Equities are mixed in trading today following a higher finish in the previous trading session.
Investors have been cautious in trading today as they await the all-important non-farm payrolls data, which is scheduled to be released on Friday.
A strong report would raise the possibility of a rate hike in 2016. The Federal Reserve has already indicated in its FOMC last week that it is open to a rate hike in 2016. Having said that, the futures market suggests that the Fed won’t announce a rate hike until 2017.
Given that all other developed world central banks are easing, it is unlikely that the Fed will turn hawkish.
Even if we get a rate hike, the pace of future rate hikes will be gradual.
That is good news for equity markets, which have had an excellent run driven mainly by loose monetary policy from the Fed. In terms of fundamentals though, the S&P 500 looks overvalued, especially as the ongoing earnings season has once again been a disappointment.
Shares of Mechanical Technology Inc. (OTCQB:MKTY) have surged though on second-quarter results. Based in Albany, New York, Mechanical Technology conducts operations through its subsidiary, MTI Instruments Inc., which supplies precision linear displacement solutions, vibration measurement and system balancing solutions, and wafer inspection tools.
The Company's product offerings include Accumeasure Series, Microtrak 4, Microtrak PRO-2D, MTI-2100 Fotonic Sensor Series, Accumeasure D Series, Microtrak TGS, PBS-4100+ Portable Balancing System, PBS-4100R+ Test Cell Vibration Analysis & Trim Balancing System, TSC-4800A Tachometer Signal Conditioner and 1510A Calibrator, Accumeasure Digital Series, Accumeasure Analog Series, Semtester Tensile Stages and Proforma 300i, PV 1000.
MKTY reported that its revenue for the second quarter of 2016 decreased by 143,000 as compared to the same period in the previous year. The decline in product revenue was attributable to reduced instrumentation product shipments to Asia, combined with a minor decline in turbo-machinery sales.
Gross profit, as a percentage of product revenue, rose from 62.4% during the second quarter last year to 66.4% for the second quarter of 2016. This upturn was attributable to lower overhead costs and improved inventory management reducing charges to reserves during the 2016 quarter for potentially obsolete stock.
Net income was $108,000 for the three months ended June 30, 2016 compared to a net loss of $218,000 for the three months ended June 30, 2015.
At last check, MKTY shares were trading 33.31% higher at $0.800 on volume of 34,208, which is well above the daily average volume of 5,235.
