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BMY | Bristol Myers business development head Biondi departs | NEW YORK Reuters Bristol Myers Squibb Co s N BMY head of strategy and business development Paul Biondi left the company last month just as it was completing its 74 billion acquisition of biotech Celgene Corp NASDAQ CELG the company said on Thursday
A Bristol Myers spokeswoman said Biondi decided to leave to pursue an external opportunity and that the U S drugmaker is actively searching for his successor Biondi could not immediately be reached for comment
Biondi joined Bristol Myers in 2002 and had been in charge of business development helping the company pursue strategic partnerships and deals since 2015
Bristol Myers announced the Celgene acquisition last January and the deal closed on Nov 28 In June the company had said Biondi would be part of the combined company s leadership |
HAL | Halliburton Shares Trade Higher On Q3 Earnings | This morning before the opening bell Halliburton Co NYSE HAL NYSE announced its third quarter earnings for the period ending September 30 2019 The company reported net income of 295 million or 0 34 per diluted share during Q3 19 This compares to reported net income for Q2 19 of 75 million or 0 09 per diluted share and adjusted net income for Q2 19 of 303 million or 0 35 per diluted share excluding impairments and other charges Operating income was 536 million during Q3 19 compared to reported operating income of 303 million and adjusted operating income of 550 million for Q2 19
Jeff Miller Halliburton s chairman CEO and president commented Our organization executed effectively in the third quarter We managed the market dynamics and delivered our financial results as per expectations Total company revenue was 5 6 billion and operating income was 536 million representing decreases of 6 and 3 respectively compared to revenue and adjusted operating income in Q2 19 International revenue which was flat sequentially was up 10 year to date and we remain confident that we will achieve high single digit international growth for all of 2019 International growth continues across multiple regions benefitting both our Drilling and Evaluation and Completion and Production divisions Our North America revenue decreased 11 sequentially driven by customer activity declines and the execution of our new playbook I am proud of how our team performed in this challenging market We are successfully implementing our new strategy and are focused on taking the right actions to deliver returns and cash flow for our shareholders As the international recovery continues and the North American market matures our strategy is allowing us to thrive in this dynamic environment generate strong free cash flow and produce industry leading returns
The company further outlined revenues by business segment in the report noting Completion and Production revenue in Q3 19 was 3 5 billion a decrease of 299 million or 8 when compared to Q2 19 while operating income was 446 million a decrease of 24 million or 5 Drilling and Evaluation revenue in Q3 19 was 2 0 billion a decrease of 81 million or 4 when compared to Q2 19 while operating income was 150 million an increase of 5 million or 3
The firmed stated that North America revenue in Q3 19 decreased 11 to 2 9 billion compared to Q2 19 primarily due to lower activity and pricing in pressure pumping and well construction services in North America land
The company indicated that although International revenue overall in Q3 19 was essentially flat at 2 6 billion compared to Q2 19 revenue in Latin America in Q3 19 increased 6 sequentially to 608 million primarily from higher activity in multiple product service lines in Argentina increased testing activity and artificial lift sales across the region and improved fluids activity in Mexico The firm also advised that Europe Africa CIS revenue in Q3 19 was 831 million and was relatively unchanged when compared to Q2 19 and that Middle East Asia revenue in Q3 19 decreased by 4 to 1 2 billion due to reduced project management and stimulation activity across the region
Halliburton NYSE HAL was founded in 1919 and is headquartered in Houston Tex The firm states it is one of the world s largest providers of products and services to the energy industry with approximately 60 000 employees operating in more than 80 countries The firm serves national and independent oil and natural gas companies and states that it helps its customers maximize value throughout the lifecycle of the reservoir from locating hydrocarbons and managing geological data to drilling and formation evaluation well construction and completion and optimizing production throughout the life of the asset The company operates through two business segments Its Completion and Production segment delivers cementing stimulation intervention pressure control specialty chemicals artificial lift and completion services and its Drilling and Evaluation segment provides field and reservoir modeling drilling evaluation and wellbore placement solutions that enable customers to model measure drill and optimize their well construction activities
Halliburton NYSE HAL has a market capitalization of about 16 1 billion with approximately 875 9 million shares outstanding and a short interest of around 4 2 HAL shares opened lower today at 18 15 0 28 1 52 compared to Friday s closing price of 18 43 The stock has traded today between 18 10 and 20 00 share and currently is trading at 19 78 1 34 7 27 |
C | Weekend Update Bearish Potential In SPX | VIX made an important Cycle low beneath the upper trendline of its Ending Diagonal and just beneath its mid cycle support resistance at 14 32 Coming up next is a Primary Wave 3 which may meet or exceed the Head Shoulders target listed on the chart
SPX stalls at its Ending Diagonal trendline
SPX hit overhead resistance at the upper trendline of its Orthodox Broadening Top at 2038 00 this week The new megaphone formation carries a very bearish potential Unfortunately most investors will be unaware of this probability
ZeroHedge Stocks end the week on a weaker note round tripping off premature exuberance into the European close after jobs data that missed expectations or did they Of course the kneejerk response took the S P and Dow to record highs before the weakness set in Thanks to a late day panic buying rip though NASDAQ and Russell 2000 close the week unch no need to call Mr Bullard
NDX reaches a new high
NDX made its final high on Wednesday its Cycle Pivot day and has been treading water since TheOrthodox Broadening Top formations in the indexes are bearish reversal patterns that indicate high public participation peak emotional involvement and no risk control A decline beneath the October 15 low at 3700 23 completes the pattern and signals a major change in trend is underway The excitement isn t over yet
ZeroHedge What really matters It s time to be invested the correction is over we ve got good jobs number which was a miss GDP is there which is being revised lower each day earnings are there which have been revised drastically lower for the rest of 2014 and 2015 and even if we do get a dip down we ve got Mr Bullard to come in and reassure the markets
High Yield meets its Ending Diagonal trendline
The High Yield Index met the lower trendline of its Ending Diagonal formation in a final push this week Traders often refer to this as the kiss of death since a reversal from an Ending Diagonal usually means a complete retracement of that Diagonal Now is time topay attention to the Orthodox Broadening Top formationas well A decline beneath weekly Long term support at 137 49 and the lower trendline puts MUT in motion toward its first target
After several rounds of volatility in recent weeks prices in the high yield bond market are lower The average yield today is about 6 1 compared with less than 5 2 at the end of June But the shake up has affected more than just prices The MacKay Shields High Yield Corporate say they ve seen some new trends emerging lately One example is the way that the market is pricing risk
Markets Are Discriminating More Between High and Low Quality Issuers As bonds have sold off a bigger gap has emerged in spreads between higher and lower quality issuers This tells us something about the market s attitude to credit risk For example the difference in spreads between the highest and lowest rated high yield credits gives a measure of the risk premium that investors demand for moving down the credit quality spectrum
The Euromakes its low on time and on target
The Euromay have made its low on Friday as suggested last week hitting the upper target range between 124 00 and 122 00 We may see a strong bounce especially since it did not challengethe Lip of a Cup with Handle formation at 122 00 We may see a bounce of approximately two weeks with an upside target at mid Cycle resistance at 132 99
The euro fell below 1 24 for first time since August 2012 on Thursday
The euro plunged to its lowest in more than two years against the dollar on Thursday after European Central Bank President Mario Draghi affirmed his pledge to use unconventional measures to stimulate a sluggish euro zone economy
He added that the impact of the ECB s asset buying program on its balance sheet would be sizable His remarks which came after the ECB kept interest rates at a record low of 0 05 percent were a green light for investors to sell the euro
Euro Stoxx reverses at point 7
The EuroStoxx 50 Index reversed at point 7 resistance of its Broadening Wedge formation A cross beneath the lower trendline at 3000 00 has the potential to propel Stoxx to its Cycle Bottom trendline at 2408 20 Last weekend provided Stoxx a Cycle Pivot that may send it to its target in as little as two more weeks
ZeroHedge Riot police clashed with demonstrators in the Belgian capital of Brussels on Thursday amid a massive protest against government plans to reform the country s welfare system This comes on the heels of violent French Italian and Spanish youth protests in recent weeks as the citizens of the non Germanic European Union decry the austerity they have been crushed by What is odd though is externally there has been no austerity with for all these nations and debt GDP at record highs for most So where is the disconnect between a people under increasing financial pressure and a sovereign issuing more and more debt at will The Telegraph has the an audit published this morning found that 109 billion out of a total of 117 billion spent by the EU in 2013 was affected by material error Brussels accounts have not been given the all clear for 19 years running In other words Brussels embezzles billions of euros per year and blames it on austerity Is it any wonder Europe is burning
The Yen also meets its bearish target
The Yen has declined to the midrange of its bearish target not shown The Cycles Model called for a low on Friday and it appears that it was made Of course confirmation won t be evident until next week but it pays to follow the indicators Last week I suggested The Yen may hit its intended downside target by the end of next week
Japanese cabinet ministers expressed concern about the yen s rapid fall suggesting that the government may be trying to ward off any criticism that it is intentionally devaluing its currency to boost exporters competitiveness
The yen hovered near a seven year low versus the dollar on Friday having tumbled around 7 yen this week after the Bank of Japan stunned investors by expanding its quantitative easing programme on Oct 31
Policymakers have stated the BOJ s easing is not targeted at the yen but some politicians worry higher import prices will hurt the
The Nikkei 225 makes makes an exhaustion high
The Nikkei gapped on Tuesday to point 5 at the upper trendline of its Orthodox Broadening Top formation where it hovered for the balance of the week This is considered the peak of the formation and a decline to mid cycle support at 13625 46 may be the next move The Broadening formations represent a market that is out of control and has a highly emotional public participation Of course the bank of Japan is doing more than just cheerleading
From hot to not and back again Japanese stocks have been a confusing lot the last couple years
Japan s stock market is flying after the Bank of Japan surprised the world last week by increasing its bond buying stimulus program The Nikkei 225 index jumped nearly 5 percent the day of the announcement and it s back in the black for the year In the spring it was down nearly 15 percent That follows a stellar 2013 where the Nikkei soared nearly 60 percent
Underlying all the market moves is investor confidence in whether Japan can jumpstart its economy s too weak inflation Japanese shoppers and companies have grown accustomed to prices staying the same which encourages them to delay purchases and investments That weighs on consumer spending and restricts the economy
US Dollar peaks at 3 year high
The US Dollar appears to have reached the limit of its first wave to emerge out of its massive Triangle formation Therally had made all buta final target that was attempted on Friday but it fell short by 18 ticks I had called for the end of the rally earlier in the week after the lesser targets were met but missed an important Pivot on Friday We may now see the dollar weaken through the end of November as it digests some of the gains it has recently made
ZeroHedge Remember that in a beggar thy neighbor world where currency warfare has once again broken out between the US Europe and Japan for every winner there is a loser In this case the loser is the one country that has decided that a strong currency is a great thing for its economy if only for the time being that would be the US There is a problem with that however because in Q3 the trade deficit rose by 7 6 virtually identically to how much stronger the US Dollar basket the DX increased by in the same period which surged by 7 7 the most since Q3 2008 when Lehman blew up
USB remains in an exhaustion formation
The Long Bond remains in an exhaustion formation that it made a month ago While it has failed to go higher the reversal is becoming overdue This weekend offers a probable reversal date that may take USB to mid December The potential target may be weekly Cycle Bottom support at 125 63
Treasury bonds strengthened on Friday as a smaller than expected increase in October nonfarm payrolls bolstered expectations that the Federal Reserve would be in no hurry to raise official interest rates
The bond market got an extra boost after Fed Chairwoman Janet Yellen said given the slow and unsteady economic recovery Ms Yellen spoke at a conference in Paris and the comments came after the jobs report
In late afternoon trading the benchmark 10 Year note was 17 32 higher yielding 2 314 The yield s 0 06 percentage point decline was the biggest one day drop since Oct 15
The yield fell by 0 02 percentage point for the week Yields fall as prices rise
Gold breaks a 16 month old support
Gold reached its first Cycle low beneath the Lip of its Cup with Handle formation Don t expect this bounce to last more than two weeks as the Cycles Model suggests the decline may soon resume into early December
Gold rose 2 6 percent on Friday its biggest one day gain in nearly five months as a retreat in the U S dollar and heavy short covering lifted bullion from a 4 1 2 year low
The metal notched a third straight week of losses however having dropped to its lowest since April 2010 at 1 131 85 an ounce earlier on Friday
The dollar slipped after a solid but below expectation October U S jobs report as investors took profits on the greenback s months long rally which has seen it reach multi year highs in anticipation of tighter U S monetary policy next year
The decline in Crude still not be over yet
Crude continues its decline but hasn t yet made its Head Shoulders target Last week I suggested This is likely to occur during the second week of November The Cycles Model and pattern both suggest another probable 2 3 days of decline to completion Once accomplished there may be a few weeks of consolidation before it resumes a further decline
WSJ Oil prices rose Friday on expectations that cold weather could boost demand for petroleum products For the week however prices posted losses as ample global supplies continued to weigh on the market
Brent the global benchmark posted a seventh weekly loss while the U S benchmark fell for a sixth straight week
Oil prices have slid for months hitting multiyear lows Tuesday on concerns that the Organization of the Petroleum Exporting Countries is unlikely to cut its output to reduce a global glut of oil
China stocks linger at point 5
The Shanghai index lingered for a week after making new highs and a point 5 of an Orthodox Broadening Top Point 6 may take it as far as its mid cycle support at 2154 69 over the next two weeks or so before a meaningful bounce Soon after the formation calls for a full retracement to the Cycle Bottom at 1918 58
ZeroHedge The former Portuguese trading outpost Macau which similar to Hong Kong is a special administrative region of China is a Mecca for China s gamblers and China is reportedly brimming with gamblers Macau s gambling industry has accordingly been on fire for many years
Macau has benefited disproportionately from two major trends the rise of a class of very rich people in China as well as a growing middle class and the need of corrupt bureaucrats to launder their money resp get it out of China
The Banking Index continues its throw back inside its Broadening Wedge
BKX continues its throw back after bouncing above Model support resistance at 71 18 This may still be considered point 7 ofthe Broadening Wedge formation The next target point 8 may be 20 beneath the lower trendlline
ZeroHedge Several years ago anyone who suggested there was a massive Libor manipulation conspiracy was branded as what else a tin foil fringe lunatic after all how can so many people possibly collude in complete secrecy And then it was revealed that for years there was a massive Libor manipulation conspiracy
Now even though it has been extensively leaked in advance we are about to get the next market rigging conspiracy theory become fact after countless traders working for major banks and conspiring in secret chatrooms such as The Cartel and the Bandits are about to cost their employers billions in settlement charges as regulators after regulator and country after country charges the world s biggest and most criminal banks with billions for manipulating their currency for years
ZeroHedge A week ago it was Citi NYSE C which took farcical non GAAP earnings through the rabbit hole when it revised its already reported Q3 earnings lower by 0 20 to as described in Algos Please Ignore Citi Slashes Previously Reported Net Income Due To Legal Investigations Over FX Rigging Probe and now it is that other bank which has made crime an ordinary course of business
From the just released press release which sees its Q3 EPS revised down from 0 04 to 0 04
Bank of America Corporation today announced an adjustment to its financial results for the third quarter ended September 30 2014 to include additional litigation expense related to its foreign exchange business
RollingStone She tried to stay quiet she really did But after eight years of keeping a heavy secret the day came when Alayne Fleischmann couldn t take it anymore
It was like watching an old lady get mugged on the street she says I thought I can t sit by any longer
Fleischmann is a tall thin quick witted securities lawyer in her late thirties with long blond hair pale blue eyes and an infectious sense of humor that has survived some very tough times She s had to struggle to find work despite some striking skills and qualifications a common symptom of a not so common condition called being a whistle blower |
C | The Fed Concerned About | The latest Reuters poll is showing 24 out of 43 economists projecting the first rate hike in the US by June of next year The futures market is pricing liftoff by September Citi s NYSE C latest analysis puts it in December And all of these forecasts are running way behind the so called which is suggests that the Fed Funds rate should already be at 1 5
In fact the US economy can easily handle non zero short term rates at this point The banking system is quite healthy and can easily manage funding costs of 1 5 Corporate borrowers can deal with slightly higher rates as well And as far as mortgages are concerned to the extend higher short term rates extend to longer maturities borrowers for whom payments become prohibitive at 5 vs 4 should not be taking out a mortgage to begin with Furthermore the issue with the housing market these days has more to do with tighter mortgage credit rather than rates But it s no longer as much about the US economy as it is about external factors The international situation has made the Fed s policy planning much more complex The monetary policy divergence among the major central banks is the issue at hand With the BoJ suddenly program the and Mario Draghi at a potential QE program in the Eurozone the Fed is becoming increasingly isolated in its plans to begin rate normalization Even India s RBI who has kept rates elevated for some time may begin to ease soon as the nation s and growth slows As a result of this divergence the US dollar has been on the rise this year
Of course the recent increase in and of itself is not tremendous relative to historical levels However given the disinflationary pressures around the world the rising US dollar effectively imports disinflation into the US Moreover the in energy prices caused by a combination of a significant rise in North American production and weaker demand globally as well as the Saudi is adding to slower inflation In fact in recent months a paradigm shift has taken place Weakness in inflation is no longer viewed as a temporary phenomenon and longer dated inflation expectation measures have turned sharply lower
Even consumer expectations of long term inflation have shifted
A Thomson Reuters University of Michigan survey released last week showed that consumers see inflation averaging 2 6 percent a year five to 10 years from now down from 2 8 percent predicted last month and the lowest reading since March 2009
Although according to a number of measures slack in US labor markets continues to persist it s not going to be about jobs going forward The Fed s focus has shifted to inflation and inflation expectations And no matter how low the unemployment rate falls it will be difficult for the Fed to pull the trigger on rates and risk further strengthening of the dollar and more downward pressure on prices It is possible the Fed will wait for growth in other major economies to stabilize before liftoff in the US Which is why some economists like those at Citi are pushing rate hike expectations further out in time Unfortunately the longer it takes to get there the more disruptive the effect of normalization will be on global financial markets as the Fed s zero rate policy moves into its 6th year and possibly beyond |
C | Japanese Yen May Rise As Year End Capital Flows Begin To Emerge | Talking Points
Japanese Yen May See Recovery as Year End Capital Flows Start to Emerge
British Pound Looks to 3Q GDP Revision to Inform BOE Rate Hike Outlook
US Dollar May Rise on Fed Tightening Bets if News Flow Proves Supportive
Seasonal factors may increasingly factor into price action as the on coming Thanksgiving holiday in the US unofficially marks the beginning of the market wide liquidity drain leading into the turn of the calendar year This may herald a period of profit taking on some of the stand out trends of 2014 as investors move to secure year end performance numbers That may bode ill for sentiment geared assets with the Japanese Yen rising amid carry trade liquidation while high yielding FX such as the Australian and New Zealand Dollars faces selling pressure
A revised set of third quarter UK GDP figures headlines the economic calendar in European trading hours Expectations point to confirmation of earlier estimates showing output growth slowed for the first time in nearly two years with the year on year growth rate ticking down to 3 percent from the 3 2 percent recorded in the second quarter A downward revision may weigh on the British Pound as traders push out BOE rate hike expectations further into the future Alternatively an upgrade may fuel bets on sooner tightening and lift the currency
Later in the day the spotlight turns to a diverse medley of US economic data releases Durable Goods Orders figures the weekly Jobless Claims report Personal Income and Spending statistics as well as Pending and New Home Sales numbers are all due to cross the wires US news flow has cautiously improved relative to expectations over the past week according to data from Citigroup NYSE C If this proves to foreshadow upside surprises on some of the day s outcomes the US Dollar may secure the fuel for another push higher amid firming Fed policy bets
Currency markets were decidedly quiet in overnight trade with most of the majors oscillating in narrow ranges against the greenback The Yen narrowly outperformed rising as much as 0 2 percent on average against its leading counterparts The move tracked a modest decline on Japan s Nikkei 225 stock index pointing to support from haven seeking flows as the catalyst behind the Yen s advance The correlation between the equities benchmark and is now 0 96 on rolling 20 day studies |
C | Nickel And Ferro Chrome Prices Up As Stocks Have Been Depleted | Ministry of Economic Affairs of Indonesia said that the ban of nickel export in the world s largest nickel producing country will continue Tim Evans the Chief Market Strategist of Long Leaf Trading Group in Chicago US said that the strengthened US economic data as well as the nickel ban by the Indonesian government will help lift nickel price further while the demand for the metal is now noticeable rising According to the Citigroup s NYSE C forecast that the deficit of nickel this year is at 62 400 tonnes while the deficit next year to be estimated much more at 103 000 tonnes
Canadian nickel mining company expects the demand for nickel will rebound in 2015 due to export ban of nickel ore in Indonesia David Pathe CEO of Sherritt said that the Indonesian export ban policy will turn the oversupply on nickel to be shortage in 2015 That is because Indonesian government insists again its attitude of export ban on International Nickel ConferenceChina s domestic spot prices for high carbon 50 ferrochrome rose 80 cents lb today up from 75 cents lb a week ago Shanxi Taigang Stainless Steel Baosteel and Jiuquan Iron Steel all raised their December purchase prices by Yuan 50 mt month on month Sahit Muja CEO of Albanian Minerals in New York said Ferrochrome and chrome ore price is up in global markets today on expectations of a shortage of in China U S Europe Japan and Germany as stainless steel makers run down their raw material stockpiles China now accounts for 40 of global ferrochrome production followed by South Africa with 35 share of global ferrochrome production output in 2014 China itself has no chrome ore reserves to produce ferrochrome which is an essential ingredient of stainless steel China is facing a huge demand for chrome ore China s production of high carbon ferrochrome increased 1000 in ten years to over 4 million tons in 2014 The ferrochrome and chrome ore industry was in turmoil in 2014 The price of the key stainless steel ingredient collapsed to a a near three year low in 2014 Mining analysts have blamed this fall in price on a lack of demand from China This is absolutely not true price of chrome ore is being manipulated by China China s exports of steel products rose to a fresh record in 2014 In the long term the manipulation by Chinese companies in chrome ore prices will have an unprecedented effect on chrome ore mining companies as they stop production chrome ore will be much more expensive in 2014 Sahit Muja said South Africa Turkey Zimbabwe India Albania Oman Iran and Pakistan are the largest exporter of raw chromite ore chrome ore to China South Africa holds by far the world s largest chrome ore reserves reserves followed by Zimbabwe Kazakhstan Albania India Turkey Finland Oman Russia Iran and Pakistan According to Albanian More than 500 million tons of chrome ore has been discovered in Albania from 2010 to 2014 This gigantic of body of chrome ore one of the largest chrome ore reserves in the world was discovered in Northern Albania Albanian Minerals and Bytyci Shpk has intensified exploration and started mining and producing recently South Africa s ferrochrome exports to China has declining as a result of expensive electricity and rising costs The demand for ferrochrome is still growing 10 a year in China and stable demand remains in U S Europe South Africa Germany Japan and other countries Albanian Minerals mining and mineral trading company currently holding 3 world s largest chrome ore reserves Much of the world s ferrochrome an alloy of chromium and iron used mainly in stainless steel production is produced in China South Africa Kazakhstan India Turkey Zimbabwe Finland Brazil Russia and Albania |
C | Will Swiss Voters Go For The Gold | Swiss voters to decide on massive central bank Gold purchase Sunday
Swiss Peoples Party claims increased gold holdings will boost economic stability
Ballot reflects isolationist Eurosceptic trends
Truth like gold is to be obtained not by its growth but by washing away from it all that is not gold Tolstoy
This Sunday Swiss voters will cast their ballots to decide whether the Swiss National Bank should cast its lot with the world s gold bugs More precisely the vote would compel the Alpine nation s central bank to cease selling any more gold and to instead boost its holdings by up to 20 At the moment and after an early surge in voter interest analysts say that they expect the initiative to be unsuccessful With gold sitting at a four and a half year low precious metals traders expect a severe rally in the event that the vote succeeds but trading remains light on the expectation that a majority of Swiss citizens will reject the proposal More interesting than this specific vote s probability of success though is the reasoning behind its conception As a political symbol gold is essentially a proxy for fear fear of inflation fear of geopolitical instability and fear of currency manipulation As a commodity that has maintained a stubborn but abstract unlike grains or oil it is not needed for any particular biological or infrastructural reason value since the dawn of civilisation gold represents a safe harbour in times of unrest and instability
According to Matterhorn Asset Management a Swiss asset management company that supports the right wing Swiss Peoples Party s stance on gold voting No on Sunday s ballot will mean Switzerland s economic policy will be tied to the EU and inflation and cost of living will increase dramatically If voters choose to embrace the proposal Switzerland will remain a strong independent nation not influenced by EU or USA
The battle lines are evidently quite clearly drawn at least in the minds of Swiss gold bugs In keeping with Switzerland s ancient self definition as a neutral and isolationist nation the gold vote represents an opportunity to retain Swiss independence from the interests of external empires particularly those like the European Union whose economic outlooks are both grim seeming and outside Swiss control Leaving the realm of symbol for that of economics however it is far from clear that enforcing a giant boost in a country s gold holdings will necessarily produce the stability and independence that the Swiss Peoples Party are seeking In the United States where the final link between the dollar s value and that of gold was severed by president Richard Nixon in 1971 calls for a return to the gold standard have been a staple of isolationist political thought ever since
In 2012 following presidential candidate Ron Paul s repeated calls to end the Federal Reserve system and return to a gold backed currency the US Republican Party added a plank to its official platform which called for an inquiry into this possibility In response the IGM Economic Experts Panel conducted a survey of its members asking them whether a gold based dollar would improve the lives of ordinary Americans
Many were asked
Zero agreed
In an article published by the Atlantic Monthly that same year Matthew O Brien also that appeared to undermine gold bugs belief that a yellow metal based currency would lead to lower inflation Comparing CPI inflation under the gold standard in the 1920s with its progress after the 2008 launched quantitative easing programme O Brien illustrated that the latter era saw 23 times less price variance than its gold backed antecedent
Source The Atlantic Monthly
Source The Atlantic Monthly
Ultimately said O Brien The gold standard is a solution in search of a problem Actually it s worse than that It s a problem in search of a problem
The Swiss ballot it must be noted is not a call to fully return to a gold pegged franc but it is a vote whose theoretical roots lie in the view that gold denominated holdings will provide a nation with greater stability and economic control than do the machinations of central banks and forex markets But even this equation is likely to be flawed
According to Ambrose Evans Pritchard international business editor for The Daily Telegraph the Save Our Swiss Gold referendum is not only an attempt to lead the world back to the halcyon days of the international Gold Standard it is also a primordial scream against a quantitative easing and money creation a l outrance by the leading central banks
The defining qualities of primordial screams are that they are both satisfying and ultimately purposeless According to Evans Pritchard the Swiss Peoples Party s fear of money printing and worthless foreign bonds does not stand up to scrutiny when we consider the Swiss National Bank s extraordinary history in both of these areas Given that at one stage the SNB was purchasing up to half of the Eurozone s entire bond issuance each month says Evans Pritchard you have to smile when you hear Swiss gold enthusiasts complaining that these foreign bonds bought with electronic fiat francs created out of thin air are now losing value as the euro slides against the dollar
Perhaps even more pertinent given the Peoples Party s intent to change course from such practices and return to the presumedly safe haven of gold is the party s plan to prevent the SNB from ever selling any of its newly expanded gold holdings
