US equities fall
The US market (SPY) fell by 1.25% during the week ending August 7, 2015. The fall was mainly due to lower manufacturing activity, the high trade deficit, and media companies’ weak earnings.
In June, the US trade deficit stood at $43.8 billion, at an annualized rate of 7.10% of the GDP (gross domestic product). The widening was mainly due to a rise in imports led by the strong US dollar. A strong currency is also impacting domestic manufacturing activity. The ISM’s (Institute for Supply Management) PMI (purchasing managers’ index) fell from 53.5 in June to 52.7 in July. It reflected a continuous fall in manufacturing.
In its 2Q15 earnings announcements, Viacom (VIAB) reported a 9% fall in its ad revenue. It missed analysts’ estimate. Walt Disney (DIS) also reported a fall in its revenue with a fall in subscribers at ESPN. 21st Century Fox (FOX) lowered its expectations for its fiscal 2016 full-year profit. Media company stocks fell for the week ending August 7, 2015, due to the growing shift towards web-based streaming services like Apple (AAPL) and Netflix (NFLX).
The stock market performance is a key driver of asset managers’ revenue. Performance flows directly to earnings and share prices. Major asset managers like BlackRock (BLK), State Street (STT), Franklin Resources (BEN), T. Rowe Price (TROW), Morgan Stanley (MS), and Berkshire Hathaway (BRK-B) are affected by US equities’ performance.
US equities fell along with emerging market (EEM) equities, but European equities (EFA) rose during the week ending August 7, 2015.
In the week ending August 7, US equities saw total outflows of $2.4 billion—compared to outflows of $1.9 billion in the previous week.
Coca-Cola (KO) impressed investors with better-than-expected revenue and earnings for the first quarter.
Microsoft (MSFT) announced this month that it had acquired a San Diego startup called Express Logic for an undisclosed amount.
Spirit Airlines is scheduled to report its first-quarter results on April 25. The airline has an impressive record of beating earnings estimates.
On April 23 before the market opened, legacy motorcycle maker Harley-Davidson (HOG) reported its first-quarter earnings results.
Williams Companies (WMB) is scheduled to release its first-quarter earnings on May 1 after the market closes.
McDonald’s (MCD) is set to report its first-quarter earnings before the market opens on April 30.