TradeTheNews.com Weekly
Market Update: Santa brings investors plenty of holiday cheer
Fri, 22 Dec 2017 16:03 PM EST
Stock markets kept on rising into the Christmas holiday as the final passage of
US tax cut legislation along with continued robust growth prospects globally
gave investors little reason to sell. Before Friday’s NY open, the UK’s FTSE
100 joined most of the major US major indices to reach fresh all-time highs.
Treasury markets sold off mid-week and yield curves began to steepen largely on
the prospects that fiscal stimulus will likely boost growth and finally
generate some inflation in 2018. Those prospects were exacerbated by news that
several large, high-profile US corporations were already offering their workers
wage increases and bonuses in response to the projected benefits from lower
corporate tax rates. Bitcoin/blockchain mania may have hit a crescendo when a
host of US micro caps surged 100% or more just on press releases suggesting a
name change. Friday saw bitcoin drop 20% at one point, along with a host of
cryptocurrencies and related equities. Copper moved up towards the Oct
multi-year highs above $3.20 and WTI crude prices drifted back up towards $60.
The Dollar index tread water and continued to consolidate around the 100-day
moving average despite exhibiting strength against the Mexican peso and
weakness versus the Loonie. For the week the S&P gained 0.3%, the Dow added
0.4% and the NASDAQ rose 0.3%.
In corporate news this week, Jack in the Box announced it would sell its Qdoba
Mexican food unit to Apollo Global Management for $305M in cash. UnitedHealth
said it would buy Chilean medical insurance provider Banmédica in a deal valued
at $2.8B as part of a plan to expand its growth to South America. Liberty
Global is reportedly close to a deal to sell its Austrian cable unit to
Deutsche Telecom for $2B, as DT seeks to expand broadband offerings to countries
with only mobile operations and Liberty reorganizes in preparation for a
possible Vodafone merger. Nike reported an earnings beat well above estimates,
but took a hit on gross margins from heavy price competition in the North
America market. FedEx noted a top and bottom line beat in its quarterly report
and projected a nearly $1.5B earnings boost from the US tax law changes.
SUNDAY 12/17
*(CN) CHINA NOV PROPERTY PRICES M/M: RISES IN 50 OUT OF 70 CITIES V 50 PRIOR
MONDAY 12/18
(US) Sen Collins (R-ME): I will vote for tax bill
TUESDAY 12/19
(UK) Ineos Spokesman: still assessing repair options for Forties oil pipeline;
timescale for repairs remains 2-4 weeks from Dec 11th - press
(DE) GERMANY DEC IFO BUSINESS CLIMATE: 117.2 V 117.5E (moves off record level);
CURRENT ASSESSMENT: 125.4 V 124.7E
(US) NOV HOUSING STARTS: 1.297M V 1.250ME; BUILDING PERMITS: 1.298M V 1.270ME
(US) House Min Whip Hoyer (D-MD): stopgap spending bill is headed to an impasse
in the House; Democrats have been asked to vote no on stopgap bill
(US) HOUSE PASSES TAX REFORM BILL (AS EXPECTED)
FDX Reports Q2 $3.18 v $2.87e, Rev $16.3B v $15.7Be; Qualifies FY18 GAAP EPS
guidance to be significantly different if Tax Cuts and Jobs Act is enacted
WEDNESDAY 12/20
*(US) SENATE VOTES TO PASS REPUBLICAN TAX LEGISLATION; FINAL VOTE 51 TO 48
(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; AS
EXPECTED (ends QE program, but maintains heavy presence in bond markets)
BBBY Reports Q3 $0.44 v $0.36e, Rev $3.0B v $2.90Be
(JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER)
UNCHANGED AT -0.10%; AS EXPECTED
THURSDAY 12/21
(FR) FRANCE DEC BUSINESS CONFIDENCE: 112 V 111E; MANUFACTURING CONFIDENCE: 112
V 113E
(TW) TAIWAN CENTRAL BANK (CBC) LEAVES BENCHMARK INTEREST RATE UNCHANGED AT
1.375%; AS EXPECTED
(CZ) CZECH CENTRAL BANK (CNB) LEAVES REPURCHASE RATE UNCHANGED AT 0.50%; AS
EXPECTED
(US) Q3 FINAL GDP ANNUALIZED Q/Q: 3.2% V 3.3%E; PERSONAL CONSUMPTION: 2.2% V
2.3%E
*(US) Q3 FINAL GDP PRICE INDEX: 2.1% V 2.1%E; CORE PCE Q/Q: 1.3% V 1.4%E
(CA) CANADA NOV CPI M/M: 0.2%E V 0.1% PRIOR; Y/Y: 2.1% v 2.0%E
(US) DEC PHILADELPHIA FED BUSINESS OUTLOOK: 26.2 V 21.0E
NKE Reports Q2 $0.46 v $0.39e, Rev $8.55B v $8.39Be
FRIDAY 12/22
(DE) GERMANY JAN GFK CONSUMER CONFIDENCE: 10.8 V 10.7E
*(FR) FRANCE Q3 FINAL GDP Q/Q: 0.6% V 0.5%E; Y/Y: 2.3% V 2.2%E
(UK) Q3 FINAL GDP Q/Q: 0.4% V 0.4%E; Y/Y: 1.7% V 1.5%E
*(US) NOV PRELIMINARY DURABLE GOODS ORDERS: 1.3% V +2.0%E; DURABLES
EX-TRANSPORTATION: -0.1% V 0.5%E
(US) NOV PCE DEFLATOR M/M: 0.2% V 0.3%E; Y/Y: 1.8% V 1.8%E
(US) NOV NEW HOME SALES: 733K V 655KE (highest level since 2007)
(US) Pres Trump: "Will be signing the biggest ever Tax Cut and Reform Bill
in 30 minutes in Oval Office. Will also be signing a much needed 4 billion
dollar missile defense bill."
XPO Home Depot reportedly mulled internally a bid for XPO in order to keep it
away from Amazon - Recode
Friday, December 22, 2017
Sunday, December 17, 2017
Barrons weekend summary
Barrons weekend summary: Cover story positive on MUNIS; positive on ALK; cautious on DIS/FOXA deal and expect more industry consolidation
Cover story: The tax changes proposed by Congressional Republicans have targeted several categories of bonds, which will lose their tax exemptions so the government can increase its revenue; Despite that, “the relatively high after-tax yields of munis still make them attractive for investors.”
Features: 1) The high valuation of NFLX—shareholders pay $47 for every $1 of cash flow it generates, a multiple no other media company has—has rivals scrambling to catch up, and more consolidation should come after the DIS-FOXA tie-up; 2) “Even after this year’s broad rally in stocks and bonds, plenty of income-oriented investments remain enticing” including MLPs, telecoms, REITs, and high-dividend stocks in the U.S. and Europe; 3) Positive on ALK: Investors have a number of concerns, including the carrier’s steps to absorb Virgin America, fare pricing, and cancellations, but its balance sheet is healthy and growth potential is robust, and shares should rise in 2018; 4) Cautious on DIS, FOXA: Disney’s proposed acquisition of assets from 21st Century Fox “is a murky web of deals within deals” that one analyst said is the “most complex transaction she’s ever had to analyze.”
Tech Trader: Cautious on AAPL: The tech giant continues to release phones with dazzling new features, but software bugs increasingly require updates to fix; There is no sign of a user exodus, but a loss of faith in Apple’s software could curb growth.
Trader: The end of crisis-level monetary stimulus will eventually affect what investors are willing to pay for riskier assets, says JPM strategist Marko Kolanovic; Utilities are sitting out the latest rally, another reason investors should be cautious when looking for opportunities in this dividend-heavy sector; “At some point, earnings growth will tail off, a recession will hit, and this bull market will end. That doesn’t make it a bubble.”
Profile: Sammy Semnegar, manager of the Fidelity International Capital Appreciation fund, looks for international companies benefiting from global megatrends; the fund has returned an average of 11.3% annually during the past five years (top 10 holdings: Tencent, BABA, TSM, UL, British American Tobacco, Naspers, SAP, AIA Group, LVMH Moet Hennessy Louis Vuitton, DEO).
Interview: Mike Kirby, chairman and director of research at Green Street Advisors, the leading independent research firm in the REIT sector, talks about valuations, New York commercial real estate, and WeWork.
European Trader: Cautious on Steinhoff International Holdings: Though shares of the global retail giant have been marked down by about 80%, bargain hunters should be wary of diving in until management takes concrete steps to fix problems.
Asian Trader: Investors in China need to monitor the pace of monetary tightening, real estate values, and A-shares in the MSCI emerging markets index if they hope to get a solid outlook for the country in 2018.
Emerging Markets: Greece has seen three straight quarters of economic growth, unemployment is down, and the budget has a surplus, improvements that have benefited bondholders and bode well for investors.
Commodities: “The Bitcoin craze may have helped dull some of gold’s shine in recent weeks, but the cryptocurrency is no substitute for the precious metal.”
Streetwise: XOM’s move to disclose more about what tightening climate-change regulations might do to the long-term value of its assets will prompt rivals to follow suit, creating the potential for major change in the industry.
Friday, December 15, 2017
Markets salivate over US tax breaks; Fed tightens, while other major central banks on hold
TradeTheNews.com Weekly
Market Update: Markets salivate over US tax breaks; Fed tightens, while other
major central banks on hold
Fri, 15 Dec 2017 16:09 PM EST
US stock markets looked to finish the week at all-time highs once again despite lingering concerns around handful of Republican Senators’ willingness to support the final terms of the tax bill. Friday’s rally, fueled by options expiration and an S&P rebalance, was largely predicated on the belief the Republicans will ultimately prove to be successful in pushing a tax cut package through Congress next week. The economic data remained robust supporting the FOMC’s decision to raise rates on Wednesday, as was expected. Thursday’s stronger than expected retail sales numbers had economists revising Q4 GDP expectations higher into the mid 3% range. A host of other key central banks met as well, largely matching market expectations by indicating they were staying the course on stimulus. European officials pushed to ball forward in terms of Brexit, but a high profile political defeat for PM May only solidified expectations that round two of the negotiations will be even more complicated.
US Treasury note sales were met with healthy demand ahead the Fed meeting but rates still rose relative to Europe’s, while the US yield curve continued to flatten, led by better buying at the long end. The 5-30 year yield-spread narrowed to under 55 basis points for the first time since 2007. The Dollar index finished largely flat, helped by firming late in the week and weakness in the Pound, in particular. Bitcoin mania spread as a host of other cryptocurrencies saw eye popping gains after bitcoin futures trade commenced on the CBOE on Sunday. Natural gas prices remained under significant pressure despite a cold blast into the Northeast US and an explosion at Austria’s largest gas hub. WTI crude oil prices remained within striking distance of the recent highs, while Brent touched levels not see in more than 2-years after the North Seas Forties pipeline was shut for immediate repairs to fix a growing crack. For the week the DJIA gained 1.3%, the S&P500 rose 0.9%, and the Nasdaq added 1.4%.
This week in corporate news, Disney confirmed it would acquire 21st Century Fox assets in at $52B deal. Bitcoin-tied stocks saw their momentum continue, with many of the small cap companies associated to cryptocurrencies moving higher still this week. Boeing climbed on its annual capital returns announcement. Mattel lowered its expectations and announced a high yield offering to replace its revolving credit facility. Caterpillar shares hit an all-time high and powered the Dow on Wednesday after disclosing a 26% rise in total machine sales in its latest monthly dealer statistics. Teva confirmed a reorganization plan that cuts its Israeli workforce in half and closes an R&D center in Netanya. Oracle shares dropped on a disappointing forecast for Q3 cloud services.
SUNDAY 12/10
XBT Bitcoin futures open at $15,000 on CBOE
MAERSKB.DK CCO: Global freight rates will be ‘fragile’ going into 2018, warned on softer demand
MONDAY 12/11
MAT Guides FY17 Gross Rev to decline by at least mid to high single digits y/y; updates cost reduction plans - filing
12/11 (US) New York Mayor de Blasio: earlier explosion in NYC subway was terrorist attack; there are no known, credible or specific threats to NYC right now
TUESDAY 12/12
(UK) Ineos issues update on North Sea Forties Pipeline (450K bpd): Says the pipeline is now closed down for additional inspections, no timeframe yet for restart
(UK) NOV CPI M/M: 0.3% V 0.2%E; Y/Y: 3.1% V 3.0%E; CPI CORE Y/Y: 2.7% V 2.7%E (highest annual pace since March 2012)
(US) NOV PPI FINAL DEMAND M/M: 0.4% V 0.3%E; Y/Y: 3.1% V 2.9%E
(US) GOP reportedly in talks to lower top income tax rate from 39.6% to 37% as part of final tax bill - Wash Post
WEDNESDAY 12/13
(UK) OCT AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.5% V 2.5%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.3% V 2.2%E
(UK) NOV JOBLESS CLAIMS CHANGE: +5.9K V +6.5K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3% PRIOR
(UK) OCT ILO UNEMPLOYMENT RATE: 4.3% V 4.2%E (matches low from 1975)
(US) NOV CPI M/M: 0.4% V 0.4%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI INDEX NSA: 246.669 V 246.816E
CAT Reports Nov dealer statistics: Total Machines +26% y/y
TMUS Acquires TV tech firm Layer3 TV, Inc.; no terms disclosed; plans to launch pay TV service in 2018
(US) House and Senate leaders said to have reached an agreement in principle on tax reform bill - press
(US) FOMC RAISES TARGET RATE RANGE 25BPS TO 1.25-1.50% (AS EXPECTED)
(UK) UK govt loses vote on EU withdrawal bill amendment by 309-305; House of Commons votes to give lawmakers final say on Brexit deal - press
(CN) PBOC RAISES INTEREST RATE ON REVERSE REPO AND MLF OPERATIONS BY 5BPS (move follows the Fed move on rates earlier)
THURSDAY 12/14
(FR) FRANCE DEC PRELIMINARY MANUFACTURING PMI: 59.3 V 57.2E (15th month of expansion and highest since Sept 2000)
(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%; AS EXPECTED
(CH) SNB LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(DE) GERMANY DEC PRELIMINARY MANUFACTURING PMI: 63.3 V 62.0E (37th month of expansion and a record high)
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50; AS EXPECTED (brings forward its 1st planned rate hike)
(EU) EURO ZONE DEC PRELIMINARY MANUFACTURING PMI: 60.6 V 59.7E (53rd month of expansion and record high)
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(UK) BOE VOTED 9-0 TO LEAVE INTEREST RATES UNCHANGED AT 0.50%
(EU) ECB LEAVES MAIN REFINANCING RATE UNCHANGED AT 0.00; AS EXPECTED
(US) NOV ADVANCE RETAIL SALES M/M: 0.8% V 0.3%E; RETAIL SALES EX AUTO M/M: 1.0% V 0.6%E
(US) NOV IMPORT PRICE INDEX M/M: 0.7% V 0.7%E; Y/Y: 3.1% V 3.2%E
(EU) ECB Draghi: Reiterates that interest rates to remain at present level well past end of QE; favorable financing conditions still needed - Prepared remarks
(US) Atlanta Fed raises Q4 GDP estimate to 3.3% from 2.9% on 12/8
(US) Speaker of House Ryan (R-WI) considering retiring from Congress after 2018 - Politico
(US) FCC VOTES TO REPEAL NET NEUTRALITY RULES IN 3-2 VOTE (AS EXPECTED)
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 7.25%; AS EXPECTED
ORCL Reports Q2 $0.70 v $0.68e, Rev $9.63B v $9.56Be; raises share repurchases by $12B (6% of market cap)
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT TARGET RATE UNCHANGED AT 2.50%; AS EXPECTED
COST Reports Q1 $1.45 v $1.35e, Rev $32B v $31.5Be
FRIDAY 12/15
SIE.DE Guides initial FY18 R&D expenditures €5.6B v €5.2B y/y - analyst day
(RU) RUSSIA CENTRAL BANK (CBR) CUTS 1-WEEK AUCTION RATE BY 50BPS TO 7.75%; MORE-THAN-EXPECTED
(UK) EU Tusk's: EU leaders formally declare that sufficient progress has been made in Brexit talks to advance into phase 2; approve the start of Brexit transition talks (as expected)
(US) DEC EMPIRE MANUFACTURING: 18.0 V 18.8E (lowest since July)
(US) NOV INDUSTRIAL PRODUCTION M/M: 0.2% V 0.3%E; CAPACITY UTILIZATION: 77.1% V 77.2%E
Fri, 15 Dec 2017 16:09 PM EST
US stock markets looked to finish the week at all-time highs once again despite lingering concerns around handful of Republican Senators’ willingness to support the final terms of the tax bill. Friday’s rally, fueled by options expiration and an S&P rebalance, was largely predicated on the belief the Republicans will ultimately prove to be successful in pushing a tax cut package through Congress next week. The economic data remained robust supporting the FOMC’s decision to raise rates on Wednesday, as was expected. Thursday’s stronger than expected retail sales numbers had economists revising Q4 GDP expectations higher into the mid 3% range. A host of other key central banks met as well, largely matching market expectations by indicating they were staying the course on stimulus. European officials pushed to ball forward in terms of Brexit, but a high profile political defeat for PM May only solidified expectations that round two of the negotiations will be even more complicated.
