OPPO is new cricket sponsor, bids Rs 1,079 crore for a period of five years

Chinese handset maker OPPO emerged the highest bidder to bag the sponsorship rights of the Indian cricketing team, reports fe Bureau in New Delhi. The bids, which are conducted by the Board of Control for Cricket in India (BCCI), saw OPPO bid R 1,079 crore for a period of five years. It will pay R4.17 crore per bilateral match and R1.51 crore crore for an ICC match.

The other firms to have bid were Vivo Mobile, Star India, Paytm, Hero MotoCorp, WPP-owned media agency GroupM, Zee Group’s English daily DNA, DBS Bank and another WPP Group-owned agency, Encompass.

OPPO will be replacing Star India, the current sponsor, from April 1.

“An association with the Indian cricket team is the biggest partnership for any brand looking the build a strong equity with consumers,” said Rahul Johri, CEO, BCCI.


The second highest bidder was another Chinese handset maker, Vivo Mobiles, which bid R768 crore.

In 2013, Star India had bagged the team sponsorship for all home bilateral and domestic matches of the Indian cricket team. At the time, BCCI had fixed the reserve price at R1.50 crore. Star India paid R1.92 crore for each bilateral match and R61 lakh for every international match.

Prior to Star India, Sahara India was the highest paying sponsor of the team, at R3.34 crore per match.

Narendra Modi government cuts FY18 gold scheme target by 50%

The government has trimmed by half its target for gold schemes in 2017-18, turning more realistic after struggling to achieve less than 40% of its goal for the current fiscal.

US data, Donald Trump, Bernard Dahdah, Peter Navarro, China, Commerzbank , SPDR Gold Shares

The government is aiming at R5,000 crore from all the schemes — sovereign gold bond, gold monetisation and Indian gold coin — in 2017-18, compared with the budgeted level of R10,000 crore for 2016-17, sources told FE. The fact that the government now estimates only R3,809 crore from these schemes in 2016-17, representing just about 2% of the country’s annual consumption, suggests these are far from being a runaway success even a year and a half after their launch.

Nevertheless, the data showed performance of the schemes witnessed some improvement this fiscal from a year earlier. Even after discounting the fact that the schemes were launched only in November 2015, they had generated just R1,318 crore in the 2015-16 fiscal.

“Such schemes don’t turn into a massive hit overnight. Some teething troubles do persist, especially in the monetisation scheme. Still, there are chances that the budgeted target for 2017-18 will be exceeded, but it’s better to be conservative,” said one of the sources.

The gold schemes were launched by Prime Minister Narendra Modi in November 2015, as the government wanted to discourage imports of the precious metal and curb their debilitating impact on the trade balance.

Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities, said chances of the sovereign gold bond picking up in the coming years are brighter than those of the monetisation scheme. “The gold bond is a relatively good instrument, and with growing investor awareness and efforts by the authorities and the banks, it has potential to be a success in the coming years,” he said.

However, to make the gold monetisation scheme a success is a more challenging task, considering that Indians don’t want to part with ancestral jewellery, he said. “(Also) logistics issues at the banks need to be sorted out first,” he added.

Recently, the government launched the seventh tranche of gold bonds, offering a 2.5% annual interest to investors. Applications were accepted from February 27 to March 3, and the bonds will be issued to eligible applicants on March 17. Investors will get the interest semi-annually on the nominal value of investment.

Indian households, together the world’s largest hoarders of gold, hold a record 23,000-24,000 tonnes of the precious metal, worth at least $800 billion despite a sharp fall in international prices from their peaks in 2011, according to a study by the London-headquartered World Gold Council (WGC).

The value of the holdings is based on (conservative) international prices, which doesn’t factor in a 10% customs duty. The value would be substantially higher in rupee terms. Coupled with 557.7 tonnes of the central bank’s holdings, gold stocks at most of the known sources in the world’s second-largest consumer would represent around half of its gross domestic product. This means the gold monetisation scheme can be a success if it’s structured in a more lucrative manner to induce households to park their gold in banks.

The country’s gold demand has been shaken a tad after the note ban in November last year, as some customers feared a crackdown on gold holding as well, but long-term prospects remain bright with demand expected to average at 850-950 per annum by 2020, the WGC said. The country’s gold demand touched a seven-year low of 675.5 tonnes in 2016, although a recovery is expected in 2017.

