Trader commentary is a bit incredulous this morning over what is going on in Germany. For example, the restrictions on naked short selling of CDS has no teeth because most CDS is traded out of London, and Germany has no jurisdiction there. Even the French aren't going along with this.
The risk trade currencies crosses — euro/yen and the Australian dollar/US dollar — are lower again today. Commodities down, platinum and palladium down 4 and 7 percent respectively, gold and gold stocks also trading down.
1) CPI was weaker than expected, so inflation is certainly not an issue yet.
2) home builders are weaker as the MBA said purchases dropped 27.1 percent last week to the lowest level since 1997. The end of the home buyer tax credit is clearly having an impact.
3) Target rises 2 percent after reporting its Q1 earnings exceeded Street estimates ($0.90 vs. $0.86 consensus). Same-store sales rose 2.8 percent as demand for apparel and other "higher-margin discretionary items" was high. Earnings were also boosted by strong performance at its credit card unit, as bad dept expense dropped 33 percent from the year-ago period.
4) Deere is up 2 percent after Q2 earnings far exceeded analyst estimates ($1.58 vs. $1.09 consensus). Boosted by stronger demand and higher prices for their farm equipment, equipment sales rose 6 percent in the quarter and are expected to rise even more for the year. The company significantly raised its full-year growth forecast for equipment sales to up 11 percent-13 percent.
5) Chico's falls 5 percent as Q1 earnings were inline with estimates. Sales at both its namesake and White House | Black Market stores were strong as the retailer's comps rose a greater-than-expected 15 percent. Meanwhile sales from its catalogue and website soared 31 percent in the quarter.
6) Hewlett-Packard is up 3 percent as Q2 earnings beat estimates ($1.09 vs. $1.05 consensus), helped by strong sales at its computer and enterprise storage divisions. Computer shipments rose 21 percent.
Overseas revenues now make up two-thirds of total sales, with emerging markets showing enormous growth (sales in BRIC nations soared 25 percent).
The tech giant also raised guidance for the full year to levels above Street expectations ($4.45-$4.50 vs. $4.45 consensus).
7) H&R Block announced it is cutting 400 jobs (nearly 5 percent of workforce) and closing 400 tax offices nationwide. The reductions will help the firm save $140-$150 annually. The tax preparation firm has seen few tax returns at its offices this year as a result of customers choosing to prepare their returns via less expensive tax software or tax preparation websites.
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