US Treasury note sales were met with healthy demand ahead the Fed meeting but rates still rose relative to Europe’s, while the US yield curve continued to flatten, led by better buying at the long end. The 5-30 year yield-spread narrowed to under 55 basis points for the first time since 2007. The Dollar index finished largely flat, helped by firming late in the week and weakness in the Pound, in particular. Bitcoin mania spread as a host of other cryptocurrencies saw eye popping gains after bitcoin futures trade commenced on the CBOE on Sunday. Natural gas prices remained under significant pressure despite a cold blast into the Northeast US and an explosion at Austria’s largest gas hub. WTI crude oil prices remained within striking distance of the recent highs, while Brent touched levels not see in more than 2-years after the North Seas Forties pipeline was shut for immediate repairs to fix a growing crack. For the week the DJIA gained 1.3%, the S&P500 rose 0.9%, and the Nasdaq added 1.4%.
This week in corporate news, Disney confirmed it would acquire 21st Century Fox assets in at $52B deal. Bitcoin-tied stocks saw their momentum continue, with many of the small cap companies associated to cryptocurrencies moving higher still this week. Boeing climbed on its annual capital returns announcement. Mattel lowered its expectations and announced a high yield offering to replace its revolving credit facility. Caterpillar shares hit an all-time high and powered the Dow on Wednesday after disclosing a 26% rise in total machine sales in its latest monthly dealer statistics. Teva confirmed a reorganization plan that cuts its Israeli workforce in half and closes an R&D center in Netanya. Oracle shares dropped on a disappointing forecast for Q3 cloud services.
SUNDAY 12/10
XBT Bitcoin futures open at $15,000 on CBOE
MAERSKB.DK CCO: Global freight rates will be ‘fragile’ going into 2018, warned on softer demand
MONDAY 12/11
MAT Guides FY17 Gross Rev to decline by at least mid to high single digits y/y; updates cost reduction plans - filing
12/11 (US) New York Mayor de Blasio: earlier explosion in NYC subway was terrorist attack; there are no known, credible or specific threats to NYC right now
TUESDAY 12/12
(UK) Ineos issues update on North Sea Forties Pipeline (450K bpd): Says the pipeline is now closed down for additional inspections, no timeframe yet for restart
(UK) NOV CPI M/M: 0.3% V 0.2%E; Y/Y: 3.1% V 3.0%E; CPI CORE Y/Y: 2.7% V 2.7%E (highest annual pace since March 2012)
(US) NOV PPI FINAL DEMAND M/M: 0.4% V 0.3%E; Y/Y: 3.1% V 2.9%E
(US) GOP reportedly in talks to lower top income tax rate from 39.6% to 37% as part of final tax bill - Wash Post
WEDNESDAY 12/13
(UK) OCT AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.5% V 2.5%E; WEEKLY EARNINGS (EX BONUS) 3M/Y: 2.3% V 2.2%E
(UK) NOV JOBLESS CLAIMS CHANGE: +5.9K V +6.5K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3% PRIOR
(UK) OCT ILO UNEMPLOYMENT RATE: 4.3% V 4.2%E (matches low from 1975)
(US) NOV CPI M/M: 0.4% V 0.4%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI INDEX NSA: 246.669 V 246.816E
CAT Reports Nov dealer statistics: Total Machines +26% y/y
TMUS Acquires TV tech firm Layer3 TV, Inc.; no terms disclosed; plans to launch pay TV service in 2018
(US) House and Senate leaders said to have reached an agreement in principle on tax reform bill - press
(US) FOMC RAISES TARGET RATE RANGE 25BPS TO 1.25-1.50% (AS EXPECTED)
(UK) UK govt loses vote on EU withdrawal bill amendment by 309-305; House of Commons votes to give lawmakers final say on Brexit deal - press
(CN) PBOC RAISES INTEREST RATE ON REVERSE REPO AND MLF OPERATIONS BY 5BPS (move follows the Fed move on rates earlier)
THURSDAY 12/14
(FR) FRANCE DEC PRELIMINARY MANUFACTURING PMI: 59.3 V 57.2E (15th month of expansion and highest since Sept 2000)
(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%; AS EXPECTED
(CH) SNB LEAVES SIGHT DEPOSIT INTEREST RATE UNCHANGED AT -0.75%; AS EXPECTED
(DE) GERMANY DEC PRELIMINARY MANUFACTURING PMI: 63.3 V 62.0E (37th month of expansion and a record high)
(NO) NORWAY CENTRAL BANK (NORGES) LEAVES DEPOSIT RATES UNCHANGED AT 0.50; AS EXPECTED (brings forward its 1st planned rate hike)
(EU) EURO ZONE DEC PRELIMINARY MANUFACTURING PMI: 60.6 V 59.7E (53rd month of expansion and record high)
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(UK) BOE VOTED 9-0 TO LEAVE INTEREST RATES UNCHANGED AT 0.50%
(EU) ECB LEAVES MAIN REFINANCING RATE UNCHANGED AT 0.00; AS EXPECTED
(US) NOV ADVANCE RETAIL SALES M/M: 0.8% V 0.3%E; RETAIL SALES EX AUTO M/M: 1.0% V 0.6%E
(US) NOV IMPORT PRICE INDEX M/M: 0.7% V 0.7%E; Y/Y: 3.1% V 3.2%E
(EU) ECB Draghi: Reiterates that interest rates to remain at present level well past end of QE; favorable financing conditions still needed - Prepared remarks
(US) Atlanta Fed raises Q4 GDP estimate to 3.3% from 2.9% on 12/8
(US) Speaker of House Ryan (R-WI) considering retiring from Congress after 2018 - Politico
(US) FCC VOTES TO REPEAL NET NEUTRALITY RULES IN 3-2 VOTE (AS EXPECTED)
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 25BPS TO 7.25%; AS EXPECTED
ORCL Reports Q2 $0.70 v $0.68e, Rev $9.63B v $9.56Be; raises share repurchases by $12B (6% of market cap)
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT TARGET RATE UNCHANGED AT 2.50%; AS EXPECTED
COST Reports Q1 $1.45 v $1.35e, Rev $32B v $31.5Be
FRIDAY 12/15
SIE.DE Guides initial FY18 R&D expenditures €5.6B v €5.2B y/y - analyst day
(RU) RUSSIA CENTRAL BANK (CBR) CUTS 1-WEEK AUCTION RATE BY 50BPS TO 7.75%; MORE-THAN-EXPECTED
(UK) EU Tusk's: EU leaders formally declare that sufficient progress has been made in Brexit talks to advance into phase 2; approve the start of Brexit transition talks (as expected)
(US) DEC EMPIRE MANUFACTURING: 18.0 V 18.8E (lowest since July)
(US) NOV INDUSTRIAL PRODUCTION M/M: 0.2% V 0.3%E; CAPACITY UTILIZATION: 77.1% V 77.2%E
Saturday, December 9, 2017
Barrons weekend summary
Barrons weekend summary: Cautious feature on MBI
Cover story: Outlook 2018 feature includes forecasts from Wall Street investment strategists, who expect U.S. stocks to head higher next year, propelled by economic growth and earnings gains; they’re bullish on financials and technology, but cautious on consumer staples and utilities; the S&P 500 could hit 2840; Barron’s 10 favorite stocks for 2018 are GOOGL, DAL, Berkshire Hathaway, Volkswagen, PXD, AMAT, EPD, ALLY, ANTM, USFD.
Features: 1) Cautious on MBI: Company’s $250M buyback returned money to long-suffering investors, but the shares were bought by the firm’s regulated insurance subsidiary, which has taken a hit in Puerto Rico ; 2) Apps such as Acorns, Stash, and Robinhood offer fractional-share ownership of a short, curated list of ETFs and encourage saving via automated deposits, and their low barriers to entry have boosted user numbers; 3) Barron’s 2017 stock picks topped the market during the past 12 months, returning 29.8% against 22.8% for the S&P 500, with TOL, AAPL, and UL the best performers; 4) Positive on GOOGL, FB, MSFT, IBM, AMZN: Among tech giants making bets on artificial reality, which is expanding beyond gaming to find uses in a range of businesses—with the potential for far-reaching implications for corporations and consumers.
Tech Trader: Positive on DISH, SNY, GOOGL, Hulu: For cord cutters, multichannel video programming distributors, or MVPDs, bring back the ability to watch news, sports, and other events in real time, and there is growing demand for the services.
Trader: “There’s not much to scare the market now at year end”; Michael Darda of MKM Partners says growth momentum remains above recovery averages, but not so much as to create an inflation panic at the Fed; “There is tremendous uncertainty heading into the year, at a time when zero fear is being priced in,” says David Rosenberg of Gluskin Sheff; Consumers still want to spend, but their buying habits have changed too much for most of the legacy retailers to return to their former glory.
Interview: Omar Selim of Arabesque Asset Management talks about S-Ray, an intelligent database that monitors the sustainability of 7,000 companies around the world, combining about 200 ESG metrics from more than 50,000 sources.
Profile: Sreeni Prabhu manages the Angel Oak Multi-Strategy Income fund, of which more than 60% of assets are nonagency residential mortgage-backed securities, with commercial mortgage-backed securities coming in a distant second.
Follow-Up: Cautious on CVS, AET: Leerink Partners analyst Ana Gupte says it’s unlikely the combined entity will pocket cost savings the companies say will result from eliminating $750M in annual operating expenses.
European Trader: Positive on Deutsche Post, Cinci: Shipping company and toll-road and construction firm are among transportation stocks that could pay off for investors as Europe’s economy continues to recover.
Asian Trader: With the MSCI AC Asia ex Japan index up 41% and Japan’s Nikkei 225 up 18% so far this year, fund managers and sell-side analysts expect Asian markets to power ahead in 2018.
Commodities: “After an unimpressive year, the 2018 outlook for commodities looks more promising, particularly for crude oil and industrial metals.”
Commodities: “After an unimpressive year, the 2018 outlook for commodities looks more promising, particularly for crude oil and industrial metals.”
Streetwise: In a reversal of the usual process in which Wall Street spots a trend and mom-and-pop investors follow later, leading to a crash, banks are only now getting into Bitcoin almost a decade after it was invented; even with new exchanges, Wall Street won’t be able to control the market for the cryptocurrency.
Friday, December 8, 2017
Brexit Talks Push Past Border Issue; Tech and Bitcoin Gyrations Distract Traders
TradeTheNews.com Weekly
Market Update: Brexit Talks Push Past Border Issue; Tech and Bitcoin Gyrations
Distract Traders
Fri, 08 Dec 2017 16:09 PM EST
US stock indices finally encountered some turbulence this week, though Monday did once again see another round of fresh highs. Rotational flows evident last week carried over early on, playing a significant role as high growth sectors, namely technology, experienced considerable relative selling. The high beta FANG names traded down 5% or more for the recent highs while the NASDAQ composite fell almost 3% from the top before buyers stepped in and shares recovered into week’s end. Some noted the parabolic rise in bitcoin, which at one point neared 19K, as potential culprit that could have been sucking oxygen away from equities. In Washington, Republicans pressed onward with efforts to reconcile the House and Senate tax bills and remain hopeful that legislation can reach the President’s desk by Christmas. Friday delivered the November employment report which offered little in way of surprises. The labor market continued to expand but the tightening slack remains slow to manifest in rising wages. Treasury yields drifted higher after the jobs report in a week that saw the benchmark spread narrow to 51 bps at one point. For the week the DJIA and S&P500 each added 0.4%, while the Nasdaq slipped 0.1%.
Back and forth surrounding the ongoing Brexit negotiations played the dominate role in FX trading this week. Disagreements surrounding the Irish border issue spurred some speculation that Prime Minister May’s eroding support could result in a leadership changed as early as next year. Those fears were temporarily allayed by a late week breakthrough in the talks that appears to have the support of factions on both sides of the border going into the EU leaders’ summit next week. The Pound stayed in a downward trend though, as focus now shifts towards what could be even tougher talks in phase two of the Brexit process.
In corporate news this week, reports indicated Disney is nearing a deal to acquire 21st Century Fox’s non-core assets, which could be accompanied by an agreement for Disney CEO Bob Iger to stay on past 2019 in order to facilitate a the integration of Fox divisions. CVS agreed on a $207/share asking price to acquire Aetna, valuing it at $77B, in a deal that would put a pharmacy, an insurer, and a PBM all under one roof. United Health's Optum unit announced it would acquire DaVita’s Medical Group division for $4.9B in cash, as DaVita pivots its focus to the kidney care sector. Lululemon shares are up 13% on the week after reporting a beat on its top and bottom line and boosting its outlook. GE announced it would cut 12K jobs from its power GE Division, mostly affecting professional and production workers based outside of the US, as the company struggles with a downturn in the gas and coal power markets. Teva is reportedly considering cutting 18% of its global workforce as it tries to pare $2B in expenses.
SUNDAY 12/3
AET Confirms to be acquired by CVS for $207/shr ($145/shr cash and 0.8378 in CVS shr) for ~$69B
MONDAY 12/4
(EU) EURO ZONE DEC SENTIX INVESTOR CONFIDENCE: 31.1 V 33.4E
(EU) Portugal Fin Min Mario Centeno wins Eurogroup chairmanship race; term starts in Jan - press
5401.JP To reduce orders accepted for steel pipes by 20-30% as production cannot keep up with the increase in demand from large-scale projects ahead of the 2020 Tokyo Olympics
*(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED (16th consecutive hold in the current easing cycle)
Roark Capital reportedly raising $2B to acquire additional restaurant chains - Axios
TUESDAY 12/5
(UK) NOV SERVICES PMI: 53.8 V 55.0E (16th month of expansion)
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
(UK) DUP party leader Foster: Believes that DUP remains far away from a border agreement - financial press
(US) OCT TRADE BALANCE: -$48.7B V -$47.5BE
(US) Atlanta Fed cuts Q4 GDP estimate to 3.2% from 3.5% on 12/1
(CN) US Commerce Dept to collect duties up to 265.79% on China origin steel imported from Vietnam
WEDNESDAY 12/6
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.00%; AS EXPECTED
FAST Reports Nov Rev $365.5M, +15.4% y/y
(US) NOV ADP EMPLOYMENT CHANGE: +190K V +190KE
(US) Q3 FINAL NONFARM PRODUCTIVITY: 3.0% V 3.3%E; UNIT LABOR COSTS: -0.2% V +0.2%E
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 1.00%; AS EXPECTED
(US) Association of American Railroads weekly rail traffic report for week ending Dec 2nd: 572.8K carloads and intermodal units, +3.5% y/y
(US) Sen Franken (D-MN) said to plan announcement tomorrow following resignation calls from nearly a dozen Democratic Senate colleagues - press
(US) President Trump: recognizes Jerusalem as Israel's capital (as expected); believes it's in the best interests of the US and the pursuit of peace between Israelis and Palestinians
(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC RATE TARGET BY 50BPS TO 7.00%; AS EXPECTED
THURSDAY 12/7
(CN) CHINA NOV FOREIGN RESERVES: $3.119T V $3.124TE (10th straight month of increases)
(EU) EURO ZONE Q3 FINAL GDP Q/Q: 0.6% V 0.6%E; Y/Y: 2.6% V 2.5%E
GE GE Power division cuts 12K jobs (18% of of Workforce)
(UK) Sticking point in Brexit talks on European Court of Justice is said to have been resolved - press
(EU) ECB's Draghi: confirms Basel III is completed; it's a great day and a major milestone
(US) Fed reports Q3 Financial Accounts: Household Change in Net Worth: $1.742T v $1.698T prior
(US) Trump admin reportedly preparing infrastructure plan announcement in Jan - press
(US) Senate passes stopgap spending measure that will keep the govt funded through Dec 22nd; vote 81 to 14
(JP) JAPAN Q3 FINAL GDP Q/Q: 0.6% V 0.4%E; ANNUALIZED SA Q/Q: 2.5% V 1.5%E; NOMINAL Q/Q: 0.8% V 0.7%E
(CN) CHINA NOV TRADE BALANCE (CNY-DENOMINATED): 263.6B V 240.8BE
(CN) CHINA NOV TRADE BALANCE: $40.2B V $35.0BE
FRIDAY 12/8
(EU) EU Commission : Reaches breakthrough in Brexit negotiations; ready for second phase of negotiations
(FR) FRANCE OCT INDUSTRIAL PRODUCTION M/M: +1.9% V -0.1%E; Y/Y: 5.5% V 2.9%E
(UK) OCT INDUSTRIAL PRODUCTION M/M: 0.0% V 0.0%E; Y/Y: 3.6% V 3.5%E
(US) NOV AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.3%E; Y/Y: 2.5% V 2.7%E; AVERAGE WEEKLY HOURS: 34.5 V 34.4E
(US) NOV CHANGE IN NONFARM PAYROLLS: +228K V +195KE
(US) DEC PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 96.8 V 99.0E
WFC Pres Trump tweets: "Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be droppe... but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!"
