>>> BPost may launch another bid to acquire PostNL (+0.32%)

BPost may launch another bid to acquire PostNL

BPost, the Belgian postal service, may launch another bid to acquire its Dutch competitor PostNL, Dutch-language Het Financieele Dagblad reported, citing analyst Marc Zwartsenburg of ING Bank.

According to Zwartsenburg, the strategic reasons for a deal remain the same, while there would be more clarity on several key issues in about 6 months to a year from now, he said in the report.

However, not all analysts agree. Marcel Achterberg of Degroof Petercam considers a second attempt at a deal unlikely, the item added, especially as politicians in Belgium are less likely to favor a deal.

A key uncertainty is Dutch market regulator ACM's investigation into the package delivery market, with a ruling expected this year, the report noted.

PostNL's current share price stands at EUR 3.45 per share, significantly below the EUR 5 to EUR 6 per share Bpost was reported to be willing to pay for a deal, the item added. This share price seems to indicate shareholders don't expected a renewed takeover attempt, the report noted.

Het Financieele Dagblad

(BofA-ML) Flow Show : Still outflow from Europe & US (equity)

>>> Asset Class Flows
- Equities: $4.6bn outflows (3 straight weeks) (note divergence between $2.1bn ETF inflows & $6.8bn mutual fund outflows)
- Bonds: big $10.2bn inflows (largest since Feb’15) (inflows in 16 of past 18 weeks)
- Precious metals: $1.8bn inflows (inflows in 9 of past 10 weeks)

>>> Equity Flows
- Europe: $3.9bn outflows (26 straight weeks of outflows)
- EM: $1.4bn inflows (5 straight weeks = longest inflow streak since Sep’14)
- US: $3.0bn outflows (3 straight weeks)
- Japan: $0.1bn inflows
- By sector: largest inflows to REITs in 8 weeks ($0.7bn) (5 straight weeks)

>>> Fixed Income Flows
- $2.2bn inflows to EM debt funds ($16.6bn inflows past 5 weeks = largest on record)
- Chunky $3.3bn outflows from HY bond funds (first outflows in 5 weeks)
- $9.2bn inflows to IG bond funds (largest since Oct’14) (inflows in 21 of past 22 weeks)
- 46 straight weeks of inflows to Munis ($1.0bn)
- Largest inflows to TIPS in 13 weeks ($0.4bn) (8 straight weeks)
- Small $0.1bn outflows from Govt/Treasury funds (4 straight weeks)

(UBS) UK Real Estate - Ugly headlines coming

UK Real Estate - Ugly headlines coming

Potential 4% monthly decline in UK property "worst since December 2008"
We've spoken to a number of valuers and UK REITs and believe the upcoming IPD (commercial property
index) release could show a c.4% decline in property values at the 'All Property' level in July. This is likely
to be heaviest in City offices (-6%?), and lightest in Industrial. If correct, this would make it the worst
monthly decline since December 2008, leaving the sector vulnerable to sensationalist headlines. This
could start as early as this Monday (8th Aug) as we understand CBRE will release its own index
information to the press then.
We've got 15% falls in our numbers – more than enough
In our 8 July note Pricing in a severe downturn, we pencilled in 15% declines to UK asset values over the
coming 12 months, but thought the market was pricing in c.30% falls, hence we saw value. Sentiment
has improved since then, and our 15% decline now looks 'more than enough', but it is still too early to
tell. We estimate that the large UK REITs trade at levels that imply a 16% fall in values (GAV discount of
16%), hence our bias remains positive, but we continue to expect volatility to come.
Why -4% and why it's not the start of a trend?
The July index will include the impact of the retail funds selling into a weak market. While transactional
evidence remains thin, a number of deals have cleared at discounts, including Aberdeen's sale of 10
Hammersmith Grove, reportedly 11% below asking. Subsequently, selling pressure across the retail
funds has abated as outflows have stemmed and downward value adjustments have been narrowed.
Hence, the magnitude in July is likely a one-off, although values could continue drifting down.
Roadmap for coming months: September will be key
The CBRE index will be published this Tuesday (9 Aug), but the information will likely be released to the
press on Monday. The IPD index will then follow on Friday 12 Aug (3pm). We anticipate the following
release (for August) will be relatively benign, given the summer holiday slowdown. However, a number
of property deals are being readied for September, which could prove a busy and decisive month, so may
be the best gauge of the new 'clearing price'. We therefore expect news flow in September, and the
September index releases (e.g. IPD on 17 October) to be of increased importance.