How to Automate Your Social Marketing Efforts

How to Automate Your Social Marketing EffortsIn their book Start Your Own Business, the staff of Entrepreneur Media Inc. guides you through the critical steps to starting your business, then supports you in surviving the first three years as a business owner. In this edited excerpt, the authors describe how you can use automation to speed up the spread of your content across multiple social channels.

With all the social media site tools available, often the best way to be effective with your social marketing is to automate the process. First, you need to decide whether automation is right for you and, if so, which automation you should set up. Automation can be key in turning your contacts into profits because you can post less, but at the same time, you get more exposure. Social automation, however, can be considered spamming, so be careful with how you set it up.

How does social network automation work? There are tools like Hootsuiteand SocialFlow where you can automate your social networking sites orTubeMogul to automate your video posting. These sites can submit a link or post to not just one or two sites but, in some cases, up to 60. Sometimes, though, the link posted isn’t relevant for the site it goes out to. In other words, the links aren’t even relevant for the members of the network, and sometimes they’re not properly tagged or categorized. This eventually leads to negative votes on the article or post submitted, so make sure you set up your automation properly.

There are many automation capabilities and options available. Here are some suggestions to get you started:

Twitter to Facebook. Every time you post on Twitter, it will automatically post to your personal Facebook newsfeed. While some media professionals have gotten away from this since the @Twitter handles are “dead links” when they move to Facebook, it can still be a fast and efficient way to automate. However, if Facebook is your primary source of engagement, consider the other way around for automation (see below).

Facebook Fan Page to Twitter. Every time you post to your Facebook fan page, it can post to Twitter, which will, in turn, post to your personal Facebook newsfeed.

Link your blog to Facebook. Click on the NetworkedBlogs application in Facebook, and add your blog information as prompted. There’s a verification process that Facebook will walk you through to make sure you’re the author of the blog.

Link your blog to LinkedIn. Go to Applications, and click on WordPress if you have a WordPress blog, or go to Applications then Blog Link if you have a TypePad blog. LinkedIn will walk you through the process step by step.

Link your blog to Twitter. Twitterfeed is a handy, free website and application that will “feed your blog to Twitter.” Go to Twitterfeed, sign up for an account, verify and log in, then click “Create New Feed” button, and add your blog. It might take a few hours to start working. Once going, it’s fairly reliable unless Twitter goes down or has API issues. Check the stream once a week.

Use a service like Hootsuite, where you can schedule posts months in advance. You can also use the service to link to all of your social media accounts, from Twitter and Facebook to LinkedIn, Google+ and Pinterest. Your most popular articles or blog posts can be “socialed” months into the future to give them new life. Just be sure to make clear that they’re older posts (add the phrase “In case you missed it,” or ICYMI in Twitterspeak).

Another way to automate your blog so it posts to the social sites you’re active on is to set up widgets and add plugins. You can do this for sites like Twitter, Facebook, LinkedIn, YouTube, Squidoo, Delicious, Digg and many more. The way a widget works is every time you post on one social site, it will go out to your blog as an update. First, you need to make sure your blog allows widgets. Some blogs won’t allow widgets unless you host the blog on your own site. Once you determine whether you can add these widgets, log in to each of the sites you want to add a widget to and go to the search box and type in widget. That will take you to the most current directions on how to upload or generate the HTML code needed to post widgets to your blog.

Plugins are applications that can enhance the capabilities of your blog, such as the All in One SEO plugins available on WordPress, which helps you optimize your blog for search engines, or the WPtouch iPhone Theme on WordPress that transforms your WordPress blog into an iPhone application-style theme. There are thousands of plugins available, and they’re usually found on your blog platform under “plugin.”

Nasdaq Hits Record as Stocks Run on Strong Data

Financial Markets Wall Street Fitbit IPO
NEW YORK — The Nasdaq composite erased its last standing milestone from the dot-com era Thursday, as it set a record intraday high, with stocks on Wall Street in rally mode boosted by strong economic data.

A report in German newspaper Die Zeit about possible concessions made to Greece by its international creditors, which briefly extended the market’s rally, was later denied by EU diplomats.