(US) Atlanta Fed cuts Q4 GDP estimate to 2.9% from 3.2% on 12/5
Fri, 08 Dec 2017 16:09 PM EST
US stock indices finally encountered some turbulence this week, though Monday did once again see another round of fresh highs. Rotational flows evident last week carried over early on, playing a significant role as high growth sectors, namely technology, experienced considerable relative selling. The high beta FANG names traded down 5% or more for the recent highs while the NASDAQ composite fell almost 3% from the top before buyers stepped in and shares recovered into week’s end. Some noted the parabolic rise in bitcoin, which at one point neared 19K, as potential culprit that could have been sucking oxygen away from equities. In Washington, Republicans pressed onward with efforts to reconcile the House and Senate tax bills and remain hopeful that legislation can reach the President’s desk by Christmas. Friday delivered the November employment report which offered little in way of surprises. The labor market continued to expand but the tightening slack remains slow to manifest in rising wages. Treasury yields drifted higher after the jobs report in a week that saw the benchmark spread narrow to 51 bps at one point. For the week the DJIA and S&P500 each added 0.4%, while the Nasdaq slipped 0.1%.
Back and forth surrounding the ongoing Brexit negotiations played the dominate role in FX trading this week. Disagreements surrounding the Irish border issue spurred some speculation that Prime Minister May’s eroding support could result in a leadership changed as early as next year. Those fears were temporarily allayed by a late week breakthrough in the talks that appears to have the support of factions on both sides of the border going into the EU leaders’ summit next week. The Pound stayed in a downward trend though, as focus now shifts towards what could be even tougher talks in phase two of the Brexit process.
In corporate news this week, reports indicated Disney is nearing a deal to acquire 21st Century Fox’s non-core assets, which could be accompanied by an agreement for Disney CEO Bob Iger to stay on past 2019 in order to facilitate a the integration of Fox divisions. CVS agreed on a $207/share asking price to acquire Aetna, valuing it at $77B, in a deal that would put a pharmacy, an insurer, and a PBM all under one roof. United Health's Optum unit announced it would acquire DaVita’s Medical Group division for $4.9B in cash, as DaVita pivots its focus to the kidney care sector. Lululemon shares are up 13% on the week after reporting a beat on its top and bottom line and boosting its outlook. GE announced it would cut 12K jobs from its power GE Division, mostly affecting professional and production workers based outside of the US, as the company struggles with a downturn in the gas and coal power markets. Teva is reportedly considering cutting 18% of its global workforce as it tries to pare $2B in expenses.
SUNDAY 12/3
AET Confirms to be acquired by CVS for $207/shr ($145/shr cash and 0.8378 in CVS shr) for ~$69B
MONDAY 12/4
(EU) EURO ZONE DEC SENTIX INVESTOR CONFIDENCE: 31.1 V 33.4E
(EU) Portugal Fin Min Mario Centeno wins Eurogroup chairmanship race; term starts in Jan - press
5401.JP To reduce orders accepted for steel pipes by 20-30% as production cannot keep up with the increase in demand from large-scale projects ahead of the 2020 Tokyo Olympics
*(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED (16th consecutive hold in the current easing cycle)
Roark Capital reportedly raising $2B to acquire additional restaurant chains - Axios
TUESDAY 12/5
(UK) NOV SERVICES PMI: 53.8 V 55.0E (16th month of expansion)
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
(UK) DUP party leader Foster: Believes that DUP remains far away from a border agreement - financial press
(US) OCT TRADE BALANCE: -$48.7B V -$47.5BE
(US) Atlanta Fed cuts Q4 GDP estimate to 3.2% from 3.5% on 12/1
(CN) US Commerce Dept to collect duties up to 265.79% on China origin steel imported from Vietnam
WEDNESDAY 12/6
(IN) INDIA CENTRAL BANK (RBI) LEAVES REPURCHASE RATE UNCHANGED AT 6.00%; AS EXPECTED
FAST Reports Nov Rev $365.5M, +15.4% y/y
(US) NOV ADP EMPLOYMENT CHANGE: +190K V +190KE
(US) Q3 FINAL NONFARM PRODUCTIVITY: 3.0% V 3.3%E; UNIT LABOR COSTS: -0.2% V +0.2%E
(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES UNCHANGED AT 1.00%; AS EXPECTED
(US) Association of American Railroads weekly rail traffic report for week ending Dec 2nd: 572.8K carloads and intermodal units, +3.5% y/y
(US) Sen Franken (D-MN) said to plan announcement tomorrow following resignation calls from nearly a dozen Democratic Senate colleagues - press
(US) President Trump: recognizes Jerusalem as Israel's capital (as expected); believes it's in the best interests of the US and the pursuit of peace between Israelis and Palestinians
(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC RATE TARGET BY 50BPS TO 7.00%; AS EXPECTED
THURSDAY 12/7
(CN) CHINA NOV FOREIGN RESERVES: $3.119T V $3.124TE (10th straight month of increases)
(EU) EURO ZONE Q3 FINAL GDP Q/Q: 0.6% V 0.6%E; Y/Y: 2.6% V 2.5%E
GE GE Power division cuts 12K jobs (18% of of Workforce)
(UK) Sticking point in Brexit talks on European Court of Justice is said to have been resolved - press
(EU) ECB's Draghi: confirms Basel III is completed; it's a great day and a major milestone
(US) Fed reports Q3 Financial Accounts: Household Change in Net Worth: $1.742T v $1.698T prior
(US) Trump admin reportedly preparing infrastructure plan announcement in Jan - press
(US) Senate passes stopgap spending measure that will keep the govt funded through Dec 22nd; vote 81 to 14
(JP) JAPAN Q3 FINAL GDP Q/Q: 0.6% V 0.4%E; ANNUALIZED SA Q/Q: 2.5% V 1.5%E; NOMINAL Q/Q: 0.8% V 0.7%E
(CN) CHINA NOV TRADE BALANCE (CNY-DENOMINATED): 263.6B V 240.8BE
(CN) CHINA NOV TRADE BALANCE: $40.2B V $35.0BE
FRIDAY 12/8
(EU) EU Commission : Reaches breakthrough in Brexit negotiations; ready for second phase of negotiations
(FR) FRANCE OCT INDUSTRIAL PRODUCTION M/M: +1.9% V -0.1%E; Y/Y: 5.5% V 2.9%E
(UK) OCT INDUSTRIAL PRODUCTION M/M: 0.0% V 0.0%E; Y/Y: 3.6% V 3.5%E
(US) NOV AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.3%E; Y/Y: 2.5% V 2.7%E; AVERAGE WEEKLY HOURS: 34.5 V 34.4E
(US) NOV CHANGE IN NONFARM PAYROLLS: +228K V +195KE
(US) DEC PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 96.8 V 99.0E
WFC Pres Trump tweets: "Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be droppe... but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!"
(US) Atlanta Fed cuts Q4 GDP estimate to 2.9% from 3.2% on 12/5
Friday, December 1, 2017
Tax Plan Euphoria Blunted by Russia Probe Developments
TradeTheNews.com Weekly
Market Update: Tax Plan Euphoria Blunted by Russia Probe Developments
Fri, 01 Dec 2017 16:13 PM EST
Stock indices moved further into uncharted territory this week on the belief tax cuts are coming from Washington DC. A mid-week rotation out of tech raised some eyebrows when high beta growth stocks fell sharply for a session. The Dow, S&P and Russell all charged ahead largely unabated, except for bouts of selling into Friday. A delayed Senate vote Thursday caused mild consternation heading into the session. Then on Friday, a report that former NSA Michael Flynn was prepared to testify against President Trump as part of plea deal caused flurry of risk off trade midway through the session. By the end of the day, markets recovered much of those losses, and for the week the DJIA gained 2.9%, the S&P500 added 1.5%, and the Nasdaq dropped 0.6%.
Oil prices drifted lower into Thursday’s OPEC meeting. As expected, Ministers and non OPEC producers ultimately agreed on a 9-month extension through 2018 and to start capping Nigeria and Libya production beginning in January. WTI crude finished the week about $1 off the recent two year highs while weekly data showed rig counts have ticked higher. Treasury markets were little changed on the week. Yields moved higher early on in the week, spurred by robust global economic data along with the belief that fiscal stimulus and forward movement in the Brexit negotiations could force Central banks to raise rates faster than the market currently anticipates. The Dollar remained on soft footing as Cable pressed out to two month highs. The Dollar index drifted back towards 93.
M&A activity dominated this week’s corporate news. Network security firm Barracuda agreed to be taken private by PE firm Thoma Bravo for $1.6 billion in cash. Publisher Time Inc reached a long-speculated deal to be acquired by Meredith Corp for $2.8B, which aims to combine the reach of its local TV business with the content available from Time’s media creators. Buffalo Wild Wings was acquired for $157/share in cash by Arby’s owner Roark Capital, which intends to make the sports bar chain a privately held unit of Arby's operated as an independent brand.
SUN 11/26
(US) According to Adobe Analytics, Black Friday and Thanksgiving online sales totaled $7.9B (record), +17.9% y/y – financial press
(US) According to ShopperTrak, shopper visits to brick-and-mortar retail stores on Thanksgiving Day and Black Friday -1.6% y/y (combined)330.HK Landlord for test store may lower rent by 30% - HK Press
TIME Meredith confirms to acquire Time for $18.50/share cash for $2.8B
MON 11/27
(US) OCT NEW HOME SALES: 685K V 625KE
CUDA Agrees to be acquired by Thoma Bravo for $27.55/sh in cash for total of $1.6B
(US) Sen Johnson (R-WI): will vote against tax bill in Budget Committee on Tues unless my issues are resolved
(US) Adobe: Confirms data shows Cyber Monday is largest online sales day in history with $6.59B in sales, +16.8% y/y as of 10:00 pm ET
TUES 11/28
*(DE) GERMANY DEC GFK CONSUMER CONFIDENCE: 10.7 V 10.7E
(US) NOV RICHMOND FED MANUFACTURING INDEX: 30 V 14E; Volume of new orders 35 v 17 prior
(US) NOV CONSUMER CONFIDENCE: 129.5 V 124.0E
(US) Senate Budget Committee advances the tax bill
WEDS 11/29
(FR) FRANCE Q3 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; Y/Y: 2.2% V 2.2%
(DE) GERMANY NOV CPI SAXONY M/M: 0.3% V 0.0% PRIOR; Y/Y: 2.0% V 1.8% PRIOR
(EU) EURO ZONE NOV BUSINESS CLIMATE INDICATOR: 1.49 V 1.51E; CONSUMER CONFIDENCE (FINAL): 0.1 V 0.1E
TIF Reports Q3 $0.80 v $0.76e, Rev $976M v $960Me
(DE) GERMANY NOV PRELIMINARY CPI M/M: 0.3% V 0.3%E; Y/Y: 1.8% V 1.7%E
(US) Q3 PRELIMINARY GDP PRICE INDEX: 2.1% V 2.2%E; CORE PCE Q/Q: 1.4% V 1.3%E
(US) Q3 PRELIMINARY GDP ANNUALIZED Q/Q: 3.3% V 3.2%E; PERSONAL CONSUMPTION: 2.3% V 2.5%E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 26th: 463.6K carloads and intermodal units, +2.4% y/y
(KR) BANK OF KOREA (BOK) RAISES 7-DAY REPO RATE BY 25BPS TO 1.50%, AS EXPECTED
(CH) CHINA NOV OFFICIAL GOVT MANUFACTURING PMI: 51.8 V 51.4E, NON-MANUFACTURING PMI: 54.8 V 54.3 PRIOR
THURS 11/30
CSGN.CH Affirms FY18 targets; announces 2019-2020 objectives; aims to pay 50% of net in buybacks, dividends
(FR) FRANCE NOV PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.2% V 1.2%E
(DE) GERMANY NOV UNEMPLOYMENT CHANGE: -18K V -10KE; UNEMPLOYMENT RATE: 5.6% V 5.6%E
(US) OCT PCE DEFLATOR M/M: 0.1% V 0.1%E; Y/Y: 1.6% V 1.5%E
(US) OCT PCE CORE M/M: 0.2% V 0.2%E; Y/Y: 1.4% V 1.4%E
(US) OCT PERSONAL INCOME: 0.4% V 0.3%E; PERSONAL SPENDING: 0.3% V 0.3%E
(US) Nevada reports Oct casino gaming Rev $988.7M, +0.3% y/y; Las Vegas strip rev $528.7M, -6.0% y/y
(US) Atlanta Fed cuts Q4 GDP estimate to 2.7% from 3.4% on 11/22
(CN) CHINA NOV CAIXIN MANUFACTURING PMI 50.8 V 50.9E (5-month low)
(HK) Macau Nov Casino Rev MOP23.0B +22.6% y/y v +19%e
FRIDAY 12/1
(BR) BRAZIL Q3 GDP Q/Q: 0.1% V 0.3%E (3rd straight quarter of growth); Y/Y: 1.4% V 1.3%E
(DE) GERMANY NOV FINAL MANUFACTURING PMI: 62.5 V 62.5E (confirms its 36th month of expansion and highest since Feb 2011)
(CA) CANADA NOV NET CHANGE IN EMPLOYMENT: +79.5K V +10.0KE; UNEMPLOYMENT RATE: 5.9% V 6.2%E
(US) NOV ISM MANUFACTURING: 58.2 V 58.3E; PRICES PAID: 65.5 V 67.0E
(US) MICHAEL FLYNN SAID TO BE WILLING TO TESTIFY AGAINST PRESIDENT TRUMP - ABC news
(US) Senator Collins (R-ME): deal was reached to include property tax deduction amendment in tax bill
(US) Sen Corker (R-TN): there are probably enough votes to pass the Senate tax bill - press
(US) NBC sources say that Jared Kusher was the "senior transition official" that discussed Russia contacts with Flynn at Mar-a-Lago in Dec 2016
Fri, 01 Dec 2017 16:13 PM EST
Stock indices moved further into uncharted territory this week on the belief tax cuts are coming from Washington DC. A mid-week rotation out of tech raised some eyebrows when high beta growth stocks fell sharply for a session. The Dow, S&P and Russell all charged ahead largely unabated, except for bouts of selling into Friday. A delayed Senate vote Thursday caused mild consternation heading into the session. Then on Friday, a report that former NSA Michael Flynn was prepared to testify against President Trump as part of plea deal caused flurry of risk off trade midway through the session. By the end of the day, markets recovered much of those losses, and for the week the DJIA gained 2.9%, the S&P500 added 1.5%, and the Nasdaq dropped 0.6%.
