Overnight, Asian markets closed lower following outsized gains in the US dollar last Friday. The Japanese Nikkei (INDEXNIKKEI:NI225) fell 1.4%, and the Chinese Shanghai Composite fell 2.44%. European markets began the day higher and closed near their highs of the day. After the European close, EU finance ministers were said to have approved a 3 billion euro tranche of aid to Greece to ensure that there would be no cash shortfall for the remainder of the quarter. Additionally, the finance ministers were said to move up aid payments to the third quarter due to a large number of bond redemptions in August.
US markets open higher and moved little for the rest of the day. The Nasdaq (^IXIC) lost 0.6% of its gains and closed around flat for the day. The leading S&P 500 (^INX) sectors on the day were utilities, consumer staples, and financials with tech and telecom in the red. Lagging tech stocks were no doubt pushed down by the 1% decline in Apple (AAPL). The largest movement was in US Treasuries, with the 10-year yield dropping 10 basis points to 2.64%. This follows a 24-basis-point rise on Friday after the better-than-consensus payroll report.
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The only economic datapoint for the day was consumer credit, which expanded by an adjusted rate of $19.05 billion in May. Consumer financed borrowing showed strong gains in non-revolving and revolving subsets, but it was little changed on an non-adjusted basis for the last year.
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Dell (DELL) founder Michael Dell and private equity firm Silver Lake was given the green light by corporate governance consulting firm Institutional Shareholder Services for its $24.4 billion leveraged buyout. ISS commented negatively on Carl Icahn's proposed buyout due to its leveraged nature. Dell shares closed at $13.42, up 3% for today and slightly below the $13.65 offer price. Dell shareholders will vote on the proposal July 18.
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Alcoa (AA) kicked off earnings today with a better-than-expected report. Earnings per share rose $0.07 versus $0.06 estimates and revenues rose $5.96 billion versus $5.79 billion estimates. The company reaffirmed its global aluminum demand forecast at 7% for the year. Shares of Alcoa were up 2% from its closing price to $8.05 in after-hours trading.
Tomorrow's Financial Outlook
Tomorrow's economic data will include the small business optimism index via NFIB and same-store sales indexes from ICSC/Goldman and Redbook. The small business optimism indexes should rise given the higher wages found in last Friday's employment report. Same-store sales have trended down of late, coincident with falling consumption. Lastly, tomorrow will be the first Treasury auction of three this week.
It will be a busy day across the globe for economic data releases. The UK will release manufacturing and industrial production from May and it will also release its trade balance from May. On a month-to-month basis, the production figures are expected to gain slightly. Lastly, the NIESR institute will release its estimate of England's GDP for June. Other economic data includes the consumer inflation index from China and Japanese production orders.
Wolverine World Wide (WWW) will be the only notable earnings report tomorrow.