All eyes on Europe as Portugal fail to organise bailout European shares are set to open mixed on Monday with Euro zone member Portugal failing to come to an agreement over the future of future of the country’s bailout on the weekend. The Portuguese government was expected to find a way to make the bailout terms work but were unable to come to a final decision on the best way forward. Original plans have Portugal exiting the international bailout program in 2014 but this could now be in doubt as a political impasse appears over remaining spending required by the bailout. Talks between the two ruling coalition parties and the opposition collapsed on Friday and now the spending cuts required of 4.7 billion Euros to keep the countries 78 billion euro bailout program on track until mid-2014 is in serious doubt. It is now increasingly likely that a second bailout program for Portugal may be needed. Key assets to look out for on Monday will be the EUR/USD and the European indices such as the German DAX and the French CAC. S&P 500 joins the Dow in fresh highs and 4 straight weekly rally Stocks were left quite unchanged on Friday as trading took a relatively lacklustre turn. The S&P 500 managed to squeeze out a small gain at another record high however with the very disappointing results from tech giants Google and Microsoft, overall shares weren’t able to rally as much. At least eight brokerages slashed their price targets for Google while seven did the same for Microsoft. The NASDAQ was the only major index not able to find gains due to the poor tech sector earnings. Nonetheless, both the Dow and S&P 500 have continued to log their fourth straight week higher as investors are confident positivity will continue. So far, 20% of the S&P 500 companies have reported their earnings for the second quarter and 65% of these have reported earnings which have beaten expectations. If all the remaining companies report earnings in line with expectations we would find earnings up 3% from Q2 in 2012. The US is now again seen as a source of strength in the world economy only five years after it was the centre of a global crisis. This was done with good use of government structure and federal policies to improve the market place. All eyes will now continue to fall on the impact the current improvements in the US market and how soon the Federal reserve may act on tapering down the current QE program. Netflix and McDonalds are set to release much anticipated Q2 earnings A strong day of earnings results is expected on Monday as both Netflix and fast food giant McDonalds are set to release their earnings and revenue projections for the second quarter. McDonalds is poised to release their figures before the market opens while we won’t see what the final result for Netflix is until after the close of the US trading session. McDonalds has historically been a poor performer around earnings as it has shown to lose ground in the three days surrounding earnings five of the last six quarters. Analysts are expecting an earnings consensus of $1.40 per share. A strong figure above $1.40 could result in a jump for the share price and a pleasant move to the McDonalds shareholders. After the closing bell, we will expect Netflix to release their second quarter earnings. Current expectations are sitting at $0.41 per share. There are whispers surrounding the market that profits will beat this figure and come out at $0.49 EPS If this was to occur, Tuesday could see a push in Netflix share prices and today would be a good time look at possible long positions on the entertainment company.
Posted on: Tue, 23 Jul 2013 11:05:17 +0000
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