PennyMac Mortgages Sink, Bull Frenzy, Treasuries Strong

Another round of positive earning reports combined with a strong 7 year Treasury auction sent stocks surging higher. The trust designed to consolidate the bad home loans, PennyMac, cut its initial public offering size by 20% and shares sunk on the first day of trading. Despite this ominous signal, the S&P 500 hit the highest level since last November on a bull frenzy. The DJIA climbed +83.74 to 9154.46 after trading much higher intraday, the Nasdaq added +16.54 to 1984.30 and the S&P 500 surged +11.60 to 986.75.

American Superconductor
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– Reported its first profit in 18 years sending shares soaring 21,35% or $5.60 to $32.03.

Avon
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– Beat analysts estimates by 17% triggering shares to climb by 8.41% or $2.50 to $32.25.

General Electric
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– Was upgraded to a buy at Goldman Sachs shares reacted by adding 6.93% or 85 cents to $13.11/share.

Symantec
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– Did not participate in the rally after forecasting sales missing analyst’s estimates. Shares dropped 14.27% or $2.46 to $14.78.

Gold climbed $7.60 to $937.30, oil advanced $3.59 to $66.56 and the VIX index fell 82% to 25.40.

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Market Snapshot

Dow

+83.74 9154.46

NASDAQ

+16.54 1984.30

S&P 500

+11.60 986.75

Economic
News

New Home Sales (Jun): Consensus: 352K, Prior: 342K

Consumer Confidence (Jul): Consensus: 48.7, Prior: 49.3

S&P/Case-Shiller Home Price Index (May): Consensus: -17.80%, Prior: -18.12%

Durable Orders (Jun): Consensus: -0.5%, Prior: 1.8%

Durables, Ex Transportation (Jun): Consensus: 0.1%, Prior: 1.1%

Crude Inventories (07/24): Consensus: NA, Prior: -1.80M

Fed’s Beige Book: Consensus: NA, Prior: NA

Initial Claims (07/25): Consensus: 585K, Prior: 554K

GDP-Adv. (Q2): Consensus: -1.5%, Prior: -5.5%

Core PCE (Q2): Consensus: 2.4%, Prior: 1.6%

Chain Deflator-Adv. (Q2): Consensus: 1.0%, Prior: 2.8%

Employment Cost Index (Q2): Consensus: 0.3%, Prior: 0.3%

Chicago PMI (Jul): Consensus: 42.0, Prior: 39.9