S&P 500 +15bps
COH reports –2% U.S. comps vs. 3.1% est.
NFLX beats and raises subscription numbers
AAPL misses Mac 4.1M vs. 5.2M est., iPhone 47.8M vs. 48.3M est., and iPad 22.9M vs. 23.2M est. unit numbers. Tells investors they will no longer sand-bag guidance. Guides to $41-43B March quarter sales vs. $45.6B est. Gross margin guidance of 37.5-38.5% vs. 40.6% est.
S&P 500 +44bps
Macro
Richmond Fed –12 vs. 5 est., 5 prior
Existing home sales 4.94M vs. 5.1M est., prior 4.99M. +12.8% y/y
Bank of Japan targets 2% inflation and new $145 billion a month QE starting 2014 Link
Market sold off on weak economic data, but then rallied after David Tepper repeatedly said “buy equities” during a Bloomberg TV interview mid-day.
TXN guided Q1 EPS to 28c mid-point vs. 34c est.
IBM sales 29.3B vs. 23.1B est., EPS 5.39 (lower tax rate) vs. 5.25 est. Services signings 17.9B (-12% y/y) vs. 20.16B est.
ISRG 4.25 EPS vs. 4.04 est. Sales $609M vs. $584M est.
GOOG paid clicks 24% vs. 33% prior quarter, CPC –6% vs. –15% prior quarter
S&P +0.34%
Macro
University Michigan consumer sentiment 71.3 vs. 75.0 est, 72.9 prior
One year inflation expectations 3.4% vs. 3.2% prior month
China GDP 7.9% vs. 7.8% est., 7.4% prior
Market faded off the open in the morning on a weak sentiment number and a poor reaction to mixed INTC/COF earnings reports. Around mid-day news leaked out that the House Republicans would kick the debt ceiling can another 3 months with a vote next week, which rallied the market rest of the day.
Kyle Bass: long U.S. housing, still hates Japan
Key events next week: Bank of Japan decision January 22nd, EU manufacturing PMIs January 24th
Earnings: GOOG IBM ISRG TXN COH AAPL NFLX SNDK WDC
Investor sentiment: 9
Market +0.51%
-Chicago PMI 53.0 vs. 53.0 est., 53.7 prior
-Consumer sentiment 74.3 vs. 73.5 est., 73.6 prior
-China Manufacturing PMI 49.2, 49.8 est., 50.1 prior
-California targets more web retailers for state tax collection Link
-WSJ Hilsenrath: "left little doubt that he is looking toward doing more to give the economy a lift at the Fed’s next policy meeting in Sept" “Maybe an unusually strong jobs report Sept. 7, a few days before Sept. 12 meeting of the Fed’s policy committee could change the Fed’s calculations. But taken together speech sounds a lot like Mr. Bernanke’s closing argument in favor for more easing”
-Fed Bernanke’s speech. Nothing incremental "as needed":http://1.usa.gov/OFdnBe
-Telegraph: Bundesbank chief Jens Weidmann ‘considered resigning over ECB bond buying’ http://bit.ly/OBUj3k
-Germany Bundesbank’s Weidmann Never Threatened To Resign Post, Source Tells DJ-WSJ
-AppleInsider: Amazon won’t unveil larger Kindle Fire next week Link
Market –0.78%
-Jobless claims 374K vs. 370K est., prior 372K revised to 374K
-Core PCE 0% vs. 0.1% est., 0.2% prior. 1.6% y/y vs. 1.8% y/y prior
-Kansas City Fed index 8 vs. 5 est. 5 prior
-Another SRPT trial kid talks to media about positive result Link
-Amazon’s Fuzzy Math (22% Kindle Fire market-share) Link
-Amazon starts Pennsylvania 6% state sales tax collection. California to start September 15th Link
Source: Link
-Fed Lockhart: "not concerned of long term costs of more action" "same time I see limited benefit of more action" Fed Lockhart: no question more stimulus if 1) deterioration from this point <100K jobs/month 2) disinflation risk – deflation risk Voting member Fed Atlanta Dennis Lockhart on CNBC: "pretty clear economy growing at 2%" on more stimulus "close call really"
-China Premier Wen Jiabao after talking to Merkel "After I heard her views, it increased my confidence.. I must honestly say, the implementation of these measures won’t be completely smooth" http://reut.rs/N1j7oW
OVTI call: not easy to forecast Q3 unit numbers due to macro concerns
OVTI call: higher product costs equals lower gross margin
OVTI call: do not expect to see material reductions on manufacturing expense in the near term (lower gross margins), R&D going up too
OVTI call: strategic decision to pre-build inventory to meet strong demand
OVTI great revenue guidance $355-390M vs $269M estimate, but guides EPS down on bad margins. Stinks to negotiate with $AAPL I guess
Market +0.08%
-Q2 GDP 1.7 vs. 1.7 est. Price index 1.6 vs. 1.6 est.
