TradeTheNews.com Weekly
Market Update: Mixed Earnings Give Way to "October Surprise"
Fri, 28 Oct 2016 16:04 PM EST
Equity markets drifted lower in the latter half of the week as quarterly
earnings showed no strong overall trend. Then on an otherwise quiet Friday
afternoon, FBI director Comey announced investigators had uncovered new emails
that may be related to the Hillary Clinton private email server probe. Though
the FBI did not give any specifics on the substance of the new investigation,
markets immediately went into risk-off mode, repricing the odds of the election
outcome. By the close on Friday, gold futures rose to the week's high at
$1285/oz, and stocks had touched their lows of the week. For the week, the
S&P500 fell 0.7%, the DJIA edged up 0.1%, and the Nasdaq dropped 1.3%.
Treasuries did not react much to the FBI story, with the 10-year yield
remaining near the weekly high around 1.85% on Friday.
Economic data was mostly upbeat. The German Ifo Business Climate index reached
its highest level in a year and a half, and the Euro Zone reported its 40th
straight month of manufacturing expansion. The UK announced Q3 advance GDP at
2.3% y/y, two-tenths higher than expectations. The advance reading on US Q3 GDP
also came in at a hotter than expected 2.9%, beating expectations by
three-tenths of a percent, solidifying expectations of a Fed rate hike in
December. Elsewhere, OPEC technical discussions on an oil production deal
appeared to make little progress, as Iran and Iraq reportedly refused to
support a production cut or freeze with the semi-annual OPEC meeting just one
month away. WTI crude futures ended the week at lows below $49/bbl.
A slew of earnings and M&A came down the pike in a busy corporate news
week. On Sunday, rumors of an AT&T acquisition of Time Warner were
confirmed when AT&T disclosed it entered into agreement to acquire Time
Warner in a $107.50/share cash and stock deal, though some media names lagged
the broader consumer discretionary sector on Monday as regulatory hurdles ahead
dampened enthusiasm for the merger. Rockwell Collins announced it had agreed to
acquire B/E Aerospace in a $6.4B cash and stock deal, which sent Boeing and
other industrials up to start the week. On Tuesday, Materials and industrials
led the indices lower, as Caterpillar reported mixed results and cut its
full-year outlook, while 3M lowered the top end of its full-year expectations.
Consumer discretionary also lagged after Sherwin Williams, Whirlpool and Under
Armour disappointed and cut their outlooks. On Wednesday, investors analyzed
another gusher of earnings reports which generally saw tech and deep cyclical
names continue to outperform companies leveraged to the US consumer. Key tech
giants reported Thursday afternoon, and while Google beat on top and bottom
line, Amazon worried investors by coming up short on profits. On Friday, AB
Inbev led losses in the Eurostoxx after releasing Q3 results which highlighted
challenges in the Brazil market.
SUNDAY 10/23
TWX: AT&T confirms to acquire Time Warner in a stock-and-cash transaction
valued at $107.50/shr; total transaction value $108.7B
MONDAY 10/24
PHIA.NL: Reports Q3 Net €383M v €324M y/y, adj EBITA €649M v €570M y/y; Rev