>>> What to look at today - 5th of August 2016

Dow-0.02% S&P+0.02% Nasdaq+0.13% Russell+0.09%
US Market continue to trade in a sleepy & Narrow mood, Even BOW news was not able to generate some action. In the past, such a healthy dose of policy stimulus would have stimulated a much more enthusiastic response in the stock market. That didn't happen this time, however. The market's sluggish behavior was held out as a possible indication that market participants believe monetary policy actions are no longer effective. the British pound dropped nearly 2.0% against the dollar to 1.3130 and sovereign bond markets rallied in the wake of the decision, generating an added thought that the Federal Reserve seems likely to refrain from raising its key policy rate at all this year. NFP today is on Focus now...but little hope of action persist regarding level of the volatility (12.42). WTI crude finished its day higher by 2.7% ($41.93/bbl; +$1.11), erasing its weekly loss. six sectors finished in the red. The financial sector (-0.3%) finished behind health care (-0.2%) and energy (-0.2%). Conversely, technology (+0.4%) finished in-line with materials (+0.4%) and ahead of consumer staples (+0.2%) at the front of the pack. Volume were slightly below recent days @ 796mil shares. US After Hours LGF +6.4%, PCLN +5.7%, UBNT +5.5%, MDRX +5.1% on earnings/guidance, RAX +17.6% on PE speculation... HDP -26.2%, FEYE -16.2%, FLR -7.9%, ZG -4.6% on earnings/guidance. Asian equity markets are marginally higher once again with the exception of Shanghai Composite. Investors have taken a rich serving of stimulus from the BOE in stride, Recall the latest ADP and Online job ads data for July have tipped a second straight month of solid growth after the May disappointment, though the former ADP did not anticipate that swoon with a false positive. In China, People's Daily reported that the progress of steel capacity reduction is unsatisfactory, but the coal reduction has been achieved. In the credit space, regulators are close to a launch of CDS products, even as a separate press source reported earlier this week that state banks are encouraged to roll over debt obligations. Trade and Industry (METI) warned that stronger JPY may force companies to revise their CAPEX plans - recall the latest Q2 Tankan survey showed a better than expected Industry Capex forecast of 6.2%. A Nikkei report noted the recent bond market volatility shows investors concerned that the BOJ may scale back its ¥80T QE program, and one of the options could be widening a range of target monetary base expansion from ¥80T to ¥70-90T, allowing more aggressive QE in the short run to be followed by a taper.

Nikkei +0.03% Hang Seng +1.40% CSI +0.45% Shanghai +0.12%

Eur$ 1.1141 CNH 6.6525 CNY 6.6453 JPY 101.04 GBP 1.3130 CHF 0.9735 RUB 65.8895 WTI $41.55 (-0.91%)

