The news today was negative as retail sales and consumer sentiment missed expectations. The inventory to sales data remained at elevated recessionary levels. Breaking that data down further, the auto-inventory to sales ratio expanded higher. This shows that sales are slowing compared to inventory. This excess inventory is going to have to be cut in price which could send the auto loan market into a downward spiral. The production of cars will also have to slow which will hurt the auto parts companies. Ford already said 2nd half sales would be weak. This confirms that statement.
NVIDIA Corporation’s (NASDAQ:NVDA) Q2 earnings per share were 53 cents which beat estimates by 16 cents. Revenues of $1.43 billion was up 24.3% from last year and beat estimates by $80 million. GPU Business revenues increased 25% from last year and the Tegra Processor Business grew 30% from last year. Gaming, Professional Visualization, Datacenter and Automotive platforms revenue increased 18%, 22%, 110%, and 68% respectively on a year over year basis. The stock is up 150% in the past 12 months.
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J.C. Penney Company Inc
J.C. Penney Company Inc (NYSE:JCP) beat earnings per share estimates by ten cents reporting a loss of 5 cents. Revenues of $2.92 billion were up 1.4% from last year which was in line with prior estimates. Same store sales increased 2.2% in Q2. The company expects comparable store sales to increase 3% to 4% in the full year.
Caterpillar Inc. (NYSE:CAT) announced it expects no significant demand growth for its energy and transportation products for the rest of 2016 as oil price have fallen recently. The company has cut 13,900 jobs since mid-2015 as the industrial recession wages on.
Petroleo Brasileiro SA Petrobras (ADR)
Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) reported Q2 net income of $118 million or 370 million reais including a 1.12 billion real impairment charge from the Comperj refinery project. This net income represents a 30% drop from last year when the firm earned 531 million reais. The consensus was for the company to earn 1.81 billion reais, so it missed by a long shot as analysts are confused by the guidance given. Revenues were down 11% year over year and total debt improved slightly as it was down 2%.