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JPM | France sees economic growth spurt from consumers and business | By Michel Rose PARIS Reuters French growth accelerated more than expected at the start of the year with the strongest increase in consumer spending since 2004 and a pick up in business investment The economy grew 0 5 percent in the first quarter beating even the most optimistic forecast in a Reuters poll as consumers splurged on clothes cars and housing equipment the INSEE national statistics agency said in a preliminary estimate of gross domestic product GDP on Friday Consumer spending was up 1 2 percent over the three months with higher spending on heating after a mild end to 2015 also offering a boost and offsetting the impact of a global slowdown that hurt exports If consumers led the way in the quarter however economists particularly took heart in a 1 6 percent rise in business investment the strongest increase in five years Investment by companies in the manufacturing sector surged by 3 3 percent the highest since the spring of 2006 It s very good news it shows companies are back on the offensive said Alexandre Mirlicourtois at Xerfi It gives more solid grounds to the recovery which is not only relying on consumption The rise in fixed investment growth was particularly noteworthy Raphael Brun Aguerre of JPMorgan NYSE JPM agreed adding that he expected decent gains in the coming quarters Although a lower euro rock bottom interest rates and cheap energy prices have boosted French growth just like its euro zone peers some also attribute the pick up in investment to government measures Paris last year introduced the possibility for companies to write off 40 percent of their investments in productive assets a one off measure which was supposed to stop in April but was extended by a year The expected extension of the tax write off certainly had a positive effect Economist Axelle Lacan at COE Rexecode said The stronger French performance also contrasted with a slowdown in the United States and Britain which both reported lower growth than France this week When expressed as an annualized growth rate like the American method French GDP rose by 2 2 percent compared with 0 5 percent in the U S France however has grown 3 5 percent accumulatively since its pre crisis peak compared with 10 2 percent for the U S and 7 3 percent for Britain which was hit harder than France by the financial crisis in 2008 but rebounded more strongly ACCELERATION The French reading still marked an acceleration from the 0 3 percent growth posted in the previous three months With 1 percent of GDP carry over at the end of March the government s 1 5 percent growth target for the full year appears within reach barring a sharp slowdown for the remainder of the year Meeting that target is important for unpopular French President Francois Hollande and his 2017 re election bid because 1 5 percent growth is generally considered by economists as the level where unemployment starts to ebb The data came at the end of a week in which the number of jobless people dropped by the most since 2000 lending credence to Hollande s assertion on prime time TV this month that things are getting better Solid growth has been set off Finance Minister Michel Sapin said in a statement Our action is bearing fruit A poll of 30 analysts surveyed by Reuters had forecast 0 4 percent growth for the euro zone s second largest economy in the three months to March with the lowest estimate at 0 1 percent and the highest at 0 4 percent Domestic demand which includes the consumer spending surge added 0 9 points to GDP in the first quarter up from 0 2 points in the previous one Trade subtracted 0 2 points as both exports and imports suffered from a global slowdown A drawdown in business inventories also shaved 0 2 points off GDP having added 0 5 points last quarter For a graphic of GDP by contributions
For further details from INSEE |
JPM | Brexit could cost each Briton 45 000 pounds in lost wealth JPMorgan | LONDON Reuters A vote to leave the European Union in a June 23 referendum could cost each Briton around 45 000 pounds 65 718 or around half the value of the United Kingdom s housing stock JPMorgan Chase Co N JPM said in a research report Some financiers say a British exit would sap London s wealth hammer sterling undermine the world s fifth largest economy and prompt some traders to move their business to other centers such as New York and Singapore Using the British finance ministry s central estimate that UK gross domestic product would be 6 2 percent lower by 2030 after a Brexit than it would be if Britain stayed in the EU JPMorgan said the impact on British wealth could be huge To make it personal each individual s wealth would be lower than it would otherwise have been by around 45 000 pounds JPMorgan said in the note for clients This is huge To put it differently the hit to wealth would be equivalent to a loss of around half of the value of the UK s housing stock and the land associated with it JPMorgan also projected the impact on wealth based on a group of Brexit supporting economists who on Thursday forecast a British exit would benefit the economy Under that scenario which sees a 4 percent boost for gross domestic product after around 10 years each Briton would get a wealth boost of about 29 000 pounds equivalent to about 40 percent of the UK housing stock JPMorgan said The note did not mention a timeframe for the different estimates of changes to wealth
JPMorgan which has donated to the In campaign did not say which scenario was most likely but noted the wide range of forecasts The Organisation for Economic Co operation and Development said this week that a Brexit would leave Britain s economy 5 percent smaller by 2030 than if it stayed in the EU |
JPM | Global factory growth nearly stalled in April PMI | LONDON Reuters Global manufacturing growth almost stalled last month as rising price halted a pick up in new orders a survey showed on Tuesday JPMorgan s Global Manufacturing Purchasing Managers Index PMI produced with Markit came in at 50 1 last month only just above the 50 level that separates growth from contraction It was 50 6 in March The latest PMI data indicate global manufacturing output is growing at an anemic pace similar to the past year said David Hensley a director at JPMorgan NYSE JPM New orders barely increased last month as factories raised prices for the first time since July 2015 The new orders sub index sank to 50 4 from 51 4 matching February s three year low The global PMI combines survey data from countries including the United States Japan Germany France Britain China and Russia |
JPM | Bankers see activist investor campaigns gaining strength abroad | By Michael Flaherty
LOS ANGELES Reuters Bankers are seeing more evidence that activist investor tactics launched in the United States several years ago are making their way abroad
So far this year international activist campaigns are up 30 percent Robin Rankin co head of global mergers and acquisitions at Credit Suisse Group AG S CSGN said during a panel on Tuesday at the Milken Institute Global Conference in Los Angeles
We re going to see some traditional activism all over the world she said citing countries in Europe and Asia as examples
Last year activist hedge funds began launching campaigns abroad to shake up management teams prompt or interrupt mergers and generally get companies to improve financial returns after U S markets became more challenging
Among the activists pushing abroad are Elliott Associates which targeted companies in South Korea and Hong Kong in the past year and ValueAct Capital which is on the board of British engine maker Rolls Royce Holdings Plc L RR Third Point is pushing changes at Japan s Seven i Holdings Co T 3382
Around the world our corporate clients outside of the States have suddenly become more aware of activist investors Rankin said
Steve Krouskos a vice chairman at Ernst Young said the nature of activist campaigns abroad will be led more by frustrated shareholders than traditional activist hedge funds He said he is already seeing investors in European companies publicly angling for greater efficiency and value creation and predicted there is more to come
One of the factors spreading activism abroad is the scarcity of targets for larger U S activists Valuations are also lower than they are in the United States where stock markets are back near historic highs
Jennifer Nason who chairs JPMorgan Chase Co s N JPM global technology media and telecommunications investment banking group said one constant across the globe was that an activist must have a powerful message a loud voice and an attractive target to make a campaign successful
Sometimes it s not so much about a campaign for change she said Activists often target high profile CEOs high profile branded companies high profile parts of the world because the exercise is about driving value for their investors at the end of the day |
HAL | U S says BP to pay 20 billion in fines for 2010 oil spill | By Susan Heavey Patrick Rucker and Emily Stephenson Reuters BP LONDON BP Plc will pay more than 20 billion in fines to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago marking the largest corporate settlement of its kind in U S history Attorney General Loretta Lynch said on Monday The agreement first outlined in July adds to the 43 8 billion BP had previously set aside for criminal and civil penalties and cleanup costs The company has said its total pre tax charge for the spill is now around 53 8 billion The total penalties Lynch announced on Monday sounded higher than the 18 7 billion deal reached to this summer in part because she included 1 billion in restoration work BP had agreed to long beforehand BP s shares rose nearly 3 percent in New York to 33 45 each Investors have praised the agreement as essentially capping liabilities that could have been much larger The fines to be paid to the federal government five Gulf Coast states and hundreds of municipalities over 18 years will fund environmental restoration and economic development programs to address the worst offshore spill in U S history This agreement will launch one of the largest environmental restoration efforts the world has ever seen Lynch said The spill fouled 1 300 miles of coastline and dumped more than three million barrels of crude into the sea hurting fishermen and prompting overhauls of safety rules and emergency plans in one of the world s most prolific offshore oil basins The core of the agreement includes 7 1 billion for natural resource damages 5 5 billion for Clean Water Act fines and 4 9 billion in payments to states The Macondo well blowout and the fire on the Deepwater Horizon drilling rig on April 20 2010 killed 11 workers Federal and state officials formally filed the settlement on Monday and it should be approved by a U S District Court in Louisiana soon The filing of the consent decree does not reflect a new settlement or any new money BP spokesman Geoff Morrell said In the past BP has paid for liabilities by shedding assets eroding about one fifth of the earnings base it had before 2010
