Morning business news - July 21Monday 21 July 2014 10.13
Earnings season in the US enters week two today with some of the bigger household names reporting.
We expect to hear from the likes of Facebook, Apple, McDonalds and Starbucks.
Aidan Donnelly, Senior Equity Analyst at Davy said the markets were a little bit nervous coming into this season, but the first week saw some good figures reported.
"We had seen forecasts being pared back on the way into the season," he said.
"However, banks have come in much better than expected, especially on the trading revenue side. They picked up towards the end of the quarter. We saw some tech names coming in with some strong numbers, like Intel, which reflected a rebound in the PC market globally."
Tech companies in particular have come under the spotlight with stocks coming under pressure and a warning from US Federal Reserve Chair Janet Yellen that some social media stocks might be over-valued.
"Ultimately, it's down to earnings growth. Many have high valuations. If earnings come through, valuations won't look that expensive," Aidan Donnelly said.
He added that Janet Yellen's warning referred mainly to small cap social media firms rather than the big household names.
"If we see earnings growth coming through for these smaller companies, over the longer term they may be ok," he said.
He said the same principle applied to all companies. Investors had given the markets a free pass for the first quarter owing to the bad weather in the early part of the year.
"We're looking at 11 to 11.5% earnings growth for the first quarter. It's still strong. If it comes through, the market will carry on," Aidan Donnelly said.
Tesco CEO Philip Clarke is standing down in October after three and a half years in the job.
He's to be replaced by Dave Lewis, currently of Unilever.
Tesco has also issued a profit warning saying current trading conditions are more challenging than they had anticipated.
Detroit could exit bankruptcy today.
The Michigan city will report later on whether its creditors, including 32,000 workers and retired individuals, approve its proposal for ending Chapter 11.
The results of a vote will help determine how severely pensions will be cut.
A yes vote promises to bring an additional $816 million for pensions from the state and foundations.
But some creditors continue to oppose the exit plan, saying it unfairly favours pensions over other types of debt.
Computer maker Dell has announced that it will start accepting bitcoin as a payment option for anything purchased on its website.
The pilot is initially open to US customers.
The move was announced on twitter by Dell founder, Michael Dell, who said the company was now the world's biggest ecommerce business to accept bitcoin.
Chinese telecom equipment maker Huawei has reported sales up by a fifth to 136 billion yuan, or around $22 billion, for the first six months of the year.
It said it expects to make an operating profit margin of 18.3% for the period.
Huawei traditionally made telecoms equipment but has diversified into smart phone manufacturing and has become the one of the biggest smart phone makers in the world.