Markets were heading slightly higher after news was released the Producer Price Index for June came in slightly above expectations. June’s final PPI reading was up 0.4% last month, a report from the U.S. Bureau of Labor Statistics said. This was up from a 0.2% drop in May. Economists had been expecting a 0.2% increase for June. The year-over-year data was up at annualized rate of 1.9%. The core producer price index was up 0.2%. From an analyst’s perspective, core prices are a better reading for longer-term inflationary pressure due to the fact that this reading subtracts volatile food and energy categories.
Shares of Bank of America (BAC) were falling slightly after the company announced that second-quarter results would be taking a hit due to a $4 billion litigation expense. The bank reported that their second-quarter earnings came in at $2 billion, or 19 cents per share, when compared with the $3.6 billion, or 32 cents per share, this time last year. The $4 billion litigation hit ended up costing the bank earnings of 22 cents per share. Revenue was down 4% to $21.9 billion from last quarter’s $22.9 billion. The banking giant’s chief executive, Brian T. Moynihan, said, “The economy continues to strengthen, and our customers and clients are doing more business with us. Among other positive indicators, consumers are spending more, brokerage assets are up by double digits and our corporate clients are increasingly turning to us to help finance business expansion and merger activity.”
BMW reported that they would be recalling nearly 1.6 million vehicles due to an airbag malfunction. The company said that the vehicles were sold worldwide. The airbag issue affects the front passenger-side airbag involves a rupturing inflator. The vehicle in question is the 3-Series manufactured between May 1999 and August 2006. BMW said, “The replacement campaign is a voluntary precautionary measure that aims at minimizing the risk of faulty airbag activiation.”
That’s all for today,
Warren Gates, Normandy Research