Its smaller size among the bigger oil majors has made it vulnerable to potential takeovers analysts have said BP has effectively settled all big claims from the spill Previous settlements included a fund originally set at 7 8 billion to compensate individuals claiming economic harm from the spill Other settlements included one with contractors Transocean Ltd NYSE RIG and Halliburton NYSE HAL Co |
HAL | Opening Bell Politics Dominates Markets Nikkei Soars Euro Sinks | by Pinchas Cohen
Key Events
On Friday animal spirits roared back to life as all three major US indexes the Dow NASDAQ and S P 500 hit fresh records As well the S P registered its 48th record of the year as it finished a sixth straight week of gains
The dollar and yields also closed higher on domestic political developments The Senate approved President Donald Trump s 4 trillion budget which paves the way for Congress to consider his tax reform proposal
Once again today politics dominates the market narrative beginning with Japan where President Shinzo Abe s snap election didn t have anything close to the dismal outcome seen by UK PM Theresa May in June Rather Abe s decision to call an early vote paid off big time He won by a landslide even as Typhoon Lan pummeled parts of the country
Abe s victory sets him on course to becoming Japan s longest serving post WW2 leader Spurred by the victory Tokyo s Nikkei 225 Index reached a 21 year high the Japanese index is on its longest winning streak in its 70 year history
While politics was the impetus for the move economics has provided legitimacy with Japan seeing 6 straight quarters of growth right now Oki Motsumoto CEO and Chairman of Monex Group a Tokyo based financial services firm says Abe s win but sees the move as done since expectations of Abe s win have now been discounted by today Nevertheless he believes it will continue to be good for markets in the longer term too
It could also be said that Abe s win is a green light for Abenomics the massive economic stimulus plan championed by the Prime Minister Following that logic to its conclusion the green light extends into the future for the Bank of Japan to resume its massive asset purchasing program And of course it also provides a green light for Abe to resume with this consumption tax increase
Global Financial Affairs
Politics continues to drive European markets as well Investors sold off the euro this morning for a second day as they await the resolution of a pair of thorny eurozone standoffs Catalonia s increasingly dramatic secession effort in Spain and stalled Brexit negotiations The single currency is potentially forming the right shoulder of an H S top Will it complete before any resolutions emerge
With Spain s threat of direct rule now on the table Catalonia s parliament is scheduled to meet on Thursday in order to decide on their response which may be a formal declaration of independence The next level would then be for Spain to remove regional President Carles Puigdemont from office and charge him with treason whereupon he could face up to 30 years in jail After that what happens in Catalonia is anyone s guess
While politics has been driving a sense of uncertainty investors are likely to focus on the more familiar uncertainty of monetary policy going forward The global financial community is entering a period where there just may be a changing of the central bank guard led by the departure of US Fed Vice Chair Stanley Fischer earlier this month and the much anticipated Trump nomination of the next Fed Chair
The potential for an additional Fed rate hike this year remains an ongoing question though some believe there may be more than one while the ECB potentially moving in a new policy direction direction could lead to a clear policy path vacuum Should this happen the uncertainty might create ripple effects across global financial markets
Up Ahead
UK PM Theresa May is expected to speak to Parliament today on the progress of Brexit negotiations
The US Q3 GDP released on Friday is expected to have expanded at 2 5 percent YoY in the third quarter taking into account the effects of Hurricanes Harvey and Irma
US big ticket Durable Goods Orders are expected to have increased a sign of firmer manufacturing growth
Earnings reports today include Halliburton NYSE HAL which reports before the open consensus EPS 0 38 vs 0 01 YoY and T Mobile NASDAQ TMUS which reports after the close consensus EPS 0 44 vs 0 27 YoY
Market Moves
Stocks
Japan s TOPIX climbed 0 8 percent cementing a rally to the highest since mid 2007 The Nikkei jumped 1 1 percent to once again hit the highest since 1996
The MSCI Asia Pacific Index added 0 2 percent
South Korea s KOSPI was little changed while Hong Kong s Hang Seng fell 0 5 percent
Australia s S P ASX 200 lost 0 2 percent
The Stoxx Europe 600 Index jumped 0 3 percent as of 8 03 a m London time
The MSCI All Country World Equity Index fell less than 0 05 percent
The U K s FTSE 100 gained less than 0 05 percent
Germany s DAX climbed less than 0 05 percent
The MSCI Emerging Markets Index dipped less than 0 05 percent
S P 500 Futures sank less than 0 05 percent the first retreat in more than a week
Currencies
The Dollar Index is being traded near the high of the day after it had gained 0 26 percent to the highest since October 6
The euro dipped 0 2 percent to 1 1757 its weakest in two weeks
The British Pound rose 0 1 percent to 1 3201
Bonds
The yield on 10 year Treasuries declined less than one basis point to 2 38 percent as investors continue to embrace risk
Germany s 10 year yield declined two basis points to 0 44 percent the biggest fall in a week
Commodities
Gold fell 0 4 percent to 1 275 59 an ounce the weakest position for the commodity in more than two weeks Could it be heading for a potentially massive 4 year bottom
West Texas Intermediate crude gained 0 2 percent to 51 92 a barrel With 52 86 looking like the Bears line in the sand are bulls set to regroup at support before the next attack |
HAL | Halliburton HAL Down 1 9 Since Earnings Report Can It Rebound | It has been about a month since the last earnings report for Halliburton Company NYSE HAL Shares have lost about 1 9 in that time frame underperforming the market
Will the recent negative trend continue leading up to the stock s next earnings release or is it due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts
Recent EarningsHalliburton reported better than expected third quarter profits courtesy of improved utilization and pricing gains in North America the company s largest market by sales Halliburton s income from continuing operation came in at 42 cents per share above the Zacks Consensus Estimate of 38 cents the thirteenth consecutive quarterly outperformance Moreover revenues of 5 444 million beat the Zacks Consensus Estimate of 5 318 9 million North American Market BoomingAlong the results Halliburton also sounded optimistic in its view that the North American land market is improving rapidly driven by increased utilization and pricing particularly for pressure pimping As it is rig counts have generally been rising during the last one and half years since plunging to an all time low of 404 in May 2016 with the addition of a flood of new units As a proof of the recovery Halliburton grew its domestic land revenue by 14 sequentially well ahead of the U S land rig count growth of 6 Additionally Halliburton s international market proved resilient in the face of challenging circumstances The company s impressive expense management for the last several quarters helped regional sales rising more than 4 from the second quarter Segmental PerformanceOperating income from the Completion and Production segment was 525 million significantly higher than the year ago level of 24 million The division also improved from previous quarter s income of 397 million helped by better utilization and pricing in the North American land market especially in Halliburton s pressure pumping completion tools and cementing product service lines Meanwhile Drilling and Evaluation unit profit improved from 151 million in the third quarter of 2016 to 180 million this year The number was also above the 125 million earned in the June quarter The outperformance was on account of higher drilling activity in the Middle East North America and Latin America This was supported by an expanding Consulting and Project Management product line in the Eastern Hemisphere Balance SheetHalliburton s capital expenditure in the third quarter was 342 million As of Sep 30 2017 the company had approximately 1 898 million in cash cash equivalents and 10 423 million in long term debt representing a debt to capitalization ratio of 53
How Have Estimates Been Moving Since Then
Following the release investors have witnessed a downward trend in fresh estimates There has been one revision higher for the current quarter compared to five lower
VGM Scores
At this time the stock has a great Growth Score of A a grade with the same score on the momentum front However the stock was allocated a grade of D on the value side putting it in the bottom 40 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
