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<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>US stock futures are lower, following a dump of economic data that showed the labor market continues to strengthen. </p><p>Just of ahead of the US market open. ET, Dow futures were down 23 points,  S&amp;P 500 futures were down 3 points, and Nasdaq futures were down 15 points.</p><p><span style="line-height: 1.5em;">Initial jobless </span><span style="line-height: 1.5em;"></span><a href="http://www.businessinsider.com/initial-jobless-claims-april-30-2015-2015-4">claims plunged</a><span style="line-height: 1.5em;"> more than expected to 262,000 last week, the lowest level since April 15, 2000. Analysts had forecast claims to fall to 290,000, slightly down from 295,00 the prior week. </span></p><p><span style="line-height: 1.5em;">The 4-week average of initial claims was 283,750 a decrease of 1,250 from the previous week's revised average.</span></p><p><span style="line-height: 1.5em;">"While the market was expecting a firm print in q/q terms, <strong>the rate of acceleration in y/y terms is likely to be taken as a sign that the economy is beyond full employment</strong>," BNP Paribas economist Bricklin Dwyer <a href="http://www.businessinsider.com/employment-cost-index-q1-2015-2015-4">said</a> in a note.</span></p><p><span style="line-height: 1.5em;">In other data, the Employment Cost Index rose in the first quarter, beating expectations, at 0.7%, compared to 0.6% forecast and 0.6% in the prior period.</span></p><p><span style="line-height: 1.5em;">And, <a href="http://www.businessinsider.com/personal-income-and-spending-april-30-2015-4">personal income was flat</a> in March from the previous month, while spending rose less than expected, at 0.4%.</span></p><p><span style="line-height: 1.5em;">Notable earnings out before the opening bell include <a href="http://www.businessinsider.com/exxonmobil-q1-earnings-2015-4">ExxonMobil</a>, which topped forecasts for both earnings and revenues.</span></p><p><span style="line-height: 1.5em;"><div class="KonaFilter image-container display-table"><div><div class="image"></div><p></p></div></div><br /></span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/charge-iphone-faster-apple-battery-life-2015-2">How to supercharge your iPhone in only 5 minutes</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="9hdGRuczob3nOr91AW6QS6gV7dw6BzKX" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

US markets are lower

Central banks have played the gods till now. They did lend more than a helping hand when the stock market traders sought protection from the market of Chinese dragon, which may unleash more than its worth in the coming days.<br />
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As of now, the situation seems to have got a breather. But, sooner than later, global market that has been long overdue for correction will take its recourse. This time around, almost all continents will suffer the brunt of this crash.<br />
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The investors all along knew this was coming. When it actually did, the effect wasn’t less difficult than what it would have been, had it happened unexpectedly.<br />
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Global market has broken, and broken bad. China, the second largest economy in the world, has been at the forefront of this global crash. And, it’s not like China can help it either. The Chinese <a href="http://www.businessinsider.in/searchresult.cms?query=stock+market+bubble+">stock market bubble</a> began to burst in early June this year and has been consistently spiraling out of control often. When the crash is complete, a lot of countries including the US and UK will go down this drain.<br />
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On Monday, the benchmark Shanghai Composite closed 0.8% lower, having slipped almost 3% since the early trade. In the last two weeks, markets have seen a lot of bloodbath in <a href="http://www.businessinsider.in/searchresult.cms?query=china">China</a> sending out danger signals in the <keyword id="46984" type="ORGANIZATION" weightage="80" keywordseo="global-markets">global markets</keyword>. Cue well taken, but is there an immediate solution?<br />
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It doesn’t look like the markets would recover in the immediate future because even on Monday – two weeks since the nosedive started – there weren’t any hopes left. Markets showed no positive signs of breathing good.<br />
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Though, in markets such as the US, the <a href="http://www.businessinsider.in/searchresult.cms?query=fed+reserve">Fed Reserve</a> gave away some goodies to protect the investor sentiment, and assured the cost of borrowing will remain at rock bottom. After a brief wobbly walk, and a dark day in the markets they did recover for a brief while. But, the Chinese market would ensure this doesn’t stay strong for too long.<br />
<br /> In early 1990s and 2000s, America had experienced similar phase. And this time, it was happening in faraway China. The ‘Greenspan Put’ as it is famously called, had offered some solace to American markets with some <keyword id="37018" type="UNKNOWN" weightage="100" keywordseo="interest-rate">interest rate</keyword> cuts, thus helping the <a href="http://www.businessinsider.in/searchresult.cms?query=economy">economy</a> get some fresh air.<br />
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Financial analysts can easily point out what caused the crash. There is simply so much cheap credit that has invaded the market, that a bubble bursting is the most inevitable thing to happen to undergo a course correction.<br />
<br /> The US Fed Reserve has pumped the market with $4.5 trillion since 2008. The Bank of England seems to be better off since it simply read the signs and stopped after putting in £ 375 bn. Bank of <keyword id="6355311" type="COUNTRY" weightage="100" keywordseo="Japan">Japan</keyword> seems to be clinging on to hopes that the market pumped with more credit is a healthy market. Hence, Japan has channeled a post-crash stimulus package of $700 bn a year, with a Frankfurt based bank European Central Bank doing almost the same. <br />
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All the countries, for which China happens to be the manufacturing hub, are riding on a bubble that can go bust anytime despite the credit oxygen it has been pumped with.<br />
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Reason being, China itself has been borrowing heavily to keep its markets on an upswing. And it is running out of steam, which will conclude sooner than later.<br />
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China has cut interest rates and hiked the borrowing limits. Smaller companies’ shares have been bought by Chinese administration in order to keep the market breathing good.  <br />
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However, Chinese shares slipped again on Monday and the days ahead don’t look very bright either. Investor sentiment now isn’t just cautious but it has gone into the dark phase with no enthusiasm witnessed in the segment. Though there are reports that Chinese authorities will intervene less in the market, unlike before, the markets have not warmed up to this news.<br />
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Japan has posted weak data, with country’s factory output coming down by 0.6% in July compared to previous month.<br />
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Financial analysts and experts, however, are trying hard to see a silver lining around this dark cloud. Some of them have been encouraging investors to buy more stocks and shares stating this are the best opportunity to buy which surfaced in many years.<br />
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Even Britain has been warned of a potential crash, though the markets aren’t so much in the red, for reasons that the recent growth has not been ‘organic, systematic and healthy’.  The unbalanced nature of the growth and global cues can actually trigger off a reaction that’s leading towards a panic situation, than the opposite.<br />
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The markets falling can send countries into a dizzy hampering much more than just money. Hopefully, countries will take a scientific step to ease the situation than an emotional one.<br />
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(Image: Reuters)<br />