S&P +0.12% EuroStoxx +0.38% Dax +0.28% SMI +0.23%

Macro :
- Carney Scorns Negative Rate Path Trodden Across World Economy

Keep an eye on :
- AIR FP : Poland May Cancel Airbus Chopper Order on Offset: Nasz Dziennik
- ALV GY : Allianz 2Q Net Halves, Misses Estimate; On Track for 2016 Target Allianz 2Q P&C Combined Ratio, Group Combined Ratio Rise
- ANDR AV : Andritz 2Q Ebita Declines, Still Sees Solid Profitability
- BAYN GY : Bayer Said to Review Monsanto Accounts, May Raise Bid (MON +1.97% yest)
- BMRN US : BioMarin Says Vimizim Growth Driven by Greater Patient Uptake
- BPE IM : Pop. Emilia Capital Generation Strong, Raised to Buy at Citi
- BPM IM : BPM CEO Says Merger Plan Fine After Stress Tests: Radiocor
- BOSS GY : Hugo Boss Cuts 2016 Sales, Ebitda Before Special Items Forecast, to Close About 20 Stores; 2Q Adj. Ebitda Beats
- EBS AV : Erste Bank Confirms 2Q Net More Than Doubled; CET1 Ratio Rises
- EVK GY : Evonik 2Q Adj. Ebitda Beats; Specifies 2016 Adj. Ebitda Outlook
- FAGR BB : Fagron Unit Probed in U.S. in Fraud Case, Dutch Paper FD Reports
- GAM SW : GAM Isn’t Ruling Out Further Acquisitions, CEO Tells NZZ
- GVNV NA : GrandVision 2Q Rev. up 4.8%, Comparable Growth Accelerates in 2Q
- HSBA LN : HSBC Bought Back 2m Shares on Aug. 4
- LHN VX : Lafargeholcim 2Q Operating Ebitda Beats; Confirms 2016 Outlook
- NOVO DC : Novo Nordisk 2Q Ebit Slightly Misses; Adjusts 2016 Outlook, CEO Says US Mkt Environment Increasingly Challenging
- POP IM : Pop. Emilia 2Q Net EU33.8m vs Est. EU42m; FL CET1 Ratio 14.1%
- ROG VX : French Health Authorities Limit Use of Roche’s Avastin: Echos
- SFR FP : SFR Job Cuts to Require EU600m-EU800m in Provisions: Les Echos
- SIE GY : Siemens CEO Kaeser May Get Contract Extension, Handelsblatt Says
- SMHN GY : Suess Microtec 2Q Sales Rise 47%, Posts LPS Loss; Keeps Goals
- VED LN : Vedanta May Raise Offer for Govt Stake in Hindustan Zinc: CNBC
- YNAP IM : Yoox Net-A-Porter 1H Ebitda Beats, Sees FY Margin Improvement

>>> Europe : Brokers Upgrade & Downgrades - 5th of August 2016

>>> Up
*ACXIOM RAISED TO OUTPERFORM AT BMO CAPITAL MARKETS
*HANNOVER RE RAISED TO NEUTRAL VS UNDERPERFORM AT MACQUARIE
*NEXANS RAISED TO NEUTRAL AT JPMORGAN
*POP. EMILIA RAISED TO BUY VS NEUTRAL AT CITI
*PRYSMIAN SPA RAISED TO OVERWEIGHT AT JPMORGAN
*SALZGITTER RAISED TO BUY VS HOLD AT BANKHAUS LAMPE
*TPG SPECIALTY LENDING RAISED TO MKT OUTPERFORM AT JMP SECS

>>> Down
*ARC LOGISTICS PARTNERS CUT TO HOLD AT STIFEL
*BEIERSDORF RAISED TO BUY AT SOCGEN
*CAIRN ENERGY RAISED TO BUY VS NEUTRAL AT UBS
*CASINO CUT TO UNDERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*KLOECKNER CUT TO HOLD VS BUY AT BANKHAUS LAMPE
*MIGROS CUT TO HOLD AT HSBC
*PFEIFFER VACUUM CUT TO HOLD AT HSBC
*RECORDATI CUT TO HOLD AT JEFFERIES
*RHEINMETALL CUT TO HOLD AT COMMERZBANK
*TF1 CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*TRANSOCEAN RAISED TO HOLD AT ARCTIC SECURITIES

>>> PT Change


>>> Initiation
*ASOS REINSTATED BUY AT BOFAML
*DIXONS CARPHONE REINSTATED UNDERPERFORM AT BOFAML
*DRILLISCH RATED NEW ’NEUTRAL’ AT MAIN FIRST BANK AG
*HENNES & MAURITZ REINSTATED BUY AT BOFAML
*HAPAG-LLOYD RESUMED AT BUY AT BERENBERG; PT EU26 VS EU31
*YOOX NET-A-PORTER REINSTATED BUY AT BOFAML

>>> Call
>> Stock
*STATOIL REMOVED FROM CONVICTION SELL AT GOLDMAN; STILL SELL
>> Index
*S&P 500 END-2016 TARGET RAISED TO 2,250 AT CREDIT SUISSE
*S&P 500 MID-2017 TARGET SET AT 2,300 AT CREDIT SUISSE
*EURO STOXX 50 END-2016 TARGET RAISED TO 3,100 AT CREDIT SUISSE
*EURO STOXX MID-2017 TARGET SET AT 3,200 AT CREDIT SUISSE