Making it illegal to ever sell any of the gold the central bank has now or acquires in the future says Citigroup NYSE C chief economist Willem Buiter would make the gold useless as an international reserve The gold stock can never be used for foreign exchange market interventions and it cannot be used as collateral The gold becomes useless as a store of value of any kind Its value is therefore zero
Even if the Swiss gold referendum is both likely to fail and less than useful as a solution to Switzerland s economic woes this does not mean that it is unimportant Though economics may be the dismal science politics with all its ritualised manipulation of ancient symbols is something closer to a black art
Though gold may not hold the answers for nations seeking price stability and economic independence its value as a symbol has been far more stable than its value as a commodity In the realm of symbol gold stands for all things weighty and timeless and against the presumedly arcane and evanescent nature of central bank policy
Across the European continent voters are coalescing into groups and parties that are deeply opposed to the dominant since the 1990s Third Way consensus In some areas the dissent focuses on immigration in others on Euroscepticism In Switzerland it has seized upon gold as its standard and though the economic solution advanced by the Peoples Party may be illusory the dissatisfaction that gained it the 100 000 signatures necessary for a referendum is very real
If there is any rule that can be said to define European politics over the past decade it is that voters abandoned by the mainstream will reappear on the fringes placards and petitions in hand They can be dismissed as ignorant as nativists as bigots as Luddites or as gold bugs entranced by shining metals but their presence does point to problems in the current order even if their solutions do not convince
Michael McKenna is a consulting editor at TradingFloor com Comment below to engage with Saxo Bank s social trading platform |
JPM | HSBC wins dismissal of Madoff customer class action in U S | By Jonathan Stempel NEW YORK Reuters HSBC Holdings Plc LON HSBA on Thursday won the dismissal of a lawsuit by former Bernard Madoff customers who accused the British bank of fuelling his massive Ponzi scheme by ignoring red flags and encouraging feeder funds to invest with him U S District Judge Laura Taylor Swain in Manhattan said a federal law governing securities fraud cases prevented the plaintiffs from bringing their class action claims against HSBC s U S unit She also said she lacked jurisdiction over claims against the HSBC parent and non U S affiliates Jason Zweig a lawyer for the customers declined to comment because he was reviewing the decision HSBC spokesman Rob Sherman declined to provide immediate comment The customers filed the lawsuit in December 2014 after a federal appeals court said the trustee liquidating Bernard L Madoff Investment Securities LLC lacked standing to sue HSBC JPMorgan Chase Co NYSE JPM and other banks he accused of aiding Madoff s fraud In their complaint the customers said HSBC sold structured financial products that resulted in hundreds of millions of dollars flowing to Madoff through feeder funds They also said HSBC looked the other way when encountering signs of fraud to help sate its unquenchable thirst for fees The customers said their accounts with Madoff were not covered securities barring them from pursuing their case because the con man had total discretion over their money But the judge said the customers expected Madoff to invest their cash in covered securities which are traded nationally and listed on a regulated national exchange to achieve the extraordinary returns for which he had at the time been known That plaintiffs had no control over which particular investment strategy Madoff undertook or specific securities he purchased does not obviate the fact that plaintiffs were seeking directly or indirectly to purchase covered securities Swain wrote Accordingly plaintiffs claims are barred Madoff 78 pleaded guilty to fraud in March 2009 three months after his scheme was uncovered He is serving a 150 year prison term The trustee Irving Picard has recouped roughly 11 2 billion for former Madoff customers
The case is Hill et al v HSBC Bank Plc et al U S District Court Southern District of New York No 14 09745 |
JPM | Wells Fargo faces scrutiny over lack of sales scandal disclosure | By Dan Freed and Ross Kerber NEW YORK Reuters A phantom account scandal at Wells Fargo NYSE WFC Co has put the U S bank s disclosure policies under a harsh spotlight Despite press reports that a federal regulator and the Los Angeles prosecutor were investigating sales practices at retail branches of the San Francisco based lender the bank which agreed to a 190 million settlement gave investors no indication of the scale of the problem The surprise spooked investors and has lopped roughly 19 billion off its market value since the probe disclosed last week that Wells employees had created roughly 2 million accounts for customers without their knowledge in order to meet internal sales targets The bank has fired 5 300 people over the scandal While the settlement barely makes a dent in the 23 billion of profit the bank earned last year the scandal s aftermath has caused a 7 5 percent drop in Wells stock compared with a roughly 2 4 percent decline for the Dow Jones US Banks Index Investors analysts and legal experts who spoke to Reuters said Wells Fargo silence did not mean it had broken the law But there is broad agreement that it made matters worse by not being more forthcoming with Chief Executive John Stumpf under pressure to explain why this happened on his watch Look they re lawyered up to the sky They did the minimum legally required Do I think that that s fair to investors or that that s all that investors need to know or want to know No I do not said Nell Minow vice chair of ValueEdge advisors a corporate governance advisory firm It further diminishes their already significantly diminished credibility in terms of their willingness to be transparent Activist investors began filing shareholder resolutions with Wells Fargo on Thursday calling on the bank to split the roles of chairman and CEO both held by Stumpf in light of the recent scandal In another activist investor Bart Naylor a financial policy analyst for consumer advocacy group Public Citizen said he has filed a shareholder resolution calling on the bank to study breaking up its business in the wake of the scandal Naylor who has submitted similar measures at other large banks in recent years called on Wells Fargo s directors to study whether the divestiture of all non core banking business segments would enhance shareholder value Meanwhile Stumpf will testify before the Senate Banking Committee next week and U S prosecutors have begun an investigation into the bank s sales practices It is a scandal of almost unimaginable proportions former U S Securities and Exchange Commission Chairman Arthur Levitt told Reuters this week You cannot hold management immune from its consequences MATERIAL OR NOT The tactics deployed in its branches were not a surprise for Wells The bank had been looking into them since 2011 when it started firing employees over inappropriate sales conduct A Los Angeles Times investigation published in 2013 described a pressure cooker sales culture at the bank No mention is made of the bank s internal probe or authorities probes in the legal actions section of its latest quarterly or annual securities filings The bank also did not say until this week that during the second quarter it had set aside money for the settlement Stumpf has since apologized and said management takes responsibility for what happened Spokesman Mark Folk said the bank did not believe it had to disclose information to investors ahead of the settlement Each quarter we consider all available relevant and appropriate facts and circumstances in determining whether a litigation matter is material and disclosed in our public filings he said Based on that review we determined that the matter was not material U S securities laws enforced by the SEC require public companies to publicly disclose meaningful financial and other information to investors If something is material it needs to be disclosed but there is some subjectivity involved in defining what is material An SEC spokeswoman declined to comment on Wells Fargo The bank s auditor KPMG said it could not comment because of confidentiality requirements GET CONTROL SEC rules prioritize the accuracy of information over the speed of disclosure experts said If management is unsure of the scale of a problem it might delay releasing information in the interest of getting it right But companies also risk making a bad situation worse if they minimize problems that come to light JPMorgan Chase NYSE JPM CEO Jamie Dimon famously referred to its so called London Whale losses as a tempest in a teapot just a month before disclosing it had lost more than 2 billion on the trades Dimon later apologized Experts said Wells Fargo would have been wise to at least flag the issue earlier They should have tried to get control over the release of the news so that it wasn t a bombshell that went off on someone else s schedule Said Erik Gordon a University of Michigan business professor Now they re in the terrible position of looking like they did something and hid it |
JPM | Bitcoin is money U S judge says in case tied to JPMorgan hack | By Jonathan Stempel NEW YORK Reuters Bitcoin qualifies as money a federal judge ruled on Monday in a decision linked to a criminal case over hacking attacks against JPMorgan Chase Co NYSE JPM and other companies U S District Judge Alison Nathan in Manhattan rejected a bid by Anthony Murgio to dismiss two charges related to his alleged operation of Coin mx which prosecutors have called an unlicensed bitcoin exchange Murgio had argued that bitcoin did not qualify as funds under the federal law prohibiting the operation of unlicensed money transmitting businesses But the judge like her colleague Jed Rakoff in an unrelated 2014 case said the virtual currency met that definition Bitcoins are funds within the plain meaning of that term Nathan wrote Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account They therefore function as pecuniary resources and are used as a medium of exchange and a means of payment The decision did not address six other criminal counts that Murgio faces Nathan wrote Brian Klein a lawyer for Murgio said he disagreed with the decision Anthony Murgio maintains his innocence and looks forward to clearing his name at his upcoming trial he added Prosecutors last year charged Murgio over the operation of Coin mx and in April charged his father Michael with participating in bribery aimed at supporting it Authorities have said Coin mx was owned by Gery Shalon an Israeli man who along with two others was charged with running a sprawling computer hacking and fraud scheme targeting a dozen companies including JPMorgan and exposing personal data of more than 100 million people That alleged scheme generated hundreds of millions of dollars of profit through pumping up stock prices online casinos money laundering and other illegal activity prosecutors have said Shalon has pleaded not guilty and is being held at the Metropolitan Correctional Center in Manhattan He hired new lawyers last month and is seeking permission to replace lawyers who joined the case in June a Monday court filing showed
The case is U S v Murgio et al U S District Court Southern District of New York No 15 cr 00769 |
JPM | JPMorgan hires and takes stake in InvestCloud | By David Henry NEW YORK Reuters JPMorgan Chase Co NYSE JPM said it had hired and would take a stake in InvestCloud which provides software that makes online transactions easier for customers with banking and investment accounts The biggest U S bank by assets JPMorgan did not disclose the amount of the stake in an announcement prepared for release on Tuesday and which Reuters saw The investment reflects Chief Executive Officer Jamie Dimon s response to threats from new Silicon Valley companies which he said in 2015 were coming to disrupt JPMorgan s business Rather than vowing to block upstarts Dimon has chosen to embrace those with technology that provides better customer service at lower costs JPMorgan is competing with other banks and money managers to meet customers rising expectations for easy but secure ways to keep up with their affairs anywhere and anytime The InvestCloud deal is also part of Dimon s commitment to spend 300 million over the next three years on digital improvements in asset management Starting early next year the bank will use InvestCloud to customize website dashboards and mobile apps for clients ranging from individuals with investments of 1 000 to managers of family investment offices with 1 billion or more Over time the tools will become more refined for people who make their own trading decisions people who only check managed accounts and people who manage part and hire out the rest Compared with the costly slog of traditional programming InvestCloud says it offers thousands of lightweight applets that can be configured within days rather than months The company started selling products in 2012 It has 660 institutions using its tools in support of 1 5 trillion of assets according to the announcement In the announcement Dimon cited InvestCloud s record of driving innovation for its institutional clients as a reason for making the deal Since December JPMorgan has struck deals with financial technology companies including OnDeck which provides systems to speed small business lending Virtu Financial Inc which handles electronic trading in U S Treasuries and TrueCar Inc which provides online car shopping services Kelli Keough JPMorgan s global head of digital wealth management said in an interview that she expected to sign additional financial technology companies
We are exploring with a range of vendors she said It allows us to get to market faster and bring in innovation |
JPM | Heat rises on Wells Fargo CEO after lawmaker grilling | By Dan Freed NEW YORK Reuters Wells Fargo NYSE WFC Co Chief Executive John Stumpf prides himself on being a banker who understands the little guy s financial problems He has spoken publicly about growing up poor on a Minnesota farm starting his career as a low level repo man and being underwater on his own mortgage years ago But when called before U S lawmakers on Tuesday to answer questions about a scandal at his bank involving 2 million fake accounts that thousands of employees set up in customers names Stumpf s answers fell flat The white haired 63 year old CEO repeatedly told a congressional panel that he had to check with staff lacked information or was not an expert on a range of topics including executive compensation credit scores and contracts that must be signed to open an account Throughout the hearing Stumpf was polite responding to senators often aggressive questions with a calm earthy twang His hand was bandaged and in a splint after roughhousing with his grandkids Wells Fargo spokeswoman Jennifer Dunn said He talks about the team he talks about the good people He smiles and he s sweet and he s in no way responsible said Robert Monks chairman of ValueEdge Advisors which advises investors on corporate governance issues His response to questions remind me of Muhammad Ali s rope a dope defense he gets up against the ropes he puts up his hands Earlier this month the lender agreed to pay 190 million in penalties and customer payouts to settle the case involving the creation of credit savings and other accounts without customers knowledge About 5 million will directly go to customers many of whom might have paid a small fee on the unwanted accounts His responses gave plenty of ammunition to critics who point to the scandal as the latest example that some banks are still too big to manage and executives should serve jail time Sen Elizabeth Warren a Democrat from Massachusetts who frequently lambasts the financial industry said the only appropriate response to the scandal would be for Stumpf to resign give back his pay and be criminally investigated Democratic presidential candidate Hillary Clinton penned an open letter arguing for greater accountability Wells Fargo spokesman Mark Folk declined to comment on Stumpf s testimony Pressure has been building beyond Capitol Hill for Stumpf and Wells Fargo s board of directors to come up with better answers Activist investors including the Needmor Fund and Public Citizen s Bart Naylor have filed motions to split the roles of chairman and CEO on Wells Fargo s proxy and examine whether the bank should be broken up The Department of Justice and Federal Bureau of Investigation also have launched probes into the bank s actions following Wells settlement with the Consumer Financial Protection Bureau and Los Angeles city attorney BAD PUBLICITY Wells Fargo has mostly sought to minimize the problem since its settlement was announced on Sept 8 Executives have pointed out that while thousands of employees set up accounts without customers authorization over five years they represent a tiny fraction of total staff Wells Fargo did not consider the matter to be financially material Stumpf told Congress on Tuesday even though it involved 2 6 million worth of inappropriate fees charged to consumers and resulted in the bank paying 190 million worth of penalties Stumpf said he takes responsibility for the problems and detailed additional steps the bank is taking to address them He is not the first Wall Street CEO to have his day before an angry congressional panel and live to tell about it Goldman Sachs Group Inc executives including CEO Lloyd Blankfein were grilled by lawmakers in April 2010 over a derivative trade that helped the bank profit from the mortgage market s implosion In 2011 former MF Global CEO Jon Corzine had to explain how his collapsed firm managed to lose more than 1 billion in customer funds And in 2012 JPMorgan Chase Co NYSE JPM CEO Jamie Dimon had to answer for the so called London Whale a wrong way derivative bet that lost the bank billions of dollars But Wells Fargo s problem may be resonating more because it involves regular bank accounts for regular people who faced unjustified fees rather than arcane derivatives traded by sophisticated investors But even if the scandal is more palpable on Main Street analysts and investors who spoke to Reuters after Stumpf s testimony said it may ultimately matter little to Wells Fargo s bottom line or share price Its biggest investor Warren Buffett has declined to comment on the matter The bank turned a 23 billion profit last year and until recently was the most highly valued bank in the United States Even analysts who were critical of Wells response to the scandal characterized its recent stock decline as a buying opportunity
It s not very good publicity for Wells but I think they ll get through it said Tim Ghriskey chief investment officer of Solaris Group in Bedford Hills New York It s a cheap stock |
HAL | Offshore spending surge risks overruns up to 110 billion by 2023 Rystad | OSLO Reuters Offshore oil services providers stand to gain as oil companies increase approvals for new projects but the activity boom raises risks of cost overruns and could deter future spending researcher Rystad Energy said on Thursday A rush to accelerate projects especially those involving tailor made designs increases the uncertainty of their final costs typically 20 above or below the initial estimate For offshore operators that means the expected variation for projects to be sanctioned during the period from 2019 to 2023 could be as high as 220 billion the research firm said It expects over 100 billion in new offshore field projects around the world to be sanctioned on average per year in 2019 2023 In 2015 18 the average was 50 billion per year Rystad added that the performance of projects in relation to initial cost estimates has historically influenced operators when deciding on subsequent project sanctioning Even if oil prices stay above 60 per barrel over the next five years offshore sanctioning could slow down due to project performance Rystad said Price deterioration has plagued oilfield service companies such as Aker Solutions and Halliburton NYSE HAL as a result of the 2014 2016 oil price crash with competition still fierce and overcapacity looming Prices of offshore services have however started to rise again Rystad Energy expects offshore unit prices to rise by 10 15 by the end of 2022 with the subsea segment in pole position after the industry reduced capacity in some particularly labor intensive segments during the downturn From 2015 fewer offshore projects were approved and the scope of projects shrunk leading to lower equipment sales The average weight of the top part of the platform at oil installations on order came down dramatically following the crash and topside equipment unit prices have dropped nearly 20 since 2014 Rystad Energy research showed Subsea probably has some of the strongest growth so we are pretty bullish on subsea activity picking up whereas the outlook for other segments such as maintenance and operational support is pretty flat Matthew Fitzsimmons Vice President of Rystad Energy s Oilfield Service Research division told Reuters Offshore service prices are lagging the development of the U S onshore industry where the boom in shale activity has attracted resources I think U S shale is very strong but that being said it is also very oversupplied in several segments and there has been a lot of inflation there to date Fitzsimmons said
Offshore hasn t really seen much yet inflation wise so I think that is going to start picking up over the next few years not to the levels that is was in previous cycles and I think it will be more paced than previously he added |
HAL | Analysts Estimate Halliburton HAL To Report A Decline In Earnings What To Look Out For | The market expects Halliburton HAL to deliver a year over year decline in earnings on lower revenues when it reports results for the quarter ended September 2019 This widely known consensus outlook is important in assessing the company s earnings picture but a powerful factor that might influence its near term stock price is how the actual results compare to these estimates
The earnings report which is expected to be released on October 21 2019 might help the stock move higher if these key numbers are better than expectations On the other hand if they miss the stock may move lower
While management s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations it s worth having a handicapping insight into the odds of a positive EPS surprise
Zacks Consensus Estimate
This provider of drilling services to oil and gas operators is expected to post quarterly earnings of 0 34 per share in its upcoming report which represents a year over year change of 32
Revenues are expected to be 5 84 billion down 5 3 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 11 14 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out This insight is at the core of our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Halliburton
For Halliburton the Most Accurate Estimate is lower than the Zacks Consensus Estimate suggesting that analysts have recently become bearish on the company s earnings prospects This has resulted in an Earnings ESP of 1 55
On the other hand the stock currently carries a Zacks Rank of 3
So this combination makes it difficult to conclusively predict that Halliburton will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Halliburton would post earnings of 0 30 per share when it actually produced earnings of 0 35 delivering a surprise of 16 67
Over the last four quarters the company has beaten consensus EPS estimates three times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Halliburton doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
HAL | Halliburton HAL Meets Q3 Earnings Estimates | Halliburton HAL came out with quarterly earnings of 0 34 per share in line with the Zacks Consensus Estimate This compares to earnings of 0 50 per share a year ago These figures are adjusted for non recurring items
A quarter ago it was expected that this provider of drilling services to oil and gas operators would post earnings of 0 30 per share when it actually produced earnings of 0 35 delivering a surprise of 16 67
Over the last four quarters the company has surpassed consensus EPS estimates two times
Halliburton which belongs to the Zacks Oil and Gas Field Services industry posted revenues of 5 55 billion for the quarter ended September 2019 missing the Zacks Consensus Estimate by 4 96 This compares to year ago revenues of 6 17 billion The company has topped consensus revenue estimates two times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Halliburton shares have lost about 30 7 since the beginning of the year versus the S P 500 s gain of 19 1
What s Next for Halliburton
While Halliburton has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Halliburton was mixed While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 3 Hold for the stock So the shares are expected to perform in line with the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 34 on 5 72 billion in revenues for the coming quarter and 1 27 on 23 19 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Oil and Gas Field Services is currently in the bottom 16 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
HAL | Stock Market News For Oct 22 2019 | Wall Street ended higher on Monday following positive development on U S China trade war front and better than expected performance by U S corporates in the third quarter of 2019 Moreover the U K parliament has forced prime minister Boris Johnson to ask for an extension of the Brexit deadline All three major stock indexes closed in the green The Dow Jones Industrial Average DJI gained 0 2 to close at 26 827 64 The S P 500 climbed 0 7 to close at 3 006 72 Meanwhile the Nasdaq Composite Index closed at 8 162 99 surging 0 9 The fear gauge CBOE Volatility Index VIX decreased 1 8 to close at 14 A total of 5 92 billion shares were traded on Monday lower than the last 20 session average of 6 55 billion Advancers outnumbered decliners on the NYSE by a 1 95 to 1 ratio On Nasdaq a 2 09 to 1 ratio favored advancing issues How Did The Benchmarks Perform The Dow closed in positive territory with 19 components of the 30 stock blue chip index closing in the green while 10 ended in red and 1 remained unchanged The Nasdaq Composite also finished in the green due to strong performance of large cap technology stocks The S P 500 also ended in the green adobe the psychological barrier of 3 000 for the first time since Sep 18 The Energy Select Sector SPDR XLE NYSE XLE Financials Select Sector SPDR XLF and Technology Select Sector SPDR XLK soared 1 8 1 4 and 1 1 respectively Notably nine out of total 11 sectors of the benchmark index closed in the green while two finished in red Positive Development on Trade War FrontAs per a Bloomberg report on Oct 18 Chinese vice premier said China and the U S have made substantial progress in many aspects and laid an important foundation for a phase one trade agreement On Oct 21 President Donald Trump said efforts to end a U S trade war with China were going well as the first phase of the trade deal is likely to be signed in the middle of next month U S Trade Representative Robert Lighthizer told reporters that White House is aiming to finalize the first phase of the deal at the Asia Pacific Economic Cooperation meetings in Chile on Nov 16 and 17 where the two presidents are supposed to meet White House economic adviser Larry Kudlow said that the Trump administration could withdraw its proposed 15 tariff on 160 billion of Chinese goods effective Dec 15 if negotiations continue to go well Brexit Likely to be Delayed FurtherOn Oct 19 after a majority voting the U K parliament has forced prime minister Boris Johnson to ask the European Union for a three month extension to the Oct 31 deadline to exit from the trade bloc The prime minister s effort to seek another trust vote in parliament on Oct 21 was thwarted by the U K House of Commons Speaker John Bercow who declared that a new vote would be repetitive and disorderly Consequently Boris Johnson s attempt to quit EU even with no deal by Oct 31 was denied by British lawmakers Several industry researchers have warned that such as situation will have severe negative impact on the global economy and financial markets Better Than Expected Third Quarter Earnings ResultsHalliburton Co NYSE HAL reported third quarter 2019 adjusted earnings per share of 0 34 in line with the Zacks Consensus Estimate Revenues of 5 6 billion were slightly lower than the Zacks Consensus of 5 8 billion Shares of Halliburton surged 6 4 yesterday SAP SE NYSE SAP reported third quarter 2019 adjusted earnings per share of 1 45 surpassing the Zacks Consensus Estimate of 1 38 Revenues of 7 57 billion were in line with the Zacks Consensus Estimate Shares of SAP surged 2 8 yesterday Both Halliburton and SAP carry a Zacks Rank 3 Hold You can see 7 Best Stocks for the Next 30 DaysJust released Experts distill 7 elite stocks from the current list of 220 Zacks Rank 1 Strong Buys They deem these tickers Most Likely for Early Price Pops Since 1988 the full list has beaten the market more than 2X over with an average gain of 24 50 per year So be sure to give these hand picked 7 your immediate attention |
BMY | Celgene Rises as European Commission OKs Merger With Bristol Myers | Investing com Celgene NASDAQ CELG was higher in midday trade on Monday after the European Union Commission gave its blessing for the biopharmaceutical company to merge with Bristol Myers Squibb NYSE BMY
The approval from the commission is just one of a few regulatory hurdles the company faces before the acquisition is completed
Clearance from the European Commission is an important milestone toward completing our combination with Celgene and moves us one step closer to creating a leading biopharma company that is well positioned to develop and deliver innovative meaningful medicines to patients said Giovanni Caforio chairman and CEO of Bristol Myers Squibb
Bristol Myers intends to close the deal by the beginning of 2020 at the latest The acquisition was announced in January but has yet to be approved by the U S Federal Trade Commission
Shares of Celgene NASDAQ CELG rose 0 3 while Bristol Myers gained 0 2 |
BMY | Stocks Tilray Canada Goose Luckin Coffee Fall Premarket | Investing com Stocks in focus in premarket trading on Wednesday
Canada Goose NYSE GOOS stock fell 5 3 in premarket trade by 8 20 AM ET 12 20 GMT after its losses during the first quarter widened despite stronger revenue growth than forecast The luxury outdoor apparel maker reported a net loss of 0 36 per share on 45 9 million in revenue
Tencent Holdings OTC TCEHY stock was in focus after the Chinese conglomerate s revenue came in short of expectations although a rebound in its gaming profits helped the bottom line jump by 35 The company s depositary receipts in Germany were down 3 6
Tilray NASDAQ TLRY stock slumped 11 5 after posting a bigger than expected loss due to increased operating expenses
Bristol Myers Squibb NYSE BMY stock slipped 0 5 despite the drugmaker being upgraded to overweight from neutral at Atlantic Equities due to increased clarity on its Celgene NASDAQ CELG acquisition CNBC reported
Luckin Coffee NASDAQ LK stock declined 8 2 after the Chinese coffee chain reported a loss of 0 48 per share which was worse than expected Revenue beat estimates |
JPM | Wells Fargo seeks to shore up reputation in wake of scandal | By Dan Freed and Lisa Lambert NEW YORK WASHINGTON Reuters Wells Fargo NYSE WFC Co scrapped its product sales goals for retail bankers on Tuesday and may take further disciplinary action against its employees in the wake of a fake account scandal that has already led to 190 million in fines and the firing of 5 300 employees Wells Fargo has been hit hard by allegations its staff opened more than 2 million bank accounts and credit cards for customers without their consent in a bid to meet internal sales goals Politicians are calling for an investigation and Wells Fargo and regulators are expected to testify in the Senate next week One of the United States largest and most respected financial institutions Wells Fargo built itself into the most valuable U S bank after the financial crisis partly because it did not rely on risky trades or complex derivatives to turn a profit But the company s shares have lost around 7 percent of their value since last week when U S regulators unveiled the fines against the bank and it has ceded its position as the largest U S bank by market capitalization to rival JPMorgan Chase Co NYSE JPM Wells Fargo which was long the envy of the banking industry for its ability to sell multiple products to the same customer agreed to pay 185 million in fines and 5 million to customers last week after reaching a settlement with three regulators over the alleged sales abuses The phantom accounts meant that some customers were charged for insufficient funds according to the regulators During a CNBC appearance on Tuesday evening Chief Executive John Stumpf apologized and said management takes responsibility for the problems identified in the settlement Although the bank has eliminated sales goals for retail staff Stumpf said cross selling products from various businesses to customers is still important to growing its business We still love cross selling he said later adding Cross sell is shorthand for deep long term relationships We love that Even after firing more than 2 percent of its staff for improper selling Wells Fargo is still examining its practices Chief Financial Officer John Shrewsberry said earlier in the day The bank will take a big wide fresh look at who knew what and when and what else might have been done he said speaking at an industry conference Shrewsberry said the review would impact people at all levels of the organization Carrie Tolstedt the head of the bank s retail operations where the abuses are alleged to have occurred stepped down in July The controversy has led to calls for the bank to claw back bonuses paid to her Tolstedt received a pay raise in March after getting more than 9 million in cash and stock last year She left with more than 2 5 million in Wells Fargo shares currently worth around 120 million A Wells Fargo spokeswoman said Tolstedt had made a decision to retire at the end of this year Tolstedt could not be reached for comment Stumpf said clawback decisions are determined by the board of directors and that product sales goals are not a component of compensation for any senior executives POLITICAL HEAT The bank s practices have also drawn scrutiny from Washington with staff members for the Senate Banking Committee which oversees the banking industry set to meet with representatives of the bank Stumpf Cordray and Tom Curry from the Office of the Comptroller of the Currency will testify before the committee next week Torrie Matous spokeswoman for the committee s chairman Richard Shelby a Republican from Alabama said staff had been arranging briefings and collecting information from both Wells Fargo and the regulators to prepare for a Sept 20 hearing Five Democrats on the committee including Senator Bob Menendez of New Jersey and Senator Elizabeth Warren of Massachusetts have pressed for an investigation The top Democrat on the banking committee Ohio s Senator Sherrod Brown wants the panel to probe deeper than a single hearing so we can get answers on how this massive fraud happened what s being done to make customers whole and how to put safeguards in place to protect against its recurrence |