Oil prices drifted lower into Thursday’s OPEC meeting. As expected, Ministers and non OPEC producers ultimately agreed on a 9-month extension through 2018 and to start capping Nigeria and Libya production beginning in January. WTI crude finished the week about $1 off the recent two year highs while weekly data showed rig counts have ticked higher. Treasury markets were little changed on the week. Yields moved higher early on in the week, spurred by robust global economic data along with the belief that fiscal stimulus and forward movement in the Brexit negotiations could force Central banks to raise rates faster than the market currently anticipates. The Dollar remained on soft footing as Cable pressed out to two month highs. The Dollar index drifted back towards 93.
M&A activity dominated this week’s corporate news. Network security firm Barracuda agreed to be taken private by PE firm Thoma Bravo for $1.6 billion in cash. Publisher Time Inc reached a long-speculated deal to be acquired by Meredith Corp for $2.8B, which aims to combine the reach of its local TV business with the content available from Time’s media creators. Buffalo Wild Wings was acquired for $157/share in cash by Arby’s owner Roark Capital, which intends to make the sports bar chain a privately held unit of Arby's operated as an independent brand.
SUN 11/26
(US) According to Adobe Analytics, Black Friday and Thanksgiving online sales totaled $7.9B (record), +17.9% y/y – financial press
(US) According to ShopperTrak, shopper visits to brick-and-mortar retail stores on Thanksgiving Day and Black Friday -1.6% y/y (combined)330.HK Landlord for test store may lower rent by 30% - HK Press
TIME Meredith confirms to acquire Time for $18.50/share cash for $2.8B
MON 11/27
(US) OCT NEW HOME SALES: 685K V 625KE
CUDA Agrees to be acquired by Thoma Bravo for $27.55/sh in cash for total of $1.6B
(US) Sen Johnson (R-WI): will vote against tax bill in Budget Committee on Tues unless my issues are resolved
(US) Adobe: Confirms data shows Cyber Monday is largest online sales day in history with $6.59B in sales, +16.8% y/y as of 10:00 pm ET
TUES 11/28
*(DE) GERMANY DEC GFK CONSUMER CONFIDENCE: 10.7 V 10.7E
(US) NOV RICHMOND FED MANUFACTURING INDEX: 30 V 14E; Volume of new orders 35 v 17 prior
(US) NOV CONSUMER CONFIDENCE: 129.5 V 124.0E
(US) Senate Budget Committee advances the tax bill
WEDS 11/29
(FR) FRANCE Q3 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; Y/Y: 2.2% V 2.2%
(DE) GERMANY NOV CPI SAXONY M/M: 0.3% V 0.0% PRIOR; Y/Y: 2.0% V 1.8% PRIOR
(EU) EURO ZONE NOV BUSINESS CLIMATE INDICATOR: 1.49 V 1.51E; CONSUMER CONFIDENCE (FINAL): 0.1 V 0.1E
TIF Reports Q3 $0.80 v $0.76e, Rev $976M v $960Me
(DE) GERMANY NOV PRELIMINARY CPI M/M: 0.3% V 0.3%E; Y/Y: 1.8% V 1.7%E
(US) Q3 PRELIMINARY GDP PRICE INDEX: 2.1% V 2.2%E; CORE PCE Q/Q: 1.4% V 1.3%E
(US) Q3 PRELIMINARY GDP ANNUALIZED Q/Q: 3.3% V 3.2%E; PERSONAL CONSUMPTION: 2.3% V 2.5%E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 26th: 463.6K carloads and intermodal units, +2.4% y/y
(KR) BANK OF KOREA (BOK) RAISES 7-DAY REPO RATE BY 25BPS TO 1.50%, AS EXPECTED
(CH) CHINA NOV OFFICIAL GOVT MANUFACTURING PMI: 51.8 V 51.4E, NON-MANUFACTURING PMI: 54.8 V 54.3 PRIOR
THURS 11/30
CSGN.CH Affirms FY18 targets; announces 2019-2020 objectives; aims to pay 50% of net in buybacks, dividends
(FR) FRANCE NOV PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.2% V 1.2%E
(DE) GERMANY NOV UNEMPLOYMENT CHANGE: -18K V -10KE; UNEMPLOYMENT RATE: 5.6% V 5.6%E
(US) OCT PCE DEFLATOR M/M: 0.1% V 0.1%E; Y/Y: 1.6% V 1.5%E
(US) OCT PCE CORE M/M: 0.2% V 0.2%E; Y/Y: 1.4% V 1.4%E
(US) OCT PERSONAL INCOME: 0.4% V 0.3%E; PERSONAL SPENDING: 0.3% V 0.3%E
(US) Nevada reports Oct casino gaming Rev $988.7M, +0.3% y/y; Las Vegas strip rev $528.7M, -6.0% y/y
(US) Atlanta Fed cuts Q4 GDP estimate to 2.7% from 3.4% on 11/22
(CN) CHINA NOV CAIXIN MANUFACTURING PMI 50.8 V 50.9E (5-month low)
(HK) Macau Nov Casino Rev MOP23.0B +22.6% y/y v +19%e
FRIDAY 12/1
(BR) BRAZIL Q3 GDP Q/Q: 0.1% V 0.3%E (3rd straight quarter of growth); Y/Y: 1.4% V 1.3%E
(DE) GERMANY NOV FINAL MANUFACTURING PMI: 62.5 V 62.5E (confirms its 36th month of expansion and highest since Feb 2011)
(CA) CANADA NOV NET CHANGE IN EMPLOYMENT: +79.5K V +10.0KE; UNEMPLOYMENT RATE: 5.9% V 6.2%E
(US) NOV ISM MANUFACTURING: 58.2 V 58.3E; PRICES PAID: 65.5 V 67.0E
(US) MICHAEL FLYNN SAID TO BE WILLING TO TESTIFY AGAINST PRESIDENT TRUMP - ABC news
(US) Senator Collins (R-ME): deal was reached to include property tax deduction amendment in tax bill
(US) Sen Corker (R-TN): there are probably enough votes to pass the Senate tax bill - press
(US) NBC sources say that Jared Kusher was the "senior transition official" that discussed Russia contacts with Flynn at Mar-a-Lago in Dec 2016
Saturday, November 25, 2017
Barrons weekend summary
Barrons weekend summary: Positive features on VZ, MDLZ
Cover story: Four emerging market stock fund managers discuss the best sectors for investors, identify risks that could be of concern, and offer stock picks: Taizo Ishida of MPACX and MEASX (BZUN, Indus Motor, Shenzhou Intl Group Holdings, China Lodging Group, PC Jeweller), Rejiv Jain of GOGPX (Sberbank of Russia, Bank Central Asia, Qualicorp, Interglobe Aviation), Howard Schwab of DREGX (Titan, Samsung Electronics, China Shenhua Energy), and Leon Eidelman of JFAMX (BABA, Kroton Educacional, Hangzhou Robam Appliances, JD).
Feature: 1) Positive on VZ: Price wars with rivals have sent down shares, but company is on track to bring in about as much revenue this year as 2016, and could return to modest growth, making the shares a bargain; 2) Positive on VMC, FLR, MLM, ACM, JEC, GVA, EXP, USCR, CAT: Among companies that would benefit if the Trump administration manages to get a $1T infrastructure building program under way, or even a compromise measure on a smaller scale; 3) Positive on MDLZ: Investors think the packaged-food company could return to growth under new chief executive Dirk Van de Put, especially if it leverages its strength in Europe and developing economies.
Tech Trader: AMZN, MSFT, and GOOGL dominate cloud computing, but a rapidly evolving new “serverless” technology pioneered by AMZN called Lambda requires far less work from programmers, gets dramatically better results--and could either solidify their position, or undermine it.
Trader: Nomura Instinet analyst Joseph Mezrich says the market is expecting earnings growth of 11.7%, well above the long-term average of 7%, a sign the market is overvalued and may undergo a correction; With quantitative easing ending, borrowing costs should rise, and high stock valuations mean companies will get less bang for their buck with buybacks; A market “melt up” would cause concern because it could entail a sharp climb followed by a painful drop.
Profile: Daniel Chace, manager of the Wasatch Micro Cap fund, picks through the less-trafficked corners of the market and focuses on about 80 potential growth companies (top 10 holdings: SGC, LGIH, HQY, IBP, V-Mart Retail, FRPT, ENSG, ENV, TREX, EXAS).
Follow-Up: Cautious on HPE: Chief Meg Whitman has made improvements at the company, but many of the challenges it faced after she took over remain, despite her efforts to reshape the business.
European Trader: Positive on Hapag-Lloyd: With the global container shipping industry seeing an uptick, the German company appears to be a good way for investors to play the revival.
Asian Trader: Positive on Tencent Holdings: Chinese giant is the world’s best-performing large-cap stock this year, bypassing the FANGS, and the shares still look good as the company continues to grow.
Commodities: “A brutal cold snap in December is likely, according to some forecasters, and it could lift winter wheat prices higher than $5 a bushel, up more than a dollar from recent prices.”
Streetwise: Uber’s decision to delay releasing news of a data breach last years is the latest example of its history of playing by its rules—and that isn’t likely to change as long as it remains a private company.-
Friday, November 24, 2017
Investors Have Plenty to be Thankful for as Stock Markets Extend Higher
TradeTheNews.com Weekly
Market Update: Investors Have Plenty to be Thankful for as Stock Markets Extend
Higher
Fri, 24 Nov 2017 13:11 PM EST
- US stock markets probed fresh all-time highs once again in a holiday shortened week. European markets shrugged off political concerns in Germany when Chancellor Merkel remained unable to force a coalition government. European economic data continued to outshine, overshadowing slogging Brexit negotiations and supporting the Euro. The Dollar remained under broad pressure, touching a 9-week low against the Euro. Treasury yield curves continued to flatten, pushing the US 2-10 year spread below 60 bps for the first time since 2007. Crude prices rose to 2-year highs heading into next week’s OPEC meeting. The Fed’s Yellen offered some slightly dovish commentary surrounding low inflation readings, setting the stage for Powell’s confirmation hearings next week. For the week the Dow and S&P gained 0.9% while the NASDAQ added another 1.6%.
- In what was a slow corporate news week, Cavium Networks confirmed an agreement to be acquired by Marvell for ~$80/shr in cash and stock in a $6B deal, as Marvell aims to expand its capacity in the networking equipment sector. Uber disclosed a cybersecurity breach that allowed hackers to access personal data from 57 million riders and drivers last year, an incident which Uber unsuccessfully tried to cover up. And Macy’s CEO said he has seen a good start to Black Friday, with traffic slightly better year-on-year so far.
11/19 SUNDAY
(CN) CHINA OCT PROPERTY PRICES M/M: RISES IN 50 OUT OF 70 CITIES V 44 PRIOR; Y/Y RISE IN 60 CITIES OUT OF 70 CITIES V 67 PRIOR (update)
11/20 MONDAY
CAVM Confirms agreement to be acquired by MRVL for ~$80/shr in cash and stock in ~$6B deal, as speculated
(DE) German President Steinmeier statement: Country faces an unprecedented situation following the failure of the coalition talks; should not return mandate to voters
(US) Janet Yellen to resign from Fed Board of Governors, effective upon the swearing in of her successor as Chair
11/21 TUESDAY
PYPL Announced move into "robo investing" with Acorns Grow Inc
(MX) Mexico business representative: NAFTA negotiators are nearing agreement on telecom, energy and e-commerce issues - press
UBER.IPO Reportedly hid a cyberattack that exposed data on 57M people, including 600K US driver's license numbers - press
(US) Fed Chair Yellen: Uncertain weak inflation is transitory; Some hint inflation expectations may be drifting down; Don't think expectations have drifted down very much - speaking in New York; We expect [inflation] to move back up over the next year or two, but I will say I'm very uncertain about this"
(CN) China Ministry of Housing and Urban-Rural Development, the Ministry of Land Resources and PBOC in a joint meeting stressed regulations to curb property sector risks must not be relaxed
(CN) China to give priority to reducing property bubble – Xinhua
(CN) China Q3 overseas real estate investments $2.5B, -51% y/y (lowest level since Q4 2013)
11/22 WEDNESDAY
(UK) Chancellor of Exchequer Hammond (Fin Min) Autumn Budget Speech
(US) OCT PRELIMINARY DURABLE GOODS ORDERS: -1.2% V +0.3%E; DURABLES EX TRANSPORTATION: 0.4% V 0.5%E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 28th: 554.1K carloads and intermodal units, +1.2% y/y
(US) FOMC MINUTES FROM NOV 1 MEETING: MANY FED POLICYMAKERS SAW NEAR-TERM RATE HIKE AS WARRANTED; SOME OPPOSED NEAR-TERM HIKE DUE TO WEAK INFLATION
(HK) Macau Q3 GDP Y/Y: 6.1% v 11.5% prior
(HK) Macau Oct Tourist Arrivals y/y: 7.9% v 2.4% prior
(US) Weekly Baker Hughes US Rig Count: 923 v 915 w/w (+0.9%) (3rd weekly rise in a row)
11/23 THURSDAY
TKA.DE Reports FY17 (cont ops) adj EBIT €1.72B v €1.8Be, Net Rev €41.4B v €41.5Be
(DE) GERMANY Q3 FINAL GDP Q/Q: 0.8% V 0.8%E; Y/Y: 2.8% V 2.8%E; GDP NSA Y/Y: 2.3% V 2.3%E
(FR) FRANCE NOV BUSINESS CONFIDENCE: 111 V 109E; MANUFACTURING CONFIDENCE: 112 V 111E
(FR) FRANCE NOV PRELIMINARY MANUFACTURING PMI: 57.5 V 55.9E (14th month of expansion and highest since Apr 2011)
(DE) GERMANY NOV PRELIMINARY MANUFACTURING PMI: 62.5 V 60.4E (36th month of expansion and highest since Feb 2011)
(EU) EURO ZONE NOV PRELIMINARY MANUFACTURING PMI: 60.0 V 58.2E (52nd month of expansion and highest since Apr 2000)
(UK) Q3 PRELIMINARY GDP (2nd reading) Q/Q: 0.4% V 0.4%E; Y/Y: 1.5% V 1.5%E
(EU) ECB ACCOUNT OF THE MONETARY POLICY MEETING (NOV MINUTES): Some members were concerned that any QE end date would cause tightening
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATE UNCHANGED AT 6.75%; AS EXPECTED
11/24 FRIDAY
(DE) GERMANY NOV IFO BUSINESS CLIMATE: 117.5 V 116.7E (record high); CURRENT ASSESSMENT: 124.4 V 125.0E
M CEO: Seeing a good start to Black Friday; traffic slightly better than last year - CNBC
Fri, 24 Nov 2017 13:11 PM EST
- US stock markets probed fresh all-time highs once again in a holiday shortened week. European markets shrugged off political concerns in Germany when Chancellor Merkel remained unable to force a coalition government. European economic data continued to outshine, overshadowing slogging Brexit negotiations and supporting the Euro. The Dollar remained under broad pressure, touching a 9-week low against the Euro. Treasury yield curves continued to flatten, pushing the US 2-10 year spread below 60 bps for the first time since 2007. Crude prices rose to 2-year highs heading into next week’s OPEC meeting. The Fed’s Yellen offered some slightly dovish commentary surrounding low inflation readings, setting the stage for Powell’s confirmation hearings next week. For the week the Dow and S&P gained 0.9% while the NASDAQ added another 1.6%.
- In what was a slow corporate news week, Cavium Networks confirmed an agreement to be acquired by Marvell for ~$80/shr in cash and stock in a $6B deal, as Marvell aims to expand its capacity in the networking equipment sector. Uber disclosed a cybersecurity breach that allowed hackers to access personal data from 57 million riders and drivers last year, an incident which Uber unsuccessfully tried to cover up. And Macy’s CEO said he has seen a good start to Black Friday, with traffic slightly better year-on-year so far.
