10 Things You Need To Know Today (DIA, SPY, SPX, QQQ, TSLA, AAPL, ICPT)
Good morning! Here's what you need to know:
Germany In A Word: Grim. The ZEW investor confidence survey index plunged to 44.3 in August, which was much worse than the 54.0 expected by economists. To make things worse, the expectations index crashed to 8.6 from 27.1. This was the lowest reading since December 2012. "In one line: Grim, as slump in investor sentiment deepens," said Pantheon Economics' Claus Vistesen. "Given the recent sharp drawdown in equities, a drop in sentiment was expected, but the decline was larger than anticipated, reinforcing downside risk to the economy."
Henkel Confirms The Grim Outlook. "We expect the escalation of the Russian Ukrainian conflict as well as the persisting political turmoil in the Middle East to have a negative impact on the market environment," said Henkel CEO Kasper Rorsted earlier Tuesday. Based in Dusseldorf, Henkel supplies the world with a variety of consumer goods ranging from laundry detergent to toothpaste.
Intercept Pharmaceuticals Explodes. Biopharma firm Intercept announced some good news regarding its drug pipeline. After the company filed its earnings announcement and 10-Q on Monday afternoon, the stock exploded by around 65%.
Markets Are Up. U.S. futures are up with Dow futures up 30 points and Nasdaq 100 futures up 9 points. Asia closed higher with Japan's Nikkei up 0.2% and Hong Kong's Hang Seng up 0.18%. Europe's a bit weaker, with Britain's FTSE flat and Germany's DAX down 0.2%.
Euro Tumbles. The euro slumped after Germany's ZEW investor index. The currency is currently at $1.3337, down 0.36% for the day. "The German ZEW survey suggests the euro-area economy will continue to slow through the first half of next year," said Bloomberg economists David Powell and Niraj Shah. "That will provide ammunition for the proponents of quantitative easing at the European Central Bank."
JOLTS Job Openings. The BLS's Job Openings and Labor Turnover Survey will be released at 10 a.m. ET. Economist expect it to reveal there were 4.6 million job openings in June, down from 4.635 million in May. "JOLTS has garnered more attention lately as Fed Chair [Janet] Yellen often cites the survey when assessing the state of the labor market," noted Credit Suisse economists. "In May, JOLTS job openings continued to strengthen, rising to 4.6M and job vacancies per unemployed worker increased to 0.47, the highest level since May 2008. The ratio of vacancies to unemployed workers has risen much faster than its post-crisis trend for two months in a row, providing further confirmation that the U.S. labor market has indeed shifted to a period of stronger growth. However, the rates of hiring and quitting were unchanged and remain well below pre-crisis levels."
Monthly Budget Statement. Economists expect the Treasury Department to report a deficit of $96 billion. Here's Morgan Stanley's Ted Wieseman: "We estimate the federal government ran a $92 billion budget deficit in July, down from $98 billion a year earlier on a 3.2% rise in receipts and 0.4% increase in outlays. Flat withheld income and payroll taxes slowed tax revenue growth, while one-off payments lowered miscellaneous outlays versus higher healthcare spending. For fiscal year 2014 ending in September we see the deficit on pace to narrow to $500 billion, or 2.9% of GDP, from $680 billion, 4.1% of GDP, in 2013 on 6.2% growth in receipts and 5.4% growth in outlays." The report gets published at 2 p.m. ET.
Consumer Reports On Tesla's Model S. "Consumer Reports, which last year gave top marks to electric carmaker Tesla Motors Inc.'s Model S sedan, now says the car it owns has had "more than its share of problems,'" reports Reuters' Bernie Woodall. "Just before the car went in for its annual service, at a little over 12,000 miles, the center screen went blank, eliminating access to just about every function of the car," the magazine said in its statement.
New York Is Going After Payday Lenders. "A trail of money that began with triple-digit loans to troubled New Yorkers and wound through companies owned by a former used-car salesman in Tennessee led New York prosecutors on a yearlong hunt through the shadowy world of payday lending," reports The New York Times' Jessica Silver-Greenberg. "On Monday, that investigation culminated with state prosecutors in Manhattan bringing criminal charges against a dozen companies and their owner, Carey Vaughn Brown, accusing them of enabling payday loans that flouted the state’s limits on interest rates in loans to New Yorkers."
New iPads Are Coming. "Apple Inc.’s suppliers have started manufacturing new iPads, according to people with knowledge of the matter, as the company works to reinvigorate sales of the tablet computers after two straight quarters of declines," reports Bloomberg's Tim Culpan and Peter Burrows. "Mass production of a full-sized iPad with a 9.7-inch screen is already under way, with an unveiling projected for the end of this quarter or early next, said two of the people, who asked not to be identified because the details aren’t public. A new version of the 7.9-inch iPad mini is also entering production and will probably be available by the end of the year, they said."