U.S. and European Equities Keep Climbing
by Hiland Doolittle
Equity markets in the U.S. appeared ready to post solid gains for the fourth straight day. Buoyed by stellar quarterly earnings from Dupont and other major U.S. companies, the DOW appeared ready to post another triple digit gain. Historically, the DOW has never had four straight days of triple digit gains.
Dupont’s strong sales figures from every division surprised analysts. The company immediately raised annual projections and raised expectations for several key divisions. Overall, U.S. business has posted strong quarterly reports, but the Consumer Confidence report, issued Tuesday morning, turned down from June’s adjusted 54 percent to slightly over 50 percent in July.
The fear surrounding U.S. companies is how the profits are being generated. What makes the Dupont performance encouraging is that profits came from strong sales rather than from cost cutting.
Europe Climbing
Meanwhile, European equities posted positive gains for the sixth consecutive day. UBS AG and Germany’s largest bank Deutsche Bank AG handily surpassed expectations.
UBS rode the three month high measure of banking shares to a 10 percent gain. Deutsche Bank rose 5.8 percent, Tompkins Plc, who agreed to sell to the Canada Pension Plan Investment Board and Onex Corp, climbed 5.3 percent.
Philipp Musil of Semper Constantia Privatbank AG in Vienna explained, “I am happy about the figures, which beat really high expectations. The market is near the top end of the trading range and there’s a new positive feeling about Europe.”
UBS has seen an inordinate number of withdrawals from its wealth management division. In the second quarter, withdrawals amounted to 8.1 billion francs compared to 15.4 billion in the first quarter. The wealth management division posted a pre-tax profit of 1.13 billion francs.
UBS silenced its critics and caught analysts by surprise by turning around its investment banking division. The division generated 3.07 billion francs from trading equities, currencies, bonds and commodities in the second quarter.
Switzerland’s biggest bank reported a net gain of 2.01 billion Swiss francs ($1.91 billion) year to date. One year ago, the bank posted a loss of 1.4 billion francs.
About the Author - Hiland Doolittle
Hiland is a professional writer with extensive entrepreneurial experience. He is a graduate of St. George’s School Newport, RI and the State University of New York at Albany where he majored in history. He has been active in the real estate business for 30 years and has founded and sold several businesses.
Hiland currently writes for several financial sites and is a published author of the novel The Last Parade. He has recently completed a manuscript for a children’s book entitled Sami and The Minnow Man.