JPM | Wells Fargo s unit to sell fund administration business | Reuters Wells Fargo Co N WFC said it agreed to sell its fund administration business Wells Fargo Global Fund Services GFS to SS C Technologies Holdings Inc O SSNC The terms of the transaction were not disclosed Wells Fargo said in a statement The fund administration business is part of Well Fargo s investment banking and capital markets business The announcement comes amid a gathering public storm over a fake account scandal at the bank that has led to 190 million in fines and the firing of 5 300 employees Well Fargo s shares have lost about 6 percent of their value since last week when U S regulators unveiled the fines As a result the bank has ceded its position as the largest U S bank by market capitalization to rival JPMorgan Chase Co N JPM Politicians are calling for an investigation and Wells Fargo and regulators are expected to testify in the Senate next week Fund administrator SS C Technologies said the deal would add 250 employees serving more than 130 fund relationships in United States UK Singapore and Hong Kong
The deal is expected to close in the fourth quarter of 2016 |
HAL | Halliburton posts fourth quarter profit compared with year ago loss | Reuters Oilfield services provider Halliburton Co N HAL reported a quarterly profit on Tuesday compared with a loss for the same period a year ago when it set aside 1 05 billion for income tax payments related to a change in U S taxes The company said net income attributable to the company was 664 million or 76 cents per share for the fourth quarter ended Dec 31 compared with a loss of 824 million or 94 cents per share a year earlier
Revenue was largely flat at 5 94 billion |
HAL | Halliburton HAL Stock Moves 0 53 What You Should Know | Halliburton HAL closed the most recent trading day at 20 92 moving 0 53 from the previous trading session The stock outpaced the S P 500 s daily of 0 Meanwhile the Dow lost 0 19 and the Nasdaq a tech heavy index added 0 07
Coming into today shares of the provider of drilling services to oil and gas operators had gained 11 88 in the past month In that same time the Oils Energy sector gained 8 19 while the S P 500 gained 4 25
Investors will be hoping for strength from HAL as it approaches its next earnings release which is expected to be October 21 2019 In that report analysts expect HAL to post earnings of 0 36 per share This would mark a year over year decline of 28 Meanwhile the Zacks Consensus Estimate for revenue is projecting net sales of 5 89 billion down 4 61 from the year ago period
Looking at the full year our Zacks Consensus Estimates suggest analysts are expecting earnings of 1 31 per share and revenue of 23 39 billion These totals would mark changes of 31 05 and 2 5 respectively from last year
Investors might also notice recent changes to analyst estimates for HAL These revisions typically reflect the latest short term business trends which can change frequently As such positive estimate revisions reflect analyst optimism about the company s business and profitability
Our research shows that these estimate changes are directly correlated with near term stock prices We developed the Zacks Rank to capitalize on this phenomenon Our system takes these estimate changes into account and delivers a clear actionable rating model
The Zacks Rank system ranges from 1 Strong Buy to 5 Strong Sell It has a remarkable outside audited track record of success with 1 stocks delivering an average annual return of 25 since 1988 The Zacks Consensus EPS estimate has moved 1 78 lower within the past month HAL is currently sporting a Zacks Rank of 3 Hold
In terms of valuation HAL is currently trading at a Forward P E ratio of 15 85 Its industry sports an average Forward P E of 22 68 so we one might conclude that HAL is trading at a discount comparatively
We can also see that HAL currently has a PEG ratio of 2 49 This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate Oil and Gas Field Services stocks are on average holding a PEG ratio of 2 49 based on yesterday s closing prices
The Oil and Gas Field Services industry is part of the Oils Energy sector This industry currently has a Zacks Industry Rank of 215 which puts it in the bottom 17 of all 250 industries
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Make sure to utilize Zacks Com to follow all of these stock moving metrics and more in the coming trading sessions |
HAL | 5 Reasons Offshore Drilling Stocks Are Poised For A Rebound | Increases in new project opportunities are expected to reverse years of decline in offshore drilling contractor revenues With the energy sector emerging from the crude slump and debt driven overhaul renewed interest in the offshore drilling space is finally raising hopes for the industry s recovery Oil Price Collapse Pummeled Offshore IndustryWhen oil was in the triple digit territories of 2014 energy companies had billions of dollars in exploration budgets The aggressive approach was essentially tied to commodity prices and severely dented balance sheets when prices fall to a 13 year low of around 26 per barrel in 2016 With operating profitability compromised the worst oil crash in over half a century triggered major restructuring and a change in the companies long term focus Most producers concentrated on becoming leaner by shunning large capital intensive projects In particular the price slump forced the top energy companies to cut spending on the costly offshore drilling projects due to lower profit margins This in turn meant less work for the beleaguered drillers With old contracts rolling off the companies either got rigs stacked or bore high reactivation costs and accepted much reduced dayrates As a result overall revenues were impacted Most offshore drilling stocks lost billions in market value during this period Signs of Gradual RecoverySteadiness of oil prices at the current levels is driving operators to make longer term plans as deepwater projects become cost effective if taken up for a long term Consequently demand for offshore drilling services have picked up Sector consolidation adoption of superior technologies new operational systems optimization of the fleet by strategic sell offs and acquisition seeking profitable collaborations among other strategic strides will certainly help boost future prospects of the drilling companies While one does not expect the sunny days of the drilling industry to return immediately signs of recovery can definitely be seen Let s discuss the most important factors shaping the industry s turnaround Reserves Growth Challenge One of the key positive arguments for offshore drillers is the focus on reserve replacement rate With less oil being discovered on land and a number of upstream operators depleting their reserves fast capital is moving into offshore projects In fact supplies from offshore fields are expected to be the primary contributor in meeting reserve shortfalls in the long run There is just no alternative Lower Breakeven Costs Operators think that the lessons learnt during the bust years will help them undertake sizeable expenditures while maintaining the target capital structure With the offshore players greatly reducing costs amid stronger operating efficiencies most of the projects are likely to generate decent returns even at today s oil prices The lower breakeven and attractive project economics are leading to more offshore projects being sanctioned Growing E P Cash Flows The good news is most exploration and production companies have plenty of cash to invest A tight leash on expenditure and conservative spending plans have resulted in cash flow coming in at higher rates driving offshore spending and drilling activity Oilfield services major Halliburton NYSE HAL estimates that investments by oil producers in international offshore markets will increase 14 this year Improving Day Rates Utilization The offshore spending growth particularly in markets like Brazil Guyana and Mozambique has led to rising day rates and utilization Both are now comfortably off the bottom in most global operating regions and for majority of the market segments While nowhere near the boom year highs they still remain quite strong and at levels rarely see in recent times The Attack on Saudi Oil Facilities The recent attack on Saudi Arabia s oil installations have raised the risk quotient associated with onshore oil production Following the strike on the state run Saudi Arabian Oil Company s Aramco Abqaiq plant a key crude processing facility and the Khurais complex which houses the kingdom s second largest oilfield market watchers have stressed the need to diversify oil supply sources This would mean more investments in offshore projects which are considered relatively immune to geopolitical risks How to Profit From This Recovery
With the offshore energy industry looking ready to turn the corner toward growth we have shortlisted four of them Noble Corporation plc NYSE NE Transocean Ltd NYSE RIG Diamond Offshore Drilling Inc NYSE DO and Valaris plc NYSE VAL that might warrant attention going into the last leg of 2019 Each carrying Zacks Rank 3 Hold the companies own some high quality offshore drilling fleets with presence in major markets Importantly their contract backlogs are anchored by a large and diverse group of clients including major national and independent upstream companies You can see Free Zacks Single Best Stock Set to DoubleToday you are invited to download our just released Special Report that reveals 5 stocks with the most potential to gain 100 or more in 2020 From those 5 Zacks Director of Research Sheraz Mian hand picks one to have the most explosive upside of all This pioneering tech ticker had soared to all time highs and then subsided to a price that is irresistible Now a pending acquisition could super charge the company s drive past competitors in the development of true Artificial Intelligence The earlier you get in to this stock the greater your potential gain |
HAL | The Zacks Analyst Blog Highlights Halliburton Noble Transocean Diamond Offshore Drilling And Valaris | For Immediate ReleaseChicago IL October 2 2019 Zacks com announces the list of stocks featured in the Analyst Blog Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets Stocks recently featured in the blog include Halliburton NYSE HAL Noble Corporation plc NYSE NE Transocean Ltd NYSE RIG Diamond Offshore Drilling Inc NYSE DO and Valaris plc NYSE VAL Here are highlights from Tuesday s Analyst Blog 5 Reasons Offshore Drilling Stocks Are Poised for a ReboundIncreases in new project opportunities are expected to reverse years of decline in offshore drilling contractor revenues With the energy sector emerging from the crude slump and debt driven overhaul renewed interest in the offshore drilling space is finally raising hopes for the industry s recovery Oil Price Collapse Pummeled Offshore IndustryWhen oil was in the triple digit territories of 2014 energy companies had billions of dollars in exploration budgets The aggressive approach was essentially tied to commodity prices and severely dented balance sheets when prices fall to a 13 year low of around 26 per barrel in 2016 With operating profitability compromised the worst oil crash in over half a century triggered major restructuring and a change in the companies long term focus Most producers concentrated on becoming leaner by shunning large capital intensive projects In particular the price slump forced the top energy companies to cut spending on the costly offshore drilling projects due to lower profit margins This in turn meant less work for the beleaguered drillers With old contracts rolling off the companies either got rigs stacked or bore high reactivation costs and accepted much reduced dayrates As a result overall revenues were impacted Most offshore drilling stocks lost billions in market value during this period Signs of Gradual RecoverySteadiness of oil prices at the current levels is driving operators to make longer term plans as deepwater projects become cost effective if taken up for a long term Consequently demand for offshore drilling services have picked up Sector consolidation adoption of superior technologies new operational systems optimization of the fleet by strategic sell offs and acquisition seeking profitable collaborations among other strategic strides will certainly help boost future prospects of the drilling companies While one does not expect the sunny days of the drilling industry to return immediately signs of recovery can definitely be seen Let s discuss the most important factors shaping the industry s turnaround Reserves Growth Challenge One of the key positive arguments for offshore drillers is the focus on reserve replacement rate With less oil being discovered on land and a number of upstream operators depleting their reserves fast capital is moving into offshore projects In fact supplies from offshore fields are expected to be the primary contributor in meeting reserve shortfalls in the long run There is just no alternative Lower Breakeven Costs Operators think that the lessons learnt during the bust years will help them undertake sizeable expenditures while maintaining the target capital structure With the offshore players greatly reducing costs amid stronger operating efficiencies most of the projects are likely to generate decent returns even at today s oil prices The lower breakeven and attractive project economics are leading to more offshore projects being sanctioned Growing E P Cash Flows The good news is most exploration and production companies have plenty of cash to invest A tight leash on expenditure and conservative spending plans have resulted in cash flow coming in at higher rates driving offshore spending and drilling activity Oilfield services major Halliburton estimates that investments by oil producers in international offshore markets will increase 14 this year Improving Day Rates Utilization The offshore spending growth particularly in markets like Brazil Guyana and Mozambique has led to rising day rates and utilization Both are now comfortably off the bottom in most global operating regions and for majority of the market segments While nowhere near the boom year highs they still remain quite strong and at levels rarely see in recent times The Attack on Saudi Oil Facilities The recent attack on Saudi Arabia s oil installations have raised the risk quotient associated with onshore oil production Following the strike on the state run Saudi Arabian Oil Company s Aramco Abqaiq plant a key crude processing facility and the Khurais complex which houses the kingdom s second largest oilfield market watchers have stressed the need to diversify oil supply sources This would mean more investments in offshore projects which are considered relatively immune to geopolitical risks How to Profit From This Recovery With the offshore energy industry looking ready to turn the corner toward growth we have shortlisted four of them Noble Corporation plc Transocean Ltd Diamond Offshore Drilling Inc and Valaris plc that might warrant attention going into the last leg of 2019 Each carrying Zacks Rank 3 Hold the companies own some high quality offshore drilling fleets with presence in major markets Importantly their contract backlogs are anchored by a large and diverse group of clients including major national and independent upstream companies You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here Free Zacks Single Best Stock Set to DoubleToday you are invited to download our just released Special Report that reveals 5 stocks with the most potential to gain 100 or more in 2020 From those 5 Zacks Director of Research Sheraz Mian hand picks one to have the most explosive upside of all This pioneering tech ticker had soared to all time highs and then subsided to a price that is irresistible Now a pending acquisition could super charge the company s drive past competitors in the development of true Artificial Intelligence The earlier you get in to this stock the greater your potential gain Download Free Report Now Media ContactZacks Investment Research800 767 3771 ext 9339 Past performance is no guarantee of future results Inherent in any investment is the potential for loss This material is being provided for informational purposes only and nothing herein constitutes investment legal accounting or tax advice or a recommendation to buy sell or hold a security No recommendation or advice is being given as to whether any investment is suitable for a particular investor It should not be assumed that any investments in securities companies sectors or markets identified and described were or will be profitable All information is current as of the date of herein and is subject to change without notice Any views or opinions expressed may not reflect those of the firm as a whole Zacks Investment Research does not engage in investment banking market making or asset management activities of any securities These returns are from hypothetical portfolios consisting of stocks with Zacks Rank 1 that were rebalanced monthly with zero transaction costs These are not the returns of actual portfolios of stocks The S P 500 is an unmanaged index Visit for information about the performance numbers displayed in this press release |
HAL | Halliburton Trims 650 Jobs As Producers Scale Down Spending | In a bid to recover from the reduced spending by oil and gas producers due to weak prices Halliburton Company NYSE HAL plans to slash nearly 650 employees in four states namely New Mexico Wyoming North Dakota and Colorado It is expected to cut more than 178 jobs in Colorado while the staff lay off in the remaining three states is not known yet The mass retrenchment is in sync with the company s strategy to revive business in the United States Also the move comes within three months of Halliburton s announcement of reducing 8 of its North American headcount and parking unused frack gear The US crew that fracks well dropped 17 in the current year Per the analysts at Cowen and Co expenses by U S independent producers are estimated to decline by almost 11 in 2019 While lower oil prices are draining profits bankruptcy in the industry is on the rise This Houston based oilfield service provider has realized that to enhance its operating efficiency amid challenging market conditions it has to lower costs substantially Halliburton noted that for operators in North America where oil production has touched record levels it s more about returns now and not growth The volatility in commodity price has convinced explorers and producers to adopt a relatively conservative approach to capital expenditure programs This shift in customer strategy is likely to induce subdued demand for its oilfield services and equipment putting much pressure on pricing This organizational restructuring is anticipated to help Halliburton achieve its purpose of minimizing expenses and optimizing operating excellence by challenging and backing its employees Halliburton is scheduled to announce third quarter earnings on Oct 21 The Zacks Consensus Estimate for the company s quarterly earnings of 34 cents is indicative of a decrease from 49 cents per share reported in the same period last year Halliburton Company Price Zacks Rank Key PicksHalliburton carries a Zacks Rank 3 Hold Better ranked players in the energy space include BP LON BP Midstream Partners NYSE BPMP Dril Quip Inc NYSE DRQ and TransCanada Corporation TSX TRP each carrying a Zacks Rank 2 Buy You can see BP s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters Dril Quip earnings beat the Zacks Consensus Estimate in three of the previous four quarters TransCanada earnings beat the Zacks Consensus Estimate in each of the last four quarters 5 Stocks Set to DoubleEach was hand picked by a Zacks expert as the 1 favorite stock to gain 100 or more in 2020 Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth Most of the stocks in this report are flying under Wall Street radar which provides a great opportunity to get in on the ground floor |
C | Economic Company Fundamentals Leading To Higher Equity Markets | Almost two weeks ago we noted the S P 500 Index appeared to look more attractive from a technical perspective Since the market reached a near term low of 1 909 57 on August 7th the S P 500 Index has rallied 4 13 through Friday to close at 1 988 40 In addition to a positive technical perspective at that time recent economic and company reports indicate potential strength ahead In looking at several economic factors last week s report on showed an increase of 9 in July which followed a 6 increase in both May and June On August 15th the the sixth straight monthly increase in industrial production with July s increase of 4
The continued improvement in the LEI Index and industrial production is showing up in the ISM non manufacturing survey specifically in new orders The report noted
the New Orders Index registered 64 9 percent 3 7 percentage points higher than the reading of 61 2 percent registered in June This represents the highest reading for the New Orders Index since August 2005 when it registered 65 3 percent
The early August report notes respondents indicating strength in the second half of this year as well A couple of direct highlights from the report
Conditions are improving Construction
Slight improvement in the economy but still experiencing delays in client project start ups Expecting some improvement in 4th quarter Professional Scientific Technical Services
Second half of the year is looking promising for increased orders versus last year Information
Business is still very good Expecting continued growth in the 2nd half of the year Retail Trade
Business has been strong this summer after a late start due to the poor spring weather Wholesale Trade
Lastly with the second quarter 2014 earnings season essentially at an end with 486 companies having reported the year over year growth rate for earnings in the quarter came in at 10 2 excluding Citigroup NYSE C It is not anticipated the remaining companies yet to report will change the 10 growth rate Thomson Reuters notes if this growth rate holds it will represent the second highest quarterly growth rate since the fourth quarter of 2011 The revenue growth rate recorded so far in Q2 is 4 6 with the health care sector leading the way with revenue growth of 12 2 in Q2
Investors and strategist may be viewing the coming end of QE as a brick wall for the economy However current economic reports and company reports are suggesting the economy may be able to function without outside stimulus I have not touched on the improvement in the job market but this is another positive as well I will highlight some of these items in our Week Ahead Magazine post but several market moving reports in the coming week include the second reading on Q2 GDP and jobless claims on Thursday |
C | S P 500 Earnings Update Still Looking For 120 For 2014 | With 493 of the S P 500 having reported 2nd quarter earnings the forward 4 quarter estimate slipped a whopping 0 05 this past week to 126 28 from last week s 126 33
With the S P 500 closing at an all time high Friday of 2003 the P E ratio on the S P 500 increased this past week to 15 9 x while the PEG ratio finished the week and month at 1 73 x
The earnings yield on the S P 500 fell this past week to 6 305 from last week s 6 35
The y y growth rate on the forward estimate fell again this past week to 9 18 and has now fallen for 5 straight weeks declining 40 bps from 8 1 14 s peak of 9 58
The July 11 14 y y growth rate was 8 53 so the growth rate accelerated through July 14 and has now decelerated through August 14
Am I worried No given that the absolute growth rate is still a healthy 9 18 and close to a 3 year record high but this is why we track it
I d rather see it rise slowly and steadily over time
Analysis commentary Second quarter earnings growth will finish at 10 2 excluding the Citigroup NYSE C charge and Q2 14 revenue growth will likely finish up near 4 6 both of which are good metrics Health Care was the sector stand out from July 1 14 through August 29 2014 Health Care growth increased from 8 2 to 18 6 a big upside surprise
Per Thomson Reuters the top down estimate for 2014 is currently projected at 117 49 The bottoms up estimate for calendar 2014 also per Thomson Reuters is currently projected at 119 25 My guess is when 2014 is all reported by 4 1 15 the actual S P 500 EPS will be at least 120
120 versus 2013 s 109 68 is 9 5 y y growth for 2014 with the S P 500 trading today at just under 16 x the forward estimate
Let s say the S P 500 P E expands to 19 x or 2 x the expected growth rate for 2014 EPS of 9 5 given the above numbers then you we I could make a good case for a 12 15 month target on the S P 500 of 2 340 or another 17 higher from here
It feels funny to write that as in it might be the source of great ridicule upon my person or character but I also wonder how many would have ventured forth on CNBC in March 2000 and without hesitation or equivocation have said to sell all your Technology exposure and buy gold
The math is the math Of course it could be wrong too
One of the reasons I suspect the S P 500 has had trouble expanding to 2 x its growth rate is that Financials haven t really participated as actively as they have in past bull markets As a sector Financials did well in 13 but have turned punk for the most part in 2014
Sentiment has turned bullish this past week too don t like to see that
More on this in a later post
We get more retail reporting this coming week The only company we will really be locked in on will be Toll Brothers NYSE TOL the high end homebuilder which reports Wednesday 9 3 14 pre market |
C | Blizzard Of Oz AUD Technicals | AUD USD is testing support levels around 0 8821 48 which do not appear strong enough to limit the downtrend notes CitiFX Technicals
Beyond this range of supports the January low is likely to be tested at 0 8660 which was the level from where we rallied to hold and turn from the 76 4 retracement of the move down from October 2013 Citigroup NYSE C projects
A weekly close below 0 8660 would amount to a significant bearish break Citi adds
With the USD Index has still not pushed through the resistance level at 85 17 and has stretched momentum on the weekly chart Citi thinks that a consolidation may be seen before further gains later which brings AUD crosses into focus
A move to the 200 day moving average in the short term 94 49 seems likely in AUD JPY A correction down to 107 107 50 area on USD JPY and a move to 0 8660 on AUD USD would put AUD JPY closer to or below 93 00 The May low was 93 04 Citi projects
Moving to GBP AUD Citi thinks that in the short term it could be one of the outperformers
Having turned from the 76 4 retracement of the rally from October 2013 in a V bottom fashion we have now taken out resistance levels that were at 1 8365 97 on a close basis The next resistance level is 1 8831 followed by the trend high at 1 9187 Citi clarifies |
BMY | Bristol Myers Squibb Earnings Revenue Beat in Q2 | Investing com Bristol Myers Squibb NYSE BMY reported second quarter earnings that beat analysts expectations on Thursday and revenue that topped forecasts
The firm reported earnings per share of 1 18 on revenue of 6 27B Analysts polled by Investing com forecast EPS of 1 07 on revenue of 6 11B That compared to EPS of 1 01 on revenue of 5 7B in the same period a year earlier The company had reported EPS of 1 1 on revenue of 5 92B in the previous quarter
Bristol Myers Squibb follows other major Healthcare sector earnings this month
On July 16 J J reported second quarter EPS of 2 58 on revenue of 20 56B compared to forecasts of EPS of 2 46 on revenue of 20 29B
Novartis ADR earnings beat analysts expectations on July 18 with second quarter EPS of 1 34 on revenue of 11 76B Investing com analysts expected EPS of 1 21 on revenue of 11 49B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
JPM | Good Technology shareholders sue JPMorgan over fiduciary duty | Reuters Former shareholders of Good Technology Corp a mobile software maker are suing JPMorgan Chase Co N JPM for breach of fiduciary duty according to a lawsuit filed on Thursday JPMorgan was self interested and conflicted in its dealings with Good Technology which led the start up to sell itself to BlackBerry Ltd TO BB O BBRY in 2015 at a fire sale price of 425 million the shareholders said in the amended lawsuit filed in Delaware Chancery Court Good Technology was being advised by JPMorgan at the same time as the investment bank was advising BlackBerry according to the lawsuit JPMorgan prioritized its relationship with BlackBerry over its dealings with Good Technology the complaint said The lawsuit valued Good Technology at over 1 billion Blackberry and JPMorgan were not immediately available to comment on the issue The New York Times first reported the amended lawsuit earlier on Thursday The complaint is part of a suit Good Technology shareholders originally filed in October 2015 The suit already named Good Technology directors and executives as defendants and accused them of conflicts of interest
The case is Good Technology Corporation Stockholder Litigation Court of Chancery State of Delaware C A No 11580 VCL |
JPM | Barclays nabs JPMorgan s Throsby to head investment bank | By Lawrence White LONDON Reuters Britain s Barclays L BARC has hired JPMorgan N JPM banker Tim Throsby to head its Corporate and International division ending a six month search for the number two job under Chief Executive Jes Staley Throsby 50 will also run Barclays investment banking business within that division filling the gap left by the departure of Tom King who retired from the bank in March Subject to regulatory approvals Throsby is expected to take up his new role in January Barclays said Staley has been running the division himself while the bank searched for a replacement King s exit had been rumored for some months prior to his departure The investment bank chief threatened to quit last summer during a row with the then CEO Antony Jenkins over the future of the division people familiar with the matter told Reuters at the time King s departure came as Staley announced the creation of Barclays corporate and international division as part of a new strategy focused on the United States and Britain This saw the bank divided into two units Barclays UK and Barclays Corporate and International to comply with ring fencing regulations aimed at safeguarding its retail banking business from riskier operations Income from Barclays investment banking division fell 5 percent in the first six months of this year as it suffered from industry wide problems including declining client trading increased regulatory costs and persistently low interest rates Barclays ranked 7th among banks worldwide advising on mergers in the first half of the year according to Thomson Reuters data 4th for debt deals and 9th for equity financing The bank s shares are down 20 percent so far this year after suffering their worst single day drop on record following Britain s vote to exit the EU on June 23 Throsby an Australian joined JPMorgan in 2010 as global head of equity derivatives before being promoted to global head of equities in September 2012 He has also worked for Credit Suisse SIX CSGN Macquarie Citadel Asia and Lehman Brothers He joins a number of JPMorgan alumni recruited by Staley who was himself CEO of the U S lender s investment bank before leaving JPMorgan in 2013 and joining Barclays in December last year
Former JPMorgan bankers now in senior roles at Barclays include finance director Tushar Morzaria chief information officer Mark Ashton Rigby chief operating officer Paul Compton and chief risk officer CS Venkatakrishnan |
JPM | JPMorgan whistleblower case revived by U S appeals court | By Jonathan Stempel NEW YORK Reuters A federal appeals court on Monday revived a former JPMorgan Chase Co N JPM private banker s whistleblower lawsuit accusing the bank of firing her in retaliation for warning that an Israeli client might be committing fraud The 2nd U S Circuit Court of Appeals in New York found enough evidence to suggest that former JPMorgan employee Jennifer Sharkey had a reasonable belief that the client was engaged in fraud and money laundering involving Colombia Sharkey said she was fired as a vice president and wealth manager in August 2009 just a week after formally urging the bank to heed red flags and sever its ties with the client who generated about 600 000 of annual billings The client was not identified in court papers Sharkey was terminated eight months after the multibillion dollar Ponzi scheme of longtime JPMorgan client Bernard Madoff was exposed U S District Judge Robert Sweet in Manhattan dismissed Sharkey s lawsuit last October Sweet said JPMorgan could have fired Sharkey based on her performance or for having purportedly lied about communications involving another client Sharkey disputed having lied But the appeals court said the close temporal proximity between Sharkey s warning and her firing justified letting the case continue It also said her qualifications as a whistleblower was an issue of fact to be resolved at trial The court returned the case to Sweet s courtroom JPMorgan spokesman Darin Oduyoye said the bank believes the lawsuit is without merit and looks forward to presenting its case in court Lawrence Pearson LON PSON a partner at Wigdor LLP representing Sharkey said he was pleased with the decision and looks forward to a trial Sharkey had sued under the whistleblower provisions of the 2002 Sarbanes Oxley corporate governance law Sweet had dismissed Sharkey s case in December 2013 Last October s dismissal came after the appeals court in the interim imposed a more lenient standard for whistleblower protection JPMorgan agreed in January 2014 to pay 2 6 billion to settle litigation over Madoff and in a deferred prosecution agreement with the U S government acknowledged responsibility for failing to stop him
