Hurricane Arthur May Rain On Your Plans, But Won't Drain Economy
Hurricane Arthur is continuing to intensify, with the National Hurricane Center predicting it to make landfall on the North Carolina coastline as a Category 2 hurricane before traveling up the East Coast, and raining on a lot of 4th of July plans in the process. But the storm shouldn't have too much of a negative impact on local communities, according to Lee Nettles, executive director of the Outer Banks Visitors Bureau in North Carolina. He says local businesses and tourism won't suffer badly from the quick-moving storm. That's echoed by research from the Hampton Roads Planning District Commission. The commission found that, "In general, those communities impacted by Category 1 and 2 storms are likely to experience little fiscal impact."
Target Earnings Fall 62% as Retailer Sees Early Signs of Progress
Target cut its full-year earnings forecast and posted second-quarter earnings that fell 62% from a year ago. Target had recently warned of weak quarterly numbers. Excluding items, the company reported earnings of 78 cents a share on total sales that rose 1.7% to about $17.4 billion. Analysts expected earnings of 79 cents a share on revenue of about $17.3 billion, according to Thomson Reuters. Target executive vice president and chief financial officer John Mulligan said, 'We are seeing some early signs of progress while we work to improve results in the U.S. and Canada.' Goldman Sachs analysts expect a muted reaction to this report, as it was in line with pre-announced results.
INTECH: 'Smart Alpha' Beats 'Beta' When It Comes to Risk Control
INTECH's 'smart alpha' funds are superior to the 'smart beta' strategies flooding the market because they are more frequently rebalanced and have steeper risk control, said Richard Yasenchak, Sr. Vice President at INTECH. Yasenchak said smart beta has the potential to generate longterm returns above cap-weighted indexes, yet it suffers from inadequate risk controls relative to the market benchmark as well as overcrowding issues. He said investors are seeking liquid alternatives and enhanced index strategies more than ever in the wake of the credit crisis. Finally, he said INTECH is a pioneer in the industry and is even able to use the strategy in traditionally volatile emerging markets.
Stocks Open Lower on Weak Retailers as Investors Wait for the FOMC Minutes
Major U.S. markets opened lower on weak retail earnings and as investors wait for the Fed Minutes from their last meeting. Americans took advantage of falling interest rates to refinance their homes. The Mortgage Bankers Association's index rose 1.4 percent last week. Refinancing applications climbed 2.7 percent. But the measure of purchase home loans dropped for the third straight week. Shares of American Eagle Outfitters (AEO) opened sharply higher. The company reported second quarter earnings before the bell. The teen retailer posted its profit was down 70 percent from a year ago but that still beat Wall Street's expectations for flat results. Lowe's (LOW) also reported before trading started. The home improvement retailer posted earnings that beat estimates but lowered its guidance. Hertz (HTZ) withdrew its full-year earnings guidance. The rental car company also said its 2014 results will be 'well below' forecasts. The stock is starting the trading day down double digits.
Overstock Rises as Bitcoin Falls: Chart of the Day
Overstock was stocking up on losing quarters, but now the company is on a tiny tear after getting a boost last month on its revenue from Bitcoin, of all things. CEO Patrick Byrne opened his company up to Bitcoin payment earlier this year, and now it is expected to drive $8 million on the top line, and contribute to EPS. The bad news, is why Overstock is our chart of the day: the company is in the red this year, in terms of its share price, and the stock is down over 40 percent over the last 12 months. Keeping up with competitors like Amazon could be impossible, but can Bitcoin keep boosting Overstock's top line?
Occidental, Ashland Remain Undervalued Says Visium Manager
Occidental Petroleum shares will be fueled by share repurchases once it completes its asset sales and California Resources spin-off, said Frank Gallagher, portfolio manager for the Visium Event Driven Fund. Gallagher said Ashland's stock will see similar growth now that it has sold its water technologies business to a private equity firm. He also said the chemical company will increase its earnings as it completes its cost reduction plan. Finally, Gallagher is bullish on the Hartford Financial Services Group, saying the insurance giant is returning capital to shareholders and has streamlined its operations in the wake of John Paulson's activism.
European Investors Await Rate Clues From Fed Minutes as Indices Cede Gains
European stock indices pare gains accrued earlier this week as investors await hints on the Fed’s next steps from the minutes of policymakers’ last meeting and as Bank of England minutes reveal the shattering of a consensus to keep rates steady at their historic low 0.5%. In London Balfour Beatty disappoints investors by batting away a sweetened $3.5 billion takeover proposal from fellow infrastructure services provider Carillion, whose only option now appears to be a hostile bid. And on mainland European bulletins from brewers Carlsberg and Heineken elicit contrasting responses.
Target, H-P & American Eagle Ready Earnings, Jim Cramer's Java
As retailers keep cranking out the positive earnings news, the market's outlook grows rosier: Today, we're going to get earnings from Target, which is looking to boost its presence online now that it has taken Brian Cornell on as CEO. That comes as the company is trying to reverse a negative trend, and make its data more secure. Cornell's push for longer hours could pay off for investors. And, we'll also get earnings from American Eagle before the open -- another retailer looking to beat back poor trends. Plus, Jim Cramer is fully caffeinated -- see which java maker he's calling a 'Buy!'
FOMC Minutes May Show Move Toward a More Hawkish Federal Reserve
On Wednesday, the U.S. Federal Reserve will release the minutes of its July meeting and they are expected to show a Fed that may be leaning toward raising the fed funds rate early in 2015. UBS U.S. Economist Kevin Cummins says the minutes will likely show a 'more hawkish tilt to the rhetoric' in the statement. In June, most FOMC members agreed the Fed should keep the fed funds rate low even after its bond buying program ends this fall. The only dissenting voice was Charles Plosser but Cummins says in the last few weeks comments from other Fed Presidents point to an increasing 'move toward the center and hawkish end.' Cummins says Fed watchers will likely not get any new clues on what the Fed means by 'policy normalization' until the beginning of the fourth quarter. TheStreet's Ruben Ramirez has details from New York.
Why Yahoo! Tapped Taylor Swift For Its Foray Into Online Video
Yahoo! has been tiptoeing into original Web content creation but made a bang Monday evening with its live stream event featuring Taylor Swift. To compete with Netflix, Amazon and Hulu, Yahoo! has adopted traditional broadcaster’s strategic game plan focusing on the spectacle of the live event, while still appealing to the cord-cutters' mentality. The internet company plans to capture the attention of music fans, demonstrated in its recent deal with concert organizer Live Nation, a partnership promising to premiere a new, live concert from performers like Swift each day for a year. Keris Lahiff reports from Wall Street.