Weighed down by energy names, stocks struggled to gain traction today – especially the Dow. Dow components Exxon and Chevron both reported today and the results weren’t pretty. To give you an idea of how far earnings have plunged for oil companies, Chevron earned $13 per share in 2013 – they are now on pace to earn about $3 per share this year. Led by miserable results in the energy sector, revenues are on pace to decline about 3.8% for the S&P this quarter. Earnings fueled by continued financial engineering will still squeak out about a 1% gain, but that is somewhat anemic.
As for stocks, for the day the Dow Jones Industrial Average was down 55 points to close at 17,690. The S&P 500 was down 4 points to finish the day at 2103. Gold was up $5 to trade at $1094 per ounce, while oil was down $1.74 to trade at $46.78 per barrel WTI.
As we end the month of July, once again we find ourselves right back to where we started the year. The Dow is down slightly while the S&P is up slightly. The 10 year Treasury note opened the year at a yield of 2.17% and ends July at a yield of 2.19% (after having been as low this year as 1.60% and as high as 2.50%).
Next week we get the all-important job information, which will be a factor in the Fed’s rate hike schedule. Today’s employment cost index surprisingly only rose slightly and was the lowest result in 33 years for that report. In other words the Fed has the employment picture on the plus side of the ledger, but the inflation picture is troublesome (lack of inflation, of course). We’ll be watching the average hourly wage number in next Friday’s government jobs report very closely.
Well, that’s enough for today. Have a great weekend everyone.