The case is Sharkey v JPMorgan Chase Co et al 2nd U S Circuit Court of Appeals No 15 3400 |
HAL | As Zinke departs Trump says he will name new interior secretary next week | By Lesley Wroughton WASHINGTON Reuters U S Interior Secretary Ryan Zinke who has aggressively sought to roll back Obama era environmental protections will be leaving his post at the end of the year President Donald Trump tweeted on Saturday the latest high profile departure from his administration Trump did not give a reason for Zinke s departure However the former Navy Seal and ex congressman from Montana has faced scrutiny of his use of security details chartered flights and a real estate deal Ryan has accomplished much during his tenure and I want to thank him for his service to our Nation Trump said on Twitter The Trump administration will be announcing the new secretary of the Interior next week Zinke has run the Interior Department which oversees America s vast public lands since early 2017 He has aggressively pursued Trump s agenda to promote oil drilling and coal mining by expanding federal leasing cutting royalty rates and easing land protections despite environmental protests Zinke 51 was among Trump s most active Cabinet members cutting huge wilderness national monuments in Utah to a fraction of their size and proposing offshore oil drilling in the Arctic Pacific and Atlantic He became a darling of the U S energy and mining industries and a prime target for conservationists and environmental groups Senate Democratic leader Chuck Schumer welcomed Zinke s departure in a tweet Ryan Zinke was one of the most toxic members of the cabinet in the way he treated our environment our precious public lands and the way he treated the govt like it was his personal honey pot The swamp cabinet will be a little less foul without him Schumer said Jamie Williams NYSE WMB president of the non profit Wilderness Society said he expects Zinke s deputy and likely successor David Bernhardt to continue with the drill everywhere agenda Deputy Secretary Bernhardt has made it his mission to stifle climate science and silence the public so polluters can profit said Williams Unfortunately even with Secretary Zinke out the Interior Department remains disturbingly biased in favor of special interests over the health of American communities and the public lands that they love Critics have questioned Zinke s ethics and some of his moves triggered government investigations In July the Interior Department s Office of Inspector General began investigating a Montana land deal between a foundation Zinke set up and a development group backed by the chairman of oil service company Halliburton NYSE HAL Co which has business with the Interior Department In late October that investigation was referred to the U S Justice Department for a possible criminal investigation according to multiple media reports The Department of Justice and the Interior Department have declined to comment There are two other investigations of Zinke s conduct Interior s watchdog is examining whether the department purposely redrew the boundaries of Utah s Grand Staircase Escalante National Monument to benefit a state lawmaker who owns adjoining property It is also probing Zinke s decision to block casinos proposed by two Connecticut Native American tribes Critics allege he made that move overruling his staff s recommendation shortly after he met with lobbyists for MGM Resorts International which owns a new casino in the region Zinke has repeatedly denied any wrongdoing Earlier this year Interior s inspector general wrapped up two other investigations related to Zinke s travel expenses Those probes found that a 12 000 private flight he took after a meeting with a professional hockey team could have been avoided and that the security detail he took on a family vacation to Greece and Turkey cost taxpayers 25 000 Trump who has repeatedly praised Zinke said on Nov 5 that he would look at the allegations
Zinke s departure makes him the ninth Cabinet level official to leave since Trump took office two years ago Other departures have included Attorney General Jeff Sessions and Environmental Protection Agency chief Scott Pruitt |
HAL | Halliburton President and CEO Jeff Miller appointed as Chairman of the board | The Board of Directors of Halliburton Company NYSE HAL has appointed Jeff Miller the Company s president and CEO as Chairman of the Board effective Jan 1 2019 Executive Chairman Dave Lesar retired on Dec 31 2018 HAL 0 68 premarket Now read |
HAL | Halliburton HAL Soars Stock Adds 11 In Session | Halliburton Company NYSE HAL was a big mover last session as the company saw its shares rise nearly 11 on the day The move came on solid volume too with far more shares changing hands than in a normal session This continues the recent uptrend for the company as the stock is now up 19 2 in the past one month time frame The company has seen five negative estimate revisions in the past few weeks while its Zacks Consensus Estimate for the current quarter has also moved lower over the past few weeks suggesting there may be trouble down the road So make sure to keep an eye on this stock going forward to see if this recent move higher can last Halliburton currently has a Zacks Rank 3 Hold while its is negative Halliburton Company Price Investors interested in the Oil and Gas Field Services industry may consider a better ranked stock like Smart Sand Inc NASDAQ SND which carries a Zacks Rank 1 Strong Buy You can see Is HAL going up Or down Predict to see what others think Up or Down5 Stocks Set to DoubleZacks experts released their picks to gain 100 or more in 2020 One is a famous cutting edge food company that is hiding in plain sight Swamped with competitors and ignored by Wall Street its stock price floundered Now suddenly it acquired a company that gives it an advantage none of its peers have |
C | S P 500 Snapshot Morning Rally To A Tiny Trading Range | Some earnings optimism triggered a modest market surge at the open with grabbing the headlines Citigroup Inc NYSE C would go on to close with a 3 gain for the day The S P 500 rose half a percent at the opening bell and then spent the rest of the day in a tiny trading range closing with a 0 48 advance
There was no economic news today so earnings took the spotlight But the situation changes tomorrow with June Retail Sales as a potential market mover Economists are expecting a month over month increase around 0 6 up from 0 3 in May
The yield on the 10 year note ended the day at 2 55 2 bps above the previous close It is now 11 bps above its interim closing low of May 28th
Here is a chart of the last five sessions The index is up 6 97 year to date and 0 42 below its record close on July 3rd
Based on trading volume market participation was extremely light The SPDR S P 500 ARCA SPY ETF s volume was 36 below its 50 day moving average
For a longer term perspective here is a pair of charts based on daily closes starting with the all time high prior to the Great Recession |
C | Central Bankers Controlling Currency Moves | Asian markets are trading on a mixed note today ahead of the Bank of Japan BOJ monetary policy meeting today The US Dollar Index traded on a flat note and declined marginally yesterday on the back of rise in risk appetite in market sentiments which led to decline in demand for low yielding currency Further hint towards rise in interest rates by US Federal Reserve in its minutes meeting in the last week continued with downside movement in the DX The currency touched an intra day low of 80 12 and closed at 80 23 and climbed this morning to trade at 80 24 Asian stocks rose for a second day after Citigroup Inc NYSE C reported better than forecast profit boosting confidence that earnings growth can sustain further gains in shares US stocks ended higher on Monday with the Dow Jones industrial average hitting an intraday record lifted by Citigroup s better than expected earnings and more deals in the healthcare space
The euro traded on a positive note and gained about 1 on Monday to ease this morning to trade at 1 3617 down by 3 points as traders worried about a lackluster industrial production report which declined by 1 1 in May against a rise of 0 8 in previous month European Central Bank s Mario Draghi said that a stronger euro would put at risk the shaky recovery in the 18 countries that use the shared currency Draghi made the remark to legislators in the European Parliament in Strasbourg amid worries that the modest rebound in Europe is stalling Data showed industrial production fell by 1 1 percent in May in the currency zone A stronger euro would hurt export dependent businesses However Draghi offered no new steps to boost the economy beyond the raft of measures the bank announced on May 8 Markets shrugged off the remark and the euro traded little changed at around 1 36
Asked about asset purchases Draghi referred legislators to statements from the bank s previous meetings where it has said it is ready to deploy such unconventional tools if the inflation outlook worsens and prices levels do not eventually start rising toward the bank s goal of just under 2 percent Some economists think Draghi and the ECB will be reluctant to go down that route partly because of technical problems such as how to buy assets and which ones across a currency bloc comprising 18 countries
The yen weakened against the dollar euro and British pound Monday as investors moved money into assets generally seen as riskier and higher yielding such as equities ahead of two potentially market moving central bank events The U S dollar rose 0 3 versus the yen to 101 58 while the euro and pound are each 0 3 higher versus the yen to 138 33 and 173 81 respectively The BOJ kept monetary policy steady as expected and trimmed its economic growth forecast for the current fiscal year to March 2015 to reflect soft exports and a slump in household spending after a sales tax increase |
BMY | Puerto Rico board files flurry of lawsuits ahead of claim deadline | By Luis Valentin Ortiz SAN JUAN Reuters Puerto Rico s federally created financial oversight board on Tuesday began filing the first round of scores of lawsuits seeking to recover money the bankrupt U S commonwealth paid to bondholders businesses and others The board has until the end of this week to file certain claims after the U S judge hearing Puerto Rico s bankruptcy cases declined to extend an expiring two year statute of limitations More than 230 complaints were filed in U S District Court in Puerto Rico targeting about 4 2 billion in payments made by the island s government according to the board Defendants include pharmaceutical maker Bristol Myers Squibb NYSE BMY Puerto Rico Inc as well as individuals and local companies that provide educational health IT security construction and communication services The oversight board has a responsibility to the people of Puerto Rico to recover any payments in contravention of bankruptcy or Puerto Rico law made prior to the commonwealth s bankruptcy board executive director Natalie Jaresko said in a statement The legal actions cover a period dating back as far as four years before Puerto Rico filed for bankruptcy on May 3 2017 in an effort to restructure about 120 billion of debt and pension obligations Legal arguments for the claims include that these payments deviate from historical payment patterns were made in the absence of a contract or do not correspond to existing contracts Claims would be dismissed against defendants who can show a proper basis for the payments A spokeswoman for Bristol Myers Squibb said We do not comment on ongoing litigation The board contends that Puerto Rico was insolvent at the time these payments were made The parties being sued knew or should have known that the commonwealth was insolvent in the vicinity of insolvency or unable to satisfy its obligations as they became due the fiscal panel argues A deluge of lawsuits is also expected this week against owners of general obligation bonds the island issued in 2012 and 2014 The board wants to recoup payments made to bondholders if the court grants its motion to invalidate the bonds because they were issued in violation of a debt limit in Puerto Rico s constitution On Monday the board informed the court it is targeting investors who owned 2 5 million or more of the bonds any time between May 3 2013 and May 21 2017 Claims would also be pursued against 27 bond underwriters nine law firms and five accounting firms according to an attorney for the oversight board |
BMY | Bristol Myers plans to divest Celgene s psoriasis drug | Reuters Bristol Myers Squibb NYSE BMY Co on Monday offered to divest Celgene NASDAQ CELG Corp s psoriasis treatment Otezla to allay concerns raised by the U S competition regulator and pushed back the closing of their 74 billion deal The surprise move sent Bristol s shares down 4 3 in morning trading while Celgene fell nearly 4 Bristol announced its plans to buy Celgene in a cash and stock deal in early January to bring together the companies that specialize in oncology and cardiovascular drugs in the largest pharmaceutical industry merger ever It had said it would close the deal in the third quarter of 2019 However now it expects the merger to close by the end of 2019 or the beginning of 2020 The divestiture is subject to further review by the U S Federal Trade Commission FTC and requires Bristol to enter into a consent decree with the agency Bristol said In March the FTC had sought additional information from the companies as it focused on their psoriasis treatments as part of its review of their planned merger Otezla brought in revenue of 1 61 billion for Celgene in 2018 Bristol is also developing a treatment for the condition and in September reported positive results from a mid stage trial of its plaque psoriasis drug The company is continuing to develop its promising immunology pipeline asset tyrosine kinase 2 TYK2 inhibitor in several autoimmune diseases including psoriasis Bristol said in a statement Jefferies analyst Michael Yee said the divestiture came as a surprise to the brokerage and can be seen as a sign that the FTC is being tougher on regulating competition Bristol said it remains actively engaged in discussions with the FTC on continued review of its offer to buy Celgene Separately on Monday Bristol said its blockbuster cancer treatment Opdivo failed to meet the main goal of statistically significant improvement in overall survival in patients in a late stage study
The companies have submitted a formal application for the merger clearance by the European Commission Bristol said |
JPM | JPMorgan settles with FDIC Deutsche Bank in WaMu case | Reuters JPMorgan Chase Co N JPM on Friday said it has settled litigation with the FDIC and Deutsche Bank AG DE DBKGn stemming from its purchase of Washington Mutual Inc s banking operations during the financial crisis In a regulatory filing JPMorgan said it will be paid 645 million in cash from the estate of Washington Mutual Bank for which the FDIC acts as receiver and release its claims against the estate
JPMorgan also said Deutsche Bank the trustee overseeing billions of dollars of Washington Mutual residential mortgage backed securities will have a claim against the estate |
JPM | European stocks open higher but gains seen limited DAX up 0 51 | Investing com European stocks opened higher on Monday but gains were expected to remain limited by fresh speculation over a possible U S rate hike before the end of the year
During European morning trade the EURO STOXX 50 advanced 0 43 France s CAC 40 climbed 0 47 while Germany s DAX 30 gained 0 51
Investors remained cautious after San Francisco Federal Reserve Bank President John Williams on Thursday signaled support for a September rate increase
In the context of a strong domestic economy with good momentum it makes sense to get back to a pace of gradual rate increases preferably sooner rather than later he said
Minutes of the Federal Reserve s July policy meeting published earlier in the week showed committee members remained divided on the timing of the next rate hike although there is general agreement that more data is needed before such a move
Financial stocks were broadly higher as French lenders BNP Paribas PA BNPP and Societe Generale PA SOGN climbed 0 65 and 0 60 while Germany s Commerzbank DE CBKG and Deutsche Bank DE DBKGn rose 0 10 and 0 21
Among peripheral lenders Italy s Unicredit MI CRDI and Intesa Sanpaolo MI ISP rallied 1 09 and 1 14 respectively while Spanish bank BBVA MC BBVA added 0 12
Elsewhere Germany insurance company Allianz DE ALVG shares advanced 0 62 after hotel booking platform Reservations com announced its partnership with Allianz Global Assistance
On the downside ArcelorMittal SA AS ISPA tumbled 1 26 after analysts at JPMorgan Chase Co NYSE JPM reiterated their neutral rating on the stock
In London FTSE 100 edged up 0 12 boosted by easyJet LON EZJ whose shares jumped 1 22 following news AerCap the world s biggest aircraft leasing company might team up with founder Stelios Haji Ioannou to take the airline private
Financial stocks added to gains as Lloyds Banking LON LLOY inched up 0 04 and the Royal Bank of Scotland LON RBS added 0 16 while HSBC Holdings LON HSBA rose 0 26 and Barclays LON BARC climbed 0 73
Meanwhile mining stocks were broadly lower on the commodity heavy index Anglo American LON AAL tumbled 1 94 and Antofagasta LON ANTO lost 2 34 while Randgold Resources LON RRS and Fresnillo LON FRES plunged 2 52 and 3 66 respectively
In the U S equity markets pointed to a steady to lower open The Dow Jones Industrial Average futures pointed to a 0 09 fall S P 500 futures showed a 0 06 slip while the Nasdaq 100 futures indicated a 0 02 dip |
JPM | British economy escapes Brexit blow for now | By Andy Bruce LONDON Reuters Britain s high streets are heaving with shoppers despite June s shock vote to leave the European Union big companies have reported few signs of distress and some tabloid newspapers are even talking about a post Brexit economic boom The overwhelming view from economists is that it is too early to know how Britain will cope with years of Brexit uncertainty but there is a growing belief the country can avoid a recession that only weeks ago was regarded as likely On the face of it the early optimism contrasts with the pre referendum warning from former Prime Minister David Cameron that a Brexit vote would put a bomb under the economy Retail sales in August reversed much of an immediate post Brexit vote fall with retailers reporting their strongest sales in six months industry data showed on Thursday partly due to a weaker pound attracting overseas buyers Official figures out last week showed the number of people claiming unemployment benefit fell unexpectedly in July Before the June 23 referendum the British finance ministry had warned a Brexit vote would mean homeowners facing higher borrowing costs pushing the economy into a DIY recession and that equity prices were likely to fall However nearly half of mortgage borrowers look set to gain from the Bank of England s interest rate cut on Aug 4 while British equity markets have risen Some British newspapers which supported the Leave campaign have hailed such news Remainers were WRONG the Daily Express declared earlier this month adding Brexit Britain booms But most economists do not share this jubilance and caution these positive signals may have little bearing on the long term outlook for the economy which must contend with years of uncertainty as Britain extricates itself from the EU WE DON T KNOW New British Prime Minister Theresa May has said she will not trigger the EU s Article 50 this year to begin formal talks with the bloc to negotiate the terms of Britain s exit from the EU and its future trading relationship with the bloc The fact that the UK avoided an immediate crisis does not tell us much about the future said Holger Schmieding chief economist at Berenberg Bank adding he thought Britain would probably avoid a technical recession defined as two consecutive quarters of falling economic output Business surveys and some forward looking indicators of inflation already offer reasons for caution Price pressures in factories which feed through into consumer prices shot higher after the pound s post referendum plunge posing a threat to consumers future spending power Market research firm GfK s gauge of consumer confidence also fell sharply after the vote The survey often predicts changes in household spending in the following quarters A YouGov CEBR gauge of consumer morale published on Friday showed consumers have regained some of the confidence they lost after the referendum but researchers warned this positive trend could easily change next year The outlook for the housing market the bedrock of British consumer wealth is also unclear a Reuters poll on Thursday suggested the Brexit vote will have a negative impact on both prices and turnover GB HOMES Charles Goodhart a former BoE interest rate setter said so far there had been almost no data on important areas of the economy such as investment inventory levels and construction I think it would be very dangerous to take a position either that it s all going to be alright and that the fears were massively overdone or that the fears were justified said Goodhart a professor at the London School of Economics said The answer is frankly we don t know FTSE RISES While the mood among economists remains one of concern it has brightened across financial markets Investors were braced for a global economic shock after a vote for Brexit but the FTSE 100 index FTSE of UK blue chip companies is about 8 percent higher since the referendum helped by overseas earnings that will benefit from the fall in the value of the pound The more domestically focused FTSE 250 FTMC index of mid sized companies is up by about 5 percent Many big companies have reported little immediate impact from the vote in Britain including retailers John Lewis and Next L NXT the world s biggest staffing company Adecco S ADEN and carmaker BMW DE BMWG Some major employers carmaker Nissan for example say their plans for investment in Britain will hinge on the trade deals it strikes with other countries Martin Sorrell chief executive of the world s largest advertising group WPP LON WPP said there was little clarity on when Britain would even begin negotiating its EU exit and that his company s clients were increasingly cautious Our own position will depend on what gets negotiated he told Reuters The pound s fall since the referendum it was down almost 15 percent at one point versus the dollar has benefited some companies it has boosted manufacturers exports for example But it also reflects the weaker outlook for the economy In essence the currency markets are saying that all UK assets are worth less than they used to be Rupert Pennant Lea a former BoE deputy governor wrote in the Financial Times The British have become poorer than they were before the votes were counted on June 23 and that reality will become clearer as the months go by But investors responding to the recent upbeat data have cut their bets against a weaker pound this week which has helped lift the currency Sterling has started to edge higher against major currencies but it remains around 11 percent lower against the dollar than before the referendum underscoring how investors see the challenge ahead for Britain s economy BEYOND BRITAIN Many international investors had feared a Brexit vote would undermine the EU and hurt business and market confidence across the euro zone But surveys point to little impact so far As a result many banks are revising forecasts for further European Central Bank stimulus JPMorgan NYSE JPM says it no longer expects the ECB to cut rates or announce an extension of its bond buying programme in September after solid growth data The Federal Reserve had warned extensively of the risk of financial reverberations from a Brexit vote which was one of the factors that led to it holding off from raising rates this year But the U S economy has barely flinched since the vote For now economists are playing the long game Official data due next month will offer a better gauge of Britain s resilience to Brexit providing the first detailed breakdown of how manufacturing services and construction firms fared in July
Any short term growth slowdown matters but the economics of Brexit are mostly about the long term said Robert Wood an economist with BofA Merrill Lynch Leaving the EU single market is in our view likely to make the UK less open to trade and therefore damage economic performance in the long run |
JPM | JPMorgan gets wholly owned asset management license in China | HONG KONG Reuters JPMorgan Chase N JPM has been granted a business license to operate a fully owned fund management business in China a Chinese regulatory notice showed as the world s second largest economy moves to further open its financial markets to foreigners The license issued to the U S bank which already has a fund management joint venture in China will enable it to set up an office in Shanghai free trade zone as per the notice on the website of the Shanghai Industry and Commerce Administration China set up the Shanghai free trade zone in 2013 as a venue to pilot economic reforms in particular in the financial sector The Shanghai regulator did not provide details of the proposed China unit of JPMorgan asset management business A spokesman for the U S investment bank s asset management unit in Hong Kong did not immediately respond to a request for comment Beijing controls access to its market tightly and overseas investors have grown increasingly concerned about its commitment to opening its financial markets after a series of heavy handed government interventions in the stock and currency markets Foreign firms who wish to distribute investment products or trade in securities in China generally have to operate on the ground through minority owned joint ventures with domestic companies China International Fund Management a joint venture between JPMorgan Asset Management and state owned Shanghai International Trust Co last August received approval to raise 100 million in China to invest in overseas assets But China regulators have been gradually loosening the reins and the latest move comes as the country prepares to host leaders from the world s biggest economies at this weekend s G20 summit
Beijing wants to use the meeting in the tourist hub of Hangzhou to lay out a broad strategy for global growth though talks are likely to be overshadowed by concerns such as protectionism |
HAL | Probe of U S Interior Secretary Zinke s conduct referred to DOJ reports | WASHINGTON Reuters The U S Interior Department s acting inspector general has referred a probe into Interior Secretary Ryan Zinke s conduct to the Justice Department for further investigation media reports said on Tuesday citing unnamed sources
Referring a probe to the Justice Department means it will explore whether evidence warrants a criminal investigation Mary Kendall the acting inspector general of the Interior Department is conducting at least three probes into Zinke s conduct but it was not clear which one had been sent to the Justice Department the Washington Post said
Among other investigations Kendall is probing Zinke s involvement in a Montana land deal and a decision not to grant two tribes approval to run a casino in Connecticut
A senior White House official said the White House understands the DOJ investigation is looking into whether the secretary used his office to help himself according to the Washington Post
The Interior Department s inspector general said in a letter to lawmakers in July that the office was investigating a Montana real estate deal involving a foundation set up by Zinke and a development group backed by the chairman of oil service company Halliburton NYSE HAL Co
The letter said the inspector general had launched the probe on July 16 to look into a development deal in Zinke s hometown of Whitefish Montana between a group funded by David Lesar Halliburton s chairman and the foundation The deal was first reported by Politico
A Lesar spokeswoman said in July that his personal investment had nothing to do with Halliburton and that the company was confident the Interior Department would not be influenced by it
The Interior Department did not immediately respond to a request for comment Zinke told CNN that he had not been contacted by the Justice Department that he follows the law and that the DOJ investigation was politically driven and has no merit
Nancy DiPaolo spokeswoman for the Interior Department s inspector general office said she could not comment on any ongoing investigation The White House and the Department of Justice did not immediately respond to requests for comment |
HAL | Trump praises Interior s Zinke but vows to look at ethics allegations | WASHINGTON Reuters U S President Donald Trump on Wednesday praised Interior Secretary Ryan Zinke who has come under scrutiny for his use of a security detail chartered flights and a real estate deal but seemed to leave open the possibility of replacing him We re looking at that and I do want to study whatever is being said I think he s doing an excellent job but we will take a look at that in a very strong and we ll probably have an idea about that in about a week Trump told reporters Last month the Interior Department s acting inspector general referred a probe into Zinke s conduct to the U S Department of Justice increasing the chances of a criminal investigation The investigation is expected to involve a Montana real estate deal involving a foundation set up by Zinke and a development group backed by David Lesar the chairman of oil service company Halliburton NYSE HAL Co A Lesar spokeswoman has said that his personal investment had nothing to do with Halliburton and that the company was confident it would not influence the Interior Department The inspector general s office at Interior has also probed Zinke over several ethics allegations The department s watchdog agency said last month that Zinke s sending of a security detail to Turkey and Greece to protect him and his wife cost taxpayers over 25 000 Zinke has said he did not ask the security detail to travel with him
Probes into Zinke s behavior follow ethics investigations into several Trump administration officials including Scott Pruitt who stepped down as the head of the Environmental Protection Agency in July and Tom Price who resigned as Health and Human Services secretary in September 2017 |
HAL | Halliburton Company Beat Earnings Expectations Domestic Headwinds Ahead | In a July 22 research note analyst Praveen Narra reported that Raymond James lowered its target price on Halliburton Company NYSE HAL to 37 per share from 39 the current share price is 23 03 The change reflects Raymond James reducing its H2 19 estimates on the energy company by 2 due to current weakened oilfield activity in North America and lower drilling and evaluation D E margins
Narra highlighted that despite those factors Halliburton s Q2 19 results were ahead of expectations on better than expected completion and production C P margins
Further looking forward Narra purported that Haliburton should continue generating free cash flow despite today s flat oil prices if it continues cutting costs and potentially reduces capex in 2019 Raymond James expects Halliburton to generate assuming a higher oil price free cash flow of around 1 billion and 1 6 billion for 2019 and 2020 or at today s prices a yield of 5 and 8 respectively
With respect to margins in specific corporate divisions Narra pointed out that Halliburton likely will not see a rebound in its C P numbers until 2020 This is because a slowing U S North American oilfield typically translates to depressed C P margins for the company Another reason is the likely continuing uncertainty in Q4 19 due to seasonality and exhausted budgets
In contrast Narra noted D E margins are poised for improvement because international markets are expanding with early signs of pricing strength in pockets That stronger offshore and international activity could offset some of the weakness in North America Also as the rigs get working at the company s North Sea and India projects this should lead to strong incremental margins added Narra For D E in Q3 19 Raymond James models roughly 65 increments and in Q4 19 11 4 margins
The financial services firm maintained its Strong Buy rating on Halliburton wrote Narra with its significant upside to a U S oilfield recovery in 2020 under our group s bullish oil price environment |
