The S&P 500 has edged down over the past two days, but the loss has been slight enough that this morning’s pre-session trading is looking to erase the 0.72% loss with a 0.8% gain.
The expected climb at the opening is due to positive earnings reports this morning.
Motorola cut production costs and shipped more phones than expected, allowing the company to record a profit of $26 million, or 1 cent per share, compared with a loss of $231 million, or 10 cents per share, in Q2 2008.
Travelers Companies, the insurance company, said net income fell 21% in the quarter, but that too was better than forecasts. Earnings per shares were $1.27, two cents higher than the market forecast.
Aside from several Treasury auctions, the only macroeconomic news today is the weekly jobless claims report to be released at 8:30. But investors will also be trading in anticipation of tomorrow’s first official estimate for second-quarter GDP, which has forecasters posting pins all over the map. The median is for GDP to drop 0.7%, but the range is wide, from -2.8% to +1.0%.
Also in the news: RealtyTrac has issued a report ranking cities with the highest number of foreclosures. Twenty-nine of the top 30 come from four states ― California, Florida, Arizona, and Nevada. The good news is that some of the worst areas are finally seeing some improvement in the first half of 2009.
"There are some significant differences beginning to show up in the data," said James Saccacio, CEO of RealtyTrac.. "Some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates."
Key Releases Today:
8:30 — Initial filings for Jobless Claims have come in below 600k for the past three weeks, but in last week’s report first-time claimants rose by 30k to 554k, and in the week ending July 25 analysts believe that figure will rise again, to 585k. Seasonal adjustment issues have distorted the data in recent weeks and analysts have had mixed reactions to the apparent downward trend, but data should be more in line with reality this week so the report could get some extra attention.
Some forecasters are optimistic that the recent downward trend but has been genuine.
“Since April there has been a clear downtrend in jobless claims, as measured by the 4-week moving average,” note economists from Deutsche Bank. “After peaking at 659k for the week ending April 3, claims have declined over 90k to 566k. Historically, when claims have declined by this much on a 4-week moving average basis, it has always represented a shift in trend.”
Others expect seasonal issues to work in the other direction.
“Claims should rebound further to about 600k from 554k as the seasonal problems caused by the auto retooling shutdowns fade,” said Ian Shepherdson from HFE. “The underlying trend, which should re-emerge over the next few weeks, is flat-to-slightly-downwards.”