European economic data continued to show improvement in this
morning's releases. The eurozone and German ZEW survey of economic
expectations rose sharply from the month prior, sparking solid
increases in European equity indices. UK indices were modestly
higher after generally in-line producer and consumer prices
increase for the month of July. Asian indices also showed positive
momentum following stories out of Japan that the government was
debating lowering corporate tax rates alongside a planned 3%
increase in the sales tax.
In the US, a story broke early in the day that activist investor
Bill Ackman was resigning from the board of
), where his firm holds a significant stake, following the board's
disapproval of his public statements regarding the search for a new
July retail sales rose by 0.2% from the prior month, slightly worse
than the 0.3% estimate and down from the upwardly revised 0.6%
(from 0.4%) reading in the prior month. Sales ex auto and gas rose
by 0.4%, in line with expectations and up from unchanged in the
prior month. Homebuilder stocks fell by 1% on the day due to the
0.4% monthly decline in building materials in the retail sales
US markets showed positive gains in the pre-market session, but
quickly lost those gains in the opening minutes of the trading day.
Following comments from Atlanta Fed President Lockhart, stating
that the reasoning for tapering asset purchases in September and
the coming months was becoming less clear, US equities rallied back
to their pre-market levels. The tech and financial sectors led
while telecom and utilities faltered. US Treasuries remained weak
throughout the day due to the weakness in German bunds, which
manifested in further weakness for UK gilts.
(NYSE:AAR) merger was put into question with the filing of an
antitrust suit by the US Department of Justice. The proposed merger
would be disadvantageous for consumers, who would face higher fares
and fewer flights between the company's bigger hubs. American
Airlines was due to appear in front of a bankruptcy court in two
days to present its reorganization plan.
Tomorrow's Financial Outlook
July US producer prices will be released tomorrow morning at 8:30
a.m. EDT. Economists are expecting producer prices to rise 0.3%
from the prior month and 2.4% from a year ago. The prior month's
rise was 0.8% and 2.5% respectively. As a whole, commodity prices
rose sharply in July, but have remained relatively steady since the
beginning of June.
In Europe, Germany and France will release the first estimate of 2Q
GDP tomorrow. German GDP is expected to grow to an annual rate of
0.7% from -1.4% the quarter prior and French GDP is expected to
slow its rate of decline to -0.1% from -0.4%. The other European
data point due out is UK employment figures from July.
Earnings that are pertinent to US growth are on the calendar
Dick's Sporting Goods
(M) will all report.