HAL | Why Is Halliburton HAL Down 20 1 Since Last Earnings Report | A month has gone by since the last earnings report for Halliburton HAL Shares have lost about 20 1 in that time frame underperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is Halliburton due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts Halliburton Q2 Earnings Beat Sales Miss EstimatesHalliburton reported higher than expected second quarter profit on robust international activity The oilfield services major saw its adjusted net income excluding impairments and other charges come in at 35 cents per share outperforming the Zacks Consensus Estimate of 30 cents However the bottom line was below the adjusted earnings of 58 cents in the year earlier quarter on weakness in the North American market Operating income reported by Halliburton was 303 million well below the 789 million for the same period last year Meanwhile revenues of 5 9 billion were 3 5 lower than the year ago quarter and missed the Zacks Consensus Estimate by a marginal 0 6 North American revenue fell 13 2 year over year to 3 3 billion Revenue from Halliburton s international operations rose 12 5 from the year ago period to 2 6 billion an area that continues to exhibit growth momentum Management s OutlookThe world s biggest provider of hydraulic fracking noted that United States land activity levels in the second quarter improved sequentially particularly in the pressure pumping business while drilling and artificial lift activity picked up too Halliburton did encounter lower pressure pumping activity in Canada and a fall in drilling fluid activity in the Gulf of Mexico but the company continues to successfully ride the changing market dynamics through excellent execution and management of the controllable factors Meanwhile Halliburton is witnessing broad based steady recovery in its international business The company anticipates its international revenue to grow at a high single digit rate in 2019 with further improvement next year Importantly Halliburton believes it has got the scale and required technology portfolio to take advantage of this growth trend Segmental PerformanceOperating income from the Completion and Production segment was 470 million 29 7 below the year ago level of 669 million The division s performance was affected by decline in Latin America stimulation services However the segment operating income bettered our consensus estimate of 430 million The outperformance was largely the result of strong domestic artificial lift activity increased cementing job and completion tool sales outside North America higher stimulation activity in North America and Middle East Asia and increased pipeline services throughout Europe Africa CIS Meanwhile Drilling and Evaluation unit profit fell from 191 million in the second quarter of 2018 to 145 million in the corresponding period of 2019 The segment income was also below the Zacks Consensus Estimate of 148 million The underperformance was on account of lower drilling fluids activity in Latin America and North America together with decline in software sales These setbacks were partly offset by stronger project management activity in Middle East Asia improved wireline activity globally and increase in North America Latin America and Europe Africa CIS drilling activity Balance SheetHalliburton s capital expenditure in the second quarter was 408 million As of Jun 30 2019 the Zacks Rank 4 Sell company had approximately 1 2 billion in cash cash equivalents and 10 3 billion in long term debt representing a debt to capitalization ratio of 52
How Have Estimates Been Moving Since Then
In the past month investors have witnessed a downward trend in fresh estimates
VGM Scores
Currently Halliburton has a nice Growth Score of B a grade with the same score on the momentum front Charting a somewhat similar path the stock was allocated a grade of A on the value side putting it in the top quintile for this investment strategy
Overall the stock has an aggregate VGM Score of A If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions has been net zero Notably Halliburton has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
HAL | Halliburton HAL Outpaces Stock Market Gains What You Should Know | Halliburton HAL closed at 18 84 in the latest trading session marking a 1 67 move from the prior day This move outpaced the S P 500 s daily gain of 0 06 Meanwhile the Dow gained 0 16 and the Nasdaq a tech heavy index lost 0 13
Coming into today shares of the provider of drilling services to oil and gas operators had lost 14 45 in the past month In that same time the Oils Energy sector lost 7 94 while the S P 500 lost 2 95
Investors will be hoping for strength from HAL as it approaches its next earnings release which is expected to be October 21 2019 The company is expected to report EPS of 0 37 down 26 from the prior year quarter Meanwhile our latest consensus estimate is calling for revenue of 5 92 billion down 4 12 from the prior year quarter
For the full year our Zacks Consensus Estimates are projecting earnings of 1 33 per share and revenue of 23 45 billion which would represent changes of 30 and 2 27 respectively from the prior year
It is also important to note the recent changes to analyst estimates for HAL These recent revisions tend to reflect the evolving nature of short term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Our research shows that these estimate changes are directly correlated with near term stock prices Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
The Zacks Rank system ranges from 1 Strong Buy to 5 Strong Sell It has a remarkable outside audited track record of success with 1 stocks delivering an average annual return of 25 since 1988 The Zacks Consensus EPS estimate remained stagnant within the past month HAL is currently a Zacks Rank 3 Hold
Digging into valuation HAL currently has a Forward P E ratio of 13 9 This represents a discount compared to its industry s average Forward P E of 20 79
Investors should also note that HAL has a PEG ratio of 2 19 right now This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate The Oil and Gas Field Services was holding an average PEG ratio of 2 19 at yesterday s closing price
The Oil and Gas Field Services industry is part of the Oils Energy sector This industry currently has a Zacks Industry Rank of 188 which puts it in the bottom 27 of all 250 industries
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
To follow HAL in the coming trading sessions be sure to utilize Zacks com |
C | Earnings Angst Smacks Down Dow | Stocks limped into the close again on Tuesday as investors squared positions and rebalanced their portfolios ahead of second quarter earnings Warnings of a severe pullback from Citigroup NYSE C coupled with Raymond James NYSE RJF concerns about the risk of more aggressive profit taking encouraged investors to realize gains on recent advances in the equity market off record levels from last week
Nearly all sectors suffered losses with biotech and other momentum issues like Twitter NYSE TWTR and Pandora Media NYSE P taking the hardest hits Tuesday was very light on economic data but was further validation of a recovering jobs market There were 4 635 million new job openings in May according to the Job Openings and Labor Turnover Survey JOLTS topping estimates for an increase of 4 40 million
Here s Where The U S Markets Stood At The Close
Dow 30 Index down 117 59 0 69 to 16 906 62
S P 500 down 13 94 0 70 to 1 963 71
NASDAQ Composite Index down 60 07 1 35 to 4 391 46
UPSIDE MOVERS
NURO FDA has approved its over the counter wearable technology for treatment of chronic pain
BIOA Inks 210 000 ton per year sales contract with Vinmar International
TXMD FBR Capital initiated coverage with an Outperform rating
DOWNSIDE MOVERS
ZGNX Competitor receives FDA priority review status for pain pill
EGLE Reached agreement with lenders allowing warrant holders to immediately convert their holdings immediately into common stock on a cashless basis
ACLS Forecast net income revenue trailing analyst forecasts after lowering Q2 outlook
After Hours Stock News From
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C | What The Buy Side Expects From Citigroup | Citigroup Inc NYSE C is set to report FQ2 2014 earnings before the market opens on Monday July 14th Reports suggest that Citigroup is in talks with the Depart of Justice to finally settle a 7 billion lawsuit related to allegations that the bank sold subprime mortgages leading up to the financial crisis in 2008 While most companies in the S P 500 are expected to have a strong earnings season the financials are an exception Most banks are expected to report an earnings downturn this quarter Wall Street is forecasting that Citigroup will report EPS of 1 08 down 17c 14 from the same quarter of last year However investors are less pessimistic than the sell side
The information below is derived from data submitted to the Estimize com platform by a set of Buy Side and Independent analyst contributors
The current Wall Street consensus expectation is for Citigroup to report 1 08 EPS and 18 800B revenue while the current Estimize com consensus from 36 Buy Side and Independent contributing analysts is 1 13 EPS and 19 074B in revenue This quarter the buy side as represented by the Estimize com community is expecting Citigroup to beat the Wall Street earnings consensus by close to 5 while reporting 1 to 2 ahead of revenue estimates
Over the previous 6 quarters the consensus from Estimize com has been more accurate than Wall Street in forecasting Citigroup s EPS in each quarter and has been more accurate in predicting revenue 4 times By tapping into a wider range of contributors including hedge fund analysts asset managers independent research shops students and non professional investors Estimize has created a data set that is more accurate than Wall Street up to 69 5 of the time
More importantly it does a better job of representing the market s actual expectations It has been confirmed by Deutsche Bank Quant Research and an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market Here we are seeing an average differential between the two groups expectations
The distribution of earnings estimates published by analysts on the Estimize com platform range from 65c to 1 29 per share and from 18 000B to 20 230B in revenues This quarter we re seeing an unusually wide range of estimates on Citigroup compared to previous quarters
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already A wide range of earnings estimates signals less agreement in the market which could mean greater volatility post earnings
Over the past 3 months the Wall Street EPS consensuses declined from 1 25 to 1 08 while the Estimize consensus plunged from 1 33 to 1 13 Meanwhile the Wall Street revenue forecast slowly decreased from 19 523B to 18 800B while the Estimize consensus slipped from 21 300B to 19 074B Timeliness is correlated with accuracy and downward analyst revisions going into an earnings report are often a bearish indicator
Among the analysts with at least 2 estimates scored on Citigroup ZachLehner has been the most accurate with an average of 10 25 points per estimate ZachLehner is a buy side equity research analyst who is currently ranked 6th overall among over 4 550 contributing analysts ZachLehner will be featured in a conference call highlighting a few of the top performing Estimize analysts on Monday July 21st to discuss earnings for the consumer discretionary sector
Data from Estimize com suggets that we may be in for the best earnings season since the fourth quarter of 2011 With that being said no fireworks are expected from the banks On Friday Wells Fargo reported EPS of 1 01 coming in line with Wall Street but missing the Estimize consensus by 4c per share Wells Fargo reported a slip in mortgage revenues which helped keep earnings lower than the Estimize community had forecast On Monday we will see if Wells Fargo s miss against the Estimize consensus was an isolated incident or if more weakness from the banks can be expected going forward |
BMY | Exclusive Magellan Health nears board deal with hedge fund Starboard Value sources | By Jessica DiNapoli and Svea Herbst Bayliss NEW YORK BOSTON Reuters U S healthcare plan and pharmacy benefits manager Magellan Health Inc is nearing an agreement with Starboard Value LP to expand the size of its board by several seats including a representative from the activist hedge fund three sources familiar with the matter said on Thursday Magellan did not respond to a request for comment Starboard declined to comment Starboard which owns 9 9 percent of the company said in February that it wanted to put six directors on the board and sent a letter to shareholders arguing that management should be looking at a number of options including a sale The hedge fund said that although the company operates in an industry that is poised for growth it has underperformed because of operational missteps and poor capital allocation Reuters reported that Magellan which has a market capitalization of about 1 6 billion would explore a sale after facing pressure from Starboard Starboard nominated two employees including Peter Feld and Gavin Molinelli as director candidates as well as four independent director candidates with expertise in corporate turnarounds and life sciences Starboard has been stepping up its healthcare campaigns lately Earlier this year Starboard said it is opposing Bristol Myers Squibb NYSE BMY Co s plan to buy biotech company Celgene Corp NASDAQ CELG The hedge fund also nominated directors at Bristol Previously it has had mixed success in healthcare including its efforts at Perrigo Company Plc and Assertio Therapeutics Inc Over the last 52 weeks Magellan s share price has fallen 38 7 percent but it is up 14 75 percent since January when Starboard began to make noise about getting involved |
BMY | Bristol Myers says shareholders vote to approve Celgene takeover | By Michael Erman and Svea Herbst Bayliss NEW YORK Reuters Bristol Myers Squibb NYSE BMY Co s shareholders voted to approve the drugmaker s 74 billion acquisition of biotech Celgene Corp NASDAQ CELG on Friday despite a campaign by activist hedge fund Starboard Value LP to scuttle the deal The company said investors holding 75 7 percent of the shares voted were in favor of the deal in a preliminary count We from a management perspective from a board perspective truly believe this is the right transaction for us Bristol Myers Chief Executive Giovanni Caforio told reporters after the vote The focus is on us right now to execute on the integration and then deliver the value of the combined portfolio to confirm that the new company will deliver significant value for shareholders he said Celgene said separately in a statement that its shareholders representing more than 70 percent of its shares outstanding who were entitled to vote voted in favor of the transaction The companies expect the deal to close in the third quarter Bristol Myers announced in early January that it planned to buy Celgene in a cash and stock transaction to bring together companies that specialize in oncology and cardiovascular drugs in what would be the largest pharmaceutical industry merger ever The New York based drugmaker has said the combined company will have six drugs with expected near term launches five from the Celgene pipeline representing over 15 billion in annual revenue potential as well as strong early stage experimental assets But Starboard and the company s second largest shareholder Wellington Management opposed the deal Starboard called it poorly conceived and ill advised and criticized Bristol Myers management and board suggesting they would not be able to successfully execute a risky deal Starboard abandoned the campaign against the deal late last month after proxy advisory firms recommended investors support it Bristol Myers said during a shareholders meeting that it does not expect changes to its dividend policy after the acquisition
Bristol Myers shares fell 50 cents or 1 1 percent to 45 59 in Friday afternoon trading on the New York Stock Exchange Celgene shares fell 9 cents to 94 14 on the Nasdaq |
BMY | Bristol Myers Squibb Earnings Revenue Beat in Q1 | Investing com Bristol Myers Squibb NYSE BMY reported first quarter earnings that Beat analysts expectations on Thursday and revenue that topped forecasts
The firm reported earnings per share of 1 1 on revenue of 5 92B Analysts polled by Investing com anticipated EPS of 1 09 on revenue of 5 76B That compared to EPS of 0 94 on revenue of 5 19B in the same period a year earlier The company had reported EPS of 0 94 on revenue of 5 97B in the previous quarter
Bristol Myers Squibb follows other major Healthcare sector earnings this month
On April 16 J J reported first quarter EPS of 2 1 on revenue of 20 02B compared to forecasts of EPS of 2 04 on revenue of 19 61B
Novartis ADR earnings Beat analysts expectations on Wednesday with first quarter EPS of 1 21 on revenue of 11 11B Investing com analysts expected EPS of 1 1 on revenue of 11 4B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
BMY | Bristol Myers profit slightly tops Wall Street view on blood thinner sales | By Michael Erman NEW YORK Reuters U S drugmaker Bristol Myers Squibb NYSE BMY Co which is set to buy biotechnology company Celgene Corp NASDAQ CELG for 74 billion posted slightly better than expected first quarter earnings on Thursday on strong sales of its blockbuster blood thinner Eliquis Net earnings in the quarter rose to 1 71 billion or 1 04 a share from 1 49 billion or 91 cents a share a year earlier Excluding one time items the company said it earned 1 10 a share That beat the average analyst estimate by a penny according to IBES data from Refinitiv Bristol Myers said it still expects full year adjusted earnings of 4 10 to 4 20 per share Revenue in the quarter was 5 92 billion exceeding analysts estimates of 5 75 billion That difference is largely due to Eliquis which Bristol shares with Pfizer Inc NYSE PFE Sales of the drug used to prevent blood clots that can cause strokes jumped 28 percent from last year to 1 93 billion Analysts had expected 1 82 billion from the drug in the quarter Sales of cancer immunotherapy Opdivo were in line with Wall Street expectations at 1 8 billion up 19 percent from a year ago but basically flat compared with the previous quarter Bristol Myers pioneered cancer immunotherapy with its first such drug Yervoy and later Opdivo But Merck Co s rival treatment Keytruda has taken a dominant position in lung cancer the most lucrative oncology market taking a toll on Bristol Myers shares Some analysts and investors have suggested that one reason Bristol launched its bid for Celgene was over concerns about Opdivo s growth after losing ground to Merck Bristol said it still expects the deal to close in the third quarter after its shareholders voted to approve the deal earlier this month despite a campaign by activist hedge fund Starboard Value LP to scuttle it The company announced in early January that it planned to buy Celgene in a cash and stock transaction to bring together companies that specialize in oncology and cardiovascular drugs in what would be the largest pharmaceutical industry merger ever The New York based drugmaker has said the combined company will have six drugs with expected near term launches five from the Celgene pipeline representing over 15 billion in annual revenue potential as well as strong early stage experimental assets
Shares of Bristol Myers closed at 44 62 on the New York Stock Exchange on Wednesday They are off by about a third since October when shares dropped due to setbacks for Opdivo in lung cancer |
JPM | Ex Wall Street banker says he did not give insider tips to father | By Nate Raymond NEW YORK Reuters A former Wall Street investment banker proclaimed on Thursday that he was innocent of insider trading charges testifying that he never tipped his father off to inside information about healthcare mergers Sean Stewart an ex banker at Perella Weinberg Partners and JPMorgan Chase Co N JPM took the stand in his own defense and told jurors in federal court in Manhattan that he had a great relationship with his father but never intended to help him profit through insider trading I never gave my father information so he could trade on it Stewart testified Stewart s trial began last week and he testified shortly after prosecutors rested in presenting evidence against him Stewart 35 was charged in May 2015 alongside his father Robert Stewart an accountant Prosecutors say Robert Stewart and a friend made 1 16 million trading on tips about five healthcare deals provided by his son from 2011 to 2014 The case has resulted in guilty pleas by Robert Stewart 61 and his friend Richard Cunniffe 62 who according to prosecutors secretly recorded the elder Stewart saying his son criticized him for not trading on a tip Lawyers for Sean Stewart contend their client was unaware of the insider trading scheme They contend the banker s father betrayed his son to execute trades based on company names his son mentioned while discussing his work The trial stems from one of several insider trading cases pursued by Manhattan U S Attorney Preet Bharara s office which has charged 107 people since 2009 The trial is the office s first since it suffered a major setback in 2014 when an appellate court limited the scope of insider trading laws causing charges against 14 people to be dropped or dismissed
The case is U S v Stewart U S District Court Southern District of New York No 15 cr 00287 |
JPM | Prosecution says ex Wall Street banker lied in insider trading trial | By Nate Raymond NEW YORK Reuters U S prosecutors on Monday sought to brand a former Wall Street investment banker as a liar after he took the stand in his own defense to deny engaging in a years long insider trading scheme with his father In her closing argument Assistant U S Attorney Sarah McCallum urged a federal jury in Manhattan to reject a web of lies conveyed during testimony by Sean Stewart an ex banker at Perella Weinberg Partners and JPMorgan Chase Co NYSE JPM While Stewart 35 had testified that he never intended to help his father profit through insider trading McCallum said evidence ranging from emails to trading records and the testimony of a cooperating witness showed his testimony was ridiculous This is no place for stories she said It is a place for evidence Martin Cohen Stewart s lawyer sought to show his client s story was supported by evidence While Stewart may have in violation of his employers policies by speaking with his family about confidential matters at his work Cohen said he never did so intending to help his father Robert Stewart to illegally trade on the information Cohen said that Robert Stewart who was struggling financially betrayed his son to profit on shares of companies mentioned in conversation and that Sean Stewart expected him to treat the information as confidential Sean Stewart is absolutely innocent Cohen said He never tipped his father The trial is the first insider trading case for prosecutors under Manhattan U S Attorney Preet Bharara to reach a jury since a U S appeals court curtailed their ability to pursue such charges Bharara who attended parts of Monday s proceedings has overseen prosecutions of 107 people for insider trading since 2009 But a 2014 appellate ruling narrowed the scope of insider trading laws resulting in charges being dropped or dismissed against 14 people Stewart was charged in May 2015 and accused of providing his father information about five mergers that JPMorgan and Perella were advising from 2011 to 2014 so the elder Stewart could trade before news of the deals was announced Prosecutors said Robert Stewart 61 in several instances had two work associates including Richard Cunniffe 62 conduct trades for him in exchange for a cut of the profits The trading resulted in 1 4 million in illicit gains McCallum said Both Robert Stewart and Cunniffe who testified at trial and who secretly recorded the elder Stewart discussing the scheme have pleaded guilty
The case is U S v Stewart U S District Court Southern District of New York No 15 cr 00287 |
JPM | Ex Wall Street banker convicted for giving father insider tips | NEW YORK Reuters A former Wall Street investment banker was convicted on Wednesday for engaging in insider trading by tipping his father off to unannounced healthcare mergers in a victory for prosecutors after an appellate ruling made pursuing such cases harder Sean Stewart who previously worked at Perella Weinberg Partners and JPMorgan Chase Co N JPM was found guilty by a federal jury in Manhattan on all nine counts he faced including securities fraud Stewart 35 a Yale University graduate was one of 107 people accused of insider trading since 2009 by prosecutors under Manhattan U S Attorney Preet Bharara His trial was Bharara s first since a 2014 appellate ruling narrowed the scope of insider trading laws U S District Judge Laura Taylor Swain scheduled Stewart s sentencing for Feb 17 Prosecutors said from 2011 to 2014 Stewart provided his father Robert tips about five mergers including INC Research s acquisition of Kendle International Inc so his father could make lucrative trades before the deals were announced Robert Stewart 61 in some instances had a friend he met working at a real estate firm Richard Cunniffe conduct trades in his own accounts because of concern he was too close to the source The trading enabled the elder Stewart and Cunniffe 62 to make 1 16 million prosecutors said Sean Stewart testified in his own defense He displayed no emotion as the forewoman read the verdict which came after more than a week of deliberation
Robert Stewart was sentenced in May to a year of home detention after entering a guilty plea Cunniffe also has pleaded guilty |
HAL | Halliburton Beats Estimates with Q3 Revenue and Profit | Investing com Halliburton reported third quarter earnings that beat analyst s expectations on Monday and revenue that topped forecasts
The firm reported income from continuing operations of 435 million or 0 50 per diluted share and revenue of 6 17 billion
Analysts polled by Investing com forecast EPS of 0 49 on revenue of 6 11 billion
Our team optimized our performance in North America in the face of short term challenges and the recovery of our international operations continued CEO Jeff Miller said He added that a combination of offtake capacity constraints and customers budget exhaustion led to less demand than expected for completion services in North America but he considers those issues to be transitory
At 7 04 AM ET 11 04 GMT Halliburton NYSE HAL stock gained 0 85 to 37 86 As of Friday s close shares are down 23 26 so far this year under performing the S P 500 which is up 3 13 year to date
Halliburton follows other major Energy sector earnings this month
On Friday Schlumberger reported third quarter EPS of 0 46 on revenue of 8 5B compared to forecasts of EPS of 0 45 on revenue of 8 6B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
HAL | Halliburton HAL Q2 Earnings Surpass Estimates | Halliburton HAL came out with quarterly earnings of 0 35 per share beating the Zacks Consensus Estimate of 0 30 per share This compares to earnings of 0 58 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 16 67 A quarter ago it was expected that this provider of drilling services to oil and gas operators would post earnings of 0 23 per share when it actually produced earnings of 0 23 delivering no surprise
Over the last four quarters the company has surpassed consensus EPS estimates three times
Halliburton which belongs to the Zacks Oil and Gas Field Services industry posted revenues of 5 93 billion for the quarter ended June 2019 missing the Zacks Consensus Estimate by 0 62 This compares to year ago revenues of 6 15 billion The company has topped consensus revenue estimates three times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Halliburton shares have lost about 18 2 since the beginning of the year versus the S P 500 s gain of 18 7
What s Next for Halliburton
While Halliburton has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Halliburton was unfavorable While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 4 Sell for the stock So the shares are expected to underperform the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 0 38 on 6 16 billion in revenues for the coming quarter and 1 31 on 24 07 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Oil and Gas Field Services is currently in the bottom 21 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
HAL | Halliburton HAL Surges Stock Moves 9 2 Higher | Halliburton Company NYSE HAL was a big mover last session as the company saw its shares rise more than 9 on the day The move came on solid volume too with far more shares changing hands than in a normal session This stock which remained volatile and traded within the range of 21 68 23 85 in the past one month time frame witnessed a sharp increase yesterday The move came after company reported better than expected second quarter 2019 results The company has seen three positive estimate revisions in the past few weeks while its Zacks Consensus Estimate for the current quarter has also moved higher over the past few weeks suggesting that more solid trading could be ahead for Halliburton So make sure to keep an eye on this stock going forward to see if this recent jump can turn into more strength down the road Halliburton currently has a Zacks Rank 4 Sell while its is positive Halliburton Company Price Investors interested in the Oil and Gas Field Services industry may consider Oceaneering International Inc NYSE OII which has a Zacks Rank 1 Strong Buy You can see the complete list of today s Zacks 1 Rank stocks here Is HAL going up Or down Predict to see what others think Up or DownToday s Best Stocks from ZacksWould you like to see the updated picks from our best market beating strategies From 2017 through 2018 while the S P 500 gained 15 8 five of our screens returned 38 0 61 3 61 6 68 1 and 98 3 This outperformance has not just been a recent phenomenon From 2000 2018 while the S P averaged 4 8 per year our top strategies averaged up to 56 2 per year |
C | Citigroup Earnings Expectations Plummet Post Fed Stress Test | Citigroup Inc NYSE C is set to report FQ1 2014 earnings before the market opens on Monday April 14th Citigroup is one of the largest banks in the United States and has been in headlines lately for all the wrong reasons On March 26th the Federal Reserve rejected Citigroup s plan to boost its dividend and buyback more shares of company stock On Friday 2 peer banks both reported earnings JPMorgan Chase and Wells Fargo JPMorgan missed earnings projections badly and the company stock fell 3 66 On the other hand Wells Fargo beat analysts profit expectations by over 7 After Cti failed the Fed s recent stress test and had its capital plan rejected analyst expectations on the Estimize com platform plunged Here s what investors expect from Citigroup Monday morning
The current Wall Street consensus expectation is for Citigroup to report 1 18 EPS and 19 620B revenue while the current Estimize com consensus from 17 Buy Side and Independent contributing analysts is 1 14 EPS and 19 394B in revenue This quarter the buy side as represented by the Estimize com community is expecting Citigroup to miss the Wall Street consensus on both EPS and revenue
Over the past 6 quarters the consensus from Estimize com has been more accurate than Wall Street in forecasting WFC s EPS and revenue 3 times each By tapping into a wider range of contributors including hedge fund analysts asset managers independent research shops students and non professional investors Estimize has created a data set that is more accurate than Wall Street up to 69 5 of the time but more importantly it does a better job of representing the market s actual expectations It has been confirmed by Deutsche Bank Quant Research and an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market In this case we are seeing a small to moderate differential between the two groups expectations
The distribution of estimates published by analysts on the Estimize com platform range from 1 01 to 1 24 EPS and from 18 550B to 19 993B in revenues This quarter we re seeing a moderate distribution of estimates on Citigroup
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already A wider distribution of estimates signaling less agreement in the market which could mean greater volatility post earnings
Over the past 4 months the Wall Street EPS consensus fell from 1 44 to 1 18 while the Estimize consensus dropped from 1 35 to 1 14 Meanwhile the Wall Street revenue consensus declined from 20 225B to 19 620B while the Estimize forecast sank from 21 145B to 19 394B Timeliness is correlated with accuracy and downward analyst revenue revisions at the end of the quarter are often a bearish indicator
The analyst with the highest estimate confidence rating this quarter is BradHewitt91 who projects 1 15 EPS and 19 450B in revenue BradHewitt91 is ranked 13th overall among over 4 000 contributing analysts Over the past year BradHewitt91 has been more accurate than Wall Street in forecasting EPS and revenue 52 and 50 of the time respectively throughout 664 estimates Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy In this case BradHewitt91 is expecting Citigroup to outperform the low bar set by the Estimize community
On Friday JPMorgan and Wells Fargo told conflicting tales about the banking industry through their earnings reports Things have been rough on Citigroup lately and sentiment on the Estimize com platform has fallen dramatically since Citi s capital plan was rejected by the Federal Reserve This quarter contributing analysts on the Estimize com platform are expecting Citi to fail meet Wall Street s expectations on both EPS and revenue
Get access to estimates for Citigroup published by your Buy Side and Independent analyst peers and follow the rest of earnings season by heading over to Estimize com Register for free to create your own estimates and see how you stack up to Wall Street |
C | Dow Posts Triple Digit Gain | Stocks seesawed Monday afternoon giving back part of a morning rally that followed a strong rebound in consumer spending last month and above consensus financial results by financial services giant Citigroup NYSE C Healthcare stocks again struggled in the afternoon swoon turning negative ahead of the close after earlier posting moderate gains But technology issues which like healthcare stocks saw steep losses last week held on to much of their morning advance closing on the positive side while the Dow Jones Composite closed near its high for the day up 0 9 at 16 173 24
Strong DataStocks rallied earlier after the Commerce Department reported retail sales rose a better than expected 1 1 in March the strongest monthly growth since September 2012 The agency also revised February sales higher now recording a 0 7 rise up from an originally reported 0 3 advance Also Monday business inventories grew 0 4 in February to a seasonally adjusted 1 72 trillion coming in just short of the 0 5 consensus estimate The inventory to sales ratio remained unchanged at 1 31 Although stocks have largely shrugged off weekend bloodshed in Ukraine geo political unrest continues to fuel a safe haven bid for Gold June futures for the yellow metal were up 9 10 to 1 327 70 per ounce rising for a fifth day in a row while May silver was up 7 cents to 20 01 per ounce In other commodities trade crude oil for May delivery settled 31 cents higher at 104 05 per barrel while May natural gas was down 6 cents to 4 56 per 1 million BTU May copper rose a penny to finish at 3 06 per pound
Here s Where The Markets Stood At Day s End
Dow Jones Industrial Average up 146 49 0 91 to 16 173 24
S P 500 up 14 92 0 82 to 1 830 61