Zacks style scores indicate that the company s stock is suitable for growth and momentum investors
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift Notably the stock has a Zacks Rank 3 Hold We are looking for an inline return from the stock in the next few months |
C | Gold futures add to losses tracking euro lower | Investing com Gold futures extended losses during U S morning trade on Wednesday as renewed concerns over the euro zone s debt crisis and weaker than expected U S data on durable goods pushed the euro lower against the greenback On the Comex division of the New York Mercantile Exchange gold futures for June delivery traded at USD1 674 55 a troy ounce during U S morning trade dropping 0 78 It earlier fell by as much as 0 92 to trade at USD1 671 05 a troy ounce the lowest since March 26 Gold futures were likely to find short term support at USD1 657 65 a troy ounce Monday s low and short term resistance at USD1 706 15 the high from March 13 Gold prices took cues from the currency market on Wednesday tracking movements in the euro Gold remains more sensitive to moves in the euro dollar exchange rate in the short term than to rising risk aversion which in the past has been a positive driver of prices The single currency came under pressure amid reports that the German government s unwillingness to increase the firepower of the euro zone s combined bailout funds to EUR1 trillion will complicate efforts to boost the lending capacity of the International Monetary Fund that is needed for future European bailouts Attention now shifts to Friday s meeting of euro zone finance ministers in Copenhagen Spain s debt problems were also on investors minds after a report from Wall Street bank Citigroup said that the risk of a Spanish debt restructuring is higher now than it has been since the beginning of the crisis Also weighing on market sentiment the U S Commerce Department said earlier that durable goods orders rose 2 2 in February partially reversing January s revised 3 6 decline but fell short of expectations for a 3 0 increase Core durable goods orders which exclude transportation rose by a seasonally adjusted 1 6 in February compared to expectations for a 1 5 gain The news boosted demand for the relative safety of the U S dollar The dollar index which tracks the performance of the greenback against a basket of six other major currencies was up 0 18 to trade at 79 42 A stronger U S dollar usually weighs on gold as it dampens the metal s appeal as an alternative asset and makes dollar priced commodities more expensive for holders of other currencies Some technical selling also weighed after prices failed to break above a key resistance level close to USD1 700 an ounce Meanwhile Goldman Sachs said in a report earlier that it remains bullish on the precious metal reiterating its six month price forecast at USD1 840 an ounce As we look forward our U S economists forecast subdued growth and further easing by the Fed in 2012 which should push the market s expectations of real rates back down near zero basis points and gold prices back to our six month forecast of USD1 840 an ounce Elsewhere on the Comex silver for May delivery dropped 1 15 to trade at USD32 24 a troy ounce while copper for May delivery tumbled 2 2 to trade at USD3 795 a pound |
C | Gold lower on stronger dollar debt worries | Investing com Gold futures traded lower during U S afternoon trade Wednesday as concerns over the euro zone s debt crisis and weaker than expected U S data on durable goods fuelled a flight to safety to the greenback On the Comex division of the New York Mercantile Exchange gold futures for June delivery traded at USD1 661 95 a troy ounce during U S afternoon trade plummeting 1 53 Gold futures were likely to find short term support at USD1 657 65 a troy ounce Monday s low and short term resistance at USD1 706 15 the high from March 13 Gold prices followed currencies tracking movements in the U S dollar Gold remains more sensitive to moves in the euro dollar exchange rate in the short term than to rising risk aversion which in the past has been a positive driver of prices The metal came under pressure amid reports that the German government s unwillingness to increase the firepower of the euro zone s combined bailout funds to EUR1 trillion will complicate efforts to boost the lending capacity of the International Monetary Fund that is needed for future European bailouts Traders await Friday s meeting of euro zone finance ministers in Copenhagen Spain s debt problems also influenced gold s price after a report from Wall Street bank Citigroup said that the risk of a Spanish debt restructuring is higher now than it has been since the beginning of the crisis Also weighing on market sentiment the U S Commerce Department stated that durable goods orders rose 2 2 in February partially reversing January s revised 3 6 decline but fell short of expectations for a 3 0 increase Core durable goods orders which exclude transportation rose by a seasonally adjusted 1 6 in February compared to expectations for a 1 5 gain The news boosted demand for the relative safety of the U S dollar The dollar index which tracks the performance of the greenback against a basket of six other major currencies was up 0 04 to trade at 79 31 A stronger U S dollar usually weighs on gold as it dampens the metal s appeal as an alternative asset and makes dollar priced commodities more expensive for holders of other currencies Some technical selling also weighed after prices failed to break above a key resistance level close to USD1 700 an ounce Meanwhile Goldman Sachs said in a report earlier that it remains bullish on the precious metal reiterating its six month price forecast at USD1 840 an ounce As we look forward our U S economists forecast subdued growth and further easing by the Fed in 2012 which should push the market s expectations of real rates back down near zero basis points and gold prices back to our six month forecast of USD1 840 an ounce Elsewhere on the Comex silver for May delivery dropped 1 89 to trade at USD31 99 a troy ounce while copper for May delivery tumbled 2 08 to trade at USD3 795 a pound |
C | First Trust Value Line 100 ETF In The Danger Zone | First Trust Value Line 100 ETF FVL is in the Danger Zone this week FVL is another example of a supposedly passive ETF that purportedly tracks an index but actually resembles an actively managed portfolio FVL s methodology tracks an index but it is an index in name only Anyone can create an index and often the index is created specifically for the purpose of launching an ETF FVL tracks the Value Line 100 Index According to their website The index is an equally dollar weighted index that is designed to objectively identify and select 100 stocks from the universe of stocks to which Value Line assigns a 1 ranking in the Value Line Timeliness Ranking System It s unclear how exactly the selection is objective as the site claims They tell you on the website that The components of the Timeliness Ranking System include factors such as the 10 year trend of relative earnings and prices recent earnings and price changes and earnings surprises That sounds to me like analyzing a variety of technical and fundamental data points to select stocks that you expect to outperform the market a k a active management Even if the stocks are being selected based on a formulaic criteria that s still a criteria created by humans New Constructs puts out the Most Attractive and Most Dangerous stocks list every month based on our stock ratings Even though those rankings are based on defined criteria I would never describe them as an index the way Value Line is doing with their rankings system FVL does not hold an index it holds a portfolio of stocks that like any actively managed portfolio is designed to out perform the market There s nothing inherently wrong with this Actively managed portfolios can out perform the market even if most of them don t Unfortunately FVL s holdings don t look likely to out perform 67 of its capital is in stocks with a Dangerous or worse rating Only 12 of its assets are in Attractive or better rated stocks Its holdings include recent Danger Zone picks Rite Aid RAD Citigroup C and Stein Mart SMRT FVL s holdings get their worst scores on valuation Pilgrim s Pride Corp PPC is another one of my least favorite holdings in FVL PPC is not a bad company Its return on invested capital ROIC of 9 puts it near the median of all the companies we cover The issue for PPC is its valuation To justify its price of 17 share PPC would need to grow after tax profit NOPAT by 12 compounded annually There is not a lot of value in this stock or this value index The final nail in the coffin for FVL is its high costs Low fees are a major part of the appeal of index ETFs As I mention in How To Avoid the Worst Style ETFs the average total annual costs of the 223 style ETFs I cover weighted by assets under management is only 0 19 FVL s TAC comes in at 0 70 Those are not mutual fund level fees but they are significantly higher than investors would pay for truly passive management As new ETFs come out of the woodwork every week investors need to consider who these funds really serve Value Line is leveraging its good brand name to try to make money selling an actively managed portfolio under the guise of an index Investors who don t look closely at the fact sheet and the holdings could end up paying higher fees and not getting the type of exposure they expect Sam McBride contributed to this report Disclosure David Trainer and Sam McBride receive no compensation to write about any specific stock sector or theme |