11/19 SUNDAY
(CN) CHINA OCT PROPERTY PRICES M/M: RISES IN 50 OUT OF 70 CITIES V 44 PRIOR; Y/Y RISE IN 60 CITIES OUT OF 70 CITIES V 67 PRIOR (update)
11/20 MONDAY
CAVM Confirms agreement to be acquired by MRVL for ~$80/shr in cash and stock in ~$6B deal, as speculated
(DE) German President Steinmeier statement: Country faces an unprecedented situation following the failure of the coalition talks; should not return mandate to voters
(US) Janet Yellen to resign from Fed Board of Governors, effective upon the swearing in of her successor as Chair
11/21 TUESDAY
PYPL Announced move into "robo investing" with Acorns Grow Inc
(MX) Mexico business representative: NAFTA negotiators are nearing agreement on telecom, energy and e-commerce issues - press
UBER.IPO Reportedly hid a cyberattack that exposed data on 57M people, including 600K US driver's license numbers - press
(US) Fed Chair Yellen: Uncertain weak inflation is transitory; Some hint inflation expectations may be drifting down; Don't think expectations have drifted down very much - speaking in New York; We expect [inflation] to move back up over the next year or two, but I will say I'm very uncertain about this"
(CN) China Ministry of Housing and Urban-Rural Development, the Ministry of Land Resources and PBOC in a joint meeting stressed regulations to curb property sector risks must not be relaxed
(CN) China to give priority to reducing property bubble – Xinhua
(CN) China Q3 overseas real estate investments $2.5B, -51% y/y (lowest level since Q4 2013)
11/22 WEDNESDAY
(UK) Chancellor of Exchequer Hammond (Fin Min) Autumn Budget Speech
(US) OCT PRELIMINARY DURABLE GOODS ORDERS: -1.2% V +0.3%E; DURABLES EX TRANSPORTATION: 0.4% V 0.5%E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 28th: 554.1K carloads and intermodal units, +1.2% y/y
(US) FOMC MINUTES FROM NOV 1 MEETING: MANY FED POLICYMAKERS SAW NEAR-TERM RATE HIKE AS WARRANTED; SOME OPPOSED NEAR-TERM HIKE DUE TO WEAK INFLATION
(HK) Macau Q3 GDP Y/Y: 6.1% v 11.5% prior
(HK) Macau Oct Tourist Arrivals y/y: 7.9% v 2.4% prior
(US) Weekly Baker Hughes US Rig Count: 923 v 915 w/w (+0.9%) (3rd weekly rise in a row)
11/23 THURSDAY
TKA.DE Reports FY17 (cont ops) adj EBIT €1.72B v €1.8Be, Net Rev €41.4B v €41.5Be
(DE) GERMANY Q3 FINAL GDP Q/Q: 0.8% V 0.8%E; Y/Y: 2.8% V 2.8%E; GDP NSA Y/Y: 2.3% V 2.3%E
(FR) FRANCE NOV BUSINESS CONFIDENCE: 111 V 109E; MANUFACTURING CONFIDENCE: 112 V 111E
(FR) FRANCE NOV PRELIMINARY MANUFACTURING PMI: 57.5 V 55.9E (14th month of expansion and highest since Apr 2011)
(DE) GERMANY NOV PRELIMINARY MANUFACTURING PMI: 62.5 V 60.4E (36th month of expansion and highest since Feb 2011)
(EU) EURO ZONE NOV PRELIMINARY MANUFACTURING PMI: 60.0 V 58.2E (52nd month of expansion and highest since Apr 2000)
(UK) Q3 PRELIMINARY GDP (2nd reading) Q/Q: 0.4% V 0.4%E; Y/Y: 1.5% V 1.5%E
(EU) ECB ACCOUNT OF THE MONETARY POLICY MEETING (NOV MINUTES): Some members were concerned that any QE end date would cause tightening
(ZA) SOUTH AFRICA CENTRAL BANK (SARB) LEAVES INTEREST RATE UNCHANGED AT 6.75%; AS EXPECTED
11/24 FRIDAY
(DE) GERMANY NOV IFO BUSINESS CLIMATE: 117.5 V 116.7E (record high); CURRENT ASSESSMENT: 124.4 V 125.0E
M CEO: Seeing a good start to Black Friday; traffic slightly better than last year - CNBC
Sunday, November 19, 2017
Barrons weekend summary
Barrons weekend summary: positive features on IBM and select big box retailers
Cover story: Initial public offerings were once a goal for so-called unicorns, companies worth more than $1B, but these startups are taking longer to go public; “The maturation of IPOs has generally been a good thing, taking the risk out of the system,” but it also reduces potential investor rewards; Leading mutual funds aren’t waiting for IPOs, and are investing in private markets.
Features: 1) Positive on IBM: The unloved company could be the next slumbering giant to fetch a higher valuation as its large investments in analytic and cloud products increasingly win over customers; 2) Positive on M, WMT, TGT: Retailers have long taken a hit from online rivals, especially AMZN, but experts believe the shopping rush that starts on Black Friday will be the first in which their online arms begin to gain ground.
Tech Trader: Cautious on CSCO: Tech giant’s fixation on its own balance sheet doesn’t bode well for its competitiveness in years to come, and chief Chuck Robbins has failed to articulate how the company can gain ground in the Internet of Things and the cloud.
Trader: Higher volatility, instead of scaring investors away from the stock market, could be bringing them in, a situation that would lead to a longer bull market; GE may be giving up on BHI, but investors shouldn’t, though without GE the company “requires a different narrative”; “While the Nafta discussions aren’t due to be settled for months, they have the potential to upend sectors of the market—and make life miserable for investors.”
Profile: Michael Grant, manager of the Calamos Phineus Long/Short fund, uses “risk regime,” or the kind of hand the market is dealing, as the starting point for investment decisions (top 10 long stocks: AAPL, GS, JPM, MS, PYPL, C, JNJ, RDN, BAC, UBS).
Interview: Ajay Kapur, Asia-Pacific and emerging markets strategist at Bank of America Merrill Lynch, became bullish on Asia ex-Japan and emerging markets in February after being bearish for five years. ETF
Special Report: Exchange traded fund experts David Nadig, Barry Ritholtz, Corey Hoffstein, and Ben Fulton discuss innovation in the sector and other topics.
Follow-Up: The battle over Nelson Peltz’s bid for a PG board seat continues, and a win for the activist investor would be good for the stock.
European Trader: Cautious on Vestas Wind Systems: The U.S. market, a key one for the company, “is at risk of turning into a turkey, depending on how Washington’s tax-reform plan plays out.”
Asian Trader: Positive on LG Chem, Samsung SDI, Panasonic: The three companies, which make batteries for electric vehicles, trail rivals in the sector, but continue to merit investor attention.
Emerging Markets: Venezuela may muddle through its debt crisis with help from Russian and China, so nervous bondholders aren’t likely to band together and seek accelerated bond repayments.
Commodities: The shutdown of the world’s largest uranium mine, owned by Cameco, has rallied prices and could help revive the market.
Streetwise: Universities pay steep fees to outside managers, but have balked at allocating money to Warren Buffett’s Berkshire Hathaway, the world’s most successful investor.
Friday, November 17, 2017
Volatility Returns Before the House Passes Tax Reform
TradeTheNews.com Weekly
Market Update: Volatility Returns Before the House Passes Tax Reform
Fri, 17 Nov 2017 16:03 PM EST
US stocks rolled over early this week nudged by pressure coming from overseas. The first three sessions of the week saw futures trade lower in the premarket along with European bourses, only to see buyers step in after the opening bell in New York. An aggressive increase in corporate debt offerings may have caused some indigestion. Monday saw ~$2.5B in junk-rated bond deals brought to market compared to ~$1.5B the previous week. By Wednesday risk barometers jumped, with the VIX rising above 14 for the first time since this summer, while the high yield bond ETF (HYG) neared the March 2017 lows. The backdrop also featured a continued flatting of Treasury yield curve. Spreads between the short and long ends of the US curve continued to probe the narrowest levels since early 2007, causing further consternation for some investors. Brexit and US tax reform were most often sited along with carryover from a technical reversal in the DAX last week as contributing factors holding back sentiment and raising volatility.
Thursday saw a significant snapback in stock prices though, as the US House of Representatives finally passed a long awaited tax reform bill. The Russel 2000 led a bounce that recouped much of the first three sessions’ losses for US indices. By week’s end, equity prices were drifting lower once again despite a swath of strong retail earnings reports and management commentary that observed business activity accelerating late in the quarter and into Q4. Supply was likely a factor yet again with six US IPOs opening for trading on Friday alone, to what can be best described as a lukewarm reception by investors. The dollar remained relatively soft probing five-week lows against the Yen and gold broke out to a one-month high on Friday. US rates continued to move lower outside of the 2-year note. For the week, the DJIA lost 0.3%, the S&P500 dropped 0.1%, while the Nasdaq added 0.5%.
In corporate news this week, some large M&A deals are brewing on the horizon. Both Comcast and Verizon are said to have been in talks to acquire assets from 21st Century Fox, following reports last week that Disney also harbored interest in some part of the media giant. Toymaker Mattel is said to have turned down a takeover approach from Hasbro, but terms of the offer are still not publically known. Earnings season slowed down considerably this week, but on the retail front, apparel stores showed some signs of life. Both Gap and Ross Stores posted same store sales above analyst expectations, and sports footwear names bounced in response to better than expected earnings from Shoe Carnival and Foot Locker. On Thursday, Walmart impressed Wall Street with better than expected numbers supported by its surging ecommerce metrics, sending shares up about 10% and adding nearly $30B in market cap. GE ran in the opposite direction during its investor meeting on Monday, where CEO Flannery announced a 50% dividend cut and a restructuring plan which spooked investors, sending GE shares below the $20/share support level, in the stock’s worst day since 2009. Tesla unveiled its long-awaited electric semi truck (and threw in a Roadster announcement for good measure), despite nagging questions that remain about Model 3 production capacity.
MONDAY 11/13
*(CN) CHINA OCT NEW YUAN LOANS (CNY): 663.2B V 783BE
(IN) INDIA OCT CPI Y/Y: 3.6% V 3.4%E
(CN) CHINA OCT AGGREGATE FINANCING (CNY): 1.040T V 1.100TE
GE Guides FY18 framework adj EPS $1.00-1.07 v $1.15e, Organic Rev 0-3% y/y, FCF $6-7B - investor slides
BWLD Reportedly receives >$150/shr takeover offer from Roark Capital - press
REN Announces withdrawal of proposed offering of $550M in 2025 senior notes ;cites 'broader market conditions'
(UK) PM May has granted parliament full vote on Brexit deal - FT
(HK) According to Credit Suisse analysts Macau Nov 1-12th gaming Rev +20-22% y/y v 15%e
(CN) China Oct Home Sales Value Y/Y: -3.4% (biggest decline in approx 3-years)
(HK) Macau Gaming Regulator's Chan: To continue existing regulations on junkets, have banned over 200 people entering casino this year
TUESDAY 11/14
(DE) GERMANY Q3 PRELIMINARY GDP Q/Q: 0.8% V 0.6%E; Y/Y: 2.8% V 2.3%E; GDP NSA Y/Y: 2.3% V 2.0%E
VOD.UK Reports H1 Adj EBIT €2.46B v €2.05B y/y, adj EBITDA €7.39B v €7.09B y/y, Rev €23.1B v €24.1B y/y
(IT) ITALY Q3 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; Y/Y: 1.8% V 1.7%E
(UK) OCT CPI M/M: 0.1% V 0.2%E; Y/Y: 3.0% V 3.1 %E; CPI CORE Y/Y: 2.7% V 2.8%E
(EU) EURO ZONE Q3 PRELIMINARY GDP Q/Q: 0.6% V 0.6%E; YY: 2.5% V 2.5%E
HD Reports Q3 $1.84 v $1.81e, Rev $25B v $24.5Be
(US) OCT PPI FINAL DEMAND M/M: 0.4% V 0.1%E; Y/Y: 2.8% V 2.4%E
Noting a number of cross currents in newsflow thru the EU session to current time
(US) Fed's Bostic (non-voter, dove): Reiterates gradual Fed hikes are appropriate over next couple of years; US is nearing full employment
(CA) Canada govt files legal challenge of US softwood lumber duties under NAFTA provisions - press
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED
9064.JP Offers to increase pay for workers by 33% y/y to ¥2,000/hour in December in order to help meet rise in demand – Japanese Press
WEDNESDAY 11/15
700.HK Reports Q3 (CNY) Net 18.0B v 15.7Be, Rev 65.2B v 61Be
(UK) SEPT AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.2% V 2.1%E; WEEKLY EARNINGS EX BONUS 3M/Y: 2.2% V 2.2%E
(UK) SEPT ILO UNEMPLOYMENT RATE: 4.3% V 4.3%E (matches lowest level since 1975)
(UK) OCT JOBLESS CLAIMS CHANGE: +1.1K V +2.6K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3% PRIOR
(DE) GERMANY SELLS €2.475B VS. €3.0B INDICATED IN 0.50%B AUG 2027 BUNDS; AVG YIELD: 0.36% V 0.48% PRIOR; BID-TO-COVER: 1.2X (technically uncovered) V 1.7X PRIOR
(US) OCT ADVANCE RETAIL SALES M/M: 0.2% V 0.0%E; RETAIL SALES EX AUTO M/M: 0.1% V 0.2%E
(US) NOV EMPIRE MANUFACTURING: 19.4 V 25.1E
(US) OCT CPI M/M: 0.1% V 0.1%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI INDEX NSA: 246.663 V 246.646E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 11th: 547.5K carloads and intermodal units, +1.2% y/y
(US) Senator Ron Johnson (R-WI) says he will vote Against the Senate tax bill - press
(US) SEPT TOTAL NET TIC FLOWS:-$51.3B V $125.0B PRIOR; NET LONG-TERM TIC FLOWS: $80.9B V $67.2B PRIOR
CSCO Reports Q1 $0.61 v $0.60e, Rev $12.1B v $12.1Be
MAT Reportedly rejects latest Hasbro acquisition bid - press
(CN) China Banks are conducting stress tests related to loans to property developers - Chinese Press
(AU) AUSTRALIA OCT EMPLOYMENT CHANGE: +3.7K V +18.8KE; UNEMPLOYMENT RATE: 5.4% V 5.5%E
(US) Christie's auction sells last privately held Leonardo da Vinci painting entitled 'Salvator Mundi' sold for record $450.3M (expected $100M+)
THURSDAY 11/16
(UK) Renewed speculation that UK PM May to increase her Brexit financial settlement (divorce bill) in Dec to help kick-start trade talks - financial press
(UK) OCT RETAIL SALES (EX AUTO FUEL) M/M: 0.1% V 0.0%E; Y/Y: -0.3% V -0.4%E
BBY Reports Q3 $0.78 v $0.79e, Rev $9.32B v $9.35Be
WMT Reports Q3 $1.00 v $0.97e, Rev $123.2B v $121.1Be
APC Guides initial FY18 oil production 385-405 MBOPD (implies +14% y/y); capex $4.2-4.6B ('17 plan 4.5-4.7B)
(NO) Norway Sovereign Wealth Fund proposes to divest oil and gas stocks (valued around $35B)
(US) OCT IMPORT PRICE INDEX M/M: 0.2% V 0.4%E; Y/Y: 2.5% V 2.5%E
(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 22.7 V 24.6E
(US) OCT INDUSTRIAL PRODUCTION M/M: 0.9% V 0.5%E; CAPACITY UTILIZATION: 77.0% V 76.3%E
(US) NOV NAHB HOUSING MARKET INDEX: 70 V 67E
(US) Judge in Sen Menendez (D-NJ) corruption trial grants mistrial - press
(US) House of Representatives passes GOP tax reform bill (as expected)
AMAT Reports Q4 $0.93 v $0.91e, Rev $3.97B v $3.93Be
GPS Reports Q3 $0.58 v $0.55e, Rev $3.84B v $3.77Be
FOXA Comcast reportedly approached Fox over possible bid; not clear if Comcast sought all of Fox or only some assets - press
FOXA Verizon reportedly also considering acquiring assets from Fox - press
TSLA Unveils prototype electric 'big rig' truck (as expected); production to begin in 2019
(IN) MOODY'S RAISES INDIA SOVEREIGN RATING TO BAA2 FROM BAA3 (1st hike in 14 years); Outlook revised to Stable from Positive
FRIDAY
(CA) CANADA OCT CPI M/M: 0.1% V 0.1%E; Y/Y: 1.4% V 1.4%E
(US) OCT HOUSING STARTS: 1.29M V 1.19ME; BUILDING PERMITS: 1.30M V 1.25ME
Fri, 17 Nov 2017 16:03 PM EST
US stocks rolled over early this week nudged by pressure coming from overseas. The first three sessions of the week saw futures trade lower in the premarket along with European bourses, only to see buyers step in after the opening bell in New York. An aggressive increase in corporate debt offerings may have caused some indigestion. Monday saw ~$2.5B in junk-rated bond deals brought to market compared to ~$1.5B the previous week. By Wednesday risk barometers jumped, with the VIX rising above 14 for the first time since this summer, while the high yield bond ETF (HYG) neared the March 2017 lows. The backdrop also featured a continued flatting of Treasury yield curve. Spreads between the short and long ends of the US curve continued to probe the narrowest levels since early 2007, causing further consternation for some investors. Brexit and US tax reform were most often sited along with carryover from a technical reversal in the DAX last week as contributing factors holding back sentiment and raising volatility.