Nasdaq Composite Index up 22 96 0 57 to 4 022 69
GLOBAL SENTIMENT
Hang Seng Index up 0 15
Shanghai China Composite Index up 0 05
FTSE 100 Index up 0 34
UPSIDE MOVERS
GDP Said a new well in southeastern Louisiana reached a peak of 1 270 barrels of oil equivalent per day almost entirely consisting of crude oil
EW Federal judge in Delaware late Friday grants preliminary injunction limiting the sale of Medtronic s MDT CoreValue aortic value replacement system saying it willfully infringes on EW patents MDT shares slip
HLF Said it has no knowledge of any investigation by the Department of Justice or the FBI refuting a report late Friday by Financial Times of a criminal probe into the company s business practices
AHL Hits all time high after rejecting a 3 2 billion buyout offer by rival Endurance Specialty Holdings Ltd ENH calling it an ill conceived proposal ENH shares fall
DOWNSIDE MOVERS
CVM Prices 10 million best efforts offering of 7 14 mln equity units at 1 40 each The units consist of one share of common stock and one quarter of a warrant to purchase another share at 1 58 prior to Oct 17
BOSC Q4 non GAAP profit falls 61 from year ago levels despite improved GAAP earnings and revenue during the quarter
After Hours Stock News From
Copyright 2014 MT Newswires a Division of MidnightTrader Inc |
C | The Seasonality Of Markets | Upcoming US Events for Today
Consumer Price Index for March will be released at 8 30am The market expects a month over month increase of 0 1 consistent with the previous report Less Food and Energy CPI is expected to show the same 0 1 increase again consistent with the previous report
Empire Manufacturing Index for April will be released at 8 30am The market expects 7 50 versus 5 61 previous
Housing Market Index for April will be released at 10 00am The market expects 49 versus 47 previous
Upcoming International Events for Today
Great Britain CPI for March will be released at 4 30am EST The market expects a year over year increase of 1 6 versus an increase of 1 7 previous
Euro Zone Trade Balance for February will be released at 5 00am EST The market expects a seasonally adjusted 15 0B versus 14 1B previous
German ZEW Survey for April will be released at 5 00am EST The market expects the survey of Current Conditions to show 51 0 versus 51 3 previous The survey of Business Expectations is expected to show 45 0 versus 46 6 previous
Canadian Manufacturing Shipments for February will be released at 8 30am EST The market expects a month over month increase of 1 versus an increase of 1 5 previous
Canadian Existing Home Sales for March will be released at 9 00am EST
China GDP for the first quarter will be released at 10 00pm EST The market expects a year over year increase of 7 3 versus an increase of 7 8 previous
China Industrial Production for March will be released at 10 00pm EST The market expects a year over year increase of 8 8 versus an increase of 8 6 previous
China Retail Sales for March will be released at 10 00pm EST The market expects a year over year increase of 12 1 versus an increase f 11 8 previous
The Markets
Stocks amounted a bit of a comeback on Monday following a better than expected earnings report from Citigroup Inc NYSE C and an improved report on retail sales for the month of March Sales are reported to have increased by 1 1 last month beating estimates calling for an increase of 1 0 February s result was also revised upward to an increase of 0 7 versus the prior reading of an increase of 0 3 It appears that the spring rebound following the colder than average winter is becoming reality unfortunately investors remain very sceptical of the stocks within the industry Following the conclusion of the last period of seasonal strength for the industry in November retail stocks have struggled even through the recent period of seasonal strength which typically runs from late January to early April The colder than average weather was certainly one factor pressuring the stocks in the industry to the lows of the year by the end of January The subsequent rebound failed to attract the strength that is typical for the period of seasonal strength that runs from the end of January through to the beginning of April Looking at the Retail Industry ETF a lower significant high was charted below the November December peak confirming the end of the positive long term trend that spanned from October of 2012 to the end of 2013 The industry continues to struggle versus the S P 500 index The result has put pressure on the broad consumer discretionary sector which has shown similar struggle versus broad market benchmarks the worst performing sector year to date Investors are rotating out of the now overvalued winners such as discretionary and reallocating towards stocks with better value The consumer discretionary sector led the market higher from the March 2009 low producing returns that vastly outperformed all other sectors With the market losing its leadership group from the past five years the sustainability of the strong uncorrected broad market trend that has been realized over the past few years comes into question Taking the place of market leader is the defensive utilities sector which has been the top performer year to date utilities has been the weakest performer of the 9 GICS sectors since the March 2009 low
Turning to the equity benchmark that continues to make headlines the Nasdaq came down and tested a key level of support around 4000 on Monday a break below this level would trigger further technical selling pressures The technology heavy benchmark has been under pressure since the start of March as a result of weakness in the biotechnology industry over the same period the biotechnology index is testing the lower limit of a long term rising trend channel although it did break through this level intraday during an abrupt afternoon decline Both biotechnology and the Nasdaq are concluding a period of seasonal weakness strength in each are common through to the end of April Given the support parameters under each benchmark and the conclusion to the period of seasonal weakness the best opportunity for each to bounce is now Declines below support would have negative implications for the benchmarks as well as the broad market as the Nasdaq has become representative of the collapse of the growth trade as investors rotate towards value
As with the biotechnology industry index the technology sector is testing important trendline support as it also concludes its period of seasonal weakness and begins a period of seasonal strength that runs through to July Returns between April 15 through to July 17 average 8 04 based on data from the past 20 years To read more on this seasonal trade be sure to read our Globe Mail titled Four ETFs to tap into the next wave of tech products
Seasonal charts of companies reporting earnings today
Sentiment on Monday as gauged by the put call ratio ended bullish at 0 75 The range of values in the ratio continue to be extreme suggesting indecision typically a negative for stocks
S P 500 Index
TSE Composite
Horizons Seasonal Rotation ETF HAC TO
Closing Market Value 14 20 up 0 21
Closing NAV Unit 14 25 up 0 44
Performance
performance calculated on Closing NAV Unit as provided by custodian |
C | The Dow Strong Psychological Level | U S Stocks Stay Higher on Positive News
Stocks rebounded on Monday snapping a two day losing streak after a bigger than expected rise in March retail sales offered signs that economic growth was on better footing following a difficult winter
Investors meanwhile were encouraged by strong earnings from banking giant Citigroup Inc NYSE C
The Dow Jones Composite gained 138 points or 0 9 to 16165 The S P 500 rose 15 points or 0 8 to 1831
The Nasdaq advanced 33 points or 0 8 to 4033 Stocks got a boost after the Commerce Department reported that retail sales rose 1 1 last month the biggest monthly gain since September 2012 and exceeding the 0 8 expected by economists Excluding auto sales retail sales grew 0 7 topping forecasts of a 0 4 rise The strong increase suggests that sales are bouncing back after the cold winter kept many consumers at home earlier in the year
Things are a little bit better on the earnings front and a little bit better on the economic front said Michael Arone who heads portfolio strategy at State Street Global Advisors which manages about 2 4 trillion Coming off that spring thaw we re seeing some good numbers
Technically Dow jones is bouncing off its trend line at the 16000 level and as we anticipated that Dow jones will give us a strong correction at the 16000 psychological level and that what Dow jones has done We can Expect Down to reach to the previous highs of 16600 level |
BMY | Starboard to vote against Celgene Bristol deal move ahead with proxy | By Svea Herbst Bayliss and Michael Erman Reuters Activist investor Starboard Value LP plans to vote against Bristol Myers Squibb NYSE BMY Co s proposed 74 billion takeover of biotech Celgene Corp NASDAQ CELG and urged other shareholders to join it in voting down the poorly conceived and ill advised deal The New York based hedge fund said in a letter sent to Bristol Myers shareholders that the Bristol Myers board should be open to evaluating all alternatives including a sale of the company It also said it will move ahead with its campaign to install its own directors on Bristol s board The letter comes only hours after Bristol Myers second biggest shareholder Wellington Management publicly said it was not supporting the deal Wellington which owns nearly 8 percent of Bristol Myers said the buyout was too risky and expensive The shareholder opposition imperils what would be the largest pharmaceutical acquisition of all time Starboard criticized the record of Bristol Myers management saying the U S drugmaker has underperformed the S P 500 index by more than 40 percent over the tenure of Chief Executive Giovanni Caforio These results are not reflective of a management team and Board of Directors that has earned the right in our view to execute on a bet the company acquisition the letter from Starboard Chief Investment Officer Jeffrey Smith said Bristol Myers investors are due to vote on the deal at a special meeting scheduled for April 12 Celgene s shares fell more than 7 percent on Thursday while Bristol Myers was up nearly 1 percent Starboard one of the industry s most prominent and successful activist investors also said that it will sue Bristol for documents in Delaware court to gain a better understand how management decided to make the offer for Celgene One of Starboard s biggest criticisms of the deal is that Celgene s blockbuster drugs will soon lose patent protection and that its pipeline is risky and will continue to require significant research and development Reuters reported earlier this month that Starboard was working with a proxy solicitor to gauge the level of support among Bristol Myers shareholders for the Celgene deal Bristol Myers said Starboard informed the company it had bought roughly one million of its common shares That is equivalent to a roughly 50 million stake a sliver of the company s 84 billion market value Bristol has told employees that it is disappointed by Wellington s opposition to the Celgene deal and said it would press ahead Even with the combined voting power for both Wellington and Starboard Value we believe there continues to be a high hurdle for opposition to reach majority said Andy Hsieh a William Blair analyst Sources have told Reuters that Dodge Cox Bristol Myers fifth largest shareholder is also unhappy with the deal
Bristol and Celgene through the deal hope to create a market leader in the lucrative treatment of cancer through their combined portfolios |
BMY | Bristol Myers defends Celgene bet as investor criticism grows | By Tamara Mathias Reuters Bristol Myers Squibb NYSE BMY defended its planned 74 billion takeover of Celgene Corp NASDAQ CELG saying it had carried out a robust assessment of the merger after two major investors opposed what could be the largest pharmaceutical deal ever The drugmaker reiterated on Wednesday in a letter to shareholders that buying Celgene was the best path forward even as investors Starboard Value LP and Wellington Management look to thwart the deal Starboard an activist investor with a history of opposing deals it is unhappy with maintained its view on Wednesday that the merger was ill advised and recommended that fellow Bristol Myers shareholders vote against it at a meeting slated for April 12 The New York based hedge fund has also presented a slate of five nominees to Bristol Myers board including Starboard Chief Executive Jeffrey Smith Wellington one of Bristol Myers top shareholders with a nearly 8 percent stake has said it finds the deal to be too risky and expensive While Bristol Myers letter conveys the Board s belief that the deal is compelling the intent of the letter also appears to be to address shareholders arguments against the deal Credit Suisse SIX CSGN analyst Vamil Divan said In its appeal to investors Bristol Myers highlighted that a buyout of Celgene would provide significant advantages with less risk compared with other options like pursuing a series of small transactions It also pointed to a six month deep dive analysis and weeks of confidential due diligence by its advisers that provided a comprehensive view of opportunities and risks associated with buying Celgene As its most important cancer immunotherapy Opdivo faces competition from Merck Co s Keytruda Bristol Myers is betting on Celgene to strengthen its position in the lucrative oncology market It also stressed that the deal was expected to increase earnings by over 40 percent in the first full year when it closes Meanwhile a third shareholder the Loncar Cancer Immunotherapy ETF also released a statement on Wednesday opposing the deal Celgene s poor stewardship of recent acquisitions suggests there is more risk in its pipeline than what is being presented at face value the fund which owns 1 65 million worth of Bristol Myers stock said
Bristol Myers shares were down 1 34 percent at 53 01 in afternoon trading Celgene s stock was 0 4 percent lower at 85 91 |
BMY | Starboard abandons campaign to scuttle Bristol Myers Celgene deal | By Svea Herbst Bayliss and Michael Erman NEW YORK Reuters Activist hedge fund Starboard Value LP on Friday abandoned a campaign to convince Bristol Myers Squibb NYSE BMY Co shareholders to vote down the drugmaker s proposed 74 billion takeover of biotech Celgene Corp NASDAQ CELG after the two leading proxy advisory firms backed the deal The firms Institutional Shareholder Services ISS and Glass Lewis said earlier on Friday that Bristol Myers shareholders should vote in favor of the deal Despite the substantial swell of support against this transaction it is extremely difficult for shareholders to prevail without a supportive recommendation from ISS and Glass Lewis to vote against the transaction Starboard said in a statement The hedge fund said it still plans to vote its shares against what it believes is a bad deal but it will withdraw its proxy solicitation to get other shareholders to vote against it The move is a victory for New York based drugmaker Bristol Myers and its Chief Executive Giovanni Caforio who have mounted their own campaign to shore up investor support for the deal Bristol Myers shareholders are set to vote on the acquisition on April 12 Shares of Celgene rose 7 5 percent to 93 99 in early afternoon trading Bristol Myers shares were off 1 1 percent at 47 29 Bristol Myers announced in early January that it planned to buy Celgene in a cash and stock transaction valued at roughly 74 billion that would bring together companies that specialize in oncology and cardiovascular drugs in what would be the largest pharmaceutical industry merger ever But Starboard and the company s second largest shareholder Wellington Management have opposed the deal Starboard has called it poorly conceived and ill advised Wellington did not respond to requests for comment PROXY FIRMS ENDORSE DEAL ISS and Glass Lewis which advise large institutional investors as to how to vote on shareholder proxy proposals both endorsed the strategic rationale for the deal significantly increasing the chances that many big mutual funds would also back it The spread between Celgene s share price and the value of the Bristol Myers bid a measure of investor confidence in the deal tightened significantly on Friday to less than 4 percent suggesting optimism that the transaction will close It had been as wide as about 20 percent after the large investors announced their initial opposition to the deal If the deal is approved Bristol Myers shareholders will own 69 percent of the company and Celgene shareholders would own the remainder This is the biggest transaction Starboard has ever opposed The firm argues the merger could destroy billions in shareholder value and that Bristol Myers should not feel forced to do a deal right now Starboard has said it is ready to nominate five directors for the board Glass Lewis argued that if the deal goes through we suspect Starboard won t seek to get its director candidates on the board but ultimately that could depend on the margin of votes cast on the merger proposal Starboard has been stepping up its healthcare campaigns lately but has had mixed success previously in healthcare Perrigo Company Plc shares have lost more than a third of their value since giving Starboard board representation in 2017 Assertio Therapeutics Inc previously known as Depomed explored a sale three years ago under pressure from Starboard but did not reach a deal Its shares have lost half their value since then |
JPM | Euro zone economy resilient to Brexit so far | By Balazs Koranyi FRANKFURT Reuters The euro zone economy has remained surprising resilient to the shock of Britain s vote to leave the European Union fresh data showed on Thursday a big contrast to the UK where signs of widespread economic pain are already apparent Euro zone economic sentiment improved this month defying expectations for a decline and German unemployment fell more than anticipated supporting views that the bloc has so far shrugged off the impact of Brexit Still Europe is unlikely to escape unscathed economists argue Export investment and sentiment are likely to take at least a moderate hit in coming months as firms come to grip with the reality that Brexit in one form or another is irreversible The stability resilience in the euro area was broad based across sectors in July and there is also nothing in the detail to suggest increased concern about the future JPMorgan NYSE JPM economist Greg Fuzesi said It is too early to draw strong implications for our growth forecast but the initial news is certainly better than expected Euro zone sentiment improved in industry services retail and the construction sector while the business climate index pointing to the phase of the business cycle also increased sharply Forward looking indicators were also solid particularly for employment and services even as manufacturing expectations dipped reversing some of the previous month s big gain Rebounding after a second weak quarter Germany is again expected to be the engine of euro zone growth preserving momentum at least for now Employment growth is robust and is set to stay high according to the latest sentiment indicators HSBC economist Rainer Sartoris said This view is supported by the number of unfilled positions which keep on rising The high demand for labour should continue to support wage growth which will continue to support private consumption he added Such an upbeat outlook is in contrast with data out of Britain where sentiment plunged this month with consumer confidence taking the biggest hit and losses recorded across all sectors The figures come on top of already grim reading in recent days which suggest Britain may struggle to stave off a recession British retailers suffered their sharpest fall in sales in four years after last month s EU referendum while the purchasing managers index the broadest survey of business confidence fell by the most in its 20 year history The weak figures which negate the impact of a sanguine second quarter GDP reading all but assure that the Bank of England will cut rates next week for the first time since 2009 But any brush with recession is bound to spread at least in part to the continent weighing on growth and holding back the euro zone s slow but steady recovery Indeed a broad survey by the European Central Bank last week indicated that Brexit would reduce euro zone growth by 0 26 percentage point next year a significant chunk for a bloc that is growing at only around 1 5 percent Combined with the significant fall in UK confidence indicators we continue to believe the eurozone growth will not be immune to the UK decision to leave the EU Clemente De Lucia an economist at BNP Paribas PA BNPP said
The analysis of sub components suggests the impact is likely to take more time to be reflected in the data We estimate the total impact of Brexit on the bloc at about 0 5 percent of GDP over the next year and a half |
JPM | Brexit could add to European banking costs JPMorgan s Dimon | Reuters JPMorgan Chase Co N JPM Chief Executive Jamie Dimon said on Monday that Britain s decision to leave the European Union could lead to duplicate costs to provide banking services to European customers Dimon speaking on CNBC television during a bus tour of bank offices in California said it is too early to tell how much of the work the bank now does from Britain might have to be done redundantly in Europe Dimon also said he thinks the U S economy is stronger than it might seem after the government reported last week that gross domestic product increased at a tepid 1 2 percent annual rate in the second quarter I am not even sure that GDP data is actually that accurate any more Dimon said We see more household formation more people buying homes more people with jobs He said the economy could grow at a 4 percent rate if the next U S president makes the right decisions Reforming immigration laws and improving infrastructure education and tax credits for people with low income would help the economy he said
Dimon did not specifically mention any of the presidential candidates |
HAL | Nuverra Environmental acquires Clearwater | Nuverra Environmental Solutions NES 2 5 acquires Clearwater Solutions for 41 9M This purchase more than doubles Nuverra s SWD capacity in the region and will add value for each of its customers with more strategically located disposal capacity Receives committed subscriptions for planned 32 5M equity rights offering Upsizes and extends first lien credit facility with 10M additional term loan paid down 10M of second lien term loan Now read |
HAL | Halliburton HAL Stock Sinks As Market Gains What You Should Know | Halliburton HAL closed the most recent trading day at 23 75 moving 0 42 from the previous trading session This change lagged the S P 500 s 0 46 gain on the day At the same time the Dow added 0 9 and the tech heavy Nasdaq gained 0 59
Coming into today shares of the provider of drilling services to oil and gas operators had gained 10 11 in the past month In that same time the Oils Energy sector gained 3 51 while the S P 500 gained 4 04
Investors will be hoping for strength from HAL as it approaches its next earnings release which is expected to be July 22 2019 On that day HAL is projected to report earnings of 0 30 per share which would represent a year over year decline of 48 28 Meanwhile the Zacks Consensus Estimate for revenue is projecting net sales of 5 97 billion down 2 94 from the year ago period
For the full year our Zacks Consensus Estimates are projecting earnings of 1 33 per share and revenue of 24 23 billion which would represent changes of 30 and 0 98 respectively from the prior year
It is also important to note the recent changes to analyst estimates for HAL These revisions help to show the ever changing nature of near term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Our research shows that these estimate changes are directly correlated with near term stock prices Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
The Zacks Rank system ranges from 1 Strong Buy to 5 Strong Sell It has a remarkable outside audited track record of success with 1 stocks delivering an average annual return of 25 since 1988 Within the past 30 days our consensus EPS projection has moved 3 47 lower HAL is holding a Zacks Rank of 5 Strong Sell right now
In terms of valuation HAL is currently trading at a Forward P E ratio of 17 94 Its industry sports an average Forward P E of 18 09 so we one might conclude that HAL is trading at a discount comparatively
It is also worth noting that HAL currently has a PEG ratio of 3 06 The PEG ratio is similar to the widely used P E ratio but this metric also takes the company s expected earnings growth rate into account The Oil and Gas Field Services was holding an average PEG ratio of 3 02 at yesterday s closing price
The Oil and Gas Field Services industry is part of the Oils Energy sector This industry currently has a Zacks Industry Rank of 178 which puts it in the bottom 31 of all 250 industries
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Be sure to follow all of these stock moving metrics and many more on Zacks com |
HAL | Earnings Preview Halliburton HAL Q2 Earnings Expected To Decline | Wall Street expects a year over year decline in earnings on lower revenues when Halliburton HAL reports results for the quarter ended June 2019 While this widely known consensus outlook is important in gauging the company s earnings picture a powerful factor that could impact its near term stock price is how the actual results compare to these estimates
The earnings report which is expected to be released on July 22 2019 might help the stock move higher if these key numbers are better than expectations On the other hand if they miss the stock may move lower
While management s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations it s worth having a handicapping insight into the odds of a positive EPS surprise
Zacks Consensus Estimate
This provider of drilling services to oil and gas operators is expected to post quarterly earnings of 0 30 per share in its upcoming report which represents a year over year change of 48 3
Revenues are expected to be 5 97 billion down 2 9 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 3 77 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out Our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction has this insight at its core
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Halliburton
For Halliburton the Most Accurate Estimate is lower than the Zacks Consensus Estimate suggesting that analysts have recently become bearish on the company s earnings prospects This has resulted in an Earnings ESP of 0 13
On the other hand the stock currently carries a Zacks Rank of 5
So this combination makes it difficult to conclusively predict that Halliburton will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Halliburton would post earnings of 0 23 per share when it actually produced earnings of 0 23 delivering no surprise
Over the last four quarters the company has beaten consensus EPS estimates two times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Halliburton doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
C | Can We Blame The Weather For The Poor Economic Data | To say that weather related news hasn t dominated the landscape for much of 2014 would be an understatement Most people had never heard of the polar vortex until this year as is clear when looking at a news trend search for the word polar vortex
We ve been dealing with an abnormally cold winter for most of 2014 with the weather being blamed for the recent poor economic data we ve had over the last two months That seems like a logical conclusion when Central Park in New York by the middle of February the 7th highest snowfall total going back to 1868
However there are plenty of naysayers who dismiss the effects of old man winter and claim the economy is beginning to cool on its own account So who s right Personally I think it is a huge mistake to minimize as having little to no effect on the economy Perhaps the weather deniers live in sunny San Diego and don t read the news
Because economists can t accurately predict the weather nor how it could impact their forecasts it s not surprising that recent economic data has been below consensus estimates The Citigroup Economic Surprise Index which measures the outcome of economic data relative to estimates fell from a peak 72 7 on January 15th to a recent low of 34 10 today Due to the weaker than expected economic reports seen over the last few months investors have ratcheted down their economic growth estimates for the first quarter and the bond market has responded as longer term interest rates have fallen this year Consequently the yield curve has flattened as short term yields remain steady while longer term yields have fallen The link between negative economic surprises and the yield curve is shown below
If in fact much of the recent economic weakness can be attributed to the weather than it is likely we should see a pickup in growth in the second quarter that was pushed out from Q1 and incoming data should begin to surprise on the upside If we begin to see positive economic surprises we should also see a steepening of the yield curve as bond investors begin to sell their longer dated holdings One of the prime beneficiaries of a rising yield curve is the financial sector and the bottoming action in the yield curve was associated with a recent bottom in the financial sector s relative strength XLF to the S P 500 SPY While the financial sector has been largely underperforming the market since the middle of 2013 they may move to a market leader should the yield curve begin to increase again
This would be significant for the market as the financial sector is the second largest sector in the S P 1500 at a 17 weighting The technology sector represents 18 5 of the S P 1500 and after financials the next largest sector is the health care sector at 13 15 With both the technology and health care sectors acting as market leadership if the financial sector were to begin outperforming the market with a rising yield curve as the catalyst we could see a strong rally ahead as these three sectors at a combined 48 5 weight make up nearly half of the entire U S market
In the Word s of Chauncey Gardner
There will be growth in the spring
As our record breaking winter begins to fade we should see growth in the spring Hopefully warmer temperatures will return alongside a rising yield curve and allow the financial sector to lead the way |
C | USD JPY Real Money Investors Pile Into Yen | The JPY Currency basket shows significantly higher volumes on yesterday s buy day and CitiGroup clients real money investors have also been piling into JPY This now put my bias for a move lower in USD JPY going into next week
USD JPY Real Money Investors Pile Into Yen src width 452 height 339 frameborder 0 allowfullscreen allowfullscreen data type youtube
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C | Will Congress Rob Charities Through Inaction | The US Congress has managed again to kick every charity in the gut Let me summarize how they ve done it first personalize the issue to my congressional district second call for action third and close by sharing a cogent analysis of why matters stand as they do and of what to expect going forward
The so called tax extenders provisions in the IRS code expired on December 31 2013 Congress is likely to act to renew most if not all of them but the political squabble in Washington introduces uncertainty and prevents timely action There are 55 such provisions but I will focus on just one the IRA charitable rollover provision
Last year if you were 70 years old and had an IRA you could choose to give up to 100 000 of your IRA to charities You needed to be sure the charity was legitimate You could receive no tangible benefit of any kind in return This was pure charity You could give to your church or synagogue or the American Cancer Society the orchestra a college or any number of other recipients
You could use the amount of the gift to reduce your otherwise required minimum distribution RMD Many Cumberland clients around the country used this provision to support charities of their choices We processed many of those gifts
Now those generous donors await an extension of this special provision They cannot legally make this gift today even if they want to Without passage of the IRA charitable rollover provision such gifts are not permitted by current 2014 law
Donors could take out the RMD pay the taxes on the amount and then give to the charity and take the charitable deduction Many of them do that anyway However they may fall into an income bracket subject to a phase out of deductions Our income tax code is so complex that many taxpayers lose the deductions they would otherwise seek So the IRA gift is often used because it is straightforward The money goes from IRA to charity no deduction is taken and the RMD is lowered by the amount of the donation The annual limit was and will be once again if the law is extended 100 000
When this provision is in force and a donor makes a charitable donation who wins The donor wins if he or she wants to be charitable The charity wins since it gains needed funds The government breaks even since it is net neutral and offsets an RMD and deduction Who loses No one
But if the provision is not extended who wins No one The charity doesn t get the money The donor taxpayer waits to give in hopes that the provision will be restored at some point or has less to give because of the tax bite Some beneficiaries of the charities don t receive the help they need because the charities no longer have as much cash flow to serve them
Why don t charities make a lot of noise about this Simple They are forbidden from engaging in politics The commentary I m writing here borders on the kind of political activity from which 501 c 3 charities are restricted Speaking out would jeopardize their tax exempt status as nonprofits So the charities advisers tell them to be silent
But donors do not have to be silent We are the constituents of congressmen and women who are in a position to extend IRA charitable rollover and other tax provisions They are supposed to represent us They could fix this at once