C | Ackman To Shed J C Penney | Few days after terming his investment in J C Penney Company Inc JCP a failure Bill Ackman announced his decision to sell the entire stake in the company Ackman publicly criticized the board and it s functioning and accused it of a slow approach to finding the new CEO Concurrently Ackman demanded the ouster of the interim CEO Mike Ullman and Chairman Tom Engibous However Ackman s public outburst did not go down well with fellow board members and his actions were termed as disruptive and counterproductive following which he resigned from the board Price Not SetThough the price of the offering is yet to be decided it is estimated that Ackman s divestiture will be at a huge loss Ackman s Pershing Square announced that it will sell 39 1 million shares or about 18 stake which it holds in J C Penney Citigroup has been appointed as the bookrunning manager and underwriter Earlier J C Penney implemented a Stockholder Rights Plan often referred to as Poison Pill to fend off any effort to gain a controlling interest in the company by any person or a group of persons which could be detrimental to the company or its shareholders Hostile Takeover Still PossibleThe company remains susceptible to hostile takeovers as it has lost a substantial amount of market share in recent times J C Penney s restructuring initiatives have been crumbling as the company is exhibiting no signs of improvement Alongside it is constantly lagging its peers Macy s Inc M Target Corporation TGT and Kohl s Corporation KSS in terms of performance During the last reported quarter J C Penney posted adjusted loss per share of 2 16 dashing all hopes of recovery at least in the near term The loss incurred was wider than the loss of 37 cents in the year ago quarter The Zacks Consensus Estimate for the quarter was a loss of 1 13 The company s quarterly sales of 2 663 million plunged 11 9 year over year and fell short of the Zacks Consensus Estimate of 2 746 million Comparable store sales decreased 11 9 year over year as its earlier pricing and marketing strategy failed to lure customers Shares of J C Penney currently carry a Zacks Rank 3 Hold as we prefer to remain on the sidelines until we see near term catalysts that could induce an improvement in the company s performance |
C | Get Ready For Larry Summers As Next Fed Chair | Has there ever really been a doubt that Larry Summers would be the next chairman of the Federal Reserve Not in these parts Remember President Obama just like his predecessors announce who the chairman of the Federal Reserve will be but that does not mean that he actually makes the selection Whom do I believe makes the selection Those running the large banks whom the Fed chair oversees So who would be in this camp aka The Club Certainly Jamie Dimon Lloyd Blankfein and John Stumpf Wells Fargo CEO Junior members Brian Moynihan Bank America CEO Mike Corbat Citigroup CEO and James Gorman Morgan Stanley CEO probably get half votes given their lack of experience amid Wall Street CEOs And who is the real power broker that delivers the message to Washington as to who Wall Street wants as the next Fed chair Most assuredly Robert Rubin With this backdrop get ready for Larry Summers a longstanding member of the Wall Street Washington Club to be our next Fed chair Why do I say this with stronger conviction now than I projected a few weeks back A proverbial leak conveniently provided to Obama s compliant and friendly folks at A source from Team Obama told CNBC that Larry Summers will likely be named chairman of the Federal Reserve in a few weeks though he is still being vetted so it might take a little longer |
C | Citigroup Sees Gold At 3 500 Oz | Today s AM fix was USD 1 406 25 EUR 1 059 96 and GBP 906 79 per ounce Yesterday s AM fix was USD 1 425 50 EUR 1 066 03 and GBP 919 91 per ounce Gold rose 0 20 or 0 014 yesterday closing at 1 415 70 oz Silver ceded some its previous gains and closed down 0 17 or 0 7 closing at 24 29 Platinum gained 9 45 oz to 1 531 20 Geopolitical Risk In Middle East Leads To Rising Oil Prices And Safe Haven Bid For Gold Bloomberg Gold fell from a three month high its first fall in six days on profit taking after the likelihood of U S military strikes on Syria at least in the short term diminished Prices rallied to 1 433 83 yesterday the highest since May 14 partly due to concern about military action and the risk that it may lead to a deeper more protracted Middle Eastern war Geopolitical risk emanating from the Middle East in particular has been underestimated for some time Since the alleged chemical weapons attack on August 21 oil has risen sharply and gold has received a safe haven bid Gold and oil began rising in afterhours trading on the day of the incident and since then gold is up 3 9 and oil is up 5 5 see chart From 103 52 per barrel to 109 25 per barrel NYMEX crude and from 1 355 oz to 1 408 oz today Gold and oil are often correlated particularly when there are sharp movements up in oil prices as was seen in the 1970s and in the period from January 2002 to July 2008 when NYMEX crude oil prices rose from less than 20 a barrel to over 140 a barrel An escalation of the crisis in the Middle East and the real possibility that Iran and Israel could become embroiled in the conflict means that there is again the possibility of oil rising to new record highs with an attendant rise in gold prices NYMEX Crude Oil Generic 1st CL Future Bloomberg There are also growing concerns that the recent poor U S economic data and geopolitical uncertainty will lead to the Federal Reserve not slowing stimulus or tapering A continuation of cheap money policies will be bullish for gold Another positive factor for the gold market is the very delicate situation regarding peak gold and supply from South Africa In what could be described as a provocative move gold mining companies in South Africa are considering locking out workers The aggressive move is being considered if labor unions fail to accept a revised pay offer The four unions in the gold industry have until 12 p m local time today to accept an offer from the chamber which represents gold mining companies to increase the wages of some categories of workers by 6 5 Workers in the automotive construction and aviation industries are already on strike to demand pay increases in excess of the considerable inflation rate of 6 3 in July The chance of a South African gold strike is highly likely said Solidarity Union General Secretary Gideon du Plessis in a speech in Johannesburg Citigroup Sees Gold at 3 500 oz Silver Jumping to 100 oz Respected Citigroup strategist Tom Fitzpatrick said in a telephone interview from New York with Bloomberg that gold and silver should surge in the coming years as the precious metals continue to benefit from the easy monetary policies adopted by central banks Fitzpatrick who has a good track record said that gold has put in a low for the year and will rise to about 1 500 1 525 oz this year A gain of over 6 3 from today s prices He said that silver is in a strong uptrend and will likely outperform gold as the gold silver ratio will drop from its current level at 58 1 Separately in an interview with King World News Eric King Fitzpatrick elaborated on why he believes gold could reach US3 500 So we believe we are back into that track where gold is the hard currency of choice and we expect for this trend to accelerate going forward We still believe that in the next couple of years we will be looking at a gold price of around US3 500 As the gold silver ratio plummets near 30 this would also suggest a silver price above US100 Silver in USD 10 Years Weekly Bloomberg Despite the recent gains gold remains down 16 this year and this is leading to contrarian buyers buying gold at what they still see as discount prices Gold appears to have bottomed in June and is rising due primarily to strong physical demand for jewelry coins and bars globally Gold is heading for a second monthly gain which is very important technically and from a momentum perspective |
C | EUR USD A Bearish Outlook | EUR USD title EUR USD width 700 height 512 EUR USD 1 3221Short Term Trend sidewaysOutlook EUR broke below 1 3298 last week and thus triggered our bearish strategy It seems the market is in the very beginning of wave c down which should bring weakness toward 1 2995 level at a minimum and most likely twd 1 2870 level So lower prices are expected in the next few weeks On the upside only a move back above 1 3340 will negate and will suggest that something else is going on here The wave count will become unclear in this case but the trending conditions will support a move higher toward 1 3520 Strategy Holding short from 1 3295 is favored Stop 1 3345 Target 1 2895 |
C | E Mini S P Retrace Back to 1667 Then Downtrend Resumes | S P has been trading sharply lower last week but now showing some evidences of a low around 1625 area which is fine because we already have five needed sub waves down in wave A We know that after every five wave move correction is expected so recovery or sideways price action in this week should not be a surprise We are talking about blue wave B that could already be underway and may even reach 1667 area before the Friday s US NFP After wave B pull back we will be looking for a strong sell off in wave C into a third leg of decline S P 500 4h Elliott Wave AnalysisThe important thing that we need to understand now is a five wave of decline from 1705 which means that bearish reversal on stocks is confirmed and that prices will stay in bearish mode for few more weeks and that any bounce will be temporary and limited with 1705 |