The Nasdaq composite (^IXIC) hit a high of 5,143.32, topping the previous 5,132.52 record which stood since March 10, 2000. It also set a record closing high, as did the Russell 2000 (^RUT), while the Standard & Poor’s 500 index (^GSPC) closed within 0.5 percent of its record.

Economic growth is beginning to make itself more evident.

U.S. consumer prices last month posted their largest increase in more than two years, jobless claims applications fell last week to a near 15-year low and factory activity in the mid-Atlantic region accelerated to a six-month high in June.

“Economic growth is beginning to make itself more evident,” said John Manley, chief equity strategist at Wells Fargo Funds Management in New York.

Manley said the perceived dovishness of the Federal Reserve’s statement and estimates after its meeting Wednesday continued to support equities.

“The Fed is going to be very slow to raise interest rates,” he said.

Markets have closely watched for signals from the U.S. central bank as it prepares to raise rates for the first time in almost a decade.

The Dow Jones industrial average (^DJI) rose 180.10 points, or 1 percent, to 18,115.84, the S&P 500 gained 20.80 points, or 1 percent, to 2,121.24 and the Nasdaq composite added 68.07 points, or 1.3 percent, to 5,132.95.

Eurozone leaders will hold an emergency summit Monday to try to avert a Greek default, after bank withdrawals accelerated and government revenue slumped as Athens and its international creditors remained deadlocked over a debt deal.

The ECB told a meeting of eurozone finance ministers it wasn’t sure if Greek banks would be able to open Monday, said officials with knowledge of the talks.

The Greek situation is an emotional one for investors and it is hard to know how exactly markets will react, said Wells Fargo’s Manley.

“In 2010 [a Greek default] would have been a real problem. I don’t see a lot of ramifications among financial institutions if it happened now, and if there were, the ECB and IMF will know how to deal with it,” he said.

All the 10 major S&P 500 sectors were higher with the health index leading with a 1.5 percent rise.

Fitbit (FIT) shares ran up as much as 59.5 percent to $31.90 in their market debut before closing at $29.68, 48.4 percent above the $20 IPO pricing.

Advancing issues outnumbered declining ones on the NYSE by 2,062 to 1,015, for a 2.03-to-1 ratio on the upside; on the Nasdaq, 1,949 issues rose and 833 fell for a 2.34-to-1 ratio favoring advancers.

The benchmark S&P 500 index posted 41 new 52-week highs and 2 new lows; the Nasdaq composite set 161 new highs and 30 new lows.

About 6.2 billion shares changed hands on U.S. exchanges, above the 5.96 billion daily average so far this month, according to BATS Global Markets data.

Wall Street Edges Lower as Energy Weighs

NYSE Reacts To Eurozone Bailout Deal With Greece
NEW YORK — U.S. stocks edged lower Wednesday following comments from Federal Reserve Chair Janet Yellen, as a decline in energy shares outweighed gains in the financial sector in the latter stages of trading.

The energy sector, down 1.6 percent, was the worst performer of the 10 major S&P groups as oil prices retreated on concerns increased exports from Iran will add to a global supply glut. Brent settled down $1.46 at $57.05 while U.S. crude settled down $1.63 at $51.41 a barrel.

We were positive the whole day and we sort of lost our gains right at the tail end.

“We were positive the whole day and we sort of lost our gains right at the tail end,” said Phil Orlando, chief equity market strategist at Federated Investors in New York.

“If crude were to be going down, that would mean there is an assumption this deal may get through Congress or the President’s veto won’t get overturned by Congress such that this Iranian flood of crude comes onto the market.”

Financials, up 0.7 percent, helped curb declines. The group was buoyed by a 3.2 percent rise in Bank of America (BAC) to $17.68 and a 3.8 percent gain in U.S. Bancorp (USB) to $45.53 after their quarterly results.

The S&P snapped a four-session winning streak, its longest run of gains since January.

Celgene (CELG) climbed 7 percent to $131.39 after touching a record high of $135.98. The company said it would buy Receptos to get a potential multibillion-dollar drug.

Yellen said she expects the economy to grow steadily for the rest of the year, allowing the Fed to hike rates, but gave no direct hint on the timing or pace of a hike. The Fed is broadly expected to hike rates in September or December.

The Fed’s Beige Book showed U.S. economic activity continued to expand from mid-May through June, with lower energy prices helping boost consumer spending but remaining a drag on manufacturing.