Bullish to hellish: Is global economy cruising in danger zone?

<p><div class="image-container float_right"><div class="image"><p class="source">REUTERS/Carlo Allegri</p><p class="caption">The U.S. flag is reflected in the window of a police car as a police man stands guard in Times Square ahead of New Year's Eve celebrations in New York, December 31, 2013.</p></div></div>After closing 2013 at <a href="http://www.businessinsider.com/closing-bell-december-31-2013-2013-12">an all-time high</a>, U.S. stock <keyword id="31671" type="CITY" weightage="60" keywordseo="markets">markets</keyword> are kicking off 2014 in the red.</p>
<p>The Dow is down 73 points (0.4%). The S&amp;P 500 is down 9 points (0.5%). The Nasdaq is down 33 points (0.8%).</p>
<p><a href="http://www.businessinsider.com/strategists-2014-sp-500-targets-2014-1">Wall Street's strategists expect 2014</a> to be another up year for stocks.</p>
<p>However, many expect to see <a href="http://www.businessinsider.com/bob-doll-10-predictions-2014-1">a correction of around 10%</a> before the year's over.</p>

US Markets Are In The Red

<p><span><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>The US auto market is booming. It's at its highest level in a decade, on a pace to see sales of 17.8 million new cars and trucks this year.</span></p><p><span>And in that market, you're doing fantastically well if you're selling trucks and SUVs. And by "fantastically well," I mean <em>stupendously, stonkingly, monumentally well</em>.</span></p><p><span><a href="http://washpost.bloomberg.com/Story?docId=1376-NPC5AD6JIJUQ01-6M1VQRQM9BNUF0VCQCV5OEKFCM">Bloomberg's Mark Clothier, David Welch and Keith Naughton have the numbers</a>:</span></p><p><span style="line-height: 1.5em;">There will be a temptation with results like this for automakers to go back to the future and neglect small cars. It's happened before. GM, for example, effectively abandoned the small-car market prior to the financial crisis, preferring to concentrate on more profitable big SUVs and full-size pickups. This worked out well for the Japanese and the Koreans, who were able to grab customers when gas prices spiked in the mid-2000s and into the financial crisis while Detroit suffered.</span></p><p><span style="line-height: 1.5em;">But markets are obviously cyclical. And how! Five years ago, few would have predicted a massive resurgence in truck and SUV buyership in the US. But the few who did predict it were, fortunately, at the automakers currently building big trucks and SUVs (as well as smaller crossovers). Which is understandable, given that a Ford or GM executive could look at the US market and conclude that decades of solid truck sales were the norm rather than an exception. </span></p><p><span style="line-height: 1.5em;">The bottom line is that Americans like big cars. They like pickups. Periodically over past five decades, Americans have shown an interest in smaller cars. Think Volkswagen Beetle in the 1960s, the Ford Falcon and even the early Mustang, cars from Honda and Toyota in the mid-1970s and 1980s, and then the South Koreans in the 1990s. By the mid-2000s, even GM and Ford were aiming to crack the code on small cars, driven by rising government fuel-economy standards.</span></p><p><span style="line-height: 1.5em;">But the dominant trend in the the US market is clear. Big cars and trucks sell. And return excellent profits. If you want to sell smaller vehicles, increasingly consumers are asking for downsized SUVs rather the the small sedans of yore.</span></p><p><span style="line-height: 1.5em;">That's the state of auto sales in the US. Bigger is better. For now.</span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/darpa-funded-cheetah-robot-can-now-jump-over-obstacles-2015-6">MIT reveals how its military-funded Cheetah robot can now jump over obstacles on its own</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="1kcTVodTqokvsyjUub66KVxes0uCDiOI" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