C | Gold To Jump Due To U S Desperation To Have A War Jim Rogers | United States President Barack Obama and officials within the administration are beating the drums of war How will this affect the markets specifically commodities like gold and oil More than a decade after the wars in Afghanistan and Iraq were launched not to mention the various strikes against Yemen Pakistan and other countries initiated by President Barack Obama throughout his tenure as commander in chief the United States is drumming the beats of war again this time in Syria After it was alleged that the Syrian government led by President Bashar al Assad launched a chemical attack against its own people even though there are some suggestions that it was performed by al Qaeda the Western world particularly the U S has been urging for an attack against the country a growing prospect as Republican Senators John McCain and Lindsey Graham are backing up the president This has led to millions of Syrians to either prepare for a potential war or to flee the country In the U S and other developed countries meanwhile investors are becoming concerned about the stock market as oil gold and other commodities are inching upwards over fears of a U S led attack against Damascus Jim Rogers and commoditiesIf an attack occurs then expect commodities to rise according to legendary investors Jim Rogers and Marc Faber Rogers speaking in an interview with Reuters suggested that oil and gold could go much much higher because the U S is desperate to have a war I own oil I own gold I own things like that and if there is going to be a war they re gonna go much much higher said Rogers in the interview Stocks are gonna go down some of the markets that I m sure are already going down commodities are gonna go up I mean yeah some of the things I own all make a lot of money It s I m not particularly keen on war I assure you but it sounds like they want it He went on to note that strange elements transpire in war and that there could be an array of unintended consequences that could hurt all involved parties But I do know that throughout history whenever you had war things like food prices have gone up a lot energy prices have gone up a lot copper price lead prices you know all of these things go up a lot whenever there s been a war in the past Another contributing factor to the price of gold is the Federal Reserve s tapering of its quantitative easing measures The latest economic news disappointed economists and suggests that the markets are unsure about the central bank s bond buying program Akin to what David Stockman former budget director under President Ronald Reagan explained earlier this year the stock market depends very much on the Fed s stimulus efforts During the Tuesday trading session gold exceeded the 1 400 per ounce mark at the time of this writing while silver also inched towards the 25 per ounce threshold Oil also increased close to 110 per barrel Marc Faber echoes Rogers Speaking with last week Marc Faber the editor and publisher of the Gloom Boom Doom Report projected the rising price of gold due to not just a potential war with Syria but also the rising debt levels and monetization policies performed by central banks worldwide Looking at the fundamentals looking at how debt will continue to increase and how central banks will continue their monetization not only in the U S but on a worldwide scale I assume the price of gold will trend higher said Faber Most likely we ve seen the lows below 1 200 Much like other gold bugs and some Faber made a point about the correction of gold and correlated it with past market events such as in the 1970s and in the 1980s We have had a meaningful correction explained the contrarian investor From 1 921 in September 2011 to less than 1 200 at the bottom is a fairly large correction But in longer term bull markets these kinds of corrections do occur We had a 40 50 percent correction in 1987 in equity markets But the bull market lasted until the year 2000 Other Washington problems On top of the issue with Syria Washington will soon deal with another debt ceiling crisis next month Treasury Secretary Jack Lew noted late last month that the U S federal government will be hitting the debt limit in mid October In a letter to Congress Lew urged officials to increase the amount of money the government can borrow Congress should act as soon as possible to protect America s good credit by extending normal borrowing authority well before any risk of default becomes imminent Lew wrote in a letter If investors should become unwilling to loan the United States money the United States could face an immediate cash shortfall The present debt ceiling is 16 7 trillion |
C | Pre NFP Review EUR USD And USD CAD | Markets did not go far since yesterday s US close as speculators are sitting on their hands ahead of the US NFP report today at 12 30GMT Expectations are 178K if news will be better than this let s say around 200K then be aware of a strong push higher on USD Index that will cause weaker majors At the same time US bonds could extend the decline based on QE tapering because of good data Markets however may not be ready for tapering just yet there is a lot of risk involved especially in stocks and as a result we could see a spike higher on US stocks futures on good number but then sharp bearish reversal on speculation for tapering On the other hand if data will be bad then stocks may not go far but EUR GBP and others will find a bid but only temporary because our wave patterns are pointing for strong USD Lets take a look at EUR USD and USD CAD On EUR USD prices fell sharply yesterday from 1 3220 which could be start of a larger impulsive weakness The reason is also a current bounce from 1 310 that has qualities of a corrective move As such bias remains bearish Intra day resistance is seen at 1 3150 at 38 2 Fibo level Any rise back to 1 3220 will put pair in bullish mode but only temporary for a larger corrective rally EUR USD 30min Elliott Wave AnalysisOn USD CAD we can see lower prices but based on the wave structure since end of August we suspect that pair is in final stages of a corrective move called a flat correction Wave c already has five waves down so be aware of a bounce Break above 1 0515 wave iv point will suggest that flat is complete and bullish moves underway USD CAD 1h Elliott Wave Analysis |
C | What to Watch US Plan For Syria China Taper Talk And RBNZ | The markets made it through another week without missiles being launched at Damascus and we now know more about the Alawites than we ever thought we d know The metals and energy complexes are well complex and don t appear to be noticing the contingent of Russian warships parked off the Syrian coast Obama and Putin had some a tense photo op at the St Petersburg G 20 with the former s anywhere but here aloofness rewarded by some late week support from the European Union for military action EUR remains in the doghouse and GBP is showing some semblance of not being impervious to gravity Here s what we re watching next week 1 The Great Winner of Oz Tony Abbott s Liberal National coalition romped to electoral victory this weekend with what appears to be the largest parliamentary majority since 1996 The Rudd Gillard Rudd show that coincided with a significant expansion in Australia s US 1 5 trillion economy activity is yielding way to a centre right cabal of Canberra cronies and the markets are curious to see how Abbott s policies are perceived and received by the markets Our earliest clues will be how A trades during the Australasian session on Monday with a gap higher not being ruled out Abbott has pledged to abolish the controversial mining tax but a bigger achievement will be figuring out how to contend with China s waning mining bid and economic moderation With deeper budget deficits forecast for the next three years and unemployment projected to reach a multi year high of 6 25 by mid 2014 the Great Winner of Oz has his work cut out for him behind the Canberra Curtain 2 US Congress back on Monday We ve all been reading the congressional tea leaves over the past several trading days to discern whether US legislators will authorise Obama to attack Syrian chemical weapons facilities for 60 90 days The Senate Foreign Relations Committee jumped on that bandwagon this past week but there are apparently more skeptics over in the House Putin has deftly maneuvered more Russian warships into the Mediterranean in case Obama s go at it alone attitude is more substance than style After trading as low as a US 1362 handle on Friday Gold closed at 1391 and Silver found a late week bid to close around US 23 84 Brent crude recovered nicely last week and stopped just short of testing US 115 while WTI stopped just short of US 110 A surprising round of support by the House or a unilateral decision by Obama could set the complexes ablaze 3 It s RBNZ s turn After this past week s blitzkrieg of monetary madness it s time for Wellington s Wheeler to weigh in After spending much of the second half of August on the defensive Kiwi is the brightest shining star on our screens thus far in September NZD USD closed above the psychologically important US 0 8000 figure on Friday for the first time since 19 August Wheeler previously noted that RBNZ has additional policymaking tools at its disposal to slow the hyperactive housing hoopla New lending restrictions go into effect from 1 October and RBNZ will not want to do too much to spook the markets in the wake of the Fonterra milk scandal 4 Big C Nope Big C isn t Citigroup but rather China and we ll see a lot of China this week starting with the August trade balance where a US 20 billion print is expected Beijing will follow that up with August new loans August money supply and August CPI numbers on Monday and August industrial production and August retail sales on Tuesday This will be a baptism by fire for Oz s Abbott PBoC s Zhou has made it abundantly clear he is ready to deal with the Fed s taper and Chinese brass has been very vocal about enacting reforms at the expense of economic growth Chinese GDP is probably running somewhere around a 7 to 8 handle and given all of the mayhem in the emerging markets lately Beijing is likely pleased with that Big C s big quandary remains how to rein in shadow banking and the monster balance sheet problems that has engendered 5 Fed up over taper talk Other than San Francisco Fed s Williams speaking at a NABE event on Monday Fed rate setters are in purdah ahead of the most closely watched FOMC meeting in anyone s recent memory An August non farm payrolls print of 169 000 underwhelmed a market that is already on pins and needles The Fed and Obama administration appear to believe they are the only ones who notice the US labour participation rate has moved to its lowest level since 1978 reaching 63 2 These pretty stinky prints place fresh emphasis on this week s upcoming data with Friday s August retail sales and University of Michigan consumer sentiment data being some of the last clues we ll receive ahead of Team Bernanke s decision Even if the FOMC votes to taper monthly asset purchases by an estimated US 10 billion we expect policymakers will continue to underscore how generous their stimulus will actually remain |