The Dow Jones industrial average (^DJI) fell 3.41 points, or less than 0.1 percent, to 18,050.17, the Standard & Poor’s 500 index (^GSPC) lost 1.54 points, or 0.1 percent, to 2,107.41 and the the Nasdaq composite (^IXIC) dropped 5.95 points, or 0.1 percent, to 5,098.94.

Earnings Season

Corporate America is expected to report its worst sales decline in nearly six years in the second quarter, while profit is expected to have fallen 2.9 percent, according to Thomson Reuters (TRI) estimates. The effect of the uncertainty in the Chinese markets and the strong dollar will also be in focus.

Yum Brands (YUM) fell 2.9 percent to $88.88. The owner of Pizza Hut and KFC reported its fourth straight quarter of falling sales, indicating it is still struggling to regain lost ground in China after a food safety scandal last year.

The Nasdaq is likely to get a lift Thursday on the heels of results from Intel and Netflix after the market close. Intel (INTC) jumped 5.4 percent to $31.30 while Netflix (NFLX) surged 10.4 percent to $108.20 in extended trade, sending Nasdaq e-mini futures up nearly 20 points.

Declining issues outnumbered advancing ones on the NYSE by 1,841 to 1,223, for a 1.51-to-1 ratio on the downside; on the Nasdaq, 1,826 issues fell and 998 advanced for a 1.83-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 30 new 52-week highs and 16 new lows; the Nasdaq composite recorded 140 new highs and 64 new lows.

Volume was light, with about 5.8 billion shares traded on U.S. exchanges, below the 6.66 billion average so far this month, according to data from BATS Global Markets.

Stocks End Sharply Higher as China Jitters Ebb

Financial Markets Wall Street
NEW YORK — U.S. stocks ended sharply higher Tuesday, breaking a five-day losing streak as attention shifted from trouble in Chinese equities to U.S. corporate earnings and to speculation the first Federal Reserve interest rate hike may not come until December.

The Dow Jones industrial average and S&P 500 chalked up gains of more than 1 percent, while the Nasdaq composite lagged slightly.

The S&P has had five down days in a row and a lot of people are starting to nibble.

After the S&P sank over the past week toward the low end of a range it has traded in since February, some investors wagered the market was primed for a technical bounce-back.

“The S&P has had five down days in a row and a lot of people are starting to nibble,” said Michael Matousek, head trader at U.S. Global Investors in San Antonio, which manages about $1 billion.

Market sentiment also reflected expectations the Fed would wait until December, rather than September, to raise interest rates for the first time since 2006, Matousek added.

With a two-day Fed policy meeting ending Wednesday, investors are looking for hints about the timing of that rate increase. No move on rates is expected this week.

“September is possible but the probability for a December rate hike is increasing,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

The Dow Jones industrial average (^DJI) rose 1.1 percent, to end the session at 17,630.27. The Standard & Poor’s 500 index (^GSPC) gained 1.2 percent to 2,093.25 and the Nasdaq composite (^IXIC) added 1 percent to finish at 5,089.21.

All the 10 major S&P 500 sectors rose, with the energy index leaping 3 percent as oil prices recovered from near six-month lows.

U.S. consumer confidence weakened in July to its lowest level since September, due in part to a less optimistic outlook on the labor market.

Earnings Watch

Ongoing uncertainty related to China’s stock market, which closed lower again Tuesday, took a backseat to U.S. corporate earnings.

With second-quarter reports well under way, analysts now expect overall earnings of S&P 500 companies to edge up 0.3 percent and revenue to decline 4 percent, according to Thomson Reuters (TRI) data.

“Earnings are growing but very slowly. The market’s biggest concern is the lack of top-line growth and where that growth is going to come from,” said Tim Courtney, chief investment officer of Exencial Wealth Advisors, which oversees $1.3 billion.

After the bell, Twitter (TWTR) jumped 5.2 percent and Gilead Sciences (GILD) rose 3 percent after both companies posted their second-quarter results. Yelp (YELP) slumped 13 percent after its report.

During Tuesday’s session, SuperValu (VALU) jumped 10.6 percent. It said it was exploring a spinoff of its discount grocery chain Save-A-Lot into a publicly traded company.

