Bob Pisani is off; this post was written by CNBC producer Robert Hum.
Down, But Not Out
The Dow is down less than 100 points — not bad, given the number of top line misses and poor housing starts data Tuesday morning. Remember, with the largest weighting in the Dow, IBM alone is contributing almost half of the blue chips losses (over 40 Dow points).
Homebuilders are also up 1 percent to 2 percent despite the miserable June Housing Starts number. Giving some hope to builders – the higher permits number, which indicates construction activity could rise later this summer.
An Early Trend This Earnings Season
As economists and traders continue to debate the state of the U.S. economy and whether a double dip can be avoided, one trend has become clearly evident early during this earnings season.
Growth overseas — particularly in Asia and Latin America — is outshining performance at home in the U.S.
Take a look at various metrics from a handful of corporate earnings reports over the past 24 hours:
1) Pepsi volumes
- U.S. beverage volumes down 1 percent (excluding recently-signed Dr. Pepper Snapple distribution agreement)
- Asia beverage volumes up high-single digits
- U.S. snack volumes decline (Frito Lay down 3 percent, Quaker down 2 percent)
- Latin America food volumes up 2 percent
- Asia snack volumes up at a “mid-teens rate”
2) Johnson & Johnson (JNJ) sales
- U.S. down 2.8%
- International: up 3.0% (excluding currency impact)
- Consumer sales: down 14.3 percent in U.S., up 1.8 percent overseas
- Pharmaceutical sales: down 2 percent in U.S., up 5.0 percent internationally
3) IBM revenues (excluding currency impact)
- Americas up 2 percent
- Asia up 3 percent
- BRIC (Brazil, Russia, India, China) countries up 15 percent
4) Tupperware sales (Tupperware segment, excluding currency impact)
- U.S up 3 percent
- Asia up 9 percent
- Mexico up 15 percent
- Emerging markets up 34 percent
5) Whirlpool sales (excluding currency impact)
- North America up 4 percent
- Latin America up 13 percent
- Asia up 34 percent
Furthermore, Whirlpool forecasts stronger overseas industry growth overseas this year compared to growth in the U.S. According to the appliance maker, 2010 industry shipments are expected to rise just 5 percent in North America compared to a higher 5 percent to 10 percent in Asia and 10 percent in Latin America.
Even industrial product manufacturer Illinois Tool Works noted, “international end markets showed no discernable signs of slowing as the second quarter progressed.” Over half of Illinois Tool Works’ revenues come from overseas.
So what have the overriding concerns of slowing U.S. growth meant to the markets over past quarter? The U.S.-centric Russell 2000 has far underperformed indices overseas, particularly in Asia and Latin America:
Last 3 Months:
Russell 2000 down 16 percent
MSCI Emerging Markets down 8 percent
Brazil down 8 percent
Hong Kong down 6 percent
Mexico down 5 percent
Singapore down 1 percent
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