C | Gold A Bullish Attitude Adjustment For Institutional Banks | The last couple of weeks have witnessed changing attitudes of large institutions concerning the gold price A growing number of institutional analysts are become bullish some them ultra bullish on gold s near term outlook What makes this unusual is the fact that only a few weeks ago they were singing a bearish tune The swift attitude adjustment is a testament to the strong impact of rising prices on the investor psyche For instance it was recently reported that Citigroup expects gold will rise to 1 500 1 525 a gain of over 6 from today s prices Moreover Citigroup s Tom Fitzpatrick s forecast that gold could reach 3 500 in the next couple of years He also sees silver jumping to 100 oz Joining the bullish bandwagon for gold is Societe Generale but with a twist SOCGEN analyst Albert Edwards foresees a stock market crash on the horizon he also believes the gold price will climb to 10 000 as investors rush into safe haven investments Back in June SOCGEN analysts Michael Haigh Jesper Dannesboe and Robin Bhar argued that ETF selling and plummeting jewelry demand would result in a Q4 gold price of 1 200 oz SOCGEN also recommended dumping safe havens like gold in exchange for buying bank and consumer retail stocks back in June Talk about a reversal of sentiment Sounding a more level headed note Goldman Sachs recently weighed in on gold s near term prospects Goldman has been rather quiet after correctly predicting the May June gold sell off and subsequent market bottom Of the major institutions Goldman is by far the most accurate when making forecasts though I should point out that even mighty Goldman sometimes gets it wrong Remember the blown 200 barrel oil forecast in 2008 According to The Economic Times Goldman Sachs raised its gold forecast for the second half of 2013 to 1 388 oz from 1 300 oz based on the metal s recent price action The firm is maintaining its intermediate term and long term price forecasts however Of the major institutions that have made gold price forecasts Goldman Sachs seems to be the most balanced and realistic We believe the recent uptick is a result of investors positioning themselves for an increase in inflation rates and speculation regarding a potential military strike on Syria the bank said in an equity research note dated Sept 2 According to The Economic Times Goldman said it expects gold prices to ease longer term on improvement in the U S economy and the reining in of an accommodative Federal Reserve monetary policy As noted previously the implication of these high profile institutional predictions is that sentiment among the big banks on the metals is becoming optimistic bordering on giddy This isn t exactly a good sign from a contrarian perspective Already gold has violated its 15 day moving average to technically break the immediate term uptrend While this may prove to be merely a temporarily pause that refreshes for the metal conservative traders should treat the signal with respect and wait for the buyers to reassert themselves by retaking the 15 da MA I would also point out that the non commercial short position among gold speculators after rising to a multi year record level recently has dropped precipitously in recent weeks Analyst Tyler Durden has pointed out that short positions in the gold futures and options market have dropped for six of the last seven weeks The 60 drop in the non commercial short position represents a massive 81 700 contracts 8 170 000 ounces or 10 6 billion worth of notional paper gold he wrote He further noted Gold s 21 rise from the lows in the last 2 months is among the fastest rises since 1999 and GLD holdings have risen for the last 6 days in a row The sharp decline in gold short positions gives us another reason to exercise caution in the near term since bearish sentiment is rapidly being replaced by bullish sentiment This can create irrational expectations for short term gains among speculators Should these gains be disappointed it can result in a potentially sharp pullback in the gold and silver prices High Probability Relative Strength Trading Traders often ask what is the single best strategy to use for selecting stocks in bull and bear markets Hands down the best all around strategy is a relative strength approach With relative strength you can be assured that you re buying or selling depending on the market climate the stocks that insiders are trading in The powerful tool of relative strength allows you to see which stocks and ETFs the smart money pros are buying and selling before they make their next major move Find out how to incorporate a relative strength strategy in your trading system in my latest book High Probability Relative Strength Analysis In it you ll discover the best way to identify relative strength and profit from it while avoiding the volatility that comes with other systems of stock picking Relative strength is probably the single most 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BMY | AstraZeneca sees fall in 2016 earnings as Crestor loss weighs | By Ben Hirschler LONDON Reuters Drugmaker AstraZeneca L AZN warned on Thursday that revenue and earnings would drop this year due to the arrival of cheap generic rivals to its cholesterol fighter Crestor which will offset growth in sales of newer medicines The company which saw off a takeover attempt by Pfizer N PFE in 2014 is expected to see a trough in profits in this year and next before a hoped for resurgence on the back of a promising pipeline of experimental drugs For the current year AstraZeneca said that would mean a low to mid single digit percentage decline in both revenue and core earnings per share which exclude certain items at constant exchange rates With currencies expected to have a further adverse impact of around 3 percent the downbeat outlook dragged the shares down more than 3 percent in early trading Chief Executive Pascal Soriot said AstraZeneca faced a transitional period due to the expiry of the U S patent for Crestor in May 2016 but the company was poised for a comeback We re confident that our strong execution on strategy combined with the benefits of focused investments and new launches keeps us on track to return to sustainable growth in line with our targets he said Revenue in the fourth quarter of last year fell 5 percent to 6 4 billion hit by earlier drug patent expiries generating core earnings per share of 94 cents up 26 percent Industry analysts had on average forecast quarterly sales of 6 29 billion and earnings of 95 cents a share according to Thomson Reuters In addition to the Crestor hit 2016 results will also be suppressed by short term profit dilution caused by the recent acquisitions of Acerta Pharma and ZS Pharma AstraZeneca s results demonstrate progress is being made with a number of positives clearly visible said Mick Cooper of equity research house Trinity Delta However the overwhelming feeling remains that the light at the end of the tunnel is still some way away Soriot has been active in making bolt on acquisitions of promising biotech companies to complement in house research while at the same time divesting non core products to help pay the bills Such divestments or externalisation deals contributed 1 1 billion to 2015 revenue and that figure is expected to be higher in 2016 the company said AstraZeneca has bet heavily on cancer medicine as a driver of future growth and it has several promising new products including recently launched lung cancer pill Tagrisso
It also has high hopes in the hot cancer area of immuno oncology but here it is competing with several tough rivals including Bristol Myers Squibb N BMY whose injectable drug Opdivo has a established a particularly strong position |
JPM | Ecuador to hike taxes sell assets to fund quake rebuilding | By Ana Isabel Martinez and Diego Or PEDERNALES QUITO Ecuador Reuters Ecuador will temporarily increase some taxes sell assets and may issue new bonds on the international market to fund a multi billion dollar reconstruction after a devastating 7 8 magnitude quake a somber President Rafael Correa said on Wednesday The death toll from Ecuador s weekend earthquake neared 600 and rescue missions ebbed as the traumatized Andean nation braced itself for long and costly rebuilding It s hard to imagine the magnitude of the tragedy Every time we visit a place there are more problems Correa said fresh from touring the disaster zone The leftist leader estimated the disaster had inflicted 2 billion to 3 billion of damage and could knock 2 to 3 percentage points off growth meaning the economy will almost certainly shrink this year Lower oil revenue had already left the poor nation of 16 million people facing near zero growth and lower investment In addition to 600 million in credit from multilateral lenders Correa an economist announced a raft of measures to help repair homes roads and bridges along the devastated Pacific Coast We re looking at the possibility of issuing bonds on the international market he said on Wednesday afternoon without providing details Ecuador had been saying before the quake that current high yields would make it too expensive to issue debt Yields on its bonds are close to 11 percentage points higher than comparable U S Treasury debt according to JPMorgan NYSE JPM data and creditors are likely to be wary after the quake Correa s government in 2008 defaulted on debt with a similar yield calling the value unfair His government has since returned to Wall Street and Ecuador currently has some 3 5 billion worth of bonds in circulation In a nationally televised address later on Wednesday Correa also announced the OPEC nation was poised to shed assets The country has many assets thanks to investment over all these years and we will seek to sell some of them to overcome these difficult moments he said He also unveiled several short term tax changes including a 2 point increase in the Valued Added Tax for a year as well as a one off 3 percent additional contribution on profits although the fine print was not immediately clear The VAT tax is currently 12 percent Additionally a one off tax of 0 9 percent will