Recap 2014-07-21


Interesting article on the EU Commission selection process:

Subprime Auto Loans: Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime

My take – subprime loans in sectors other than housing (esp auto & student loans) is one way credit markets are beginning to under price risk in this cycle. As an anecdotal observation, it probably is suggestive of the state of credit markets in general.


  • JPM: The Q2 earnings season is shaping up to be a strong one. It is still very early as only ~80 companies in the SPX have posted numbers but so far 77% are beating on EPS (by an average 7%) and ~70% are topping sales forecasts (by an average 1.6%). EPS is on pace to increase nearly 10% Y/Y in Q2 (based on those who have reported combined w/forecasts for the remaining companies) and sales are tracking up ~4% (all those numbers are from Bloomberg). The revenue upside is what distinguishes this earnings season from ones in the recent past – EPS beats have been routine for a while now (thanks to aggressive cost containment and share shrinkage) but sales (so far in Q2) are finally beginning to exceed forecasts too (even perianal revenue underperformers, such as IBM, are coming in better for the June-end period).


  • Tue: US CPI, FHFA House Prices, Existing home Sales, AU CPI
  • Wed: BoE Minutes, EU Consumer Confidence, RBNZ, NZ Trade Balance, Japan Trade Balance, PMI, China HSBC Mfg PMI
  • Thu: EU PMI, UK Retail Sales, Italy Consumer Confidence, US Jobless Claims, US Markit Mfg PMI, New Home Sales, Japan CPI, NZ Business Confidence
  • Fri: GfK Consumer Confidence, IFO, Turkey Trade Balance, US DGO

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