Thursday saw a significant snapback in stock prices though, as the US House of Representatives finally passed a long awaited tax reform bill. The Russel 2000 led a bounce that recouped much of the first three sessions’ losses for US indices. By week’s end, equity prices were drifting lower once again despite a swath of strong retail earnings reports and management commentary that observed business activity accelerating late in the quarter and into Q4. Supply was likely a factor yet again with six US IPOs opening for trading on Friday alone, to what can be best described as a lukewarm reception by investors. The dollar remained relatively soft probing five-week lows against the Yen and gold broke out to a one-month high on Friday. US rates continued to move lower outside of the 2-year note. For the week, the DJIA lost 0.3%, the S&P500 dropped 0.1%, while the Nasdaq added 0.5%.
In corporate news this week, some large M&A deals are brewing on the horizon. Both Comcast and Verizon are said to have been in talks to acquire assets from 21st Century Fox, following reports last week that Disney also harbored interest in some part of the media giant. Toymaker Mattel is said to have turned down a takeover approach from Hasbro, but terms of the offer are still not publically known. Earnings season slowed down considerably this week, but on the retail front, apparel stores showed some signs of life. Both Gap and Ross Stores posted same store sales above analyst expectations, and sports footwear names bounced in response to better than expected earnings from Shoe Carnival and Foot Locker. On Thursday, Walmart impressed Wall Street with better than expected numbers supported by its surging ecommerce metrics, sending shares up about 10% and adding nearly $30B in market cap. GE ran in the opposite direction during its investor meeting on Monday, where CEO Flannery announced a 50% dividend cut and a restructuring plan which spooked investors, sending GE shares below the $20/share support level, in the stock’s worst day since 2009. Tesla unveiled its long-awaited electric semi truck (and threw in a Roadster announcement for good measure), despite nagging questions that remain about Model 3 production capacity.
MONDAY 11/13
*(CN) CHINA OCT NEW YUAN LOANS (CNY): 663.2B V 783BE
(IN) INDIA OCT CPI Y/Y: 3.6% V 3.4%E
(CN) CHINA OCT AGGREGATE FINANCING (CNY): 1.040T V 1.100TE
GE Guides FY18 framework adj EPS $1.00-1.07 v $1.15e, Organic Rev 0-3% y/y, FCF $6-7B - investor slides
BWLD Reportedly receives >$150/shr takeover offer from Roark Capital - press
REN Announces withdrawal of proposed offering of $550M in 2025 senior notes ;cites 'broader market conditions'
(UK) PM May has granted parliament full vote on Brexit deal - FT
(HK) According to Credit Suisse analysts Macau Nov 1-12th gaming Rev +20-22% y/y v 15%e
(CN) China Oct Home Sales Value Y/Y: -3.4% (biggest decline in approx 3-years)
(HK) Macau Gaming Regulator's Chan: To continue existing regulations on junkets, have banned over 200 people entering casino this year
TUESDAY 11/14
(DE) GERMANY Q3 PRELIMINARY GDP Q/Q: 0.8% V 0.6%E; Y/Y: 2.8% V 2.3%E; GDP NSA Y/Y: 2.3% V 2.0%E
VOD.UK Reports H1 Adj EBIT €2.46B v €2.05B y/y, adj EBITDA €7.39B v €7.09B y/y, Rev €23.1B v €24.1B y/y
(IT) ITALY Q3 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; Y/Y: 1.8% V 1.7%E
(UK) OCT CPI M/M: 0.1% V 0.2%E; Y/Y: 3.0% V 3.1 %E; CPI CORE Y/Y: 2.7% V 2.8%E
(EU) EURO ZONE Q3 PRELIMINARY GDP Q/Q: 0.6% V 0.6%E; YY: 2.5% V 2.5%E
HD Reports Q3 $1.84 v $1.81e, Rev $25B v $24.5Be
(US) OCT PPI FINAL DEMAND M/M: 0.4% V 0.1%E; Y/Y: 2.8% V 2.4%E
Noting a number of cross currents in newsflow thru the EU session to current time
(US) Fed's Bostic (non-voter, dove): Reiterates gradual Fed hikes are appropriate over next couple of years; US is nearing full employment
(CA) Canada govt files legal challenge of US softwood lumber duties under NAFTA provisions - press
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED
9064.JP Offers to increase pay for workers by 33% y/y to ¥2,000/hour in December in order to help meet rise in demand – Japanese Press
WEDNESDAY 11/15
700.HK Reports Q3 (CNY) Net 18.0B v 15.7Be, Rev 65.2B v 61Be
(UK) SEPT AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.2% V 2.1%E; WEEKLY EARNINGS EX BONUS 3M/Y: 2.2% V 2.2%E
(UK) SEPT ILO UNEMPLOYMENT RATE: 4.3% V 4.3%E (matches lowest level since 1975)
(UK) OCT JOBLESS CLAIMS CHANGE: +1.1K V +2.6K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3% PRIOR
(DE) GERMANY SELLS €2.475B VS. €3.0B INDICATED IN 0.50%B AUG 2027 BUNDS; AVG YIELD: 0.36% V 0.48% PRIOR; BID-TO-COVER: 1.2X (technically uncovered) V 1.7X PRIOR
(US) OCT ADVANCE RETAIL SALES M/M: 0.2% V 0.0%E; RETAIL SALES EX AUTO M/M: 0.1% V 0.2%E
(US) NOV EMPIRE MANUFACTURING: 19.4 V 25.1E
(US) OCT CPI M/M: 0.1% V 0.1%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI INDEX NSA: 246.663 V 246.646E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 11th: 547.5K carloads and intermodal units, +1.2% y/y
(US) Senator Ron Johnson (R-WI) says he will vote Against the Senate tax bill - press
(US) SEPT TOTAL NET TIC FLOWS:-$51.3B V $125.0B PRIOR; NET LONG-TERM TIC FLOWS: $80.9B V $67.2B PRIOR
CSCO Reports Q1 $0.61 v $0.60e, Rev $12.1B v $12.1Be
MAT Reportedly rejects latest Hasbro acquisition bid - press
(CN) China Banks are conducting stress tests related to loans to property developers - Chinese Press
(AU) AUSTRALIA OCT EMPLOYMENT CHANGE: +3.7K V +18.8KE; UNEMPLOYMENT RATE: 5.4% V 5.5%E
(US) Christie's auction sells last privately held Leonardo da Vinci painting entitled 'Salvator Mundi' sold for record $450.3M (expected $100M+)
THURSDAY 11/16
(UK) Renewed speculation that UK PM May to increase her Brexit financial settlement (divorce bill) in Dec to help kick-start trade talks - financial press
(UK) OCT RETAIL SALES (EX AUTO FUEL) M/M: 0.1% V 0.0%E; Y/Y: -0.3% V -0.4%E
BBY Reports Q3 $0.78 v $0.79e, Rev $9.32B v $9.35Be
WMT Reports Q3 $1.00 v $0.97e, Rev $123.2B v $121.1Be
APC Guides initial FY18 oil production 385-405 MBOPD (implies +14% y/y); capex $4.2-4.6B ('17 plan 4.5-4.7B)
(NO) Norway Sovereign Wealth Fund proposes to divest oil and gas stocks (valued around $35B)
(US) OCT IMPORT PRICE INDEX M/M: 0.2% V 0.4%E; Y/Y: 2.5% V 2.5%E
(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 22.7 V 24.6E
(US) OCT INDUSTRIAL PRODUCTION M/M: 0.9% V 0.5%E; CAPACITY UTILIZATION: 77.0% V 76.3%E
(US) NOV NAHB HOUSING MARKET INDEX: 70 V 67E
(US) Judge in Sen Menendez (D-NJ) corruption trial grants mistrial - press
(US) House of Representatives passes GOP tax reform bill (as expected)
AMAT Reports Q4 $0.93 v $0.91e, Rev $3.97B v $3.93Be
GPS Reports Q3 $0.58 v $0.55e, Rev $3.84B v $3.77Be
FOXA Comcast reportedly approached Fox over possible bid; not clear if Comcast sought all of Fox or only some assets - press
FOXA Verizon reportedly also considering acquiring assets from Fox - press
TSLA Unveils prototype electric 'big rig' truck (as expected); production to begin in 2019
(IN) MOODY'S RAISES INDIA SOVEREIGN RATING TO BAA2 FROM BAA3 (1st hike in 14 years); Outlook revised to Stable from Positive
FRIDAY
(CA) CANADA OCT CPI M/M: 0.1% V 0.1%E; Y/Y: 1.4% V 1.4%E
(US) OCT HOUSING STARTS: 1.29M V 1.19ME; BUILDING PERMITS: 1.30M V 1.25ME
Saturday, November 11, 2017
Barrons weekend summary
Barrons weekend summary:
Cover story on growing competition for TSLA in EV market; positive feature on SNE; cautious on consumer staples Cover story: With electric cars increasingly likely to supplant gas-powered models, major automakers are working on new technologies and initiatives that could benefit customers and shareholders, a sign TSLA will face growing competition.
Features: 1) Positive on SNE: Japanese electronics giant is finally thriving, with sales of camera chips for smartphones, videogame systems, and software up, while profits from its TV and music divisions are strong; 2) Cautious on PG, CL, KO, UN: Investors who could once count on consumer staples’ slow and steady earnings growth and high dividends can no longer do so as industry trends drag on stalwarts.
Tech Trader: The success of FB “has made it easy to forget that social networking remains a challenging business model,” leaving many companies—including SNAP and TWTR—struggling to find footing.
Trader: “There are plenty of reasons to worry the Fed will continue to raise interest rates, which would explain the 0.064-percentage-point increase in the 10-year Treasury on Friday”; The yield curve is the big issue for banks right now, but investors may be making too much of it, says Chris Verrone of Strategas Research Partners; Many of the moves in high-yield bonds last week were as much a matter of catching up to stock moves as something dire lurking under the surface, according to Evercore ISI.
Profile: Scott Kimball of the BMO TECH Core Plus Bond fund doesn’t hitch the portfolio to sweeping macroeconomic views or use derivatives (top 10 corporates: IBM, ABT, ATVI, GS, HNZ, Coach, EBAY, BDX, Mexichem Sab). Health & Wealth Roundtable: At Barron’s fifth annual gathering, four top advisors—Kathleen Weber of Weber Russo Group, Ann Marie Etergino of RBC Wealth Management, Barbara Archer of High-Tower, and Rob Vinder of The Vinder Group—discuss how to have a healthy and stress-free retirement.
Follow-Up: Positive on PYPL: Payments company has had a strong year, with shares up 87%, but despite the surge there’s likely more upside ahead.
European Trader: Positive on AMS: Company’s sensor technology helps power the AAPL iPhone X’s face identification feature, and though shares have tripled this year, they still have room to rise..
Asian Trader: Positive on Nintendo: The company’s move to ramp up production of its Switch console and the addition of new games for its devices should help it during the holiday season, and shares could rise by 25%.
Emerging Markets: “The dramatic arrests of prominent Saudis by their own government has unnerved some investors and raised questions about the timing and structure” of the Saudi Aramco IPO.
Commodities: Oil prices are set to rise during the next few months, even though West Texas Intermediate crude has already reached a two-year high.
Streetwise: Reverberations from the palace coup in Saudi Arabia are likely to be felt for a long time, complicating the difficulty investors already face trying to understand the “opaque workings” of the government.
Friday, November 10, 2017
Markets Feel Blip of Anxiety Amid Slow Progress on Policy Talks
TradeTheNews.com Weekly
Market Update: Markets Feel Blip of Anxiety Amid Slow Progress on Policy Talks
Fri, 10 Nov 2017 16:08 PM EST
The week opened with stocks continuing to float up to all-time highs on low volatility, but finished on a different note. The volume of corporate announcements remained robust as the third quarter earnings season hit its peak. By midweek a slew of stock and bond offering announcements appeared to begin weighing on markets. The high-yield bond ETF broke through the 200-day moving average, and that coincided with at 15% jump in the VIX volatility index on Thursday. Global Treasury curves remained at some of its flattest levels in about decade before yields lifted on Friday. The underlying risk currents continued to be swayed by headlines from Washington and Brussels. More details started to emerge on the Republican tax plan as it worked its way through Congress. Word that a one-year delay in the implementation of the corporate rate cut to 20% was something being seriously considered seemed to cause some indigestion in US stocks — small caps, in particular. There was no breakthrough in the latest round of Brexit talks, as expected, but renewed reports that both sides continue to prepare for a ‘no deal’ scenario may have also weighed on sentiment. Crude remained one of the few bright spots as oil attracted money flows on the lead-up to the November 30th OPEC meeting and continued fallout from the Saudi crown price consolidating his power. US natural gas futures climbed another 7%, helped by forecasts for the arrival of winter temperatures across the Northeastern US. For the week the DJIA fell 0.5%, the S&P500 slipped 0.2%, and the Nasdaq lost 0.2%.
In corporate news this week, T-Mobile and Sprint formally ended long-running merger discussions, as the two companies were ultimately unable to find mutually agreeable terms. Qualcomm confirmed receipt of a $70/share merger proposal from Broadcom, but reports suggested Qualcomm is poised to reject the offer. CNBC reported that Disney recently held talks to acquire most of 21st Century Fox and later added that, while the talks have paused, the two parties have not given up on the idea of a deal. Disney earnings disappointed but shares were lifted on news that the company intends to take on Netflix with a lower-priced streaming service and that the company plans to produce a new Star Wars trilogy. Macy's reported a miss on revenues, but earnings came in stronger than anticipated on tighter inventory controls which boosted margins.