be imposed on people with wealth of over 1 million Ecuadoreans will also be asked to contribute one day of salary calculated on a sliding scale based on income FOOD PLEASE Briefly pausing talk of reconstruction and hindering rescuers another quake of 6 2 magnitude shook the coast before dawn on Wednesday terrifying survivors You can t imagine what a fright it was Not again I thought said Maria Quinones in Pedernales town which bore the brunt of Saturday s disaster That quake the worst in decades killed 570 people injured 7 000 others damaged close to 2 000 buildings and forced over 24 000 survivors to seek refuge in shelters according to government tallies Four days on some isolated communities struggled without water power or transport as torn up roads stymied deliveries Along the coast stadiums served as morgues and aid distribution centers I m waiting for medicines diapers for my grandson we re lacking everything said Ruth Quiroz 49 as she waited in an hour long line in front of a makeshift pharmacy set up at the Pedernales stadium On a highway outside the town some children sat holding placards saying Food please When a truck arrived to deliver water to the small town of San Jacinto hungry residents surrounded the vehicle and hit it as they yelled We want food Scores of foreign aid workers and experts have arrived in the aftermath of Saturday s disaster and about 14 000 security personnel have kept order with only sporadic looting reported But rescuers were losing hope of finding anyone alive even as relatives of the missing begged them to keep looking
Speaking from the highland capital Quito Correa said the death toll would likely rise further although at a slower rate than in previous days May these tears fertilize the soil of the future he said |
JPM | Mitsubishi Motors shares slump to record low on mileage cheating scandal | By Chang Ran Kim TOKYO Reuters Mitsubishi Motors Corp s T 7211 shares slid for a second straight day hitting a record low after it admitted to manipulating fuel economy data stirring worries of compensation costs and fines in its biggest scandal since a defect cover up a decade ago The stock has lost a third of its market value or 2 5 billion in two days after Japan s sixth biggest automaker said it had manipulated test data to overstate the fuel economy of 625 000 cars a situation the government called extremely serious The issue came to light after Nissan Motor Co T 7201 which markets a model made by Mitsubishi found a discrepancy in fuel efficiency test data It affects two models Mitsubishi s eK mini wagon and Nissan s Dayz with both automakers saying they will halt sales of the vehicles JPMorgan NYSE JPM auto analyst Akira Kishimoto estimated the cheating could cost Mitsubishi more than 50 billion yen 450 million including payments to consumers the costs of replacing parts and compensation to Nissan And while Mitsubishi said the cars were sold only in Japan the impact could be felt wider In addition to the costs of the scandal the secondary effects on worldwide sales could be very large Kishimoto wrote in a note to clients adding that the automaker has tied its brand to environmentally friendly technology with its fuel sipping plug in hybrids and fully electric vehicles Revelations of the cheating follow a cover up scandal that brought Mitsubishi close to the brink about a decade ago when the automaker admitted to systematically concealing defects over decades It was Japan s worst automotive recall scandal at the time On Thursday the shares were untraded for the whole day as they were swamped with sell orders which sometimes happens when there is particularly bad news for a company Tokyo stock exchange rules do not allow trades when there is a huge imbalance in buy and sell orders but shares close at their last indicated price Japan s transport ministry has ordered the company to submit a full report on test manipulation within a week We want the whole picture of the misconduct clarified as soon as possible and want a strict response and the safety of automobiles to be ensured Chief Cabinet Secretary Yoshihide Suga the government s top spokesman told a news conference The transport ministry has also ordered Japanese automakers to submit fuel economy test data by May 18 Mitsubishi which has annual sales of just over 1 million cars is the first Japanese automaker to report misconduct involving fuel economy tests since Volkswagen AG DE VOWG p was discovered last year to have cheated diesel emissions tests in the United States and elsewhere People briefed on the matter told Reuters Volkswagen and U S officials had reached a framework deal under which the automaker would offer to buy back almost 500 000 diesel cars that used sophisticated software to evade U S emission rules
South Korean car maker Hyundai Motor Co KS 005380 and affiliate Kia Motors Corp KS 000270 in 2014 agreed to pay 350 million in penalties to the U S government for overstating their vehicles fuel economy ratings They also resolved claims from car owners |
JPM | U S jobless claims hit 42 1 2 year low as labor market firms | By Lucia Mutikani WASHINGTON Reuters The number of Americans filing for unemployment benefits unexpectedly fell last week hitting its lowest level since 1973 suggesting an apparent sharp slowdown in economic growth in the first quarter could be temporary While another report on Thursday showed a mild weakening in factory activity in the mid Atlantic region in April manufacturers were fairly upbeat about business prospects in the next six months This together with labor market buoyancy bodes well for a pick up in economic growth in the second quarter The labor market continues to improve If the apparent slowing in GDP in the first quarter was truly a sudden change in trend we should have seen something happen in claims by now said Jim O Sullivan chief U S economist at High Frequency Economics in Valhalla New York Initial claims for state unemployment benefits declined 6 000 to a seasonally adjusted 247 000 for the week ended April16 the lowest reading since November 1973 the Labor Department said Economists polled by Reuters had forecast claims rising to263 000 in the latest week Jobless claims have now been below 300 000 a threshold associated with healthy labor market conditions for 59 weeks the longest stretch since 1973 Labor market strength comes despite signs that growth stumbled in the first quarter The economy has been hurt by a strong dollar and weak global demand which have eroded exports Lower oil prices are also a constraint as they have undercut the profits of energy firms forcing them to slash spending on capital projects There is also a tendency for reported growth to weaken in the first three months of the year because of measurement challenges which have been acknowledged by the government First quarter gross domestic product growth estimates are currently as low as a 0 2 percent annualized rate The economy grew at a 1 4 percent rate in the fourth quarter STRENGTHENING LABOR MARKET With growth weak and inflation benign labor market strength is probably not enough to nudge the Federal Reserve away from its policy of raising interest rates at a gradual pace The Fed lifted its benchmark overnight interest rate in December for the first time in nearly a decade and policymakers recently forecast only two more rate hikes this year In a separate report the Philadelphia Federal Reserve said its business conditions index fell to 1 6 this month from a reading of 12 4 in March But the survey s indicators of future activity showed continued improvement with rising expectations for increases in orders shipments and factory jobs The dollar rose marginally against a basket of currencies while prices for U S government debt fell U S stocks were little changed The four week moving average of claims considered a better measure of labor market trends as it irons out week to week volatility fell 4 500 to 260 500 last week The claims report covered the survey week for April non farm payrolls The four week average of claims rose 1 000 between the March and April survey periods implying another strong month of employment gains Payrolls increased 215 000 in March This continued strength in the labor market supports our forecast for a modest rebound in consumer spending growth in the second quarter but it also suggests that wage and inflation pressures will continue to build said Jesse Edgerton an economist at JPMorgan NYSE JPM in New York
The claims report also showed the number of people still receiving benefits after an initial week of aid dropped 39 000 to 2 14 million in the week ended April 9 the lowest level since November 2000 The four week average of the so called continuing claims was also the lowest since November 2000 |
JPM | Alaska Air CEO sees challenge in keeping Virgin customers after merger | Reuters Alaska Air Group Inc expects it will be challenging to keep customers who are loyal to Virgin America Inc after the two companies merge Alaska Air s chief executive said on an analyst call on Thursday Alaska Air said earlier this month that it would buy Virgin America a carrier with cult status among leisure and business travelers on the U S West Coast for 2 6 billion Chief Executive Brad Tilden said the biggest challenge ahead will be appealing to its own customers as well as Virgin America s passengers after that airline is merged into the Alaska brand Virgin America has a distinctive style with in flight mood lighting and media rich entertainment Shares of Alaska Air were down about 3 percent in afternoon trade JPMorgan NYSE JPM analyst Jamie Baker said on the same call that he had underestimated Virgin America s following and asked if Alaska Air expected a spillover from the deal We are aware of the value that that company has brought to its customers Our goal isn t to lose that Tilden said Our goal is to gain that as a foothold in the state of California as something that we grow in the decade or two ahead Alaska Air has said it might keep using the Virgin America brand in some form Executives said they still expect regulatory approval of the deal this year and that they are answering the U S Justice Department s questions about the merger