>>> Asian Update

Asian Mid-session Market Update: RBA quarterly statement (SOMP) maintains GDP/CPI forecasts despite uncertainty in labor and transition away from mining; Markets await US payrolls


***Economic Data***
- (JP) JAPAN MAY LABOR CASH EARNINGS Y/Y: 1.3% V 0.3%E (3-month high); REAL EARNINGS (EX-INFLATION) Y/Y: 1.8% V 0.4% PRIOR
- (JP) JAPAN JULY OFFICIAL RESERVE ASSETS: $1.27T v $1.27T PRIOR
- (AU) AUSTRALIA JULY AIG PERFORMANCE OF CONSTRUCTION INDEX: 51.6 V 53.2 PRIOR; 2nd month of expansion
- (PH) PHILIPPINES JULY CPI M/M: 0.1% V 0.3%E; Y/Y: 1.9% V 2.1%E; CPI CORE Y/Y: 1.9% V 2.1%E
- (TW) TAIWAN JULY CPI Y/Y: 1.2% V 1.0%E; WPI Y/Y: -2.4% V -2.2%E

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.3%, S&P/ASX +0.4%, Kospi +0.7%, Shanghai Composite -0.1%, Hang Seng +1.3%, Sep S&P500 +0.2% at 2,162

***Commodities/Fixed Income***
- Dec gold flat at $1,367/oz, Sep crude oil -0.7% at $41.63/brl, Sep copper flat at $2.17/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 3.3 tonnes to 973.2 tonnes; highest since July 11th
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.6406 V 6.6444 PRIOR
- (CN) PBOC to inject CNY90B in 7-day reverse repos; For the week drained CNY162B v injected CNY325B w/w
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, ¥430B in 5-10yr JGBs, and ¥1.5T in T-bills
- (AU) Australia MoF (AOFM) sells A$1.0B in 5.75% 2022 Bonds; avg yield: 1.6368%; bid-to-cover: 2.37x

***Market Focal Points/FX***
- Asian equity markets are marginally higher once again with the exception of Shanghai Composite. Investors have taken a rich serving of stimulus from the BOE in stride and now await the critical non-farm payrolls report in the US on Friday. Recall the latest ADP and Online job ads data for July have tipped a second straight month of solid growth after the May disappointment, though the former ADP did not anticipate that swoon with a false positive. Appetite for US stocks has flattened in the past 3 weeks after a torrid first half of July, as traders look to interpret whether the Fed-on-hold-through-2016 upswing has run its course. USD majors are also fairly thin with the exception of AUD/USD rising 30pips to 3-weeks highs after RBA quarterly statement - USD/JPY was in a 30pip range above ¥101, NZD/USD rose 20pips toward $0.72, and GBP/USD has bounced some 30pips off the late US session low of $1.31.

- After a cut in interest rates earlier this week, RBA's quarterly statement on monetary policy did little to elaborate on expectations for the future of policy directions. Following a downward revision on inflation last time around, RBA this time kept all of its forecasts for CPI and GDP unchanged - 2016 and 17-end GDP midpoint 3.0% and 2018 at 3.5%, with 2016 core CPI seen at 1.5% and 2017/18-midpoints at 2.5%. RBA warned that commodity prices will remain under pressure as China demand cools and forecast business investment sentiment in the non-mining sector - the lynchpin of new economy - to remain subdued. Wage inflation outlook was also foggy and momentum difficult to judge. On the flip side, RBA was encouraged by economy's potential given low rates, anticipates resource export demand to improve, sees household consumption growth close to long-run average, and remain upbeat on property investment.

- Among notable China press sources, People's Daily reported that the progress of steel capacity reduction is unsatisfactory, but the coal reduction has been achieved. In the credit space, regulators are close to a launch of CDS products, even as a separate press source reported earlier this week that state banks are encouraged to roll over debt obligations.