SUVs are crushing it in the US market

<ul class="summary-list"><li>US companies will find it much harder to pass on price rises to consumers, <keyword id="6361649" type="UNKNOWN" weightage="60" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword> said.</li><li>Sharon Bell, a European stock strategist, said profitability is still high, but it's going to get squeezed.</li></ul><p>So far, Corporate America has weathered <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> at 41-year highs without suffering too many ill effects on profitability.</p><p>But US companies are going to find it increasingly difficult to pass on price increases to consumers, and as a result, <keyword id="6357061" type="UNKNOWN" weightage="60" keywordseo="earnings" source="Orion">earnings</keyword> estimates still look far too optimistic, according to Goldman Sachs.</p><p>Goldman strategist Sharon Bell on Thursday underlined the bank's view that the bear market in <keyword id="11893878" type="UNKNOWN" weightage="60" keywordseo="stocks" source="Orion">stocks</keyword> is not over yet — not least because company margins, and by extension earnings estimates, are still too high.</p><p>"Most CEOs are still seeing very high input-cost inflation, very high raw material-cost inflation," Bell told <a href="https://www.cnbc.com/2022/07/22/goldman-sachs-on-why-the-bear-market-is-not-over.html">CNBC</a>. "Really, whether you see it come through to consumer price inflation depends on how much they pass through." </p><p>"The last couple of quarters, companies have passed through most of it. Because employment has been strong, the economy has been strong, consumers have had savings — so they've been able to pass through most of that to the consumer," the senior European equity strategist said.</p><p>"I think it will become more difficult to pass that through to the consumer, and we are expecting margins to be squeezed," she added. </p><p>Companies from across the US corporate spectrum — from luxury electric carmaker Tesla, to pizza delivery company Domino's, to social media app maker Snap — have cited the impact of inflation on their bottom lines, in earnings reports on the three months to June.</p><p>According to <a href="https://www.zacks.com/research-daily/1954406/earnings-season-scorecard-and-fresh-analyst-research-reports-for-chevron-adobe-amd">Zach's Research</a>, 72.9% of companies have beaten earnings-per-share estimates in the second quarter so far. But this is the lowest percentage since the first quarter of 2020 for the group of 48 companies Zach's tracks, and the third lowest in the preceding 20 quarters.</p><p>In a note earlier this week, Bell and her team pointed out that in the past eight recessions since 1970, there has been an average decline of 14% in earnings-per-share estimates in the US and a far more aggressive decline of 20-30% in Europe.</p><p>"When I speak to most of my clients — fund managers, etc. — they're very skeptical about the bottom-up earnings forecasts. Now, I do think they reflect a little bit of what we've seen in the first half of the year, so they're a little bit trailing," Bell said.</p><p>Economic growth and employment held up robustly in the first half of 2022, even as inflation was picking up to its highest since the early 1980s. That rise came amid surging energy and raw material prices, stemming in part from Russia's war in Ukraine and from general disruption in trade flows in the wake of the pandemic.</p><p>As the Federal Reserve has raised interest rates in response to that rise in consumer prices, borrowing costs have grown and the dollar has strengthened. That has undermined foreign revenues for several big names, including Netflix, IBM, Johnson &amp; Johnson and Microsoft, in these most recent quarterly results.</p><p>The dollar has risen to its highest in 20 years against a basket of major currencies, meaning the value of revenue from key <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> like Europe, India, Japan or Mexico has fallen. A recent analysis from <a href="https://www.bloomberg.com/news/articles/2022-06-13/-dollar-ate-my-profit-is-corporate-america-s-lament-once-again#xj4y7vzkg">Bloomberg</a> showed references to "foreign exchange" in earnings calls hit the highest in three years.</p><p>"Inflation has been high and it is quite good for companies — at least initially — because that means they're passing on some of these additional prices. But I think more medium-term, these earnings estimates are going to come down," Bell said. </p><p><strong>Read more: </strong><em><a href="https://www.businessinsider.com/tesla-earnings-q2-stock-should-i-buy-sell-elon-musk-2022-7">Tesla earnings: Time to top-up on shares in Elon Musk's car maker or bail out? 3 experts weigh-in on its prospects and reveal an updated price target.</a></em></p>

You Searched For "US market" and got 5 results

US markets are lower

Akin Oyedele

Bullish to hellish: Is global economy cruising in danger zone?

Preetam Kaushik

US Markets Are In The Red

Sam Ro

SUVs are crushing it in the US market

Matthew DeBord

US companies are going to find it much tougher to pass on inflation to consumers, Goldman Sachs says

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