€5.9B v €5.95Be
(DE) GERMANY OCT PRELIMINARY MANUFACTURING PMI: 55.1 V 54.4E (23rd month of
expansion)
(EU) EURO ZONE OCT PRELIMINARY MANUFACTURING PMI: 53.3 V 52.7E (40th month of
expansion)
(UK) OCT CBI TRENDS TOTAL ORDERS: -17 V -5E
(US) OCT PRELIMINARY MARKIT MANUFACTURING PMI: 53.2 V 51.5E (highest since Oct
2015)
V: Reports Q4 $0.78 v $0.73e, R$4.26B v $4.24Be
000660.KR: Reports Q3 net KRW597M v KRW498Be; Op KRW726B v KRW660Be; Rev
KRW4.24T v KRW4.17Te
TUESDAY 10/25
NOVN.CH: Reports Q3 $1.23 v $1.18e, Core Op profit $3.38B v $3.49B y/y, R$12.1B
v $12.3Be
ORA.FR: Reports Q3 Restated EBITDA €3.60B v €3.59Be, Rev €10.3B v €10.2Be
(DE) GERMANY OCT IFO BUSINESS CLIMATE: 110.5 (highest since Apr 2014) V 109.6E;
CURRENT ASSESSMENT: 115.0 V 114.9E
MRK: Reports Q3 $1.07 v $0.98e, R$10.5B v $10.2Be
LMT: Reports Q3 $3.61 v $2.86e, R$11.6B v $11.4Be
GM: Reports Q3 $1.72 v $1.44e, R$42.8B v $40.1Be
S: Reports Q2 -$0.04 v -$0.07e, R$8.25B v $7.99Be
FCX: Reports Q3 $0.13 v $0.19e, R$3.88B v $3.86Be
(US) OCT RICHMOND FED MANUFACTURING INDEX: -4 V -4E
(US) OCT CONSUMER CONFIDENCE: 98.6 V 101.5E
AAPL: Reports Q4 $1.67 v $1.66e, R$46.9B v $46.8Be
TWTR: Disney rumored to have rekindled takeover interest; Closing in on deal
after both companies agreed on takeover price "in high $20s/shr" last
week - Betaville
(AU) AUSTRALIA Q3 CONSUMER PRICES (CPI) Q/Q: 0.7% (matches 5-quarter high) V
0.5%E; Y/Y: 1.3% V 1.1%E; TRIMMED MEAN Q/Q: 0.4% V 0.4%E ; Y/Y: 1.7% V 1.7%E
WEDNESDAY 10/26
AIR.FR: Reports 9-month Net €1.81B v €1.90B y/y, Adj EBIT €2.41B v €2.80B y/y,
Rev €42.7B v €43.0B y/y
SAN.ES: Reports Q3 Net €1.7B v €1.54Be, Rev €11.1B v €10.9B q/q
BAYN.DE: Reports Q3 Net profit €1.19B v €1.10Be; adj EBITDA €2.68B v €2.52Be,
Rev €11.6B v €11.27Be
(DE) GERMANY NOV GFK CONSUMER CONFIDENCE: 9.7 V 10.0E
LLOY.UK: Reports Q3 PBT £1.91B v £2.0Be, Rev £4.28B v £4.24B y/y
HEIA.NL: Reports Q3 Organic beer volume +2% v +1.4%e
(UK) SEPT BBA LOANS FOR HOUSE PURCHASE: 38.3K V 37.4KE
LUV: CEO: Sees increased competition in many more markets; Q4 rev trends unch -
post earning comments
3988.HK: Reports Q3 Net CNY41.8B v CNY40.8B y/y
(US) OCT PRELIMINARY MARKIT SERVICES PMI: 54.8 V 52.5E (highest since Nov 2015)
(US) SEPT NEW HOME SALES: 593K V 600KE
TSLA: Reports Q3 $0.71 v $0.14e, R$2.30B v $2.13Be
TXN: Reports Q3 $0.94 v $0.86e, R$3.68B v $3.48Be; Raises dividend 32% to $0.50
(implied yield 2.8%)
(NZ) NEW ZEALAND SEPT TRADE BALANCE (NZ$): -1.44B V -1.15BE; 3rd straight and
RECORD deficit
005930.KR: Reports Q3 final Net KRW4.41T, Op profit KRW5.2T v KRW5.2T prelim,
Rev KRW47.82T v KRW47.0T prelim
THURSDAY 10/27
BAS.DE: Reports final Q3 Net €888M v €1.2B y/y, EBIT €1.5B v €1.50B prelim, Rev
€14.0B v €14B prelim; affirms outlook
NOK1V.FI: Reports Q3 adj Op €556M v €492Me, Rev €6.0B v €5.85Be; Names Kristian
Pullola CFO effective Jan 1st
DBK.DE: Reports Q3 Net profit €256M v loss €394Me, Pretax profit €619M v loss
€379Me, Rev €7.49B v €7.19Be
SU.FR: Reports Q3 Rev €6.06B v €6.21B y/y; Lays out its Growth, Execution &
Digital plans at its Investor Day
BARC.UK: Reports Q3 adj Net £509M v £486M y/y, PBT £837M v £619M y/y, Net Rev
£5.45B v £5.48B y/y