Advancing issues outnumbered declining ones on the NYSE by 2.7 to 1. On the Nasdaq, 1.67 stocks gained for each that declined. The S&P 500 racked up 15 new 52-week highs and 12 lows. The Nasdaq composite posted 36 new highs and 163 lows. Some 7.3 billion shares changed hands on U.S. exchanges, above the daily average of 6.7 billion so far this month.

Stocks End Higher as Investors Shrug Off Fed

Financial Markets Wall Street
NEW YORK — U.S. stocks finished stronger Wednesday after the Federal Reserve said the economy and job market continued to strengthen and left its key interest rate unchanged.

The central bank’s comments on the economy and inflation after its two-day pow-wow appeared to do little to drastically change wide expectations that the first rate hike will come in September or possibly December.

The statement tried to just give an update on the state of the economy, which is showing some modest improvement.

No move on rates was expected this week. U.S. interest rates have remained near zero for almost a decade and the Fed has said it will raise rates once it sees a sustained recovery in the economy.

“The statement tried to just give an update on the state of the economy, which is showing some modest improvement,” said Guy Haselmann, head of U.S. interest rate strategy at Scotiabank in New York. “They were trying not to create extra volatility in a market already on edge.”

The Dow Jones industrial average (^DJI) rose 0.7 percent to end at 17,751.39. The Standard & Poor’s 500 index (^GSPC) gained 0.7 percent to 2,108.57 and the Nasdaq composite (^IXIC) added 0.4 percent to finish at 5,111.73.

All 10 major S&P sectors were higher with the energy index’s 1.3 percent rise leading the way.

The S&P 500 has bounced about 2 percent higher in the past two days following a deeper near-3 percent drop over the preceding week that had been caused in part by a rout in China’s stock markets.

With second-quarter earnings season more than halfway done, analysts now expect overall earnings of S&P 500 companies to edge up 0.8 percent and revenue to decline 3.9 percent, according to Thomson Reuters data.

While earnings are expected to increase this quarter, valuations remain a concern. The S&P 500 is trading near 16.9 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

Stocks in the News

After the bell, Facebook (FB) and Whole Foods Market (WFM) dropped 4 percent and 11 percent, respectively, following quarterly reports that left investors wanting more.

During the session, Twitter (TWTR) shares fell 14.5 percent to a year-low of $31.24 after the microblogging company said its number of monthly average users rose at the slowest pace since it went public in 2013.

General Dynamics (GD) rose 3.9 percent after its earnings. It sparked a sector-wide rally across major aerospace stocks including Northrop Grumman (NOC), Spirit Aerosystems (SPR), Lockheed Martin (LMT) and TransDigm Group (TDG).

Cytec Industries (CYT) soared 27.1 percent after Belgian chemical group Solvay agreed to buy the company for $5.5 billion.

Advancing issues outnumbered declining ones on the NYSE by 2.69 to 1. On the Nasdaq, the ratio was 1.28 to 1. The S&P was chalked up 26 new 52-week highs and 1 low; the Nasdaq posted 43 new highs and 62 lows. Some 7.2 billion shares changed hands on U.S. exchanges, above the daily average of 6.7 billion so far this month, according to BATS Global Markets.

Stocks End Flat; LinkedIn Jumps After the Bell

Financial Markets Wall Street
NEW YORK — Wall Street ended flat Thursday as investors digested ho-hum corporate earnings and new data showed that the economy grew more quickly in the second quarter.

Procter & Gamble, Facebook and Whole Foods Market all fell after quarterly reports that left investors wanting more.

U.S. economic growth accelerated in the June quarter as solid consumer spending offset a drag from weak business spending on equipment, suggesting steady momentum that could bring the Federal Reserve closer to hiking interest rates this year.

With a mixed bag of corporate earnings over halfway through second-quarter reporting season and a sharp focus on when the Federal Reserve will begin raising interest rates from near zero, investors on Thursday saw few reasons to pay more for shares.

“We’ve been stuck in a 3-percent band since almost the beginning of the year,” said Warren West, principal at Greentree Brokerage Services in Philadelphia. “There’s nothing motivating investors to push it outside of that in either direction.”

The Dow Jones industrial average (^DJI) ended 0.03 percent weaker at 17,745.98, while the Standard & Poor’s 500 index (^GSPC) was unchanged at 2,108.63. The Nasdaq composite (^IXIC) added 0.3 percent to 5,128.79.

