Trade the News TradetheNews.com US Market Update

Dow -52 S&P -5 NASDAQ flat

***Economic Data***

– (CA) Canada July Consumer Price M/M: 0.2% v 0.2%e; Y/Y: 2.7% v 2.8%e; CPI Index: 120.0 v 119.8 prior
– (CA) Canada July CPI Core M/M: 0.2% v 0.2%e; Y/Y: 1.6% v 1.6%e
– (BR) Brazil Aug IBGE CPI IPCA-15 M/M: 0.3% v 0.2%e
– (PD) Poland July Core Inflation M/M: 0.1% v 0.1%e; Y/Y: 2.4% v 2.5%e
– (BE) Belgium Aug Consumer Confidence: -9 v -4 prior
– (MX) Mexico Jun Global Economic Indicator: 3.6% v 3.9%e
– (MX) Mexico Q2 GDP Y/Y: 3.3% v 3.6%e

– European equity indices recovered much or all of their earlier losses as US traders entered the market this morning after various positive factors aided sentiment. The Spanish government approved a previously announced round of spending cuts and Spanish Finance Minister Salgado outlined details of the measures, while unsubstantiated rumors made the rounds that an emergency Fed meeting might take place. In the US it is a double witching day, driving very strong volumes of trading. US equities peaked around 10:30ET and then gave up gains and ducked back into negative territory. Dollar weakness helped commodities a bit, however front-month crude remains well below the $87 handle seen early yesterday. Spot gold made fresh all-time highs around $1,876 earlier this morning, although it has dropped back to around $1,850 with the better equity sentiment.

– Apparel names Footlocker and Gap offered decent results yesterday afternoon. Shares of Footlocker jumped 5% in post-market trading after reporting twice the expected profit in the firm’s Q2, thanks to very strong margins. Gap modestly exceeded diminished expectations and reaffirmed its full-year outlook, even as inventories grew and margins shrank. Ann Taylor very modestly topped expectations and nudged its FY11 revenue forecast a bit higher. Aeropostale’s revenue missed targets widely and the firm’s profit guidance for next quarter was less than half the expected amount. ANN is up nearly 15%, GPS and FL are both up around 4%, while ARO is -10%, but well off the -16% level seen just after the open.

– Analysts continue to dissect the Hewlett-Packard announcements from yesterday afternoon, and nobody seems to like what they see. S&P put the firm’s ratings on watch negative, multiple analysts downgraded their ratings on HP to a neutral or sell, and everyone is wondering who would have the funds or desire to acquire all of the firm’s huge PC division, especially given the rickety state of the consumer PC business as a whole. After Dell’s terrible quarter, focus is also shifting to Intel, after Nomura said they expect Intel to miss its Q3 guidance. Shares of HPQ are down 20% this morning, although DELL and AMD are both up 5% or so. INTC is flat. Note that analog chip maker Marvell is up 11% after meeting expectations and offering lots of positive commentary about the second half of 2011.

– The euro rally pulled funds away from the greenback this morning thanks to Spain’s demonstration of its commitment to austerity and the Fed emergency meeting chatter. Note also that EU Commissioner Rehn stated that euro bonds would help enforce fiscal discipline in the euro zone. EUR/USD popped above 1.4450 very briefly before trading off a bit, aiding overall sentiment. The Japanese Finance Ministry said there is no reason for the yen to be treated as a safe haven currency, continuing its verbal assault on yen strength. The ministry reiterated that it would not hesitate to undertake further interventions, but just not on a daily basis. Markets ignored the comments as USD/JPY hit fresh all-time lows and tested below the 76 handle by the mid-NY morning.

***Looking Ahead***

– 13:45 (US) Fed’s Pianalto speaks on economy in Columbus, Ohio
– 15:00 (AR) Argentina Jun Economic Activity Index M/M: No est v 1.5% prior; Y/Y: 7.7%e v 8.1% prior
– 15:00 (AR) Argentina July Industrial Production M/M: No est v -0.1% prior; Y/Y: 8.4%e v 8.2% prior
– 17:00 (CO) Colombia Jun Industrial Production Y/Y: 3.6%e v 4.3% prior
– 17:00 (CO) Colombia Jun Retail Sales Y/Y: 13.0%e v 11.5% prior
– (CO) Colombia Central Bank Interest Rate Decision: Expected to raise the Overnight Lending Rate by 25bps to 4.75%

This information was brought to you courtesy of TradetheNews.com, for your free trial Click Here