More Global Growth Fears Put Indices Back in the Red (Tue, Jul 17 2012)

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DJIA -36 S&P 500 -3.7 Nasdaq -6.5

Economic Data

- (RU) Russia Jun Industrial Production Y/Y: 1.9% v 3.6%e

- (US) July Empire Manufacturing: 7.39 v 4.00e

- (US) Jun Advance Retail Sales: -0.5% v +0.2%e; Retail Sales Less Autos: -0.4% v 0.0%e; Retail Sales Ex Auto & Gas: -0.2% v +0.2%e

- (CA) Canada May Int'l Securities Transactions: C$26.1B v C$7.0Be

- (CA) Canada Jun Existing Home Sales M/M: -1.3% v -3.1% prior

- (BE) Belgium May Trade Balance: +€125.6M v -€276.1M prior

- (PL) Poland Jun YTD Budget Level (PLN): -20.9B v -27.0B prior; Budget Performance: 59.8 v 77.1% prior

- (US) May Business Inventories: 0.3% v 0.2%e

- (EU) ECB completed €0.0M in weekly settlements vs. prior €0.0M (nil) in its Govt Bond Buying program (SMP)

- Equity indices swooned at the open this morning in another session of very light volume. Before the open, the advance reading of the June retail sales data saw its third straight monthly decline, for the longest downtrend since 2008. Note however that the July Empire Manufacturing survey was much better than expected. European trading was choppy, and there was some apprehension about the -1.7% decline on the Shanghai Composite, which is now at its lowest levels since early 2009. The IMF published its updates to the April World Economic Outlook report: it maintained its 2012 global GDP outlook at +3.5% but trimmed its 203 outlook slightly to +3.9%. In FX, the greenback eased broadly following the weaker retail data. One dealer pointing out that QE3 chatter always picks up in the wake of weaker US economic data, helping to further weaken the dollar. Most other commodities are flat with Friday levels, with the exception of ag futures, which are pushing out to fresh five-year highs.

- Shares of Citigroup were up more than 3% in the premarket after the bank beat profit expectations in its Q2, however shares were volatile in cash trading, dropping to flat before ticking up again. Note that Citi's profits were down somewhat from the year-ago quarter, and were padded by profits from the sale of a Turkish unit and a big DVA adjustment. Losses at Citi Holdings were higher. CEO Pandit said that business remained resilient despite the volatility in the quarter.

- After several months of rejected approaches, GlaxoSmithKline has finally found the right price point for partner Human Genome Sciences, which has agreed to be acquired for $14.25/shr or a total of $3 billion. This compares with GSK's prior $13/shr offer. The acquisition will secure GSK's rights to recently launched lupus drug Benlysta and full ownership of experimental medicines for diabetes and heart disease.

- Visa, MasterCard and other card issuing firms have agreed to a $7.3B debit card swipe fee settlement with retailers. If approved, the deal would resolve lawsuits filed by retailers in 2005. The card companies and banks would also allow stores to start charging customers extra for using certain credit cards in an effort to steer them toward cheaper forms of payment. Shares of V and MA are up 3% a piece this morning on the news.