Wednesday, July 15, 2009

Quick Notes for the Day - July 15

Intel Powers the Market and Optimism - "While the global economic environment is still recovering, our customers signaled increased confidence for a seasonal second half with their ordering patterns," Intel Chief Executive Paul Otellini said in a call with analysts. "From a consumption perspective, consumer purchases led the way." I don't believe that you can speak in much plainer English.

Intel reported a net loss for the second quarter, but that was due to a fine imposed by the European Union. The total charge due to the fine was $1.45 billion. The company's reported adjusted earnings actually exceeded expectations. And in its first formal outlook in two quarters, Intel said it expects third-quarter revenue to come in better than estimates as well.

CPI Rises in June - The Labor Department reported this morning that the Consumer Price Index (CPI) rose a seasonally adjusted 0.7% in June in-line with expectations with gasoline prices the driving force. The core CPI, does not include the highly variable food and energy prices, rose a seasonally adjusted 0.2%. The CPI has fallen 1.4% in the past year, the sharpest decline since January 1950.

Capital One Moves on a Drop in Delinquencies - Capital One reported today that the rate of its accounts 30 days or more delinquent dipped modestly to 4.77% in June from 4.9% in May. This sparked a rally of more than 7% in the stock.

As Inflation Worries Rise, So Does Gold - It was just a few days ago that everyone was talked about deflation, but you get a few economic reports, and now the talk is of inflation. Gold futures rose almost $16 to about $939 after positive comments by Intel and Wednesday's CPI report. Gold is at its highest level in two weeks.

Dollar Falls, Oil Rises - As optimism in the global market and economy improve, the dollar fell (it is seen as a safe haven). The CPI report, a NY manufacturing report that showed an increase, and a good earnings report and projection from Intel have fueled the growing optimism and put a halt to the dollar's rise. Both the euro and the British pound rose against the dollar in today's trades.

Oil meanwhile gains when the dollar falls, so the drop in the dollar and a surprising drop in gasoline inventories helped move crude up. Oil moved back above $60 and was up more than 2% today, but it is still down more than 13% this month.

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