SUNDAY 11/5
S Softbank announces its intention to raise stake through open market transactions or otherwise, subject to market conditions and other factors
TMUS T-Mobile and Sprint end Merger discussions
(UK) Reportedly UK govt has signaled that it is willing to pay the €60B (£53B) Brexit divorce bill, meeting Brussels' demands - UK press
MONDAY 11/6
*(DE) GERMANY SEPT FACTORY ORDERS M/M: +1.0% V -1.1%E; Y/Y: 9.5% V 7.1%E
(CH) Swiss Oct CPI M/M: 0.1% v 0.1%e; Y/Y: 0.7% v 0.7%e
(EU) EURO ZONE NOV SENTIX INVESTOR CONFIDENCE: 34.0 V 31.0E (highest level since July 2007)
FAST Reports Oct Rev $399.7M, +19.2% y/y
FOXA CNBC's Faber: Disney recently held talks to acquire most of 21st Century Fox; price talks and deal structure can't be learned at this time
QCOM Confirms unsolicited merger proposal from Broadcom for $70/shr in cash and stock valued at $130B with our without NXP
(US) NY Fed President Dudley (FOMC voter) to retire in mid-2018 (as speculated over weekend)
CRM Forms new strategic partnership with Google
TUESDAY 11/7
(CN) CHINA OCT FOREIGN RESERVES: $3.1092T V $3.110TE (9th straight increase)
(CN) CHINA OCT TRADE BALANCE (CNY) 254.5B V 280.5BE
(CN) CHINA OCT TRADE BALANCE: $38.2B V $39.1BE
WEDNESDAY 11/8
ACA.FR Reports Q3 Net €1.07B v €1.03Be, Rev €4.58B v €4.76Be
RMS.FR Reports Q3 Rev €1.34B v €1.31Be
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
AAPL Reportedly ramping up work on augmented reality headset with new chip and op system - press
(US) Association of American Railroads weekly rail traffic report for week ending Nov 4th: 538.7K carloads and intermodal units, -0.8% y/y
*(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(CN) China President Xi: Vast potential exists in China-US economic ties; China willing to significantly raise imports from the US; US/China exploring long term agreement on repatriation
THURSDAY 11/9
SIE.DE Reports Q4 Net €1.29B v €1.25Be, industrial business profit €2.20B v €2.45Be, Rev €22.3B v €24.8Be;
DTE.DE Reports Q3 adj Net €1.24B v €1.15Be, adj EBITDA €7.32B v €5.33B y/y, Rev €18.34B v €18.1B y/y
DPW.DE Reports Q3 Net €641M v €620Me, EBIT €834M v €755M y/y, Rev €14.6B v €13.9B y/y
BRBY.UK Reports H1 adj Op £185M v £163.3Me, Rev £1.26B v £1.24Be; Announces strategic update
AZN.UK Reports Q3 Core EPS $1.12 adj v $1.04e, Rev $6.23 v $6.0Be
*(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%, AS EXPECTED
ODP Outlines vision to become IT Service co with MRR ahead of analyst day
M Reports Q3 $0.23 v $0.19e, Rev $5.28B v $5.32Be
(US) Senate tax bill reportedly to propose delaying corporate tax cut implementation by one year to 2019 - press
HYG High yield ETF extends below 200-day moving average
*(MX) MEXICO CENTRAL BANK (BANXICO) LEAVES OVERNIGHT RATE UNCHANGED AT 7.00%; AS EXPECTED
(UK) Ireland reportedly has made new demands in Brexit talks regarding the northern border, surprising UK negotiators - UK press
DIS Reports Q4 $1.07 v $1.12e, Rev $12.8B v $13.1Be
NVDA Reports Q3 $1.33 v $0.94e, Rev $2.64B v $2.36Be; raises dividend to $0.15/shr from $0.14 (indicated yield 0.29%)
NRG Withdraws planned $870M offering of 2028 senior unsecured notes on ‘broader market conditions’; as a result to terminate cash tender for 6.625% senior notes due 2023
FRIDAY 11/10
MT.NL Reports Q3 Net $1.21B v $680M y/y, EBITDA $1.92B v $1.88Be, Rev $17.64B v $17.2Be
(FR) FRANCE SEPT INDUSTRIAL PRODUCTION M/M: 0.6% V 0.5%E; Y/Y: 3.2% V 3.1%E
*(UK) SEPT INDUSTRIAL PRODUCTION M/M: 0.7% V 0.3%E; Y/Y: 2.5% V 1.4%E
(UK) EU/UK officials Barnier and Davis hold press conference following the 6th monthly round of Brexit negotiations
Fri, 10 Nov 2017 16:08 PM EST
The week opened with stocks continuing to float up to all-time highs on low volatility, but finished on a different note. The volume of corporate announcements remained robust as the third quarter earnings season hit its peak. By midweek a slew of stock and bond offering announcements appeared to begin weighing on markets. The high-yield bond ETF broke through the 200-day moving average, and that coincided with at 15% jump in the VIX volatility index on Thursday. Global Treasury curves remained at some of its flattest levels in about decade before yields lifted on Friday. The underlying risk currents continued to be swayed by headlines from Washington and Brussels. More details started to emerge on the Republican tax plan as it worked its way through Congress. Word that a one-year delay in the implementation of the corporate rate cut to 20% was something being seriously considered seemed to cause some indigestion in US stocks — small caps, in particular. There was no breakthrough in the latest round of Brexit talks, as expected, but renewed reports that both sides continue to prepare for a ‘no deal’ scenario may have also weighed on sentiment. Crude remained one of the few bright spots as oil attracted money flows on the lead-up to the November 30th OPEC meeting and continued fallout from the Saudi crown price consolidating his power. US natural gas futures climbed another 7%, helped by forecasts for the arrival of winter temperatures across the Northeastern US. For the week the DJIA fell 0.5%, the S&P500 slipped 0.2%, and the Nasdaq lost 0.2%.
In corporate news this week, T-Mobile and Sprint formally ended long-running merger discussions, as the two companies were ultimately unable to find mutually agreeable terms. Qualcomm confirmed receipt of a $70/share merger proposal from Broadcom, but reports suggested Qualcomm is poised to reject the offer. CNBC reported that Disney recently held talks to acquire most of 21st Century Fox and later added that, while the talks have paused, the two parties have not given up on the idea of a deal. Disney earnings disappointed but shares were lifted on news that the company intends to take on Netflix with a lower-priced streaming service and that the company plans to produce a new Star Wars trilogy. Macy's reported a miss on revenues, but earnings came in stronger than anticipated on tighter inventory controls which boosted margins.
SUNDAY 11/5
S Softbank announces its intention to raise stake through open market transactions or otherwise, subject to market conditions and other factors
TMUS T-Mobile and Sprint end Merger discussions
(UK) Reportedly UK govt has signaled that it is willing to pay the €60B (£53B) Brexit divorce bill, meeting Brussels' demands - UK press
MONDAY 11/6
*(DE) GERMANY SEPT FACTORY ORDERS M/M: +1.0% V -1.1%E; Y/Y: 9.5% V 7.1%E
(CH) Swiss Oct CPI M/M: 0.1% v 0.1%e; Y/Y: 0.7% v 0.7%e
(EU) EURO ZONE NOV SENTIX INVESTOR CONFIDENCE: 34.0 V 31.0E (highest level since July 2007)
FAST Reports Oct Rev $399.7M, +19.2% y/y
FOXA CNBC's Faber: Disney recently held talks to acquire most of 21st Century Fox; price talks and deal structure can't be learned at this time
QCOM Confirms unsolicited merger proposal from Broadcom for $70/shr in cash and stock valued at $130B with our without NXP
(US) NY Fed President Dudley (FOMC voter) to retire in mid-2018 (as speculated over weekend)
CRM Forms new strategic partnership with Google
TUESDAY 11/7
(CN) CHINA OCT FOREIGN RESERVES: $3.1092T V $3.110TE (9th straight increase)
(CN) CHINA OCT TRADE BALANCE (CNY) 254.5B V 280.5BE
(CN) CHINA OCT TRADE BALANCE: $38.2B V $39.1BE
WEDNESDAY 11/8
ACA.FR Reports Q3 Net €1.07B v €1.03Be, Rev €4.58B v €4.76Be
RMS.FR Reports Q3 Rev €1.34B v €1.31Be
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
AAPL Reportedly ramping up work on augmented reality headset with new chip and op system - press
(US) Association of American Railroads weekly rail traffic report for week ending Nov 4th: 538.7K carloads and intermodal units, -0.8% y/y
*(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(CN) China President Xi: Vast potential exists in China-US economic ties; China willing to significantly raise imports from the US; US/China exploring long term agreement on repatriation
THURSDAY 11/9
SIE.DE Reports Q4 Net €1.29B v €1.25Be, industrial business profit €2.20B v €2.45Be, Rev €22.3B v €24.8Be;
DTE.DE Reports Q3 adj Net €1.24B v €1.15Be, adj EBITDA €7.32B v €5.33B y/y, Rev €18.34B v €18.1B y/y
DPW.DE Reports Q3 Net €641M v €620Me, EBIT €834M v €755M y/y, Rev €14.6B v €13.9B y/y
BRBY.UK Reports H1 adj Op £185M v £163.3Me, Rev £1.26B v £1.24Be; Announces strategic update
AZN.UK Reports Q3 Core EPS $1.12 adj v $1.04e, Rev $6.23 v $6.0Be
*(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%, AS EXPECTED
ODP Outlines vision to become IT Service co with MRR ahead of analyst day
M Reports Q3 $0.23 v $0.19e, Rev $5.28B v $5.32Be
(US) Senate tax bill reportedly to propose delaying corporate tax cut implementation by one year to 2019 - press
HYG High yield ETF extends below 200-day moving average
*(MX) MEXICO CENTRAL BANK (BANXICO) LEAVES OVERNIGHT RATE UNCHANGED AT 7.00%; AS EXPECTED
(UK) Ireland reportedly has made new demands in Brexit talks regarding the northern border, surprising UK negotiators - UK press
DIS Reports Q4 $1.07 v $1.12e, Rev $12.8B v $13.1Be
NVDA Reports Q3 $1.33 v $0.94e, Rev $2.64B v $2.36Be; raises dividend to $0.15/shr from $0.14 (indicated yield 0.29%)
NRG Withdraws planned $870M offering of 2028 senior unsecured notes on ‘broader market conditions’; as a result to terminate cash tender for 6.625% senior notes due 2023
FRIDAY 11/10
MT.NL Reports Q3 Net $1.21B v $680M y/y, EBITDA $1.92B v $1.88Be, Rev $17.64B v $17.2Be
(FR) FRANCE SEPT INDUSTRIAL PRODUCTION M/M: 0.6% V 0.5%E; Y/Y: 3.2% V 3.1%E
*(UK) SEPT INDUSTRIAL PRODUCTION M/M: 0.7% V 0.3%E; Y/Y: 2.5% V 1.4%E
(UK) EU/UK officials Barnier and Davis hold press conference following the 6th monthly round of Brexit negotiations
Friday, November 3, 2017
Markets Remain Positive on Solid Data and Strong Earnings
TradeTheNews.com Weekly
Market Update: Markets Remain Positive on Solid Data and Strong Earnings
Fri, 03 Nov 2017 16:14 PM EST
Investors had an overwhelming amount of information to digest this week, with much of it again emanating out of Washington DC. The week began with news that President Trump’s former campaign chairman, Paul Manafort, would be indicted with others as part of special counsel Mueller’s Russia probe. By Wednesday, House Republicans released the long awaited details of their tax reform proposal after a 24 hour delay, and the following day the President confirmed Jerome Powell was his choice for the next FOMC Chairman. The three DC headlines sandwiched three key central bank meetings. The US Fed and BOJ, as expected, each left rates unchanged and made minimal revisions to their policy statements. That left the Fed squarely on track for a December rate hike. The Bank of England, in a somewhat controversial yet expected decision, raised rates for the first time in a decade taking back last summer’s post-Brexit referendum cut. Nevertheless, the statement was viewed in a somewhat dovish light because it removed previous language that interest rates may need to rise more than markets expected. By Friday, all eyes were on the October jobs report that served up some surprises, but overall along with a 12-year high in the ISM services reading reinforced the notion that the US economy, helped by growth globally, may be gaining traction at higher gear than has been seen over the last decade.
Treasury prices rose, putting modest downward pressure on yields. The long end saw better buying resulting in curve flattening after the Treasury secretary indicated there was little interest in issuing ultra-long bonds at this time, and the size of the quarterly refunding issuance remained unchanged. The Dollar Index pushed back towards the recent 5-month highs helped by the robust US data and hopes for fiscal stimulus. WTI crude futures finished the week at the best levels since this spring as consensus grows that OPEC and its partners will extend their production cuts by 9-months through the end of 2018. The VIX volatility index finished the week not far from the October lows while stocks ended on a high note. For the week, the DJIA gained 0.4%, the S&P500 added 0.3%, and the Nasdaq rose 0.9%.
Earnings season pushed onward with another third of S&P500 names reporting. Once again, many highlights came from the tech space led by Apple on Thursday. Rising material costs and disruptions from the hurricanes wreaked havoc on margins and outlooks for some sectors. Management missteps continued to get punished mercilessly, particularly in retail.
In corporate news this week, Apple recorded another blowout quarter, pointing to strong iPhone 8 and iPhone X orders, as the tech giant’s market cap stretched to $900B. Facebook posted big beats on its top and bottom line, but shares fell when it forecast expenses growing 45-60% next year. Worse than expected same-store sales and a cut to long-term outlook from Starbucks sent its stock tumbling after hours Thursday, but the coffee chain rebounded on Friday as buyers queued up. Tesla was weaker on a wider-than-anticipated loss for the quarter and after the House tax plan put the federal electric vehicle tax credit on the scrap heap. In M&A news, Lennar agreed to acquire CalAtlantic Group for $51.34/share in a $9.3B transaction to create the largest homebuilder in the United States. Power producer Dynegy agreed to a $20B all-stock merger with Vistra Energy in order to address shrinking profit margins in the industry. Rockwell Automation rejected an unsolicited $215/shr bid from Emerson Electric on grounds the offer was not in shareholders’ interests. And on Friday, reports emerged that Broadcom was making a play for chip maker Qualcomm, putting QCOM’s bid for NXP Semiconductor in jeopardy.
