Good Housing and CPI Data Fuel Risk Appetite

Economic Data

- (UK) July CBI Industrial Trends Total Orders: 2 v 8e; Selling Prices: -4 v +4e; Business Optimism: 19 v 30e
- (US) ICSC Chain Store Sales w/e July 18th: w/w -0.4%; y/y: +2.8% - 08:00 (BR) Brazil July IBGE Inflation IPCA-15 M/M: 0.2% v 0.2%e; Y/Y: 6.5% v 6.6%e
- (HU) Hungary Central Bank (NBH) cuts Base Rate by 20bps to 2.10%; more than expected
- (US) Jun CPI M/M: 0.3% v 0.3%e; Y/Y: 2.1% v 2.1%e
- (US) Jun CPI Ex Food and Energy M/M: 0.1% v 0.2%e; Y/Y: 1.9% v 2.0%e
- (US) Jun CPI NSA: 238.343 v 238.535e; CPI Core Index SA: 238.083238.227e
- (US) Redbook Retail Sales w/e July 18th: +3.7% y/y, July MTD: -0.3% m/m; July MTD: +3.9% y/y
- (US) May FHFA House Price Index M/M: 0.4% v 0.2%e
- (MX) Mexico May Retail Sales Y/Y: 1.6% v 1.0%e
- (US) July Richmond Fed Manufacturing Index: 7 v 5e
- (US) Jun Existing Home Sales: 5.04M v 4.99Me

- Tame inflation and very good June housing data has added to the strong momentum seen in European trading, sending the S&P500 to within points of all-time highs this morning. As of writing, the DJIA is up 0.43%, the S&P500 is up 0.53% and the Nasdaq is up 0.87%.

- Inflation is still not showing up to the party, according to the June CPI data out this morning. The increase in the headline CPI index was mild enough to keep the y/y growth rate unchanged at 2.1%, while the y/y growth rate of the core fell to 1.9%. Food prices decelerated faster than expected, turning in a flat performance in June after four months of growth. Energy prices were up less than expected. After tumbling in Asia and European trading, the euro fell further this morning, with EUR/USD taking out the January low of 1.3477 to touch 1.3460.

- The June existing home numbers were pretty strong and the may figure was revised slightly higher. According to the NAR, inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country, which bodes well for rising home sales in the upcoming months. Skeptics note that home sales were still down 2.3% y/y.

- A broad spectrum of healthcare names were hit mid-morning after a federal appeals court overturned a lower court ruling that allowed Obamacare subsidy payments. The ruling voids the regulations that allow subsidies for insurance that is purchased through federal exchanges. The ruling impacts 5.5M people who received those subsidies.

- Pershing Square's Bill Ackman continues to present data he claims will further undermine Herbalife's business model. Ackman has presented Herbalife internal documents that refer to low income people in developing countries as BOPs, or 'bottom of the pyramid' agents, asserting that the documents show the company deliberately targets lower income people and certain ethnic groups to expand their sales.

- Shares of Netflix fell more than 4% in the pre-market despite the firm's doubling its earnings and surpassing 50 million subscribers in Q2. Shares of Verizon are still practically flat after the firm met expectations in its Q2, nearly doubled net income and expanded net wireless additions. Note that Apple reports Q3 earnings after the close. This morning there were press reports that Apple is asking manufacturers to build 70-80 million iPhone 6s (of both screen sizes), much larger than the initial iPhone 5 order last year.

- McDonalds offered pretty weak results in its second quarter results: both earnings and revenue missed expectations, on very slight y/y growth, flat global sales comps and a 1.5% contraction in comps in the US. July global comparable sales are expected to be negative. MCD dropped more than 2.5% in the premarket but shares have recovered in the early going. Coca Cola's revenues came in a bit shy of estimates, and both revenue and earnings slid lower on a y/y basis.

Looking Ahead

- 11:30 (US) Treasury to sell 4-Week and 52-Week Bills
- 16:30 (US) Weekly API Oil Inventories
- 17:00 (CO) Colombia May Trade Balance: $411.4Me v -$905.6M prior; Total Imports: $5.3Be v $5.5B prior
- 17:00 (KR) South Korea Q2 FDI: No est v 49.1% prior
- 21:30 (AU) Australia Q2 CPI Q/Q: 0.5%e v 0.6% prior; Y/Y: 3.0%e v 2.9% prior
- (AR) Argentina July Consumer Confidence Index: No est v 41.9 prior
- (MX) Mexico Banamex Survey of Economists