Happy Monday. Good Luck out there this week.
Global Spotlight
Whatever Happened to a Quiet August in Europe? Italy’s government is hanging by a thread after the right-wing League party asked for a general election, effectively ditching a coalition with the anti-establishment Five Star Movement party.
Modi Remakes Kashmir. In a historic decision upending seven decades of policy, Indian Prime Minister Narendra Modi’s government stripped Jammu and Kashmir of its autonomous status and split the restive Himalayan state into two territories. It’s probably not a coincidence that New Delhi made the move when Pakistan is in a deep economic crisis and when the International Monetary Fund will be monitoring closely any big budget diversions to boost military spending.
A Glimmer of U.S.-Chinese Security Cooperation? Even as U.S.-China trade tensions are on the rise again, Beijing made a highly conditional but notable statement suggesting that it could cooperate with the United States in securing the Persian Gulf.
Saudi Arabia’s Oil Dilemma. Oil markets had another rough week on fears of a global recession catalyzed by the U.S.-China trade war, with the price of Brent crude oil bottoming out at below $57 per barrel. All eyes are now on Saudi Arabia, for whom there are no good options.
Where Do Venezuelan Sanctions Go From Here? The United States has banned U.S. entities from dealing with the Venezuelan government and its state-owned firms like the national oil company Petroleos de Venezuela. The United States also opened the door to secondary sanctions on foreign companies working with Venezuelan entities on the Treasury Department’s sanctions lists.
Renewing Indonesian Resource Nationalism? Indonesian President Joko “Jokowi” Widodo may reimpose a full ban on the export of unprocessed nickel ore ahead of the current 2022 deadline.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- Second quarter earnings are expected to increase 2.8% from 18Q2. Excluding the energy sector, the earnings growth estimate is 3.5%.
- Of the 450 companies in the S&P 500 that have reported earnings to date for 19Q2, 73.3% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 76%.
- 19Q2 revenue is expected to increase 4.7% from 18Q2. Excluding the energy sector, the growth estimate is 5.2%.
- 56.6% of companies have reported 19Q2 revenue above analyst expectations. This compares to a long-term average of 60% and an average over the past four quarters of 63%.
- For 19Q3, there have been 54 negative EPS preannouncements issued by S&P 500 corporations compared to 19 positive, which results in an N/P ratio of 2.8 for the S&P 500 Index.
- The forward four-quarter (19Q3 –20Q2) P/E ratio for the S&P 500 is 17.1.
- During the week of August. 12, 11 S&P 500 companies are expected to report quarterly earnings.
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