NYSE Halts Trading on Wednesday

On Wednesday, the NYSE halted trading on all securities for 3.5 hours. Trading was back on by 3:05 ET and continued without issue through the 4:00 PM ET close. The NYSE is claiming that it was due to a computer glitch that would have caused symbols to trade differently (i.e. you put in an order for ABC and it purchases XYZ). While the timing seemed a bit suspicious, as United Airlines halted all flights around the country due to a computer glitch earlier that morning, nothing at this time seems to suggest this was anything but a computer glitch.

We were watching this very closely. No Paradigm orders were affected. While the NYSE was closed, orders were routed to the various other exchanges for execution (i.e. BATS, NASDAQ, NYSE ARCA, etc). The market’s reaction to this news was largely subdued; it originally pulled back but then recovered. Had this been something more, we would have expected a large drop in the market.

We do expect more information will come out on this and we will keep everyone updated, as needed.

Earnings Season Begins:

Wednesday saw the unofficial beginning to earnings season, with Alcoa (AA) reported earnings. Earnings results of $.19 per share were short of $.23 per share Wall Street expectation. Alcoa is currently trading at $10.81, its lowest price in over a year. The decline mirrors a widespread fall in aluminum prices on the London Metals Exchange, with a 12% decline in May taking aluminum to $1,700 per metric ton. Primarily known as a producer of lightweight metals, Alcoa is transitioning to direct production of metal parts for automobiles and aircraft. Consequently, Alcoa managed to report a quarterly net profit of $140 million up from $138 million a year earlier.

Conversely, PepsiCo (PEP) reported better than expected earnings yesterday morning. PepsiCo earned $1.32 per share, topping the $1.23 per share Wall Street expectation. In addition, overall sales of $16 billion outperformed the average expectation of 15.8 billion. Nonetheless, the decline of international revenues by 6% in the second quarter can be mostly attributed to unfavorable exchange rates. These generally positive earnings are an indication of a diversified product line from PepsiCo and management’s adaptability to new consumer trends. Consequently, Pepsi has raised its profit estimates for the entire year. PepsiCo recently announced a new $12 billion share repurchase program starting this month and ending in June of 2018.

Next week, several companies will report earnings. A few companies scheduled to report next week are: Johnson & Johnson (JNJ), JP Morgan (JPM), Wells Fargo (WFC), Bank of America (BAC), Intel (INTC), Kinder Morgan Inc (KMI), Blackstone (BX), Citigroup (C), Goldman Sachs (GS), Google (GOOG), General Electric (GE), and Honeywell (HON).

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