Good morning,
The U.S. markets are lower for the fourth straight days after major companies like IBM, Apple, Catepillar reported disappointing earnings earlier in the week. Also weighing on the markets: A weak purchasing manager report out of China. Who is going to be buying everything we make? Next week, the three horsemen of social media report: Twitter, Facebook, LinkedIn. China shares ended lower Friday but completed the week 3%-6% higher. Meanwhile, President Obama becomes the first U.S. commander in chief to visit Kenya, birthplace of his father.
New homes sales for June 482,000, below expectations. The expectations for the seasonally adjusted annual rate were 550,000. Nonetheless, Bill McBride writes that new home sales — an important engine for economic expansion — are on track to grow at a relatively solid pace. Calculated Risk
NYT edits story on criminal probe into Hillary emails so that she is no longer target. Politico’s Dylan Byers reports that the paper of record, without comment, changed its initial story, which stated that two inspector generals were looking “into whether Hillary Rodham Clinton mishandled sensitive government information on a private email account she used as secretary of state.” The story now says “into whether sensitive government information was mishandled in connection with the personal email account Hillary Rodham Clinton used as secretary of state.” New York Times (paywall)
WSJ says Clinton sent classified emails from her private computer while Secretary of State. The inspector general said in a letter to Congress that Hillary Clinton had sent four emails with “secret information — the second highest classified rating. Wall Street Journal (paywall)
Clinton reportedly plans on doubling capital gains tax. For investments held one to two years the tax rate would go to the normal income-tax rate of 39.6%, nearly twice the capital gains rate of 20%. Wall Street Journal (paywall)
Jeff Bezos is now $7 billion richer. Amazon has rallied 15% after reporting an unexpected profit of $92 million. At $258 billion, Amazon now has a bigger market cap than WalMart and JPMorgan. Google, which reported earnings last week, gained even more when investors bought up shares in the search giant: $60 billion vs $36 billion for Amazon. Bloomberg
Anthem to buy Cigna for $48.4 billion. The deal creates the largest U.S. health insurance company and comes after a year of back and forth. Anthem is paying $188/share, up from $184 offered last month. Bloomberg
Trade front and center for China. After successfully re-inflating a popped bubble, the Chinese government announced that it is now set to take on its embattled trade sector, a timely move given that the nation’s preliminary PMI reading just came in at 48.2 – its lowest level in 15 months. Wall Street Journal (paywall)
Gold gets bloodied to its 5 ½ year low. Support levels for the yellow metal continue to get obliterated as traders send the price of gold down almost 1% to $1,084 – its lowest in 5 ½ years. It is now on track for its worst weekly decline since October 2014. Reuters
Euro sinks after miserable German PMI reading. Germany’s robust manufacturing sector saw its PMI reading unexpectedly drop from 51.9 last month to 51.5 in July. Analysts had expected the reading to come in unchanged, prompting the Euro to fall nearly 0.4%. Financial Times (paywall)
Japan PMI blows away forecasts. While almost every country involved in today’s attack of the PMI’s had a pretty bad day, Japan saw its PMI reading soar to 51.4, its fastest pace in five months and way above analysts’ forecast of 50.5. Financial Times (paywall)
Photo: Mike Mozart