Summary for the 16th of July


Citigroup’s released earning report didn’t show anything out of the expectations. It had left the guidance for growth in net interest revenue unchanged at 4%, even with high probability of interest rate cut from the Fed. Citi had expected only one interest rate cut from the Central Bank, if there should be more than one rate cut this year, the growth guidance in net interest revenue would be quite affected.

The financial markets are expecting weak company earnings from the past quarter, some are expecting earning recessions, classified by two quarters of weak company earnings. All of these should already have been priced in by the markets.

Easy access to liquidity and with low yields had made it easier for Greece to return to the financial markets. It had in March auctioned and agreed to sell 2.5 billion euros of 10 years bonds with a yield of 3.9%.  This was the second  auction this year after the bailout from the EU. At the auction prior March, it offered for sale 5 years bonds for a yield of 3.45%. Consider how Greece economy had been for a couple of years ago, the auctions should be seen as positive. The country is now planning to hold a new auction, this time it is planning to sell 1 billon euro worth of 7 years bonds.

NY Empire State Manufacturing released yesterday was the first activity index released for July. Last month, the index fell to the lowest level in 3 years. For July, the index increased more than expected and indicated a stabilized outlook for the manufacturing sector on the east coast of the US.

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