Chillin' out till it needs to be funded
Retail Gasoline stocks shot up by 4.5 M barrels in the week after having given hope with customers starting drawing down on gas money and inventories flowing to the pump for three months on the trot. Crude Oil inventories on the hole were up 2.7 M Barrels and still near their all time record with 1.8 B barrels in storage including the Reserve
As commentators noted, it was also not a good June for BRICs and Foreign Capital outflows from Brazil hit almost $2 B in July. However, we maintaina turnaround is near for Emerging markets with EM Bonds offering an alternate for those getting too much of low yield US treasuries. The Euro’s dead cat bounce is on news that the importance of continuing the bailouts has sunk in on the larger set of decision makers and this time it is real additional additions to the Bailout funds, like that is going to happen after a German and Dutch downgrade threat. On deck was the ECB member Nowotny , imagining how ESM would look with a Banking licence
Apple’s miss was understandable and not many would have called selling 26 mln iPhones a miss bu tthen iPads are a low margin business, less than 60% of hat they make on the Direct margin for the iPhone. Caterpillar, beat estimates but is already down 20% relative to the S&P 500 since May with Capital Goods taking it on the chin globally. CAT reported profits higher by 60% on last June at $1.7B or $2.54 per share on revenues of $17.4 B but cut the top end of its revenue estimates for 2012 to $70 B . Profits will be higher at $9.60 per share. Pursuant to its earlier estimates for Chinese growth the company would be shipping nearly 2000 excavators from China to export destinations.
Apple’s cash kitty is now running at $117.4B, give or take $10 B from operations this quarter for more than 25% of the current market price. It’s earnings are still a $9.32 per share for this quarter alone. A net margin of 22% meant profits were adding directly to cash on a $35 B revenues. Profits were down 15% sequentially.
Ford in the mean time has doubled ‘loss estimates’ to $1 B from Europe, which I would say is small change for the US car maker, but still too much of hope in holding on to European markets. Revenues were down 6% along expected lines to $33 B while profits were 60% to $1 B from $2.4 B last June. Ford still put out estimates of 14.5m to 15 m four wheelers for the US market.
Markets are trading down even as Europe closes with the Euro still trading at $1.2125 and the GBP down further from $1.55 after some bad economics spoiled the European morning. German Business Surveys did not trend much lower and confidence was better even Italy reporting good customer confidence but British GDP down 0.7% for the Quarter and worse for the year, business confidence also trending down.
Spanish yields continue to trend above 7% and Cisco is back in the day’s trade.