Six of the 10 major S&P sectors were higher, with the utilities index leading gainers, up 0.72 percent, and the energy index the biggest decliner, down 0.7 percent.

Thursday’s GDP report lifted the dollar as some investors bet on a September, rather than December, rate hike. The dollar index rose 0.6 percent to 97.545 after touching its highest in a week.

With 64 percent of S&P 500 companies having reported second-quarter results, analysts expect overall earnings to edge up 1 percent and revenue to decline 3.6 percent, according to Thomson Reuters data.

Valuations remain a concern. The S&P 500 is trading near 16.8 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

“Earnings haven’t been great,” said John Canally, investment strategist at LPL Financial. “We are in a slow-growth environment and anything that knocks that down further is not a plus for the market.”

Earnings News

After the bell, LinkedIn (LNKD) surged 8 percent while Expedia (EXPE) jumped 6 percent, both posting quarterly reports that pleased investors.

During Thursday’s session, Skechers USA (SKX) jumped 16 percent as the sports shoe maker and retailer reported a better-than-expected rise in quarterly revenue.

Procter & Gamble (PG) fell 4.0 percent, Facebook (FB) dropped 1.8 percent and Whole Foods Market (WFM) slumped 11.6 percent.

Advancing issues outnumbered declining ones on the NYSE by 1.04 to 1. On the Nasdaq, that ratio was 1.10 to 1, favoring advancers. The S&P 500 saw 35 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 70 new highs and 79 new lows. Some 6.4 billion shares changed hands on U.S. exchanges, below the daily average of 6.7 billion this month, according to BATS Global Markets.

Wall Street Ends Lower as Weak Oil Weighs

Markets React To Fed Interest Rate Announcement
NEW YORK — Wall Street ended on a sour note Friday as a drop in energy stocks eclipsed wage data that supported expectations that the U.S. Federal Reserve might hold off on an interest rate.

Exxon Mobil (XOM) shares dropped 4.6 percent while Chevron (CVX) lost 4.9 percent after reporting poor quarterly earnings due to weak oil prices.

The drop in those stocks, as well as additional declines in crude prices amid oversupply concerns, contributed to a 2.6 percent decline in the energy index, its deepest one-day drop since January.

“It’s all about rotation [between sectors]. That’s what this market has been about since we’ve been in such a tight trading range this year,” said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading in Las Vegas.

The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September hike.

Initially helping share prices, labor costs in the second quarter recorded their smallest increase in 33 years, with the Employment Cost Index edging up a less-than-expected 0.2 percent.

“The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September hike. This definitely puts a lower probability on that,” said Stanley Sun, interest rate strategist at Nomura Securities International in New York.

Earlier in the week, many investors considered positive comments by the Fed about the economy as a signal that a rate rise could come as early as September.

The Dow Jones industrial average (^DJI) ended down 0.3 percent at 17,690.46. The Standard & Poor’s 500 index (^GSPC) finished 0.2 percent lower at 2,103.92 after opening with a gain. The Nasdaq composite (^IXIC) was virtually unchanged at 5,128.28.

More stocks rose than fell in the S&P and Nasdaq.

Gains For the Week, Month

For the week, the Dow rose 0.7 percent, the S&P added 1.2 percent and the Nasdaq gained 0.8 percent. For July, gains for the Dow, S&P and Nasdaq were 0.4 percent, 2 percent and 2.8 percent, respectively.

Despite the S&P’s negative close Friday, half of the 10 major S&P 500 sectors were higher, with the utilities index’s 1 percent rise leading the advancers.

Stocks are a tad expensive and valuations will be a concern if earnings don’t continue to grow in the second half of the year, said Steve Freedman, senior investment strategist at UBS Wealth Management.

With more than half of the S&P 500 companies having reported their second-quarter results, analysts expect overall earnings to edge up 0.9 percent and revenue to decline 3.3 percent, according to Thomson Reuters (TRI) data.

Coca-Cola Enterprises (CCE) jumped 12.41 percent after The Wall Street Journal reported that the independent Coca-Cola bottling company is in merger talks with two European bottlers.

LinkedIn (LNKD) slumped 10.52 percent after the social network’s second-quarter results failed to connect with investors.