MONDAY 10/30
7974.JP Reports H1 Net profit ¥51.5B v ¥38.3B y/y, Op profit ¥40.0B v loss ¥5.95B y/y, Rev ¥374B v ¥137B y/y; Raises FY18 outlook
386.HK Reports Q3 (CNY) Net 11.3B v 9.9B y/y, Op 20.3B v 16.9B y/y, Rev 579.1B v 484.7B y/y
(EU) EURO ZONE OCT BUSINESS CLIMATE INDICATOR: 1.44 V 1.40E ; CONSUMER CONFIDENCE (FINAL): -1.0% V -1.0E
CAA To be acquired for ~$51.34/shr by Lennar in all stock transaction valued at $9.3B inc debt; Creating largest US homebuilder
AMZN Reportedly has slashed seller fees to try to improve its grocery selection online - RECODE
(US) SEPT PCE CORE M/M: 0.1% V 0.1%E; Y/Y: 1.3% V 1.3%E
(US) SEPT PCE DEFLATOR M/M: 0.4% V 0.4%E; Y/Y: 1.6% V 1.6%
(US) SEPT PERSONAL INCOME: 0.4% V 0.4%E; PERSONAL SPENDING: 1.0% V 0.9%E
TATA.IN Reports Q2 (INR) Net 9.76B v 16.6Be, Rev 325B v 323Be
(DE) GERMANY OCT PRELIMINARY CPI M/M: 0.0% V 0.1%E; Y/Y: 1.6% V 1.7%E
(US) Atlanta Fed forecasts initial Q4 GDP at 2.9%
MDLZ Reports Q3 $0.57 v $0.54e, Rev $6.52B v $6.46Be
TUESDAY 10/31
AIR.FR Reports Q3 Net €348M v €50M y/y; Adj EBIT €697M v €632Me, Rev €14.2B v €14.0Be
(FR) FRANCE Q3 ADVANCE GDP Q/Q: 0.5% V 0.5%E; Y/Y: 2.2% V 2.1%E
BP.UK Reports Q3 Net $1.87B v $1.58Be, Underlying replacement cost profit $1.87B v $933M y/y, Total Rev $60B v $48B y/y; to commence share buyback in Q4
(FR) FRANCE OCT PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.1% V 1.0%E
(FR) FRANCE CONSUMER SPENDING M/M: 0.9% V 0.6%E; Y/Y: 2.8% V 1.9%E
WCG Reports Q3 $4.08 v $1.63 y/y, Rev $4.40B v $4.40Be
(EU) EURO ZONE OCT ADVANCE CPI ESTIMATE Y/Y: 1.4% V 1.5%E; CPI CORE Y/Y: 0.9% V 1.1%E
(US) Nevada reports Sept casino gaming Rev $979.9M, +3.3% y/y; Las Vegas strip rev $567.9M, +4.7% y/y
(US) OCT CONSUMER CONFIDENCE: 125.9 V 121.5E (highest since Dec 2000)
X Reports Q3 $0.92 v $0.67e, Rev $3.25B v $3.04Be
WEDNESDAY 11/1
(HK) Macau Oct Gaming Rev MOP22.6B, +22.1% y/y v 14.5%e
STAN.UK Reports Q3 adj pretax $814M v $861Me, op income $3.59B v $3.64Be
(US) OCT ADP EMPLOYMENT CHANGE: +235K V +200KE
NYT Reports Q3 $0.13 v $0.09e, Rev $385.6M v $388Me (2 est)
(US) OCT FINAL MARKIT MANUFACTURING PMI: 54.6 V 54.5E
(US) OCT ISM MANUFACTURING: 58.7 V 59.5E; PRICES PAID: 68.5 V 67.8E
(US) Atlanta Fed raises Q4 GDP to 4.5% from 2.9% on 10/30
(US) Association of American Railroads weekly rail traffic report for week ending Oct 28th: 546.6K carloads and intermodal units, +0.2% y/y (Strongest month for intermodel in history)
FB Reports Q3 $1.59 v $1.29e, Rev $10.3B v $9.88Be
TSLA Reports Q3 -$2.92 v -$2.45e, Rev $2.98B v $2.92Be
FB CFO: See FY18 total GAAP expenses +45-60%; continue to see decelerated ad revenue growth for the foreseeable future - earnings call comments
COST Reports Oct Total SSS (ex-gas) 5.6%; US SSS (ex-gas) 5.9% v 4.9%e
THURSDAY 11/2
992.HK Reports Q2 Net $139M v $157M y/y, Rev $11.76B v $11.2B y/y
CARLB.DK Reports Q3 (DKK) Rev 16.7B v 17.1Be
CSGN.CH Reports Q3 (CHF) Net 244M v 201Me, adj Pretax 620M v 237M y/y, Rev 4.97B v 4.97Be
RDSA.NL Reports Q3 adj Profit $4.09B v $3.6Be, basic CCS EPS $0.50 v $0.44e, Rev $75.8B v $61.9B y/y
(DE) GERMANY OCT UNEMPLOYMENT CHANGE: -11K V -10KE; UNEMPLOYMENT RATE: 5.6% V 5.6%E
DWDP Reports Q3 $0.55 v $0.45e, Rev $18.3B v $17.5Be; to cut workforce
(CZ) CZECH CENTRAL BANK (CNB) RAISES REPURCHASE RATE BY 25BPS TO 0.50%; AS EXPECTED
(UK) BANK OF ENGLAND (BOE) RAISES INTEREST RATES BY 25BPS TO 0.50%; AS EXPECTED
(UK) BOE NOV MINUTES: VOTED 7-2 TO RAISE INTEREST RATES BY 25BPS TO 0.50% (Ramsen and Cunliffe dissented to keep policy steady)
(US) Q3 PRELIMINARY NONFARM PRODUCTIVITY: 3.0% V 2.6%E; UNIT LABOR COSTS: 0.5% V 0.4%E
DAL Reports Oct Load factor 86.0%, +0.9ppt y/y
SYT Obtains non-exclusive IP license from Broad Institute for CRISPR-Cas9 genome-editing technology for agriculture applications
(US) PRESIDENT TRUMP NOMINATES JEROME POWELL TO FED CHAIR POSITION (AS EXPECTED)
(US) Fed Chair-designate Powell: committed to dual mandate of maximum employment and stable prices - comments in Rose Garden
SBUX Reports Q4 $0.55 v $0.55e, Rev $5.70B v $5.73Be; Raises dividend 20%; Estab $15B 3-yr buyback plan (~19% market cap)
AAPL Reports Q4 $2.07 v $1.87e, Rev $52.6B v $51.2Be
(AU) Australia Sept Retail Sales M/M: 0.0% v 0.4%e; Q3 Ex Inflation Q/Q: 0.1% v 0.0%e
(CN) PBOC CONFIRMS CNY404B MEDIUM-TERM LENDING FACILITY (MLF) OPERATION; Offers 1-year loans at 3.20% v 3.20% prior
FRIDAY 11/3
GLE.FR Reports Q3 adj Net €1.08B v €1.0Be, Gross Op €1.96B v €1.99B y/y, Adj Rev €5.96B v €6.04Be
(UK) OCT SERVICES PMI: 55.6 V 53.3E (15th month of expansion)
(US) OCT UNEMPLOYMENT RATE: 4.1% V 4.2%E (lowest level since Dec 2000)
(US) OCT AVERAGE HOURLY EARNINGS M/M: 0.0% V 0.2%E; Y/Y: 2.4% V 2.7%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
(US) SEPT TRADE BALANCE: -$43.5B V -$43.3BE
(US) OCT CHANGE IN NONFARM PAYROLLS: +261K V +313KE
MTB Continues to expect FY17 low-single digit overall loan growth - Investor presentation
(US) OCT ISM NON-MANUFACTURING COMPOSITE: 60.1 V 58.5E (highest since Aug 2005)
QCOM Broadcom reportedly considering bid to acquire Qualcomm - press
Fri, 03 Nov 2017 16:14 PM EST
Investors had an overwhelming amount of information to digest this week, with much of it again emanating out of Washington DC. The week began with news that President Trump’s former campaign chairman, Paul Manafort, would be indicted with others as part of special counsel Mueller’s Russia probe. By Wednesday, House Republicans released the long awaited details of their tax reform proposal after a 24 hour delay, and the following day the President confirmed Jerome Powell was his choice for the next FOMC Chairman. The three DC headlines sandwiched three key central bank meetings. The US Fed and BOJ, as expected, each left rates unchanged and made minimal revisions to their policy statements. That left the Fed squarely on track for a December rate hike. The Bank of England, in a somewhat controversial yet expected decision, raised rates for the first time in a decade taking back last summer’s post-Brexit referendum cut. Nevertheless, the statement was viewed in a somewhat dovish light because it removed previous language that interest rates may need to rise more than markets expected. By Friday, all eyes were on the October jobs report that served up some surprises, but overall along with a 12-year high in the ISM services reading reinforced the notion that the US economy, helped by growth globally, may be gaining traction at higher gear than has been seen over the last decade.
Treasury prices rose, putting modest downward pressure on yields. The long end saw better buying resulting in curve flattening after the Treasury secretary indicated there was little interest in issuing ultra-long bonds at this time, and the size of the quarterly refunding issuance remained unchanged. The Dollar Index pushed back towards the recent 5-month highs helped by the robust US data and hopes for fiscal stimulus. WTI crude futures finished the week at the best levels since this spring as consensus grows that OPEC and its partners will extend their production cuts by 9-months through the end of 2018. The VIX volatility index finished the week not far from the October lows while stocks ended on a high note. For the week, the DJIA gained 0.4%, the S&P500 added 0.3%, and the Nasdaq rose 0.9%.
Earnings season pushed onward with another third of S&P500 names reporting. Once again, many highlights came from the tech space led by Apple on Thursday. Rising material costs and disruptions from the hurricanes wreaked havoc on margins and outlooks for some sectors. Management missteps continued to get punished mercilessly, particularly in retail.
In corporate news this week, Apple recorded another blowout quarter, pointing to strong iPhone 8 and iPhone X orders, as the tech giant’s market cap stretched to $900B. Facebook posted big beats on its top and bottom line, but shares fell when it forecast expenses growing 45-60% next year. Worse than expected same-store sales and a cut to long-term outlook from Starbucks sent its stock tumbling after hours Thursday, but the coffee chain rebounded on Friday as buyers queued up. Tesla was weaker on a wider-than-anticipated loss for the quarter and after the House tax plan put the federal electric vehicle tax credit on the scrap heap. In M&A news, Lennar agreed to acquire CalAtlantic Group for $51.34/share in a $9.3B transaction to create the largest homebuilder in the United States. Power producer Dynegy agreed to a $20B all-stock merger with Vistra Energy in order to address shrinking profit margins in the industry. Rockwell Automation rejected an unsolicited $215/shr bid from Emerson Electric on grounds the offer was not in shareholders’ interests. And on Friday, reports emerged that Broadcom was making a play for chip maker Qualcomm, putting QCOM’s bid for NXP Semiconductor in jeopardy.
MONDAY 10/30
7974.JP Reports H1 Net profit ¥51.5B v ¥38.3B y/y, Op profit ¥40.0B v loss ¥5.95B y/y, Rev ¥374B v ¥137B y/y; Raises FY18 outlook
386.HK Reports Q3 (CNY) Net 11.3B v 9.9B y/y, Op 20.3B v 16.9B y/y, Rev 579.1B v 484.7B y/y
(EU) EURO ZONE OCT BUSINESS CLIMATE INDICATOR: 1.44 V 1.40E ; CONSUMER CONFIDENCE (FINAL): -1.0% V -1.0E
CAA To be acquired for ~$51.34/shr by Lennar in all stock transaction valued at $9.3B inc debt; Creating largest US homebuilder
AMZN Reportedly has slashed seller fees to try to improve its grocery selection online - RECODE
(US) SEPT PCE CORE M/M: 0.1% V 0.1%E; Y/Y: 1.3% V 1.3%E
(US) SEPT PCE DEFLATOR M/M: 0.4% V 0.4%E; Y/Y: 1.6% V 1.6%
(US) SEPT PERSONAL INCOME: 0.4% V 0.4%E; PERSONAL SPENDING: 1.0% V 0.9%E
TATA.IN Reports Q2 (INR) Net 9.76B v 16.6Be, Rev 325B v 323Be
(DE) GERMANY OCT PRELIMINARY CPI M/M: 0.0% V 0.1%E; Y/Y: 1.6% V 1.7%E
(US) Atlanta Fed forecasts initial Q4 GDP at 2.9%
MDLZ Reports Q3 $0.57 v $0.54e, Rev $6.52B v $6.46Be
TUESDAY 10/31
AIR.FR Reports Q3 Net €348M v €50M y/y; Adj EBIT €697M v €632Me, Rev €14.2B v €14.0Be
(FR) FRANCE Q3 ADVANCE GDP Q/Q: 0.5% V 0.5%E; Y/Y: 2.2% V 2.1%E
BP.UK Reports Q3 Net $1.87B v $1.58Be, Underlying replacement cost profit $1.87B v $933M y/y, Total Rev $60B v $48B y/y; to commence share buyback in Q4
(FR) FRANCE OCT PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.1% V 1.0%E
(FR) FRANCE CONSUMER SPENDING M/M: 0.9% V 0.6%E; Y/Y: 2.8% V 1.9%E
WCG Reports Q3 $4.08 v $1.63 y/y, Rev $4.40B v $4.40Be
(EU) EURO ZONE OCT ADVANCE CPI ESTIMATE Y/Y: 1.4% V 1.5%E; CPI CORE Y/Y: 0.9% V 1.1%E
(US) Nevada reports Sept casino gaming Rev $979.9M, +3.3% y/y; Las Vegas strip rev $567.9M, +4.7% y/y
(US) OCT CONSUMER CONFIDENCE: 125.9 V 121.5E (highest since Dec 2000)
X Reports Q3 $0.92 v $0.67e, Rev $3.25B v $3.04Be
WEDNESDAY 11/1
(HK) Macau Oct Gaming Rev MOP22.6B, +22.1% y/y v 14.5%e
STAN.UK Reports Q3 adj pretax $814M v $861Me, op income $3.59B v $3.64Be
(US) OCT ADP EMPLOYMENT CHANGE: +235K V +200KE
NYT Reports Q3 $0.13 v $0.09e, Rev $385.6M v $388Me (2 est)
(US) OCT FINAL MARKIT MANUFACTURING PMI: 54.6 V 54.5E
(US) OCT ISM MANUFACTURING: 58.7 V 59.5E; PRICES PAID: 68.5 V 67.8E
(US) Atlanta Fed raises Q4 GDP to 4.5% from 2.9% on 10/30
(US) Association of American Railroads weekly rail traffic report for week ending Oct 28th: 546.6K carloads and intermodal units, +0.2% y/y (Strongest month for intermodel in history)
FB Reports Q3 $1.59 v $1.29e, Rev $10.3B v $9.88Be
TSLA Reports Q3 -$2.92 v -$2.45e, Rev $2.98B v $2.92Be
FB CFO: See FY18 total GAAP expenses +45-60%; continue to see decelerated ad revenue growth for the foreseeable future - earnings call comments
COST Reports Oct Total SSS (ex-gas) 5.6%; US SSS (ex-gas) 5.9% v 4.9%e
THURSDAY 11/2
992.HK Reports Q2 Net $139M v $157M y/y, Rev $11.76B v $11.2B y/y
CARLB.DK Reports Q3 (DKK) Rev 16.7B v 17.1Be
CSGN.CH Reports Q3 (CHF) Net 244M v 201Me, adj Pretax 620M v 237M y/y, Rev 4.97B v 4.97Be
RDSA.NL Reports Q3 adj Profit $4.09B v $3.6Be, basic CCS EPS $0.50 v $0.44e, Rev $75.8B v $61.9B y/y
(DE) GERMANY OCT UNEMPLOYMENT CHANGE: -11K V -10KE; UNEMPLOYMENT RATE: 5.6% V 5.6%E
DWDP Reports Q3 $0.55 v $0.45e, Rev $18.3B v $17.5Be; to cut workforce
(CZ) CZECH CENTRAL BANK (CNB) RAISES REPURCHASE RATE BY 25BPS TO 0.50%; AS EXPECTED
(UK) BANK OF ENGLAND (BOE) RAISES INTEREST RATES BY 25BPS TO 0.50%; AS EXPECTED
(UK) BOE NOV MINUTES: VOTED 7-2 TO RAISE INTEREST RATES BY 25BPS TO 0.50% (Ramsen and Cunliffe dissented to keep policy steady)
(US) Q3 PRELIMINARY NONFARM PRODUCTIVITY: 3.0% V 2.6%E; UNIT LABOR COSTS: 0.5% V 0.4%E
DAL Reports Oct Load factor 86.0%, +0.9ppt y/y
SYT Obtains non-exclusive IP license from Broad Institute for CRISPR-Cas9 genome-editing technology for agriculture applications
(US) PRESIDENT TRUMP NOMINATES JEROME POWELL TO FED CHAIR POSITION (AS EXPECTED)
(US) Fed Chair-designate Powell: committed to dual mandate of maximum employment and stable prices - comments in Rose Garden
SBUX Reports Q4 $0.55 v $0.55e, Rev $5.70B v $5.73Be; Raises dividend 20%; Estab $15B 3-yr buyback plan (~19% market cap)
AAPL Reports Q4 $2.07 v $1.87e, Rev $52.6B v $51.2Be
(AU) Australia Sept Retail Sales M/M: 0.0% v 0.4%e; Q3 Ex Inflation Q/Q: 0.1% v 0.0%e
(CN) PBOC CONFIRMS CNY404B MEDIUM-TERM LENDING FACILITY (MLF) OPERATION; Offers 1-year loans at 3.20% v 3.20% prior
FRIDAY 11/3
GLE.FR Reports Q3 adj Net €1.08B v €1.0Be, Gross Op €1.96B v €1.99B y/y, Adj Rev €5.96B v €6.04Be
(UK) OCT SERVICES PMI: 55.6 V 53.3E (15th month of expansion)
(US) OCT UNEMPLOYMENT RATE: 4.1% V 4.2%E (lowest level since Dec 2000)
(US) OCT AVERAGE HOURLY EARNINGS M/M: 0.0% V 0.2%E; Y/Y: 2.4% V 2.7%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
(US) SEPT TRADE BALANCE: -$43.5B V -$43.3BE
(US) OCT CHANGE IN NONFARM PAYROLLS: +261K V +313KE
MTB Continues to expect FY17 low-single digit overall loan growth - Investor presentation
(US) OCT ISM NON-MANUFACTURING COMPOSITE: 60.1 V 58.5E (highest since Aug 2005)
QCOM Broadcom reportedly considering bid to acquire Qualcomm - press
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