The European Central Bank (ECB) and the Bank of England announced new monetary policy this morning, and two important employment data points reached the wire States-side. The corporate news includes a slew of retailers reporting same-store sales results for the month of June, and we have the morning's most active stocks list for you too.
Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.
ECB Raises Rates The ECB raised its key rates as expected, hiking the rate for the main refinancing operations of the euro-system by a quarter point to 1.5%. The ECB also raised the rate on the marginal lending facility by a quarter point to 2.25% and the rate on the deposit facility by a quarter point to 0.75%. The actions were widely expected by the broader financial markets after ECB Chief Trichet forewarned of the bank’s inflation concerns. However, some question around ECB follow-through creeped back into the equation, as further European stresses recurred in Greece, and again this week on the rating downgrade of Portugal. The ECB, however, is like a large ship in that once it has decided on a direction, though that process may take awhile, it will be long in turning but will turn stubbornly nonetheless.
BOE Holds Course The Bank of England (BOE) held steady on all guns. The official statement read, "The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion."
ADP Offers Bright View ADP reported its Private Nonfarm Payrolls estimate for the month of June a day ahead of the official release of the Labor Department. ADP sees private payrolls increasing by 157K in June, far above the revised May estimate of +36K. Economists surveyed by Bloomberg see Private Nonfarm Payrolls rising by 125K for June, after marking an 83K increase in May.
Overall payrolls are estimated to increase by 110K when reported tomorrow. That’s lower than the private payroll estimate because public sector jobs are expected to cost the economy again in June.
Weekly Jobless Claims Weekly Initial Jobless Claims fell by 14K to 418K in the July 2 period. While this is an improvement, it’s not enough of a change to raise an eyebrow on Wall Street this morning. The four-week moving average better illustrates my point, as it fell just 3,000 to 424,750.
Consumer Count The Bloomberg Consumer Comfort Index, a weekly take of the consumer mood, declined to negative 45.5 in the July 3 period, down from negative 43.9 the week before. It seems that after reaching a 10-week high, consumers have reconsidered their temporary high.
Corporate Wire Individual retailers will be reporting their Chain Stores Sales for the month of June Thursday and over the near-term generally. You won’t get any from Wal-Mart (NYSE: WMT), which composes a huge portion of America’s retail sales, but look for news from Macy’s (NYSE: M) and all the rest.
Limited Brands (NYSE: LTD) reported June same-store sales rose 12%, above street views. J.C. Penney (NYSE: JCP) posted sluggish 2% same-store sales growth for June. The Gap’s (NYSE: GPS) 1% sales increase beat the street’s morbid views for a decrease. Costco (Nasdaq: COST) grew sales 14% and exceeded the high bar set by analysts for June.
Facebook made its new “awesome” announcement yesterday after the bell, reporting that it would indeed provide free video chatting via Skype technology. Has Facebook become your new phone company and given Skype exactly what it needed to get ahead of Vonage (NYSE: VG) and the rest? It appears so.
Pfizer (NYSE: PFE) may sell its non-core nutrition and animal health units over the next two years so it can focus on its low-cost pharmaceuticals growth.
A Morgan Stanley (NYSE: MS) analyst replaced Ford (NYSE: F) with GM (NYSE: GM) in his "best ideas." It should be noted that he still likes both stocks.
Energy Data The EIA will report on both Oil and Natural Gas Inventory this Thursday, due to the holiday. Catch the Natural Gas Report at 10:30 AM ET. Last week’s data covering the period ending June 24 showed natural gas inventory increased by 78 Bcf. However, stocks remained 243 Bcf less than last year at this time and 63 Bcf below the five-year average for this time of year.
The EIA’s Oil Inventory data is due for release at 11:00 AM ET. Last week’s data covering the period ending June 24 showed crude oil inventory fell by 4.4 million barrels, but remained above the upper limit of the average range for this time of year. Total motor gasoline stocks fell by 1.4 million barrels, and were in the middle of the average range for this time of year.
DC Doings Senate Democrats meet with President Obama’s economic team Thursday to discuss the debt ceiling catastrophe in waiting. Democrats have been pushing back against the political leverage of the GOP, suggesting the Republicans should meet the Democrats’ cost cutting concessions with revenue supportive tax increases on the rich.
The CFTC works on some of the Dodd-Frank rules regarding agricultural commodities, swap reporting and manipulation protections. Kansas City Fed President Thomas Hoenig addresses a group at lunch.
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