A man take a rest near ballot boxes at Bendungan Hilir in Jakarta July 10, 2014.
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Espirito Santo: Isolated Incident? European stocks recovered Friday as fears over contagion risk from Portugal's Espirito Santo's solvency subsided. Goldman cut its outlook on the bank's parent company but said the reaction to its troubles was overblown. “Notwithstanding any further bad news, we think that the sovereign financial implications are rather limited,” they said according to Bloomberg.
Gap Comps Drop. Gap's same-store sales fell 2% in June, and were off 7% in both regular Gap and the Banana Republic. Shares declined 1.3% after hours yesterday. A host of big retail chains have been reporting disappointing results in recent days. The Container Store , Family Dollar , and Lumber Liquidators all had the economy to blame. "Consistent with so many of our fellow retailers, we are experiencing a retail 'funk,'" said Container Store CEO Kip Tindell. "While consumers are buying homes and automobiles and even high ticket furniture, most segments of retail are, like us, seeing more challenging sales than we had hoped early in 2014 – so we’re not alone in this."
Wells Fargo Earnings. The American banking behemoth announces its financial results at 8 a.m. Consensus is for $1.01/share.
Tobacco Stocks Surge. Reynolds is looking to buy Lorillard, while Imperial Tobacco could end up purchasing any LO assets Reynolds doesn't pick up, Bloomberg said. Imperial climbed 3.2%, while British American Tobacco, which owns Reynolds, was up 1%. Lorillard is up 5%.
Rail Traffic Surges. Volumes showed continued double-digit growth last week and brought the 12 week moving average in traffic to 7.5%, Cullen Roche notes. AAR reported: " 270,731 total carloads, up 9.4 percent compared with the same week last year. Total U.S. weekly intermodal volume was 227,097 units, up 10.5 percent compared with the same week last year. Total combined U.S. weekly rail traffic was 497,828 carloads and intermodal units, up 9.9 percent compared with the same week last year.”
Best Year For Hotels Since 2000. According to Bill McBride, weekly hotel occupancy for July 4 increased 4.4%, and the four-week moving average for 2014 shows hotels are having their strongest year in 14 years.
Buffett, Adelson, & Gates Blast Congress. In a co-signed New York Times op-ed, the trio hammer Washington for not passing immigration reform, and for general inaction. " American citizens are paying 535 people to take care of the legislative needs of the country," they begin. "We are getting shortchanged. Here’s an example: On June 10, an incumbent congressman in Virginia lost a primary election in which his opponent garnered only 36,105 votes. Immediately, many Washington legislators threw up their hands and declared that this one event would produce paralysis in the United States Congress for at least five months."
Plosser, Evans. Philadelphia Fed President Charles Plosser speaks at 11:15 a.m. today at the Rocky Mountain Economic Summit in Jackson Hole, Wyoming. He's followed by Chicago Fed President Charles Evans.
Markets. U.S. futures were up. European stocks were higher. Asian indexes closed lower.
No Major Economic Data On The Calendar. Have a great weekend.
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