- In Japan, Ministry of Economy, Trade and Industry (METI) warned that stronger JPY may force companies to revise their CAPEX plans - recall the latest Q2 Tankan survey showed a better than expected Industry Capex forecast of 6.2%. A Nikkei report noted the recent bond market volatility shows investors concerned that the BOJ may scale back its ¥80T QE program, and one of the options could be widening a range of target monetary base expansion from ¥80T to ¥70-90T, allowing more aggressive QE in the short run to be followed by a taper. Fin Min Aso reiterated risks in Japan economic recovery are still present, and that the govt is working with the BOJ to use all policy options to support growth.

***Equities***
US equities / ADRs:
- RAX: Said to be in advanced talks to be sold to PE firm - press; +19.8% afterhours
- MTZ: Reports Q2 $0.36 v $0.22e, R$1.23B v $1.15Be; +10.8% afterhours
- LGF: Reports Q1 +$0.20 v -$0.23e, R$553.6M v $501Me; +7.7% afterhours
- PCLN: Reports Q2 $13.93 v $12.67e, R$2.56B v $2.60Be; +5.7% afterhours
- SYMC: Reports Q1 $0.29 v $0.25e, R$884M v $878Me; +4.1% afterhours
- KHC: Reports Q2 $0.85 adj v $0.71e, R$6.8B v $6.82Be; Increases dividend 4.3% to $60/shr; +3.5% afterhours
- MNST: Reports Q2 $0.99 adj v $1.04e, R$827.5M v $808Me; Authorizes new $250M share repurchase (~1% of market cap);+1.6% afterhours
- ATVI: Reports Q2 $0.54 v $0.45e, R$1.61B v $1.50Be; +1.2% afterhours
- WTW: Reports Q2 $0.46 v $0.48e, R$310M v $319Me; -7.5% afterhours
- FEYE: Reports Q2 -$0.33 v -$0.39e, R$175M v $181Me; -16.8% afterhours

Notable movers by sector:
- Consumer discretionary: MGM China 2282.HK +2.9% (H1 result); Namco Bandai Holdings 7832.JP +11.0% (Q1 result); Tabcorp TAH.AU +4.3% (FY16 result); Kirin Holdings Co 2503.JP +0.4% (Q1 result)
- Financials: Haitong Securities 6837.HK +1.4% (July result); CITIC Securities 6030.HK +1.7% (July result); China Vanke Co 000002.CN +3.688% (confirms China Evergrande has acquired stake); Mitsui Fudosan Co 8801.JP +1.4% (Q1 result)
- Industrials: Downer EDI DOW.AU +5.1% (FY16 result); Toyota Motor Corp 7203.JP +3.6% (Q1 result); Virgin Australia VAH.AU +2.1% (FY16 result); Yamaha Motor 7272.JP +1.6% (H1 result)
- Technology: Brambles BXB.AU +0.8% (to set up JV); Disco Corp 6146.JP +5.1% (Q1 result); Nikon Corp 7731.JP +5.1% (Q1 result)
- Energy: JX Holdings 5020.JP -0.8% (Q1 result); CNOOC 883.HK +1.4%, PetroChina 857.HK +0.8% (oil gains)
- Healthcare: Terumo Corp 4543.JP +2.9% (Nomura raised to Buy)
- Utilities: Korea Electric Power Corp 015760.KR -0.3% (Q2 result)
- Materials: Maruichi Steel Tube 5463.JP -3.8% (Q1 result)

>>> US After Hours Summary: LGF +6.4%, PCLN +5.7%, UBNT +5.5%, MDRX +5


After Hours Summary: LGF +6.4%, PCLN +5.7%, UBNT +5.5%, MDRX +5.1% on earnings/guidance, RAX +17.6% on PE speculation... HDP -26.2%, FEYE -16.2%, FLR -7.9%, ZG -4.6% on earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: EGLT +31.2%(also announces that the joint meeting of the FDA voted 18 to 1 to recommend approval of ARYMO), PACB +14.8%, MTZ +9.6%, AAOI +9.2%, PETX +9.2%, OSIR +8.5%, KTOS +8.4%, CTRL +7.8%, ICON +6.5%, LGF +6.4%, PCLN +5.7%, UBNT +5.5%, MDRX +5.1%, ESPR +4.8%, SSNI +4.4%, MELI +4.1%, ONVO +3.9%, TSRO +2.9%, VVUS +2.9%, EOG +2.8%, RVNC +2.5%, ASYS +2%, ECYT +1.9%, ABTL +1.8%, IMPV +1.6% (also Board commences review of strategic alternatives), IRWD +1.3%, TASR +1.2%, ATVI +1.2%, MNST +1.1%, (also authorizes $250 mln share repurchase (1), BMRN +0.9%, SEM +0.9%, ECPG +0.8%

