter’s 2.1% decline.
- Inventory investment, exports and consumer spending led the increase.
Jobless Claims:
- Initial unemployment insurance claims increased 23,000 to 302,000 last week.
- The four-week moving average fell below 300,000 to 297,250.
- Continuing claims increased 31,000 to 2.5 million.
Earnings:
AFLAC Inc. (NYSE: AFL)
- Aflac earned $810 million, or $1.78 a share, compared to $889 million, or $1.90 a share, last year.
- After adjustments, the insurer earned $1.66 a share.
- Revenue fell to $5.84 billion.
- Analysts expected $1.59 a share on sales of $5.84 billion.
United Parcel Service, Inc. (NYSE: UPS)
- UPS earned $454 million, or $0.49 a share, compared to $1.07 billion, or $1.13 a share, a year ago.
- After adjustments, UPS earned $1.21 a share.
- Revenue rose to $14.27 billion from $13.51 billion.
- Analysts expected $1.24 a share on revenue of $14.07 billion.
American Express Company (NYSE: AXP)
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- American Express earned $1.52 billion, or $1.43 a share, compared to $1.39 billion, or $1.27 a share, last year.
Revenue increased to $8.66 billion from $8.25 billion last year.
- Analysts expected $1.38 a share on revenue of $8.67 billion.
Twitter, Inc. (NYSE: TWTR)
- Twitter’s revenue increased to $312.2 million compared to $139.3 million last year.
- Twitter posted a loss of $144.6 million, or $0.24 a share, compared to last year’s loss of $42.2 million, or $0.32 a share.
- Excluding items, the social media company posted a profit of $0.02 a share compared to a loss of $0.12 last year.
- Analysts expected a loss of about $0.01 a share.
Interest Rates
- The two-year Treasury rate rose seven basis points to 0.56%.
- The five-year Treasury rate increased 11 basis points to 1.78%.
- The 10-year Treasury rate rose 11 basis points to 2.58%.
- The 30-year Treasury yield increased 10 basis points to 3.34%.
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.