Is the current holdup a Senate problem or a House problem Well it is both So in my case as a Florida resident I could point my finger at Senator Marco Rubio and Senator Bill Nelson and say why are you failing to help every charity in your state and hundreds or thousands of your constituents who want to support those charities That is a fair question How about an answer and some action
But in reality this is tax legislation so it must originate in the House and not the Senate according to the US Constitution The Senate Finance Committee is likely to try to move forward a tax extender bill for discussion according to Strategas Research They believe that Finance Committee Chair Ron Wyden wants to move this legislation and realizes how it is damaging sections of the US economy
Jim Lucier of Capital Alpha Partners a Washington based consulting firm agrees that the Senate is favorably disposed to an extender bill His firm too believes such a bill would advance in the Senate if the House were to move on it soon However as Lucier says in response to my query The Senate can mark up a proposal but it cannot send one to the House unless it is replying to a House bill So all fingers now point to the House of Representatives
In my case my Congressman is Vern Buchanan so I will take the matter up with him directly along the lines that follow Readers may freely change names to their own congressional representatives The principle is the same
Vern I will call you Vern since we have met personally and you like to use the name Vern when you call me on the phone with one of your recorded political messages in Sarasota there are numerous Sarasota based and regional charities which received payments from IRAs last year under the IRA charitable rollover provision in the tax code Our firm has handled a number of them Among those charities are Sarasota Community Foundation Westcoast Black Theater Troupe SPARCC Safe Place and Rape Crisis Center New College Foundation not to forget Ringling Museum Red Cross and the Library Foundation
Vern those charities are familiar to you This year they have less money to meet their needs because they are still waiting on you and your House colleagues to extend the provision in the tax code Since you have previously supported the idea of the IRA charitable rollover there is no reason to believe that you have changed your mind Yet you stand in the position along with your fellow members of Congress of either thwarting or enabling charitable donations amounting to millions for this tax year
Now you and your colleagues are out seeking re election You want money to support your campaign and you want votes Well charities want money too and they have donors and members and supporters who want to give to them Some of them are in your political base
You want votes We want passage of an extension of the IRA charitable rollover provision before the election You want financial support for your campaign we want to help the charities of our choice Take Sarasota s Safe Place and Rape Crisis Center What makes anyone think that their clients needs stop just because the House of Representatives is locked in political dysfunction Take the All Faiths Food Bank Is the hungry going to remain hungry until Congress gets around to passing a bill
Senators Nelson and Rubio last time I checked you were Floridians too I know you want the best for donors charities and those with whom they partner to serve in this district I urge you to sponsor and or support IRA tax extender legislation
Jim Lucier s full text in answer to my inquiry about tax extender legislation follows below We thank Jim for the time and effort he invested to phrase this analysis
Hi David
There are two reasons for slow action on extenders The first reason is everyone on Capitol Hill thoroughly detests doing extenders over and over again It has gotten to the point that even members of Congress realize that doing an annual extenders bill is silly and embarrassing
The Senate Finance Committee and the House Ways and Means Committee both made it clear they were not prepared to talk about extenders until they had made progress toward permanent and fundamental tax reform And it is not as if we haven t had chances to do tax reform We had opportunities following the Simpson Bowles report during the debt ceiling crisis of 2011 during the fiscal cliff and during the last standoff over the debt ceiling
Ways and Means Chairman David Camp R Mich has finally put out his tax reform package which makes important and difficult choices and which despite grumbling from many critics is likely to set the baseline for serious tax reform during the next administration Once Camp has had the opportunity to hold a few hearings on his plan we will probably see him turn his attention to extenders As I mentioned Senator Wyden will complete an extenders bill over the next few weeks
It is true that the IRA charitable contribution provision could be extended as a standalone or as part of any appropriate vehicle but there is another consideration on the House Republican side This is that constitutionally tax bills can originate only in the House Thus as long as the House passes no tax bill the Senate cannot take the initiative in proposing corporate tax hikes to pay for extending unemployment insurance or reversing the sequester or funding food stamps or any other such worthy endeavor
Fortunately there is now a budget agreement covering this year and the next The Senate has indicated that it will not even do a budget of its own for the coming fiscal year Appropriations for the current fiscal year are settled Republicans don t seem likely to demand policy concessions on the debt ceiling going forward unless perhaps they gain a Senate majority in the fall elections There is probably now less need on the House Republican side to preemptively block tax increases coming from the Senate However the clock has also run out on doing much before the elections and so I don t believe there is any prospect of doing a standalone fix on the IRA provision until after the elections
I have not been following the IRA provision so I cannot say for sure if there is no opposition to it I am not aware of any It seems reasonably likely to me that the IRA provision could pass with an extenders package in November However in the future as we get closer to tax reform the trend in policy will be toward limiting retirement savings options for upper income taxpayers so it is not certain how long this will last For your clients who are fortunate enough to have the option of making a 100 000 charitable contribution from their IRAs I would recommend that they do it while they can We may get it restored retroactively for 2014 and I would not be surprised to see it extended for 2015 But after 2016 all bets are off
David R Kotok Chairman and Chief Investment Officer |
C | Markets Breathlessly Await FOMC Pound May Fall On BOE Minutes | Major Currencies Treading Water as Markets Await FOMC Announcement Outcome
USD May Rise if Fed Forecasts Yellen Rhetoric Support QE Tapering Cycle
Pound Vulnerable if BOE Minutes Hint at Longer Delay of Interest Rate Hikes
The major currencies are treading water in late Asian trade as traders withhold directional conviction ahead of today s much anticipated FOMC monetary policy announcement This time around the statement following the sit down will be accompanied by an updated set of official economic projections from Federal Reserve official and the first press Chairman s press conference from Janet Yellen
The markets have grappled with a difficult conundrum since mid January On one hand US economic news flow increasingly underperformed relative to consensus forecasts On the other the Federal Reserve remained steadfastly committed to tapering its QE stimulus effort Central bank officials have argued that the soft patch in US performance looked to be transitory and did not warrant altering the course of policy Having now monitored the situation for some time the Fed will have an opportunity to express its views in hard numbers and explain its thinking
An upbeat set of economic forecasts that belies a firm commitment to continued stimulus reduction couched in similarly themed rhetoric from the Fed Chair is likely to put the disparity between the direction of US monetary policy and that of most G10 central banks in stark relief Indeed investors priced in expectations show that only the RBNZ is expected to deliver greater cumulative tightening than the FOMC over the next 12 months Such an outcome is likely to scatter doubts about tapering continuity and boost the US Dollar Needless to say worried rhetoric from the US central bank stands to yield the opposite result
Minutes from this month s Bank of England policy meeting may put downward pressure on the British Pound if policymakers sound off on the recent soft patch in UK news flow Indeed data from Citigroup shows economic releases began to notably deteriorate relative to expectations late last month The latest revision of the BOE s forward guidance framework stressed absorbing spare capacity undermining the hawkish significance of crossing the 7 percent unemployment rate threshold set in August Weakening performance and its acknowledgement by the central bank may push traders to speculate that this will delay interest rate hikes for a relatively longer period than currently priced in pressuring Sterling downward
Asia Session
European Session
Critical Levels |
BMY | Bristol Myers Opdivo Yervoy shows sustained benefit in late stage RCC study | Updated results from the Phase 3 CheckMate 214 study evaluating Bristol Myers Squibb s NYSE BMY Opdivo nivolumab plus low dose Yervoy ipilimumab in patients with previously untreated advanced metastatic renal cell carcinoma RCC continued to show a survival benefit compared to Pfizer s NYSE PFE Sutent sunitinib The data will be presented at the ASCO GU Cancers Symposium in San Francisco At month 30 overall survival OS in the intermediate and poor risk population was 60 in the Opdivo Yervoy group compared to 47 in the Sutent group with 34 less risk of death hazard ratio 0 66 The overall response rate ORR also favored Opdivo Yervoy 42 vs 29 p 0 0001 52 of intermediate and poor risk patients who responded experienced a durable response of at least 18 months compared to 28 for Sutent The complete response rate in the Opdivo Yervoy cohort was 11 compared to 1 for Sutent Now read |
BMY | Bristol Myers says Starboard nominated five directors bought shares | By Svea Herbst Bayliss and Greg Roumeliotis Reuters Bristol Myers Squibb NYSE BMY Co said on Wednesday that activist hedge fund Starboard Value LP intends to nominate five directors to the U S drugmaker s board one month after it announced a 74 billion deal to acquire peer Celgene Corp NASDAQ CELG Reuters reported last week that Starboard was working with a proxy solicitor to gauge the level of support among Bristol Myers shareholders for the Celgene deal If it finds enough discontent Starboard could agitate against it Bristol Myers said Starboard informed the company it had bought roughly one million of its common shares That is equivalent to a roughly 50 million stake a small sliver of the company s 84 billion market capitalization Starboard has submitted regulatory filings that would allow it to acquire additional stock In the meantime its small position in Bristol Myers stock and its proposed director slate give the fund the option to explore other changes at the company Starboard Value sent Bristol Myers Squibb a notice of nomination in connection with Bristol Myers Squibb s 2019 annual meeting of stockholders Bristol said in a regulatory filing on Wednesday adding that the hedge fund proposed five directors including Starboard co founder Jeffrey Smith Besides Smith the hedge fund proposed the following as directors pharmaceutical industry veteran Janet Vergis James Tyree an adviser to Starboard healthcare and technology veteran Steven Shulman and John Leonard who had been chief scientific officer at global pharmaceutical company AbbVie NYSE ABBV The hedge fund asked to speak with Bristol Myers management when it submitted its nomination notice and also requested that any meetings and its notice be kept confidential Bristol said the two sides have met on multiple occasions Bristol Myers shareholders will vote on the Celgene deal in April Starboard did not respond to requests for comment on Wednesday Bristol Myers shares dipped 0 5 percent to 51 09 The presence of an activist investor can encourage potential deal interlopers to step in However no rival suitor has so far emerged publicly either for Bristol Myers or for Celgene
Starboard has a track record of opposing deals It tried to block Virginia based meat giant Smithfield Foods sale to Chinese company Shuanghui International in 2013 as well as aircraft component maker Rockwell Collins NYSE COL Inc s acquisition of B E Aerospace two years ago Both deals were done |
JPM | JPMorgan to pay about 200 million to settle Asia hiring probes | By Nikhil Subba Reuters JPMorgan Chase and Co N JPM is expected to pay about 200 million to settle criminal and civil probes over its Asian hiring practices according to a person familiar with the matter A settlement which could come later this year would end probes that began three years ago into whether JPMorgan investment banking executives in Hong Kong hired sons and daughters of officials of Chinese companies as a way to win business
The prospect of a settlement was reported on Thursday by the Wall Street Journal JPMorgan would likely admit that its hiring practices violated a U S law prohibiting giving something of value in exchange for business the Journal said The settlement could pave the way for similar outcomes of ongoing inquiries into other banks While it is not unusual for investment banks to employ children of powerful people JPMorgan s potential liability increased when investigators found documents indicating executives were tracking the business results of hiring decisions another person familiar with the matter said earlier |
JPM | JPMorgan to exit government securities settlement business | NEW YORK Reuters JPMorgan Chase Co N JPM plans to end services on settling government securities after a review of its businesses a bank spokesperson said on Friday
After a careful review we have determined that is a non core service particularly as we simplify our business and continue to prioritize strategic growth opportunities the spokesperson said in an email of its government securities settlement services business |
JPM | Corporate raiders seek Brexit bargains in Britain | By Pamela Barbaglia and Freya Berry LONDON Reuters Overseas buyers lured by a plunge in the pound are looking to snare British companies on the cheap ensuring a steady flow of deals since Britain voted to leave the European Union and defying expectations of an M A drought Almost 60 transactions totalling 34 5 billion have been struck by foreign companies for British firms since June 23 according to Thomson Reuters data compared with 79 deals amounting to 4 3 billion in the month leading up to the vote This activity dominated by Japanese group SoftBank s T 9984 32 billion swoop for chip designer ARM Holdings L ARM has defied warnings that dealmaking could dry up for a period if Britain backed Brexit given uncertainty surrounding risks to the economy and access to the EU single market The list of British takeovers could grow after the summer according to bankers who say they are working on possible bids on behalf of foreign companies interested in UK targets The SoftBank deal was hailed by the government as a sign of UK economic resilience prompting new Prime Minister Theresa May to declare the country open for business But M A bankers said some of the post vote takeovers had more to do with the relatively low valuations of British companies given current exchange rates rather than being driven by confidence in the British economy Sterling has taken the brunt of market concern since the Brexit vote on June 23 falling to a 31 year low in the aftermath of the vote Clearly this is a buying opportunity said Ben Ward head of UK corporate at law firm Herbert Smith Freehills People with strong currencies dollar renminbi yen will no doubt be interested in acquiring sound sterling denominated assets There have been dozens of other deals since the referendum South African retailer Steinhoff DE SNHG agreed to pay nearly 600 million pounds for British based discount chain Poundland L PLND on July 13 for example It came a day after AMC Entertainment Holdings N AMC an American company majority owned by a Chinese conglomerate said it would buy London based Odeon UCI Cinemas Group to create the world s largest cinema operator in a deal valued at about 921 million pounds On Thursday China s Fosun International HK 0656 snapped up English football club Wolverhampton Wanderers DEFENCE FROM RAIDS Some M A bankers in London say they are working closely with British companies who feel vulnerable to hostile bids from cash rich foreign buyers in sectors including aerospace housebuilding and retail Others say they are trying to win advisory mandates at firms viewed as potential takeover targets We re helping our UK clients think through the right fundamental value of their business in the current environment and shoring them up to prevent unwanted opportunistic situations where an international rival tries to buy them on the cheap said Hernan Cristerna co head of global M A at JPMorgan NYSE JPM U S and Asian conglomerates are also stepping up efforts to secure bargain deals unseen in decades sources said Some have hired banks to resurrect deals that were aborted in recent years because of price disagreements After the vote British companies have become 10 15 percent cheaper for overseas buyers due to the devaluation of the pound which was trading at 1 31 on July 22 against 1 50 the day before the referendum When you have a material currency discontinuity it makes sense to dust off previous M A analyses and crunch the numbers again said Paulo Pereira a partner at boutique advisory firm Perella Weinberg POLITICAL FOOTBALL Surveys conducted in the run up to the referendum had warned a Brexit vote would threaten M A activity A study released on June 16 by Merrill Corporation a provider of technology and services in the M A industry and market intelligence firm The M A Advisor found a Brexit vote would have a negative and tangible near term impact on UK dealmaking with British companies becoming less attractive to overseas buyers A survey of 1 500 global dealmakers published the same day by technology provider Intralinks suggested a decision to leave the EU would lead to dealmaking chaos driving down M A levels in Britain as well as the rest of Europe But the M A drought has yet to materialize The sectors with the highest concentration of foreign takeovers in the past four weeks were technology consumer industrials and media with an overall 37 sales valued at 33 billion Industry sources said some had roots in discussions that began well ahead of the June referendum If we have learned one thing from the global financial crisis it s that standing still means moving backwards said Steve Krouskos EY Global Vice Chair Transaction Advisory Services adding that companies need to carry on doing deals to boost their organic growth build a global presence and stay ahead of the technology curve JPMorgan s Cristerna stressed that boards still have strategic needs and ambitions and need to remain open to external sources of growth Pricing aside however dealmaking will still be tough for overseas buyers who must evaluate the uncertainty surrounding Britain s future relationship with the EU and the prospects of a messy divorce that may take several years to conclude Additionally any sizable takeover could face tighter government scrutiny after May pledged to oppose foreign companies trying to buy British champions deemed strategically important citing the sale of chocolatier Cadbury in 2010 and Pfizer s attempted takeover of AstraZeneca in 2014 But SoftBank s friendly takeover of ARM which won the blessing of the government in less than 24 hours established a useful blueprint for dealmaking following the Brexit vote banking sources said The Japanese company made legally binding commitments to double ARM s UK headcount in the next five years and preserve its Cambridge headquarters There is so much political football going on that if you want to pull off a significant transaction in a sensitive sector it is wise to start planning some concessions beforehand to ease government approval said Perella s Pereira
1 0 7644 pounds |
JPM | Ex Wall Street banker accused of insider tips to father faces trial | By Nate Raymond NEW YORK Reuters Federal prosecutors in Manhattan are set to face off with a former Wall Street investment banker in their first insider trading trial since a U S appeals court curtailed their ability to pursue such cases Jury selection is expected to begin on Monday in the case of Sean Stewart an ex banker at Perella Weinberg Partners and JPMorgan Chase Co N JPM accused of supplying inside information to his father about unannounced healthcare mergers Prosecutors say accountant Robert Stewart the father and Richard Cunniffe an acquaintance who worked at a boutique investment bank made 1 16 million trading on tips about five healthcare deals provided by the younger Stewart The mergers included INC Research s 2011 acquisition of Kendle International Inc The case has resulted in guilty pleas by Robert Stewart 61 and Cunniffe 61 who according to prosecutors secretly recorded the elder Stewart saying his son criticized him for not trading on a tip I handed you this on a silver platter and you didn t invest in this Robert Stewart quoted his son as saying according to prosecutors Sean Stewart 35 is expected to argue he believed his father would keep the information secret and not trade on it according to court records After a year of being dragged through the mud he is looking forward to clearing his name at trial said Martin Cohen Stewart s lawyer The case is being pursued by Manhattan U S Attorney Preet Bharara s office which has charged 107 people with insider trading since 2009 The trial is his office s first since suffering a major setback in 2014 when an appellate court limited the scope of insider trading laws causing charges against 14 people to be dropped or dismissed The 2nd U S Circuit Court of Appeals held that to prove insider trading prosecutors must establish that a tipper received a benefit in exchange for the information that was not just friendship but of some consequence like money The U S Supreme Court is expected to examine that issue in a different case in October Bharara has said the 2nd Circuit s ruling could allow executives who tip family members for no pecuniary benefits to avoid prosecution In Stewart s case prosecutors say evidence shows his father used some trading profits to pay 10 055 toward his son s wedding Stewart s lawyers have called linking the payment to the trading ludicrous since it is customary for a groom s parents to pay for some wedding costs
The case is U S v Stewart U S District Court Southern District of New York No 15 cr 00287 |
JPM | Insider trading by ex banker s father becomes focus in U S trial | By Nate Raymond Reuters The relationship between a former Wall Street investment banker charged for insider trading and his father who traded on information about mergers he learned from him took center stage at the start of the son s trial on Wednesday Assistant U S Attorney Brooke Cucinella told jurors in Manhattan federal court that tips by Sean Stewart an ex banker at Perella Weinberg Partners and JPMorgan Chase Co N JPM enabled his father and another man to make over 1 million trading It s not hard to get an A when someone has already given you the answers to the test Cucinella said in her opening statement But Mark Gombiner a defense lawyer said while the father Robert Stewart did illegally trade on information he learned while talking to his son Sean Stewart had no idea that his father was doing so He ended up betraying his son as he was weak and foolish and selfish Gombiner said The trial stems from one several insider trading cases pursued by Manhattan U S Attorney Preet Bharara s office which has charged 107 people since 2009 The trial is his office s first since suffering a major setback in 2014 when an appellate court limited the scope of insider trading laws causing charges against 14 people to be dropped or dismissed Prosecutors contend Sean Stewart 35 tipped his father about five unannounced healthcare deals from 2011 to 2014 enabling Robert Stewart and an acquaintance Richard Cunniffe to make 1 16 million The case has already resulted in guilty pleas by Robert Stewart 61 and Cunniffe 61 who Cucinella told jurors cooperated with the Federal Bureau of Investigation and secretly recorded the elder Stewart discussing the scheme In one recording Cucinella said Robert Stewart discussed how his son had been serving him up inside information on a silver platter Sean Stewart kept tipping his father even after being questioned by JPMorgan in connection with a regulatory inquiry about trades by his father before the announcement of the 2011 buyout by Apax Partners of Kinetic Concepts Inc CRGYHK UL Gombiner acknowledged his client worried about potential repercussions lied to JPMorgan about telling his father anything about that deal
But he said the investment banker loved his father and trusted him to not execute trades which he did amid financial struggles based on names of companies his son mentioned while talking about his work Sean Stewart is absolutely unequivocally innocent he said The case is U S v Stewart U S District Court Southern District of New York No 15 cr 00287 |
HAL | U S Interior watchdog probes Zinke over real estate deal | By Timothy Gardner WASHINGTON Reuters The U S Interior Department s watchdog said in a letter to lawmakers on Wednesday that it was investigating a Montana real estate deal involving a foundation set up by Interior Secretary Ryan Zinke and a development group backed by the chairman of oil service company Halliburton NYSE HAL The letter a copy of which was seen by Reuters said that the agency s inspector general had launched the probe on July 16 to look into a development deal in Zinke s hometown of Whitefish Montana between a group funded by David Lesar Halliburton s chairman and the foundation Neither the inspector general s office nor the Interior Department which comments on behalf of Zinke replied to requests for comment Halliburton spokeswoman Emily Mir said in an email that Lesar s personal investment in a small land development in Montana has nothing to do with Halliburton and the company is confident that any actions of the Interior Department will not be influenced by his personal investment The deal reported by Politico in June included a hotel retail shops and microbrewery The brewery would be set aside for Zinke and his wife Lola to own and operate Whitefish city planner said in the Politico story though the developer said at the time that no final decision had been made Politico reported that Zinke s foundation the Great Northern Veterans Peace Park Foundation had pledged in writing to allow the Lesar backed developer to build a parking lot for its Peace Park project Zinke s wife Lola is president of the foundation a position she took over from her husband when he became secretary The letter first reported by Politico was addressed to U S Representatives Raul Grijalva Donald McEachin and Jared Huffman all Democrats who had asked the inspector general to investigate if Zinke had used taxpayer resources to advance land developments The letter said the investigation had been opened because the lawmakers expressed special concern about the reported funding by a top executive at Halliburton and assuring decisions that affect the nation s welfare are not compromised by individual self enrichment Zinke has pushed for opening federal lands for energy development as the Trump administration pursues a policy of energy dominance to maximize production of crude natural gas and coal
The Interior Department s inspector general has also been investigating Zinke over travel issues since late last year after reports that he had used a private plane owned by an oil executive while secretary |
HAL | Halliburton HAL Dips More Than Broader Markets What You Should Know | Halliburton HAL closed the most recent trading day at 22 84 moving 0 17 from the previous trading session This move lagged the S P 500 s daily loss of 0 13 At the same time the Dow lost 0 13 and the tech heavy Nasdaq lost 0 24
Prior to today s trading shares of the provider of drilling services to oil and gas operators had lost 2 68 over the past month This has lagged the Oils Energy sector s gain of 0 64 and the S P 500 s gain of 4 13 in that time
Wall Street will be looking for positivity from HAL as it approaches its next earnings report date This is expected to be July 22 2019 On that day HAL is projected to report earnings of 0 29 per share which would represent a year over year decline of 50 Meanwhile the Zacks Consensus Estimate for revenue is projecting net sales of 5 97 billion down 2 84 from the year ago period
For the full year our Zacks Consensus Estimates are projecting earnings of 1 38 per share and revenue of 24 37 billion which would represent changes of 27 37 and 1 55 respectively from the prior year
Investors should also note any recent changes to analyst estimates for HAL These revisions typically reflect the latest short term business trends which can change frequently As such positive estimate revisions reflect analyst optimism about the company s business and profitability
Based on our research we believe these estimate revisions are directly related to near team stock moves To benefit from this we have developed the Zacks Rank a proprietary model which takes these estimate changes into account and provides an actionable rating system
Ranging from 1 Strong Buy to 5 Strong Sell the Zacks Rank system has a proven outside audited track record of outperformance with 1 stocks returning an average of 25 annually since 1988 The Zacks Consensus EPS estimate has moved 1 03 lower within the past month HAL is currently sporting a Zacks Rank of 3 Hold
Investors should also note HAL s current valuation metrics including its Forward P E ratio of 16 61 This valuation marks a discount compared to its industry s average Forward P E of 17 67
Meanwhile HAL s PEG ratio is currently 1 24 The PEG ratio is similar to the widely used P E ratio but this metric also takes the company s expected earnings growth rate into account The Oil and Gas Field Services was holding an average PEG ratio of 1 85 at yesterday s closing price
The Oil and Gas Field Services industry is part of the Oils Energy sector This group has a Zacks Industry Rank of 149 putting it in the bottom 42 of all 250 industries
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
You can find more information on all of these metrics and much more on Zacks com |
C | DAX Correcting Within Uptrend | We have seen some risk off moves on European markets with the Dax falling more than 100 points on the day down to 9500 where recent support was found From an Elliott Wave perspective we see the Dax in an expanded flat correction with wave c now underway down to 9430 9470 support area Wave c also needs to be made by five subdivisions so looks like there is room for more weakness before corrective pullback can be finished However our bias is still bullish just waiting on signs for resumption of an uptrend We can also see that DAX is weaker compared to the S P 500 which is still in bullish mode so if US markets will continue back to the highs then DAX will follow even if with a delay reaction Dax Hourly Analysis |
C | GOLD Elliott Wave Analysis Bearish Reversal | Gold has turned down from 1345 resistance area where we see a completed five wave rise from 1251 level which was the end point of a triangle There are chances that market accomplished wave c that is a part of a huge zigzag from 1181 low Notice that price also moved beneath 1251 1307 trendline that suggests further weakness in the short term probably back to 1307 area of a former wave iv GOLD 4h Elliott Wave Analysis |
C | Gold Approaching Resistance | Gold broke to a new swing high which can be wave v in C as shown at the updated wave count We see prices hitting first resistance area around 1352 from where price may turn down if at the same time RSI resistance line will not be breached Generally speaking divergence on the RSI and fifth wave up in c signal a coming reversal on metal we are just waiting on impulsive sell off back to 1320 to confirm bearish waves Gold 4h Elliott Wave Analysis |
C | PreMarket Primer US Takes Steps To Limit Putin s Forces | Although Russian President Vladimir Putin showed no signs of letting up on his military initiatives on Monday as he amassed armored vehicles in Ukraine s Crimean peninsula he has since ordered troops near Ukraine border to return to bases
Ahead of this initiative investors had pulled money from stock markets and fled to perceived safer bets like oil and gold
Russia s markets were also suffering as the Obama administration began the process of isolating Russia as part of a non military response to Putin s declaration of war
The US withdrew military cooperation with Russia and canceled negotiations on increasing trade and investment between the two nations The US State Department issued a warning to Russia saying that if Putin did not pull back the US and its European allies would punish the nation economically
Top News
In other news around the markets
The Obama administration is set to release its budget proposal later on Tuesday which is expected to require 4 trillion in spending Among other things the proposal implements higher tax credits for childless workers a higher minimum wage and reduces tax credits for Americans in higher income brackets
The Chinese government is set to announce its official GDP target on Wednesday With the most recent economic indicators showing that the Chinese economy has slowed policymakers are stuck between setting a high target and delivering the message that the nation is focused on growth at all costs or a lower goal which would indicate that the nation s focus will be on lowering debt and fixing structural problems Local media has reported that the goal is likely to be 7 5 percent the same as last year s target