Companies trading higher in after hours in reaction to news: IDXG +37% (announces that the NY State Department of Health has reviewed and approved ThyraMir for marketing in New York State), VIVE +19.2% (receives regulatory approval for the sale of the Viveve System from the Ministry of Food and Drug Safety in South Korea), RAX +17.6% (following late spike/halt on potential PE interest), OSIR +8.5% (Osiris Therapeutics announces that the manuscript from its multicenter prospective post-market clinical trial using Grafix was accepted for publication in the International Wound Journal), SAUC +2.7% (Diversified Restaurant Holdings to split into two separate, publicly-traded companies through the tax-free spinoff of its Bagger Dave's business, also reported earnings)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: HDP -26.2% (also President and Chief Operating Officer Herb Cunitz resigns), SWIR -16.4%, FEYE -16.2%, AQXP -14.7%, ZNGA -9.1%, OLED -8.2%, (also signs five-year License and Supplemental Material Purchase Agreement with Tianma Micro-electronics), FLR -7.9%, TWOU -6.8%, INAP -6.4%, APRI -5.6%, NOG -5.1%, ZG -4.6%, LADR -4.4%, NDLS -4.3%, ACAD -3.6%, TCRD -3.4%, CERS -3.2%, CERS -3.2%, WING -3.1%, OTIC -3.1%, SYRG -2.8%, NRP -2.6%, CARA -2.4%, MACK -1.7%, RATE -1.7%, FDUS -1.6%, INGN -1.3%, AHS -1.3%, ATRC -1.1%, EMKR -1%, FPRX -0.9%, MMI -0.8%

Companies trading lower in after hours in reaction to news: DMRC -2.4% (announces proposed public offering of common stock), CLX -0.8% (appoints CEO Benno Dorer as Chairman of the Board), SONC -0.2% (announces 27% increase to dividend program beginning in Q1 of FY17)

>>> US Close Dow-0.02% S&P+0.02% Nasdaq+0.13% Russell+0.09%

Closing Market Summary: Indices End Flat with Employment Report on Tap

The stock market ended a surprisingly sleepy session on a flat note as the S&P 500 (UNCH) maintained a meager nine-point range.  We say surprising because the Bank of England (BOE) caused quite the stir this morning with some monetary policy accommodation that was more aggressive than expected.

In particular, the BOE exceeded market expectations when it announced a 25 basis point cut in its Bank Rate to a record-low 0.25%, and added that it will purchase up to GBP10 billion of U.K. corporate bonds, and expand its purchase of UK government bonds by GBP60 billion, bringing its total stock of asset purchases to GBP435 billion.

In the past, such a healthy dose of policy stimulus would have stimulated a much more enthusiastic response in the stock market.  That didn't happen this time, however.  The market's sluggish behavior was held out as a possible indication that market participants believe monetary policy actions are no longer effective.

The latter point notwithstanding, the British pound dropped nearly 2.0% against the dollar to 1.3130 and sovereign bond markets rallied in the wake of the decision, generating an added thought that the Federal Reserve seems likely to refrain from raising its key policy rate at all this year.

Investors lacked conviction throughout today's session, mulling the possible implications of the BOE decision and cognizant that the Employment Situation Report for July will be released on Friday before the start of trading.

Today's trade featured a continued rebound in oil, some strengthening in the dollar, and otherwise mixed performances by the stock market's most influential sectors.  To that end, the information technology sector (+0.4%) traded higher while the financial sector (-0.3%) traded lower.  All other sectors moves were equally limited in scope on either side of the unchanged line.

The Nasdaq Composite (+0.1%) ended its day slightly ahead of the S&P 500 (UNCH) and the Dow Jones Industrial Average (UNCH).

The S&P 500 meandered in a tight trading range today, finding support at 2159, which was the previous range low, and largely ignored the Factory Orders report for June (-1.5%; consensus -1.9%), which featured the second consecutive monthly decline in factory orders. 