-ECB Draghi editorial "fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools” "This may at times require exceptional measures" Link
-TrustEgg allows anyone to setup a trust for their kids Link
-NYTimes Pogue says imminent $AMZN movie deal coming for thousands more streaming movies: http://nyti.ms/Q1ST5r
-$JOY call: China deceleration last few months. "surprised how quickly and deeply" in China. "1/2 prior year’s growth rate"
-$JOY order bookings: underground mining -25.5% y/y, surface mining -38.5% y/y.
-$JOY PR: "the deceleration of China demand has deteriorated international markets more quickly and severely than previously expected"
-$JOY PR: "outlook for our business has continued to decline over the past quarter"
Market –0.08%
-Spain bank deposits down 4.7% in July vs. June. Sharpest drop since ECB collected this data since 1997 http://on.wsj.com/PnZHfI
-consumer confidence 60.6 vs. 65.8 est., prior 65.9 revised to 65.4
-Richmond Fed manufacturing index –9 vs. –10 est., –17 prior
-StarTribune: Best Buy clears way for Schulze offer Link
-NYTimes on Amazon AWS Link
-MarketThoughts: Jesse Livermore and his Legacy Link
-NVDA reportedly delays Maxwell from 2013 to 2014 due to Taiwan Semi slower rollout: http://bit.ly/O0eqsB
-GOOG now advertising Google Nexus 7 tablet on their search engine home-page. That’s called monopoly leverage folks:http://tcrn.ch/Ot1iiy
-SRPT Sarepta Soars 14%+ To Decade High On Muscular Dystrophy Treatment Trial http://on.barrons.com/Nsfc6j
FIO call: reiterated Q1 guidance modest increase in revs, 56-58% margin, op margin 10%. 1/3 of Fortune 500 now customers. Partnerships HP/IBM/Dell/Cisco/NetApp helping. 40 end user customers greater than $1M. last quarter Apple and Facebook 53% of revenue. 10 million servers expected to ship in 2012 vs. 100K stoarge arrays. MUCH BIGGER market opportunity for FIO
Market –0.05%
-Dallas Fed –1.6 vs. –6 estimate, –13.2 prior
-key patents GOOG needs to either license from AAPL or work around are 1) tap to zoom 2) multi-touch gestures http://bit.ly/Odz0F3
-9 quotes from George Soros: http://bit.ly/QfruOZ
-Mitt Romney’s funds annual return 1984-1999 +88% per year. Source: Howard Anderson, former VC and Bain Capital investor
-Steve Jobs: Good artists copy great artists steal Link
TIF call: don’t anticipate meaningful price increases rest of the year. strongest performance came in Japan. higher spend by China/Japan tourists off-set by lower spend by European tourists. sales in NYC flagship store -9%
Market +0.65%
-Durable goods ex-transportation –0.4% vs. 0.4% est., prior –1.1% revised to –2.2%
-Reuters: ECB mulls setting target bands for bond yield – central bank sources Link
-Bloomberg: ECB to await Germany ESM court rule before settling on plan Link
-German finance ministry studying Greece euro exit Link
-“There is scope for further action by the Federal Reserve to ease financial conditions” Bernanke letter to Congressman Link
-Vermont mom to petition the FDA for SRPT in October Link
-ITG raises quarterly revenue estimate for AMZN to $14.2B vs. $13.9B est. Link
Market –0.81%
-HSBC China flash manufacturing PMI 47.8 vs. 49.3 prior
-EU flash manufacturing PMI 45.3 vs. 44.2 est., 44 prior
-Jobless claims 372K vs. 363K est., 359K prior
-Reuters: Spain in talks with EU over sovereign aid Link
-VC Fred Wilson interview Link
-Tiger Global up 21% YTD Link
-CNBC: Fed’s Bullard on QE3 Link Link2
Key take-away from Fed Bullard this morning on CNBC is the QE on the Fed table is smaller, not bazooka size. Fed Bullard: doesn’t mean no action. That’s the question that is on the table for the committee (sounds like smaller action on the table). Fed Bullard: if recession probability would go up sharply, then I’m sure the FOMC would come in (easing). Fed Bullard: 2% growth, 150K jobs, claims below 400K = middling data. I don’t think FOMC can take gigantic action based on muddling thu data. Fed Bullard threshold that "works surprisingly well" is jobless claims over 400K. 370K is about 150K monthly jobs growth. Probability of QE `Not as High’ As Markets Expected This Summer –CNBC. Bullard: central bank can control medium-run rate of inflation (5 years he says), he looks at the TIPS for inflation expectations. Bullard on ECB trying to save Europe: "if Lincoln has been shot and surgeon says he will do whatever it takes, only so much he can do". Fed Bullard: "if growth continues around 2% for the remainder of the year, the Fed likely will remain on the sidelines".
ADSK call: short-fall was mainly central Europe, Brazil, and India. central Europe and Americas worse than expected. Southern Europe was weak as expected. short-fall in revenue didn’t show up till July. Recent re-org hurt. “July was an unmitigated disaster” pricing increase in August didn’t stimulate demand in July like it usually does historically.
HPQ call: challenges in consumer printing, secular shift to tablets, execution, and pricing pressures across the board. “we see economic slow-down in China" Russia/India good, Brazil medium, China not as strong as they would have liked. will give FY13 guidance in October