Japan s Financial Services Agency is leaning on regional banks to consolidate and to do so quickly A process which was expected to take decades will likely be accelerated as officials from the FSA meet with the nation s more than 100 regional banks to get details on their long term strategy and push banks without an airtight plan to speed up the consolidation process
Recent US data helped assuage worries that the nation s economy was faltering following a spate of poor data US factory activity recovered in February after falling to an eight month low and another report showed consumer spending was also improving The data may encourage the US Federal reserve to move forward its tapering plans as the US economy gains momentum
Asian Markets
Asian markets were mixed on Tuesday the Japanese NIKKEI gained 0 47 percent and the Hang Seng index was up 0 87 percent However China s Shanghai composite was down 0 18 percent and the South Korean KOSPI lost 0 54 percent
European Markets
Europe s markets were down across the board the UK s FTSE lost 1 49 percent and the eurozone s STOXX 600 was down 3 02 percent The German DAX lost 3 44 percent France s CAC 40 fell 2 66 percent and the Spanish IBEX was down 2 33 percent
Commodities
Energy futures leveled off on Tuesday morning with Brent futures down 0 61 percent and WTI futures down 0 80 percent Gold lost 0 68 percent but silver gained 0 18 percent Industrial metals were down across the board with tin posting the largest loss down 2 51 percent
Currencies
The euro remained above 1 37 and gained 0 20 percent on Tuesday morning The pound was up 0 08 percent against the dollar and the Australian dollar gained 0 09 percent against the greenback The dollar gained 0 39 percent against the yen and lost 0 74 percent against the Russian ruble
Earnings
Notable earnings released on Monday included
Stratasys Inc SSYS reported fourth quarter EPS of 0 50 on revenue of 155 10 million compared to last year s EPS of 0 40 on revenue of 71 15 million
Rockwood Holdings Inc ROC reported fourth quarter EPS of 0 53 on revenue of 347 00 million compared to last year s EPS of 0 47 on revenue of 829 00 million
QR Energy LP QRE reported fourth quarter EPS of 0 25 on revenue of 119 30 million compared to last year s loss of 0 24 per share on revenue of 97 41 million
Pre Market Movers
Stocks moving in the Premarket included
Citigroup Inc C gained 1 45 percent in premarket trade after falling 1 02 percent on Monday
Carnival Corp CCL gained 1 32 percent in premarket trade after losing 2 87 percent on Monday
Procter Gamble Co PG was up 1 06 percent in premarket trade after choppy trading took the stock down 0 49 percent over the past five days
Lowe s Companies Inc LOW fell 14 45 percent in premarket trade after rising 6 29 percent over the past week
Earnings
Notable earnings releases expected on Tuesday include
AutoZone Inc AZO is expected to report second quarter EPS of 5 54 on revenue of 1 97 billion compared to last year s EPS of 4 78 on revenue of 1 86 billion
Bob Evans Farms Inc BOBE is expected to report third quarter EPS of 0 57 on revenue of 350 54 million compared to last year s EPS of 0 56 on revenue of 434 44 million
Radioshack Corporation RSH is expected to report a fourth quarter loss of 0 14 per share on revenue of 1 12 billion compared to last year s EPS of 0 04 on revenue of 1 30 billion
Economics
Tuesday s economic calendar will include British construction PMI eurozone PPI the US redbook Australian GDP and US oil and gasoline inventory data
Original Post |
C | USD JPY Corrective Rally | It seems that USD JPY has finally found the base at 101 17 where we labeled a completed wave b and that price is now heading to the upside within wave c Notice that reversal from latest swing low was fast and sharp so we see it as impulsive bounce that is part of current bullish sentiment Based on minimum expectations we expect a break above 102 82 high but ideally rally will reach 103 43 figure USD JPY 4h Elliott Wave Analysis USD JPY Elliott wave title USD JPY Elliott wave height 587 width 600 |
C | Ukraine Russia And The Nonexistent US Oil And Natural Gas | Commentators were falling all over themselves to announce that far from being impotent in the Ukraine crisis the United States had a very important weapon growing oil and natural gas production which could compete on the world market and challenge Russian dominance over Ukrainian and European energy supplies if only the U S government would change the laws and allow this bounty to be exported
But there s one very big problem with this view The United States is still a net importer of both oil and natural gas The economics of natural gas exports beyond Mexico and Canada which are both integrated into a North American pipeline system suggest that such exports will be very limited if they ever come at all And there is no reasonable prospect that the United States will ever become a net exporter of oil
U S net imports of crude oil and petroleum products are approximately 6 4 million barrels per day mbpd This estimate sits between the official U S Energy Information Administration EIA numbers of 5 5 mbpd of net petroleum liquids imports and 7 5 mbpd of net crude oil imports And so to understand my calculations please see two comments I made in a previous piece and My number is for December 2013 the latest month for which the complete statistics needed to make my more accurate calculation are available
The EIA predicts that U S crude oil production defined as crude including lease condensate will experience a tertiary peak in 2016 around 9 5 mbpd just below the all time 1970 peak and then decline starting in 2020 This level is far below 2013 U S consumption of about 13 2 mbpd of actual petroleum derived liquid fuels This number excludes natural gas derived liquids which can only be substituted for petroleum derived liquids on a very limited basis
So when exactly is the United States going to drown the world market in oil and thereby challenge the Russian oil export machine The most plausible answer is never And the expected 2016 peak in U S production is only about 1 5 mbpd higher than production today That s really quite small compared to worldwide oil production of about 76 mbpd And there s no guarantee that the rest of the world isn t going to see a decline in oil production between now and then So much for the supposed U S oil weapon taming the Russian bear
But what about natural gas Surely America s great bounty of natural gas from shale could challenge the Russians Well not really It s true that U S natural gas production trended up significantly from its post Katrina nadir in 2005 But the trend has now stalled U S dry natural gas production has been almost flat since January 2012 The EIA reports total production of 24 06 trillion cubic feet tcf for 2012 and 24 28 tcf for 2013 a rise of only 0 9 percent year over year
Not mentioned by any of the commentators touting the U S natural gas weapon is that U S natural gas imports for 2013 were about 2 88 tcf or about 11 percent of U S consumption So let me see if I understand this The plan seems to be to import more so we can export more And this would change exactly what in the worldwide supply picture
Certainly it is true that low U S natural gas prices have reduced drilling and exploration dramatically But prices will likely have to rise above 6 and trend higher as time passes as the easy to get shale gas is used up and only the more costly and difficult reservoirs remain Drillers don t keep drilling unless they can make money and that will require significantly higher prices
And here s the kicker In order to ship U S natural gas to Europe or Asia it has to be liquefied at 260 degrees F shipped on special tankers and then regasified The cost of doing this is about 6 per thousand cubic feet mcf So the total cost of delivering 6 U S natural gas to Europe is around 12 per mcf With European liquefied natural gas LNG prices mostly below this level for the last five years it s hard to see Europe as a logical market Japan would be a better target for such exports with prices moving between 15 and 18 per mcf in the last five years But a U S entry into the LNG market could conceivably depress world prices and make even Japan a doubtful destination for U S LNG And what if U S prices rise significantly above 6
But all this presupposes that the United States will have excess natural gas to export As my colleague Jeffrey Brown has pointed out Citi Research an arm of Citigroup puts the decline rate for existing U S natural gas production at about 24 year which would require the industry to replace about 100 of current U S natural gas production in four years just to maintain current production
It seems that U S drillers are going to be very very busy just keeping domestic natural gas production from dipping let alone expanding it to allow exports And remember we are still importing the stuff today
How many companies will actually risk the billions needed to build U S natural gas export terminals to liquefy and load exports that may never appear I doubt that very many will actually go through with their plans
What is truly puzzling is that all the information I ve just adduced except the cost of liquefying transporting and regasifying natural gas is available with a few clicks of a mouse and a little arithmetic performed on tables of data I got the cost information on LNG from a money manager specializing in energy investments And yet commentators reporters and editorial writers don t even bother to check the internet or call their sources in the investment business
Perhaps the facts have become irrelevant Only that would explain the current hoopla over the nonexistent U S oil and natural gas weapon in the face of the all too obvious and readily available evidence |
C | Swing Trading Watch List C AKAM STX AA V | Here are trade setups for today s market
Short Citigroup C
Short Akamai Technologies AKAM
Short Seagate Technology Holdings STX
Long Alcoa AA
Long Visa V |
C | What Will Gold And Silver Prices Do Next | Gold has had a nice bounce now off the bottom set in December of 2013 but are we off to the races just yet Here is what I wrote last month where I concluded we could go higher from here for a bit to trap more of the bulls who say the bottom is in
We should start to see gold and silver begin their meteoric 3rd phase rise beginning sometime this year Before that occurs I have been calling for one more test of the lows and will wait patiently for it If you call me and ask what I think I tell you despite the fact that most other gold dealers will say you have to buy because of a falling dollar hyperinflation or some other nonsense I am dollar bullish which is something that most who sell gold don t understand I don t see hyperinflation in a country that has the economic power that the U S does I do see a government trying to screw it all up despite all you hear that the economy is recovering In fact I do see a higher stock market for now and another test of the highs in the coming months
But I also see things that can change my mind quickly Europe has their issues and they will start to come to fruition towards the end of the year We ve already seen the negativity of what emerging markets are bringing causing the DOW to fall over 1 000 points off its high currently sitting at 15 440 Treasuries have been strong and with interest rates low this has allowed the Fed to taper another 10 billion a month I watch the 3 level as my line in the sand as to Fed tapering Anything above that and we re back to QE I also at some point see the dollar and gold moving higher together but this may not happen till later in the year when Europe runs into more problems
Gold and silver will begin to be buoyed by the world chasing the monetary metals We have seen a taste of it in January and we ll see more of it later this year But watch the Market Makers try and scare you out one more time We could go higher from here for a bit to trap more of the bulls who say the bottom is in But I know I m one of the few who think we have one more test of the lows I hope we get it as I ll be ready to write my all in article and become the biggest bull around There are literally trillions of reasons to be bullish and while we may not time the bottom perfectly most of my clients who are dollar cost averaging into a position will be very happy with their allocations into precious metals in the years to come
Gold and Silver Price Action
When I wrote that comment above gold was at 1 266 after topping at 1 372 earlier today and now gold is sitting just over 100 higher Silver was 19 92 then but is only 34 cents higher today presently sitting at 22 26 Silver is acting more like copper utilizing its industrial side rather than it s monetary side But please know that I believe once silver bottoms it will outperform gold This leaves us to try and answer the question when will we bottom
Anyone who has followed me for awhile knows that I don t write articles every day trying to predict what gold and silver will do next I look at a site like Kitco com and their headlines change from day to day depending on the news of the day but they grasp at the reasons why gold is going up or down If the gold price is moving higher they ll say it s because of safe haven demand or Ukraine concerns or possibly a weaker dollar But the next day when gold declines they ll say it s because of profit taking or a weaker dollar Anyone can write those headlines and pick a reason for the bullishness or bearishness I d rather spend that time writing a book and you d rather spend that time following whatever is important in your life assuming you already have a position in gold
You will know when we are off to the races in gold First off I will tell you by writing my all in article Second it won t be because the dollar is crashing or hyperinflation is around the corner All currencies will have their issues but when they are priced in each other it is impossible for any of the major currencies to crash It is most likely however for it to take more of any currency to purchase gold moving forward once we bottom out
The Yen s Future
I first started cautioning about the troubles with the Yen in December of 2009 The dollar has risen 13 since then and 38 from the where the Yen topped out
USD JPY title USD JPY align bottom border 0 height 242 width 474
The Yen would crash before the dollar would as their debt is unsustainable highest debt to GDP ratio for major countries and their economy hasn t crashed yet because they have been buoyed by historically being a net exporter But even with Prime Minister Abe Shinzo s weaker Yen policy from last year Japan has been importing more than exporting What do you think Japan s choices are
The Euro s Future
The Euro would be the next currency to have issues especially with their banking uncertainty moving forward While there has been a rebound in some southern countries in Europe they are not out of the woods just yet According to
A future crisis in a larger southern tier nation could spark a deposit flight that is impossible to stem Europe is stuck in a monetary corset it needs a weaker currency to export its way out of debt and import some inflation Yet the euro is rising due to a trade surplus and reduced financial risk This is deflationary
While ECB President Mario Draghi has kept interest rates low he has one problem that I have been talking about which will surface later this year He s trying to tie any future money given to the banks with a directive that forces the banks to lend the money out rather than repair their own balance sheets If you are a banker in Italy or even here in the U S even with the fact that demand for loans are down and the credit requirements are stricter why would you want to lock in a low rate for years to come possibly decades if interest rates are at historical lows Where is the profit in that That s why banks go out and try to find profit anywhere else they can today besides making loans
A couple of headlines caught my eye just yesterday regarding what s coming down the road for European banks
In an early sign of the hefty toll the ECB s probe could take on eurozone banks Italy s largest bank said on Tuesday that efforts to clean up its balance sheet before the review and stress tests for 2013 that surprised markets
Europe s banking union plans are in danger of unraveling amid a protracted political stand off over the system for shutting failing banks
As you can see banks want one thing and the European banking union wants another and Draghi just wants it to all go away It won t
What do you think Europe s choices are It s quite obvious to me print Euro s
The U S Dollar s Future
Banks here in the U S have taken money from the Fed and instead of loaning it out have repaired their balance sheets
Problem banks those at risk of failure fell for the 11th straight quarter to 467 down from 515 in the third quarter and 47 below a recent high of 888 as of March 2011 That s less than 7 of the 6 798 banks and thrifts the FDIC said were operating as of Wednesday
Hidden of course in this good news for banks is the fact that even as of today 6 years after the crisis 467 banks are still at risk of failure here in the U S
The dollar itself has fallen back below 80 on the index but it does this typically once or twice a year of late While the Yen has got hammered most of the fall in the dollar can be attributed to the Euro breaking out of a pattern higher This too won t last and towards the end of the year we ll see the dollar regain its strength as the Euro falters under the weight of its banking industry disarray
By default the dollar will become stronger Just look at how strong Treasuries are
While we may want a policy of a weaker dollar in the U S perception around the world is the dollar is the place to be Those in Argentina who are seeing some serious inflation appear are looking to exchange Peso s into dollars 70 of the world is still on the dollar standard Most every other country can undercut our prices and there s not much we can do about it when our companies have so many regulations to overcome and high prices employees How long will we allow the dollar to stay so strong in spite of an out of control debt and never ending budget deficits
The reason I keep an eye closely on the 10 year is because it tells me the Fed is still in control Once we shoot above 3 all bets are off and you better be in gold For now I see stronger treasuries ahead especially if I am right about the Euro and Yen Please note the upward trend in the dollar is still intact since the bottom of 2011 ironically the same time that gold peaked The dollar is still a part of the puzzle that needs to be considered in deciphering what gold may do next
What Does More Fiscal Stimulus Mean
There are consequences of course to all of the fiscal stimulus that the Bank of Japan ECB and the Fed implement It can best be summed up in a Fiscal Stimulus in Times of High Debt written by the ECB s Christiane Nickel and Andreas Tudyka WHU Otto Beisheim School of Management
If you want to understand their conclusion in plain English please watch this video still my favorite
The Euro issues with banks and other security firms as well as most every other countries issues including that of the U S banks and the likes of J P Morgan and Citigroup which I will discuss in future articles is summed up in another written in 2010
In other words they haven t got a clue Still today they can t figure out what the hell the banks are doing and here in the U S the did nothing to enlighten us
Deflation vs Inflation
Despite the so called recovery and token tapering by the Fed here in the U S we and most every other major country are still fighting Deflation Just looking at the problem assets on the books of the banks and the fact that many are still in trouble shows the underlying truth at least what we hear about There is much I am sure that we don t know about too Many banks are still involved in lawsuits and much of J P Morgan s profit have gone to pay for their past decisions Heck I still know people who haven t paid a dime on their mortgage since the crisis and the banks have not yet foreclosed Why would that be
It takes awhile for a deflationary credit contraction to resolve itself and with the ECB Bank of Japan and the Fed fighting it all the way it is simply making things worse dragging it out longer before we hit the final bottom Enjoy the fun while you can especially if you have profited from it but at some point you will need some insurance just in case these Central Bank experts that run our monetary systems don t see the forest beyond the trees and something worse than 2008 comes to fruition Based on what the Fed and U S Congress had to do last time they didn t see what was coming is reason enough for you to buy gold now and in the future Just look at all of the over 9 8 Trillion worth of pieces they had to bring together in attempting to put this current Humpty Dumpty economy together after the last financial crisis
Those charts kind of look like the breakdown of DNA don t they
Of course this DNA is isolated from E coli which can cause serious infections Do you see any risk of serious infection for the economy in the first two charts Did Dodd or Frank
What Will Gold and Silver Prices do Next
We are close to a short term top in my opinion probably within 50 in gold and silver I just don t think has the legs to continue much higher I would be dollar cost averaging out of short term positions now and look to buy again lower Gold and silver are not going to the moon just yet Despite some issues and concerns abroad and many gold bulls calling it a safe haven at present I don t think you are seeing a small group of Ukrainians knocking down the door of the local gold dealer as I don t think they even have gold dealers in the Ukraine at least when
I Googled them
If you are long gold and silver right now a little more patience is needed You also have to believe that the cracks in the Humpty Dumpty economy are only slabbed over with patchwork policies and that eventually all the kings horses and all the kings men won t be able to put this economy together again albeit they will try and try and try Just look at how much it took them to accomplish the task last time 9 8 trillion worth the result of which is we re still mired in mystery of what s to come
In trying to prognosticate short term movements in the price of metals I admit it s not easy I just simply call things the way I see them and have told many clients to hold off in purchasing because of the way I see things unfolding If I am right great as many will be able to buy gold and silver at lower prices If I am wrong and the price of gold moves higher and starts to take off this is the reason to own some physical now I only put a 10 probability on that occurring right now |
BMY | Bristol Myers Squibb Earnings Revenue beat in Q4 | Investing com Bristol Myers Squibb NYSE BMY reported fourth quarter earnings that beat analysts expectations on Thursday and revenue that topped forecasts
The firm reported earnings per share of 0 94 on revenue of 5 97B Analysts polled by Investing com anticipated EPS of 0 84 on revenue of 5 94B That compared to EPS of 0 68 on revenue of 5 45B in the same period a year earlier The company had reported EPS of 1 09 on revenue of 5 69B in the previous quarter
Bristol Myers Squibb follows other major Healthcare sector earnings this month
On Tuesday J J reported fourth quarter EPS of 1 97 on revenue of 20 39B compared to forecasts of EPS of 1 95 on revenue of 20 2B
Abbott Labs earnings matched analyst s expectations on Wednesday with fourth quarter EPS of 0 81 on revenue of 7 77B Investing com analysts expected EPS of 0 81 on revenue of 7 81B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
BMY | Starboard said to take stake in Bristol Myers Squibb | Starboard Value took a stake in Bristol Myers Squibb NYSE BMY ahead of the company s planned acquisition of Celgene NASDAQ CELG sources tell Bloomberg The size of the activist hedge fund s stake hasn t been disclosed Now read |
JPM | Laurion Capital shuts 1 1 billion macro hedge fund | By Lawrence Delevingne NEW YORK Reuters Laurion Capital Management has shut a large hedge fund that bet on macroeconomic trends according to people familiar with the situation The approximately 1 1 billion Laurion Capital Global Markets Fund launched in 2012 closed in recent months following a loss of 4 6 percent this year through April according to one of the people The benchmark Hedge Fund Intelligence Americas Macro Index gained 1 16 percent over the same period Investors in the Global Markets fund such as the state of New Jersey were given the option to transfer their assets into the main Laurion Capital fund the firm s other vehicle that pursues a similar global relative value strategy but with less volatility according to the people New York based Laurion founded in 2005 by JPMorgan NYSE JPM veterans Benjamin Smith and Sheehan Maduraperuma managed 3 1 billion at the end of June according to one of the people Given December 2015 assets of 3 37 billion that means most clients chose to transfer their money rather than redeem Joseph Perone a spokesman for the New Jersey Department of the Treasury which had 100 million in each of the two Laurion strategies as of April said in a statement that the funds will be redeployed as the team identifies opportunities Perone did not clarify if the money from the macro fund would be kept with Laurion Sara Vavra a representative for Laurion declined to comment |
HAL | Halliburton says sand delivery delays to reduce first quarter EPS by 10 cents | Reuters Halliburton Co s N HAL first quarter earnings would be reduced by 10 cents per share due to delays in sand deliveries a company executive said on Thursday
Chief Financial Officer Christopher Weber speaking at the Credit Suisse SIX CSGN energy summit said the oilfield services company had been facing delays of up to 72 hours since February |
HAL | CN Rail CEO steps down marketing chief at helm in interim | Reuters Canadian National Railway Co said on Monday Chief Executive Officer Luc Jobin would step down immediately The move comes as the railroad struggles to cope with a surge in demand and a harsh winter which has affected its ability to deliver freight on time Last month customer Halliburton NYSE HAL Co blamed CN Rail for frac sand delays Canada s largest railroad has appointed Chief Marketing Officer Jean Jacques Ruest as interim CEO
The company s shares have risen 27 percent since Jobin s appointment as CEO in July 2016 The stock has lost more than 6 percent of its value this year |
HAL | U S trained engineer takes on Algeria s energy monolith | By Lamine Chikhi ORAN Algeria Reuters When the U S educated CEO of Algeria s state energy company Sonatrach ended a speech to staff by seeking questions an executive sitting next to him quickly picked up the microphone There are no questions he said and some 1 000 employees filed straight out The scene revealed the scale of the challenge facing Abdelmoumen Ould Kadour who took over Sonatrach a year ago with a mission to improve communication and transparency in a company that is central to stability in Algeria and beyond Sonatrach funds 60 percent of the state budget and falling oil prices have created pressure for change while Algeria s role as a major gas supplier to Europe means new tension between the continent and gas giant Russia could play into his hands He will soon unveil a plan to lift stagnant output and has revived ties with European oil majors But project delays fraud scandals secrecy and red tape abound in a country where adults remember civil war and change is often resisted It s hopeless he confided to colleagues accompanying him to the company office in the northwestern city of Oran one of dozens of such visits by the 66 year old alumnus of MIT and Harvard to Sonatrach outposts witnessed by Reuters On his first day he said on another occasion he was given so much paperwork to sign he feared he would do little else There was no medium and long term strategy there was no communication no coordination between Sonatrach s executives every single piece of information was confidential No stranger to setbacks he spent two years in an Algerian jail for collaborating with foreigners after a decade in charge of a joint Algerian U S engineering company co owned by oil services firm Halliburton NYSE HAL He has brought in his own team to lead the revamp at Sonatrach declining requests for an interview but sharing his views during his tour of the company A company source said his turnaround plan would be unveiled within weeks if not days Designed partly to attract foreign investment it is likely to come during or before a conference he hosts on April 16 18 which the CEOs of France s Total PA TOTF Italy s ENI MI ENI and Norway s Statoil OL STL are expected to attend FOREIGN PARTNERS His broad goal is to turn Sonatrach into an integrated energy company by 2030 from its current sprawling state which includes an aircraft maker and extensive social programmes and excludes renewables which come under the environment ministry While Western CEOs will expect concrete steps after years of bold announcements the plan has spread unease among executives several of whom told Reuters they feared sweeping management changes in Ould Kadour s declared battle with red tape In Oran he told staff that Statoil set to resume work at the Hassi Mouina gas field had previously left because of bureaucracy Better communication a better environment is key to convince foreign partners to work in Algeria he said A Sonatrach source said Statoil is expected to invest 500 mln in gas a figure described by a Statoil source as speculation Last month Statoil and Britain s BP L BP agreed to strengthen cooperation in upstream oil exploration and explore solar energy to allow Algeria to export more of its gas In December Ould Kadour revived ties in December with Total ENI and Saipem MI SPMI but his ability to nurture those relationships and reverse years of stalling production will depend on how his company s 40 000 employees respond to his message of change He is an unlikely manager in a country known for secrecy and a suspicion of Westerners dating from ties to the Soviet Union and the trauma of the 1954 1962 independence war with France But energy revenues have halved since 2014 and President Abdelaziz Bouteflika the 81 year old leader who might run for a fifth term next year is struggling to maintain a welfare state necessary for social stability The government has launched austerity measures banning the import of 900 goods and freezing public sector hiring and development projects Doctors and teachers have been on strike in several cities for three months demanding better pay and conditions and the state has been unable to end dissent by paying out as it did when a barrel of crude cost 100 instead of 70 as now This has turned improving the efficiency of the state oil company into a political imperative Ould Kaddour has no choice but to succeed as Sonatrach s CEO a former energy minister told Reuters Critics of the CEO say he has only been appointed because of Bouteflika and will last no longer than his many predecessors If Bouteflika quits Ould Kaddour would be sacked in the next five minutes a former Sonatrach executive said BALANCING ACT With the presidential election looming Ould Kadour has sought to cut Algeria s import bill by recruiting oil trader Vitoil to swap crude for the petrol in growing need at home The strategy was to show that Algeria which is a big oil producer is not spending gigantic sums on imports of products an oil insider said One delayed gas field was brought online last year with three more slated to start producing this year lifting annual gas output of 94 billion cubic metres by 9 billion cubic metres Sonatrach has signed a 1 billion deal with Turkey to build a petrochemical facility discovered crude in Niger and explored cooperation with Iraq It is also considering shale but protests in 2015 from Algerians fearing environmental damage have made that politically unpalatable for now In further signs of a balancing act company sources say Sonatrach will offer more flexible short term gas contracts on terms of 10 15 years or less instead of 20 25 and invest 250 million in the Tinhert gas field project using Algerian firms Ould Kadour s sentencing by a military court in 2007 on charges working for a foreign country was part of an internal regime conflict typical for Algeria observers say An elite made up of the ruling FLN party army and security has controlled Algeria since independence with officials or executives of state firms sometimes losing jobs when a new faction takes over in power plays behind closed doors After serving his two year jail term he worked in Qatar France Senegal and the United Arab Emirates before Bouteflika made him Sonatrach CEO in March 2017 Anis Rahmani owner of private Ennahar TV station said the CEO had told him he was devastated by being branded a traitor But the man has vision a plan to transform the company into a modern and performing one which is not the case now he said He is more powerful than the energy minister one insider said but must also win backing from politicians resistant to opening up the country too much A key energy law has been stalled for years but a draft is now due in July
It is likely to retain Sonatrach s majority stake in all energy projects but offer tax incentives for investors a Sonatrach executive said The law needs to be attractive he said If not it will be useless |
HAL | Bahrain asks for big oil s help to develop shale discovery | Bahrain says it will invite international oil companies to help it develop its reputed 80B barrel discovery hoping to begin production within five years Only a fraction of the 80B plus barrels is likely to be recoverable says Tom Quinn senior analyst for Middle East upstream at Wood Mackenzie Ltd The oil will also be technically challenging and potentially high cost to develop while Bahrain s previous oil contracts offered meager returns for international oil companies Bahrain s oil ministry says the size of recoverable resources and the cost to develop them are not yet known but international oil companies will be invited to join once there s more data last year the country produced only 49K bbl day of crude from its only wholly owned field Halliburton HAL 0 9 will drill two wells this year in the offshore Khaleej Al Bahrain Basin to appraise how much of the oil contained underground is actually recoverable with the first well in the drilling program expected to start producing in August Now read |
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