066570.KR: Reports Q3 Net loss KRW62.0 v KRW83.7B y/y, op profit KRW283.2B v
KRW283Be; Rev KRW13.22Tv KRW13.7Te
(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; AS
EXPECTED
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50%; AS
EXPECTED
(EU) EURO ZONE SEPT M3 MONEY SUPPLY Y/Y: 5.0% V 5.1%E
(UK) Q3 ADVANCE GDP Q/Q: 0.5% V 0.3%E; Y/Y: 2.3% V 2.1%E
000002.CN: Reports Q3 Net CNY2.91B v CNY2.01B y/y, Rev CNY42.3B v CNY29.3B y/y
POT: Reports Q3 $0.10 v $0.09e, R$1.14B v $1.00Be
NXPI: Confirms to be acquired by Qualcomm for $110.00/shr in cash valued at
~$47B
DOW: Reports Q3 $0.91 v $0.80e, R$12.5B v $12.1Be; Sees steady growth in North
America and Europe continuing
F: Reports Q3 $0.26 v $0.21e, R$35.9B v $32.0Be
TWTR: Reports Q3 $0.13 v $0.09e, R$616.0M v $611Me; Confirms to cut up to 9% of
jobs
MO: Reports Q3 $0.82 v $0.81e, R$5.19B (ex-excise tax) v $5.12Be (update)
COP: Reports Q3 -$0.66 v -$0.69e, R$6.52B v $6.54Be (update)
UPS: Reports Q3 $1.44 v $1.43e, R$14.9B v $14.7Be
(US) INITIAL JOBLESS CLAIMS: 258K V 255KE; CONTINUING CLAIMS: 2.04M V 2.05ME
(US) SEPT PRELIMINARY DURABLE GOODS ORDERS: -0.1% V 0.0%E; DURABLES EX
TRANSPORTATION: 0.2% V 0.2%E
F: Exec: confirms plan to cut production during Q4, cutting output of Focus,
Fusion, and Escape models - earnings call comments
(US) SEPT PENDING HOME SALES M/M: 1.5% V 1.0%E; Y/Y: 2.0% V 4.0%E
ZTO: IPO opens for trade at $18.40
AMZN: Reports Q3 $0.52 v $0.85e, R$32.7B v $32.6Be
GOOGL: Reports Q3 $9.06 v $8.58e, R$22.5B (includes $ TAC) v $22.1Be; Approves
$7B buyback of Class C shares (1.3% of market cap)
BIDU: Reports Q3 $1.28 v $0.87e (unclear if comp), R$2.74B v $2.59Be
BHI: GE said to be talks to buy Baker Hughes; BHI has market cap of $23B, GE
may pay over $30B - financial press
FRIDAY 10/28
BNP.FR: Reports Q3 Net €1.89B v €1.69Be, Rev €10.6B v €10.3Be
ABI.BE: Reports Q3 $0.83 v $1.02e, Adj EBITDA $4.03B v $4.43Be, Rev $11.1B v
$11.4Be
(FR) FRANCE Q3 ADVANCE GDP Q/Q: 0.2% V 0.3%E; Y/Y: 1.1% V 1.2%E
SAN.FR: Reports Q3 Net €2.30B v €2.0Be; Business Op €3.10B v €2.75Be; Rev
€9.65B v €9.58Be; to buy back €3.5B in shares (3.9% of market cap)
RBS.UK: Reports Q3 Net loss £469M v loss £1.08B y/y, underlying pretax £1.33B v
£776Me, Rev £3.31B v £3.18B y/y
ELUXB.SE: Reports Q3 Op SEK1.83B v SEK1.72Be, Rev SEK30.9B v SEK31.4Be
3328.HK: Reports Q3 Net CNY14.9B v CNY14.7B y/y, Net interest income CNY100.8B
v CNY108.0B y/y
601398.CN: Reports Q3 Net CNY72.6B v CNY72.7B y/y, Op Income CNY155.0B v
CNY167.1B y/y, Net Interest Income CNY117.1B v CNY127.9B y/y
(EU) EURO ZONE OCT BUSINESS CLIMATE INDICATOR: 0.55 V 0.46E; CONSUMER
CONFIDENCE (FINAL): -8.0 V -8.0E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €5.25B VS. €4.25-5.25B INDICATED
RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
(RU) RUSSIA CENTRAL BANK (CBR) LEAVES 1-WEEK AUCTION RATE UNCHANGED AT 10.00%;
AS EXPECTED
(DE) GERMANY OCT PRELIMINARY CPI M/M: 0.2% V 0.2%E; Y/Y: 0.8% V 0.8%E
(US) Q3 ADVANCE GDP PRICE INDEX: 1.5% V 1.4%E; CORE PCE Q/Q: 1.7% V 1.6%E
(US) Q3 ADVANCE GDP ANNUALIZED Q/Q: 2.9% V 2.6%E; PERSONAL CONSUMPTION: 2.1% V
2.6%E
(US) Q3 EMPLOYMENT COST INDEX (ECI): 0.6% V 0.6%E
(US) OCT FINAL MICHIGAN CONFIDENCE: 87.2 V 88.2E (lowest level since October
2014)
