Today - Thursday, July 30, 2015
- Based on the market action, a September rate hike just got somewhat more likely after the first estimate of Q2 GDP growth came in at 2.3%. The print missed estimates, but Q1 was revised to +0.6% from -0.2%, so the full measure of the report could be deemed a beat.
- 30-day Fed Funds futures for October are 12 basis points lower than July, suggesting about a 50/50 chance of a 25 basis point hike when the kids go back to school. January 2016 futures have priced in a 100% chance of a 25 basis point hike, plus the beginnings of a chance of a 2nd boost to rates.
- The 10-year Treasury yield - initially moving up to 2.32% after the GDP number - has slipped back to 2.29%, flat on the session. TLT +0.2%, TBT -0.4%
- ETFs: SHY, IEF, PST, IEI, BIL, TYO, DTYS, UST, VGSH, SHV, VGIT, SCHO, TBX, SCHR, GSY, TYD, ITE, DTYL, DTUS, DTUL, SST, TUZ, DFVL, FIVZ, TBZ, DFVS, TYNS, SYTL
- Among the movers after reporting last night are Facebook -2% and Whole Foods -14%. Procter & Gamble is marginally lower after releasing its results a few minutes ago.
- Q2 GDP set for release at 8:30 ET is expected to show growth of 2.8% after Q1's contraction. The FOMC yesterday all but promised a rate hike soon if incoming data fit the narrative of continuing economic recovery.
- U.S. stock index futures are volatile, but flat at the moment.
- Shanghai couldn't hold early gains overnight and fell 2.2%, and Europe is moderately in the green.
- The 10-year Treasury yield is up one basis point at 2.30%, gold is down $7 per ounce, and oil is up $0.47 per barrel to $49.26.
- ETFs: SPY, QQQ, DIA, SH, SSO, SDS, VOO, IVV, UPRO, PSQ, SPXU, TQQQ, SPXL, RSP, QID, SQQQ, QLD, DOG, DXD, RWL, UDOW, EPS, SDOW, DDM, VFINX, BXUB, QQEW, QQQE, SPLX, SFLA, BXUC, QQXT, SPUU, UDPIX, OTPIX, RYARX
- Shell (RDS.A, RDS.B) is bracing for a "prolonged downturn," the company declared as it reported a sharp fall in Q2 profit and said it would cut 6,500 jobs and full-year capex to $30B.
- Quarterly profit on a current cost-of-supplies basis dropped to $3.4B from $5.1B a year earlier, meeting analyst expectations.
- Shell has still acted boldly despite a slump in crude prices. In April it signed a $70B deal to acquire BG Group, and is pressing ahead with expensive plans to drill in the Arctic.
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