Revenue misses continue

Revenue misses from MSFT, AMZN, KLAC, AXP and BNI has the futures below fair value but well off their lows as European stocks rallied at around 4am when Germany’s July IFO business confidence number was released and was almost 1 point more than expected rising to the highest level since Oct ’08. Also, the Euro Zone manufacturing and services composite index was 1.5 points higher than forecasts and at a 10 month high at 46.8 with 50 being the breakeven between expansion and contraction. In response, the euro is rallying to the highest level since early June vs the US$ and the $ index is just shy of its lowest level since Sept ’08. Don’t discount the possibility that Europe recovers more quickly than the US does as their consumer base is much less leveraged and exports (particularly in Germany) are a key driver, especially to Asia. UK Q2 GDP fell more than expected, by 5.6% y/o/y. A slightly better than expected Q2 GDP report from South Korea helped to buoy Asian markets as the Shanghai composite rose to a fresh 13 month high for a 3rd straight day. The final U of Michigan confidence figure is expected to rise to 65, a touch above the preliminary report.

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