By James Langton
(July 18 – 09:00 ET) – The U.S. Consumer Price Index for June was higher than expected, up 0.6% on the headline compared to expectations of 0.5%. The core rate (ex food and energy) was up 0.2%, above expected rates of 0.1%. The number was pretty close to targets so market reaction has been muted, but it does confirm both continued inflation and the primacy of energy prices in encouraging inflation.
There are no major economic releases due out in Canada today.
Markets were mixed overseas. In London the FTSE is down 25 points to 6,499. France’s CAC 40 is off 58 to 6,561, and Germany’s DAX is up two points to 7,432. Markets are depressed on expectations of coming rate hikes there after the Eurozone CPI was reported up 0.5% in June.
Earnings season is in full swing today. So far Merrill Lynch & Co. is reporting second-quarter earnings up 34% and a two-for-one stock split. General Motors has also reported strong earnings, as has Continental Airlines. Later today Broadcom, Microsoft and Dow components Coca-Cola and Honeywell will also report.
OPEC is increasing production by another 500,000 barrels a day, knocking prices down.
In Asia stocks were down, too. The Nikkei dropped 341 points to close at 16,945. The Hang Seng closed down 394 points to 17,440.
In other earnings news, paper giant Weyerhaeuser today reported net earnings for the second quarter up 24%, or 89¢ per share from 82¢ for the same period last year. AEterna Labs meanwhile is reporting a consolidated net loss of 7¢ per share, up from last year’s 8¢ net loss.
Networking company 360networks Inc says it will spend US$800 million in a joint venture with a subsidiary of Singapore Telecommunications Ltd to develop a diversified Asia-Pacific network.