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Pence Financial Markets News

US FINANCIAL MARKET

WALL STREET OPENS LOWER AS CHINA WEAKENS CURRENCY

  • China’s devaluation of its currency sent global stocks tumbling lower on Tuesday.
  • Companies that rely heavily on exports to China, including auto and luxury goods makers, retreated.
  • A weaker yuan could hurt the competitiveness of firms outside China by making their goods and services relatively more expensive.
  • Greece and its international creditors reached an agreement in principle to provide the country with a bailout worth as much as €86 billion ($94.4 billion).

China Moves to Devalue Yuan

  • China’s central bank devalued its tightly controlled currency, causing its biggest one-day loss in two decades.
  • The devaluation Tuesday was the most significant downward adjustment to the yuan since 1994.
  • The yuan’s fixing was weakened by 9% Tuesday from the previous day, leaving it at 6.2298 to the U.S. dollar.

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Google Creates Parent Company Called Alphabet in Restructuring

  • Sundar Pichai will be CEO of Google as Larry Page will head parent company Alphabet; Sergey Brin to be Alphabet president.
  • Google said Monday it had created a holding company, Alphabet Inc., that will manage each of its growing cast of businesses, including those building robots and self-driving cars, helping to cure disease, developing nanoparticles and extending Internet connectivity via balloons.
  • Alphabet will be run by Google’s current leaders, including Chief Executive Larry Page, co-founder Sergey Brin and Chief Financial Officer Ruth Porat.
  • Alphabet’s new Google subsidiary—including the search business, YouTube and the Android and Chrome operating systems—will be led by Sundar Pichai, who has been in charge of product and engineering for Google’s Internet businesses.

Hertz Reaffirms Guidance, Total Revenue Down 1%  

  • Second-quarter consolidated total revenue of $2.7 billion was down 5% year-over-year.
  • Excluding the unfavorable impact of foreign currency, total revenue was down 1% versus the same period last year.
  • On track to reach $200 million in cost savings in 2015 and $300 million annually for 2016.
  • Cost savings of approximately $80 million were realized during the first six months of 2015.
  • Second-quarter net income was $23 million, down from $72 million year-over-year.
  • Hertz Global reaffirms full-year Corporate EBITDA guidance of $1.45 billion to $1.55 billion.

Chevron Takes Harder Punch from Low Oil

  • Chevron’s $571 million profit in the second quarter was just 10% of its haul a year earlier.
  • Chevron is shedding 1,500 workers, waiting to raise its dividend and has delayed some drilling projects to conserve cash.
  • Chevron continues to outspend Exxon, which generates twice as much revenue.
  • Within two years, Chevron committed at least $50 billion to five massive projects in Australia, Brazil and the U.S. Gulf of Mexico.

US Charges Nine in Big Insider Trading Scheme

  • Defendants generated more than $30 million in illegal profits, prosecutors say.
  • The charges range from wire fraud to securities fraud to aggravated identity theft.
  • Those charged by the US attorney’s office include Ivan Turchynov and Oleksandr Ieremenko, computer hackers who resided in Ukraine; Arkadiy Dubovoy, a securities trader living in Alpharetta, Ga., and his son Igor Dubovoy.; and Pavel Dubovoy, who resided in Ukraine but was related to Messrs. Dubovoy.

M&A Deal Activity on Pace for Record Year

  • Companies hunting for growth drive volume.
  • Takeover-deal announcements would reach $4.58 trillion this year if the current pace of activity continues.
  • That tally would comfortably exceed the $4.29 trillion notched in 2007, a record year for deal making.

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US ECONOMY & POLITICS

US Productivity Increases at 1.3% Pace in Second Quarter

  • Reflects only moderate economic growth despite steady hiring.
  • The increased productivity in the second quarter was a result of output increasing at a 2.8% pace and hours worked rising 1.5%.
  • A gauge of compensation costs, unit labor costs, increased at a 0.5% annual rate from April through June.

Small business confidence bounces back in July

  • Small Business Optimism Index increased 1.3 points to 95.4.
  • Owners were upbeat about business conditions over the next six months, and their expectations about sales improved after weakening for several months.
  • They were optimistic about investing in capital and inventories.

EUROPE & WORLD

Greek bailout package 82-86 billion euros

  • “The overall financing envelope of the ESM program will be upheld at between 82 billion and 86 billion euros ($94 billion),” the diplomat said, referring to the euro zone bailout fund.

TODAY in HISTORY

  • Arapahoe became the first American ship to use the O.S. distress signal (1909)
  • The first inmates arrived at the federal prison on Alcatraz Island in San Francisco Bay (1934)
  • Chad gained its independence from France (1960)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.

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