Advancing issues outnumbered declining ones on the NYSE by 1.72 to 1. On the Nasdaq, winners beat losers by 1.33 to 1. The S&P index posted 40 new 52-week highs and 8 new lows; the Nasdaq composite saw 100 new highs and 82 new lows. Some 6.8 billion shares changed hands on U.S. exchanges, just above the daily average of 6.7 billion this month, according to BATS Global Markets.

How to Invest in Bond Funds During a Bear Market

money background of american...

If it’s fizzy, it’s iffy. That’s the key thing to know about bond funds this week.

With drama engulfing the stock market, bonds look safe. But all bond funds aren’t the same, and analysts say it’s imperative to understand what’s in a bond fund before shifting money into it — especially if you are seeking stability.

Right now, the most unsettled segment in bonds is funds comprised of “illiquid, lower-rated bonds in exchange-traded funds,” says Dan Heckman, senior fixed-income strategist at U.S. Bank Wealth Management, based in Kansas City, Missouri. The problem there is that the funds are difficult to value and even harder to sell, but the funds trade minute by minute. That’s a profound mismatch, he says, that explains why some of these funds dropped on Monday by as much as 25 percent of their underlying value.

Another sore spot is foreign bonds, thanks to turmoil in currency markets. “You can pick up some yield, based on the volatility, but that’s dangerous until currencies are on firmer ground,” Heckman says.

Attempting to reap high yields through bonds invariably translates to low credit quality, especially in this cycle, and that means those bonds will be more volatile and harder to manage.

Corporate bonds have been popular recently as companies seek to lock in long-term borrowing costs, says George Rusnak, co-head of fixed-income strategy at Wells Fargo Investment Institute. He anticipates a little bit of fizziness if companies in troubled sectors default, triggering shudders of additional problems. Usually, analysts say, a rush of selling indicates that a category was fizzy, though at that point there’s little investors can do but gain insights to apply to the next cycle of high-yield bond excitement.

Mortgage bonds are one subsector that looks a bit carbonated, Rusnak says. Residential mortgage-backed bonds are less of a worry than bonds backed by commercial properties. “The lending standards are loosened, so there’s probably going to be a little more volatility,” he says.

Energy and mining is another sector that has analysts worried. Falling energy commodity prices could result in some corporate defaults. As well, the unusual turmoil in those categories ripples through related categories, such as shipping, which could undermine debt repayment for business partners.

The current conflagration is a bit of a distraction from the ongoing debate about the existence — or not — of a bond bubble.

The classic definition of a bubble is a disconnect between the underlying value of the bonds and the momentary market value of the bonds or bond fund. “It’s when they’re not being valued properly in the short term versus what they should be in the long term,” Rusnak says. At the moment, rates are very low, compared with norms over the last three decades.

That’s largely because the Federal Reserve and central banks of other major countries have been buying their own countries’ bonds. That keeps interest rates low and stable, but it also raises the question of what will happen when the central banks sell those bonds.

Pent-Up Demand

“They took bonds from the market last year, but they’ll be adding them to the market this year. Will those bonds then flood the market, so prices will be weak? We don’t believe that will happen. The Fed is now discussing how it will go about selling those bonds,” Rusnak says.

As well, there’s plenty of pent-up demand for Treasury bonds, especially from retiring baby boomers looking for safe investments and institutions craving stable returns. “They’ll easily absorb those extra Treasuries coming on board,” Rusnak says.

Corporate bonds and high-yield bonds, though, react more quickly to momentary market trends, Rusnak says, and that’s the issue for this week’s market.

Safety can be at odds with risk.

He’s on the lookout for a “liquidity event” within the high-yield bond sector. That could pinch some investors that had temporary amnesia about risk in their pursuit of yield. “We’re trying to get people to rethink — did you buy high-yield bonds because of the income, and did you know about the potential vulnerability?” he says.

“Safety can be at odds with risk,” says Ike N. Ikeme, assistant professor of finance and economics with Salt Lake Community College. For most people, the goal is to maintain the right balance of income, growth and stability for the long haul — a sustainable strategy that overrides momentary market bumps, he adds.

Heckman recommends sticking with domestic bonds: Treasury and municipal bonds. Analysts agree that rising interest rates are likely, but say the role of traditional bonds is still invaluable for most individual investors.

“You have to be very diversified and lean in to credit quality,” Heckman says. “You may not like the returns, but you’ll like the return of your principal.”