Stock futures slip as ECB excitement dims
The central bank says a report that it plans to cap government bond yields is "misleading." Bundesbank warns of risks from a bond buying program. Lowe's quarterly results disappoint.
By Andrea Tse
Stock futures were largely pulling back Monday as the steadily building enthusiasm over the potential for European Central Bank intervention in the sovereign debt markets took a bit of a hit.
The ECB has called a Der Spiegel report about a plan by the central bank to cap government bond yields in troubled eurozone countries such as Spain and Italy as "misleading."
Also, the Bundesbank threw cold water on anticipation about an ECB bond buying program, saying that it “holds to the opinion that government bond purchases by the Eurosystem are to be seen critically and entail significant stability risks.”
Futures for the Dow Jones Industrial Average ($INDU) were down by 20 points at 13,227. S&P 500 ($INX) futures were down by 1.2 points at 1,414. Futures for the Nasdaq ($COMPX) 100 were up by 2.5 points to 2,778 and paring gains.
Meanwhile, the euro was sliding against the dollar by 0.26% on the quashed excitement.
"The suggestion here is that no major program will be announced any time soon, despite what European Central Bank President Mario Draghi suggested at the European Central Bank policy meeting on August 2," said Christopher Vecchio, currency analyst at DailyFX, about the Bundesbank commentary.
The major U.S. equity averages approached highs for the year Friday and extended gains on signs the U.S. economy is performing better than expected. Last week's rally was also supported by German Chancellor Angela Merkel's backing of European Central Bank President Mario Draghi's plan to do "whatever it takes" to support the euro.
There were no major U.S. economic releases scheduled for Monday.
Events this week include Wednesday's release of the minutes from the July 31 to August 1 Federal Open Market Committee meeting and Thursday's jobless claims data connected to the August employment survey period.
On Wednesday and Thursday existing and new home sales reports will be released and on Friday there will be durable goods orders data.
China's economic calendar will include the HSBC flash manufacturing purchasing managers data, expected on Wednesday. In Europe, German economic growth figures and a meeting in Berlin of Merkel and French President François Hollande to discuss the euro crisis on Thursday is expected, as is Greek Prime Minister Antonis Samaras' meeting with these European leaders later this week.
On the corporate front Monday, home improvement retailer Lowe's (LOW) posted second-quarter earnings of 64 cents a share on revenue of $14.25 billion. Analysts surveyed by Reuters expected a profit of 70 cents a share on revenue of $14.46 billion.
Consumer electronics retailer Best Buy (BBY) has named Hubert Joly, former chief executive of hospitality and restaurant giant Carlson, the new CEO of the struggling company, according the Wall Street Journal.
October crude oil futures were falling 5 cents at $96.27 a barrel and December gold futures were down $2.70 at $1,616.70 an ounce.
The benchmark 10-year Treasury was falling 10/32, pushing the yield up to 1.855%. The greenback was flat, according to the dollar index.
The FTSE in London was down 0.05% and the DAX in Germany was up 0.12%.
The Hong Kong Hang Seng index settled up 0.71% and the Nikkei in Japan closed up 0.86%.
More from TheStreet.com
The current entire Federal Budget today is $3.8 trillion and we're only taxing about $2.6 trillion -- so that, in fact, is all we should have to spend.
To continue to spend above and beyond that is reckless, and not worth another term.
Such crazy thinking!!!
We take a day like today anytime, flat, a bit down; after the last 6 weeks and a horrible economy, we cant complain....You should have seen these scumbags after the close though, not a bunch of happy campers, a big bunch too. We are sure they will come out with swords drawn in the morning....Oh well, we will deal with them tomorrow. One thing is for sure, cheating crooks will never go away.
Also...VF, you can always sell small amounts out of a brokerage account, at a time...That would accomplish your goal.
One big dump of a high flyer, would put you under the gun for the tax burden; Just like income for the year.
So if LOW gains were your entire income, you would find the effective tax rate for 2K and apply that to the whole 10K. If you started with 50K of AGI, you would find the effective tax rate for 52K (50+average gain of 2) and apply it to 60 (50+total gain of 10)
It's clunky, and really needs some polishing before anything else.. but it's a starting point that treats all income basically the same
Seriously, I'm actually surprises.. i though it would open -50 or so and close -80 after last week.