A reversal in oil futures added to support efforts as the energy component continued its recent rebound. WTI crude finished its day higher by 2.7% ($41.93/bbl; +$1.11), erasing its weekly loss.

The S&P 500 (UNCH) finished in the middle of today's trading range as six sectors finished in the red. The financial sector (-0.3%) finished behind health care (-0.2%) and energy (-0.2%). Conversely, technology (+0.4%) finished in-line with materials (+0.4%) and ahead of consumer staples (+0.2%) at the front of the pack.

Relative strength in Microsoft (MSFT 57.39, +0.42) and Facebook (FB 124.36, +1.85) helped the technology sector outperform. The two large caps gained 0.7% and 1.5%, respectively. The high-beta chipmakers also outperformed as the sub-group moved higher, helped by gains in ASML (ASML 110.09, +1.64) and Micron (MU 14.03, +0.52).

The economically-sensitive financial sector (-0.3%) underperformed as long-term interest rates came under pressure following the Bank of England's decision. Life insurance names also contributed to sustained weakness as Prudential (PRU 72.84, -3.31) and MetLife (MET 39.54, -3.76) fell 4.4% and 8.7%, respectively. The two names disappointed investors with their bottom-line quarterly results.

Biotechnology displayed relative weakness in the health care space (-0.2%) as the iShares Nasdaq Biotechnology ETF (IBB 296.15, -1.77) trimmed its weekly gain to 2.3%. In the group, Biogen (BIIB 315.56, -6.78) continued to underperform as investors further discounted an acquisition of the company. The stock rallied 9.4% on Tuesday on M&A speculation. Elsewhere, Regeneron Pharmaceuticals (REGN 433.40, -7.97) declined 1.8% after missing top-line estimates for the quarter.

The U.S. Dollar Index (95.77, +0.21) finished modestly higher as the euro and the pound lost ground against the buck. The single currency declined 0.2% against the dollar (1.1130).

Treasuries finished the day on a higher note as yields came down across the curve. The 10-yr note yield finished lower by four basis points (1.51%).

Participation was below the recent average as fewer than 796 million shares changed hands at the NYSE floor.

Today's economic data included Challenger Job Cuts for July, weekly initial claims, and Factory Orders for June: 

  • July Challenger Job Cuts reported in at 45,300, which compares to the prior month's reading of 38,500.
  • Initial claims increased by 3,000 to 269,000 (consensus 264,000) for the week ending July 30.
    • There were no special factors influencing the initial claims reading.
    • The four-week moving average for initial claims jumped to 260,250 from 256,500.
    • Weekly initial claims remained below 300,000 for the 74th straight week.  
  • Continuing claims decreased by 6,000 to 2.138 million for the week ending July 23.
    • The four-week moving average for continuing claims increased by 5,250 to 2.142 million, which is still near its lowest level since November 2000.
  • Factory orders declined 1.5% in June (consensus -1.9%) on the heels of a downwardly revised 1.2% decline (from -1.0%) in May.
    • That qualified June as a double-dip month since it was the second consecutive month that factory orders declined.
    • On a year-over-year basis, factory orders are down 2.6% with durable goods orders unchanged and nondurable goods orders down 5.1%.
    • Orders for durable goods slumped 3.9% in June after a 2.9% decline in May.
    • That had a lot to do with a 10.5% decline in orders for transportation equipment, which featured a 58.8% decline in orders for nondefense aircraft and parts.
    • There was some offsetting strength fortunately in orders for nondurable goods industries, which increased 1.0% in June on the back of a 0.6% increase in May.
    • Notwithstanding the back-to-back monthly decline in factory orders, shipments increased 0.7% and were up for the fourth straight month.
    • Total inventories for all manufacturing industries were down 0.1% and have now declined in thirteen of the last fourteen months.
    • The inventory-to-shipments ratio dipped to 1.35 in June from 1.36 in May.

Tomorrow's data includes the 8:30 ET release of the Employment Situation Report for July. The report is expected to show that nonfarm payrolls increased by 185,000. Separately, the June Trade Balance Report (consensus -$42.7 billion) June Consumer Credit (consensus $16.2 billion) will cross the wires at 8:30 ET and 15:00 ET.