Two earnings reports give a clue about the US economy
Keeping with the consumer theme, Ford motors announced record profits moments ago which were helped by strong North American sales. They posted Q2 earnings of $0.47 vs $0.37 expected, and revenue of $37.3bn vs $35.3bn exp. That was despite a slowdown in Chinese sales which has forced them to downgrade their 2015 Chinese sales forecasts to a 23/24m range from 24.5/26.5m
As I've just written in my prior post on UK travel spending, so here is a little slice of US consumer spending via the auto industry. Later at 14.00gmt we have US consumer confidence data from the Conference Board which will give us another look at sentiment on the streets. It's been riding high for a while but is expected to drop slightly to 100.0 vs 101.4 in June. Although confidence has been high it hasn't translated into a large increase in spending and that the key point. The Ford numbers show that that might just be starting to happen
On the broader economy, it's always good to look at the couriers and shipping companies and UPS has just reported also
They posted earnings of $1.35 vs $1.26 exp on revenue of $14.1bn, down slightly from $14.5bn expected, and -1.2% q/q, and had some warnings for the US economy
They noted that the US economy appears to be growing at a slower pace and that the exchange rate and lower fuel surcharges reduced revenues. Although they saw higher base rates, this was offset by the lower fuel surcharges
They are more upbeat on their international business and hope that the current "strong momentum" continues. International operating profit rose 17% vs 2014. Inter-Europe growth was strong which helped exports shipments rise 5.5%
So mixed messages from the international carrier. The US traffic is doing ok and there are signs of an increase in overseas business, but the strong currency and lower surcharges are hampering margins. That's a bit cheeky blaming a surcharge anyway as they will be seeing vastly reduced transport costs on the lower oil and fuel prices
