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Macro View

Following some decent earnings numbers from a few of the U.S.'s top retailers, we also received good economic data this morning. The Producer Price Index (PPI) reported up 0.3%, which was as expected, but 0.4% subtracting food and energy costs, which was a positive surprise. And July Retail Sales came in quite strong at up 0.8%; subtracting gas and autos, this rose to 0.9%, another positive surprise.

Analysts had expected more expensive food prices to bump the numbers a bit, but this healthier spending also suggests American consumers are less affected by the global slowdown than predicted. Regarding the sales numbers particularly, they followed three straight months of decline, so perhaps we're seeing a bit of pent-up action here.

Also this morning, Home Depot (HD - Analyst Report) reported strong 2nd quarter earnings, easily surpassing analysts estimates and year-over-year comparisons. At high-end retailer Saks, Inc. (SKS), its net loss rose in the quarter but revenues were up year over year. And Estee Lauder (EL - Analyst Report) posted pre-market gains after a better-than-expected 4th quarter.

Elsewhere, rumors of the death of the Eurozone are greatly exaggerated. The German economy grew an unastounding 0.3% in the 2nd quarter and French GDP was flat, but they both beat expectations. European oil companies such as Total (TOT - Analyst Report) and Shell (RDS.A - Analyst Report) were up in the overseas markets, as were German big pharma companies Merck (MRK - Analyst Report) and Bayer.

Overall, GDP in the Eurozone dropped 0.2%, an improvement over the previous quarter's 0.4% loss, but a loss nonetheless. But we investors here in the U.S. already understand why this has sent futures higher: this increases the likelihood that stimulus from central banks will be forthcoming.

Finally, Groupon (GRPN - Analyst Report) giveth, and Groupon taketh away: after spiking to nearly $8 per share on Monday in anticipation of its earnings beat after the bell -- which followed a 12% gain in the stock Friday, where it started trading at $6.65 -- the company missed its revenue estimate yesterday afternoon and guided well below what analysts were expecting. So the stock is now down over 22% in the pre-market, and will be a stock to watch today, as well.

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