I think capital gains are too low to be honest. Dividends should be taxes at earned income levels, and I personally thing there should be a kick in for SS and Medicare as well for all "unearned" income. Capital gains, I used to think should be normal income as well but I've softened a little on that as a result of some of the discussions here. Being taxed in one shot on 10 years of asset growth seems like it would push many people into marginal tax rates that are too high. I kind of like the idea of averaging out the gain and using the average yearly gain as a basis for determining the tax rate. (10K of growth over 5 years, 2K added to your earned income for the purposes of determining the tax rate to be applied to your entire AGI, followed by credits) I don't have the details worked out to make it into a full proposal, just an idea at this point.
If you're asking for my read of how Europe will impact us, I think it'll be somewhat muted. i don't think we're going to see the kind of contagion that many are fearing because banks with exposure are much better capitalized and can sustain losses without impacting their ability to lend. I see more slow growth unless there's a serious leap in technology.
Amazing maybe the Markets are for real ///////???????
Possible some of that old rich money is finally going back into equities?? I've heard that...
Something going on here...?
Okay I'm following your example now...
I happened to invest in 401s, IRAs then rolled out 401s to rollover IRAs and have a large Roth, I have been contributing to...Or doing IRA-ROTH conversions.
Thus I can pull out of the IRA or rollover; Using Tax amounts that are manageable; Very similar to your example...Of course the ROTH is a totally different animal as far as taxes...
Any out right sales from our brokerage accounts that made decent money should be taxed differently, it also "has the ability" to be written off as a lost..
These different tax advantages or disadvantages are available to all, we probably just consider that the rich have a bigger advantage then others....They DO....And better accountants.
So to reap some of those benefits....Try and follow closely to what the rich do...
Until early this AM or late last night...I expected a pull back.....I'm trying to fill a limit oder on an Oil company, STO....If it looks like I could gain 25-50 cents on the buy, I will change the pricing..
As always I own HD and Lowes, instead of Coventry Health...One of these days I may get lucky too.
I get a kick out of the combining of Healthcare companies,and others with price increases that are not warranted...They are expecting to make a bigger killing, then what they do now...
Non-profit my azz.....I hoping they are all rolled back..?
In a recent post you projected a year end DJ close of 14,000 which I agree with and hope it bears fruition. What troubles me a bit is the 6 months scenario following 2013. I rarely care or make portfolio decisions based on short term emotional or capricious market trends.
It looks pretty certain that regardless of who wins the election, we are due for some hefty tax increases and if they are not applied judiciously we are headed for some deep doodoo. Small investors should not be penalized by increased capital gains tax. Most use it for retirement or seed money for new ventures. And, remember, most of all, that this money has already been taxed once before it was invested.
I see a potentially uncomfortable trend developing for 2013 aside from the European impact. The seedlings of improvement from 2011 & 2012 could be trampled instead of nourished.. Would you care to render an opinion.??
An odd way yes, but exactly what it is and can work in a positive manner for future generations..
Kind of a balance when the younger generation is stymied for spending large sums or are trying to save, for their futures...
We have the last or second back, spending to keep the machines rolling.
And pass on possible leftovers? It helped us...
A somewhat non-vicious circle..?
And there are many,or too many; That cannot take advantage of it...Sometimes by poor planning.
Most all of these tax incentive plans were put in to place to encourage Americans to become a saving Nation....We are or were very poor at putting away for a rainy day..It has gotten better the last few to ten years maybe? Americans have been saving a lot the last 4-5 years.percentage wise.
Of course the original 401s and IRAs were the cats meow, for people that took advantage of them..?
Surprisingly, There were way less then 50% takers,way back; Even with "matching contributions", many shied away.
But as usual....And this is not an issue that I am trying make; It is a major money maker for the Rich, that are in a better position to take advantage of the situation.
First we have to realize who encouraged the Laws or Regulations to be written or passed.??
Maybe there needs to be a limit on Capital Gains of claiming lower tax rates..Then again we go back to limitations or punishing of the rich, as some would surely say..And then I really can't take sides one or the other...
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[BRIEFING.COM] The stock market finished a down week on a cautious note with small caps leading the retreat. The Russell 2000 lost 0.5%, widening its weekly decline to 2.6%, while the S&P 500 shed 0.3%. The benchmark index ended the week lower by 2.7%.
This morning, the market was provided a basis to rebound with the July employment report, which was just right for the policy doves (209K versus Briefing.com consensus 220K). It showed payroll growth that was weaker than expected, ... More
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