The company also said it grew adjusted profit 23 percent to 183 million in the first quarter or 1 45 per share not including Virgin America s results Analysts on average had expected 1 42 according to Thomson Reuters I B E S |
JPM | Florida man indicted for bribery in case tied to JPMorgan hacking | By Nate Raymond NEW YORK Reuters A Florida man was arrested on Thursday for participating in a bribery scheme aimed at supporting an illegal bitcoin exchange operated by his son and owned by an Israeli behind a series of hacking attacks on organizations such as JPMorgan Chase Co NYSE JPM Michael Murgio who serves on a school board in Palm Beach County was charged in an indictment filed in federal court in Manhattan for participating in a scheme to pay bribes to let the bitcoin exchange s operators gain control of a credit union Murgio 65 was arrested by the Federal Bureau of Investigation on Thursday He was later released on a 250 000 bond following a hearing in federal court in West Palm Beach Stuart Kaplan Murgio s lawyer said he was confident that he will be fully exonerated from the allegations The indictment added Murgio as a defendant in a case against three other individuals including his son Anthony Murgio who prosecutors say operated the unlicensed bitcoin exchange Coin mx and was involved in the bribe scheme Prosecutors have said that Coin mx was owned by Gery Shalon an Israeli accused of orchestrating a massive hacking scheme with another Israeli Ziv Orenstein and an American Joshua Samuel Aaron Prosecutors contend Shalon Orenstein and Aaron ran a criminal enterprise that hacked into a dozen companies networks stealing the personal information of more than 100 million people In the case of JPMorgan prosecutors said records belonging to more than 83 million customers were stolen While the Murgios are not accused of engaging in the hacking offenses prosecutors said they committed crimes with their co defendants Florida resident Yuri Lebedev and New Jersey pastor Trevon Gross related to the unlicensed operation of Coin mx Prosecutors said beginning in 2013 Anthony Murgio operated Coin mx which exchanged millions of dollars of the virtual currency bitcoin for customers while Lebedev supervised computer programming functions for the exchange To evade scrutiny of Coin mx the Murgios and Lebedev in 2014 acquired control of Helping Other People Excel Federal Credit Union of Jackson New Jersey by paying 150 000 in bribes to Gross its chairman the indictment said Anthony Murgio Lebedev and Gross have previously pled not guilty to the charges against them They are scheduled to face trial on Oct 31 Extradition proceedings in Israel against Shalon and Orenstein remain pending Aaron remains at large and was believed by the FBI as of November to be in Eastern Europe The case is U S v Murgio U S District Court Southern District of New York No 15 cr 00769 |
HAL | With options dwindling BP seized a chance to settle oil spill case | By Jessica Resnick Ault Dmitry Zhdannikov and Terry Wade NEW YORK LONDON HOUSTON Reuters In early May with its legal options dwindling and investors impatient BP LONDON BP Plc saw a chance to negotiate what became a 18 7 billion settlement that ended five years of litigation over the worst offshore oil spill in U S history An unexpected opportunity to secure a global deal that would wipe the slate clean of hundreds of claims and untold billions of dollar in penalties opened up when Chief Executive Bob Dudley met with Patrick Juneau the lifelong Louisiana litigator who BP had panned for handing out absurd sums of money as part of a class settlement in 2012 The British giant was ready to bury the hatchet after years of acrimony over payouts which had ballooned to more than 10 billion It had bigger problems unresolved claims by the federal government five Gulf of Mexico states and hundreds of local municipalities stemming from Macondo well blowout Toward the end of an over hour long conversation about the claims Juneau a mediator by trade steered it toward the bigger cases BP still faced from the 2010 disaster that killed 11 men and gushed oil into the Gulf of Mexico for 87 days I suggested to Mr Dudley that it seemed to me that I along with Judge Shushan and Louie Freeh thought that those matters can be and should be addressed he told Reuters Sally Shushan the eastern Louisiana district court magistrate and former Federal Bureau of Investigation director Freeh who had been enlisted to investigate Juneau s oil spill claims program were already deeply steeped in the issue Within weeks District Court Judge Carl Barbier who had overseen years of acrimonious lawsuits had designated this trio to shepherd the sides to what would be the largest corporate settlement in U S history according to people involved Within a day BP signaled its interest in further talks Juneau said Its executive board put chief financial officer Brian Gilvary a mathematics PhD and career BP man in charge of the effort hoping it would turn out better than in 2012 when an initial round of settlement talks collapsed Dudley returned to meet Juneau Shushan and Freeh in New Orleans later in May bringing the credibility of an American who grew up just a two hour drive away in Hattiesburg Mississippi That s how you settle you get the CEO to walk into the room said Jim Hood the attorney general of Mississippi one of the five states involved in the settlement It took BP nearly two months of 10 hour sessions often through the weekend to reach the provisional agreement signed a week ago finally putting a price tag on the spill s civil damages The deal swelled BP s total bill for Macondo to 53 8 billion yet provided a sense of closure for investors and boosted the share price of the company valued around 120 billion by as much as 5 percent Graphic With a federal confidentiality order still in effect and a final agreement yet to be signed much is still unknown about the secret negotiations that headed off what could have been another decade of litigation But conversations with half a dozen people directly involved or briefed on the matter show how a series of legal decisions and deft maneuvering by a trio of insiders paved the way They were losing at every count said New Orleans attorney Walter Leger Jr who represented several local parishes and municipalities in the litigation against BP I think they finally realized that all the forces of the universe suggested they d better talk ROAD TO A DEAL The road toward a settlement was laid by a series of rulings by Barbier New Orleans based Eastern Louisiana District federal court judge who has been involved in Macondo related cases since a few months after the accident In September 2014 he ruled BP was grossly negligent in the disaster and last January set the size of the spill at 3 19 million barrels Taken together the rulings meant the BP was on the hook for a fine of up to 13 7 billion under the Clean Water Act alone Billions more could be levied from a federal Natural Resource Damage Assessment Then in March BP took a pivotal step and withdrew a bid to remove Juneau as the administrator overseeing the payouts of individual and business damage claims from the uncapped 2012 class action settlement Juneau said he med Dudley shortly thereafter to reset the button Freeh had set up the meeting By early May Barbier had named the panel of neutrals to guide the process TIME TO MOVE BP was also under mounting internal pressure to free itself from a financial albatross that stymied planning Executives feared an unexpectedly large penalty could force a new round of asset sales undercutting growth The company also hoped state attorneys would be more flexible on a payout after an oil market crash that had halved prices since mid 2014 sliced BP s earnings and threatened jobs in oil states such as Texas and Louisiana A BP spokesman in Houston declined to comment Weeks of meetings and hundreds of phone calls with anywhere from 5 to 50 people at a time followed The trio mostly used conference rooms at two New Orleans hotels but also Freeh s office in Washington D C to hold meetings with everyone from federal lawyers to community representatives Juneau said Shushan a former commercial litigator who has served as U S magistrate judge since 1999 and often negotiated settlements in complex cases proved particularly pivotal as she was seen taking a firm hand when necessary The magistrate started pulling the bull by the horns said Hood That lady worked hours and hours and hours and if anybody deserves the credit in this thing it s Judge Sally Shushan MILESTONES While the talks continued under wraps a series of milestones related to Macondo passed by eliminating some of the uncertainty stemming from the disaster Barbier held off making a final ruling on the Clean Water Act penalty as widely expected while the talks continued in private On May 20 BP resolved a chunk of messy litigation by settling all cross claims from the spill with well services company Halliburton NYSE HAL Co and driller Transocean Ltd NYSE RIG Then the deadline for submitting business or individual claims from the accident closed on June 8 Finally just three days before the settlement was announced the Supreme Court dealt BP another blow dismissing the company s appeal of Barbier s ruling that the company was liable under the Clean Water Act At this point Barbier could formally penalize the company at any moment On the morning of July 2 BP signed the deal 5 5 billion for Clean Water Act violations less than the maximum 8 1 billion for natural resources damages 4 9 billion to settle economic claims from the Gulf of Mexico states and up to 1 billion reserved for local government claims It is not quite over Local entities including the La Fourche Parish Veterans district in Louisiana must still approve the agreement by July 15 and it may take months to complete the legal paperwork for the federal agreement and get a binding deal approved by the court The hard work however appears finished With the ink not yet dry on the deal last week CFO Gilvary was already heading back to London to begin a holiday
It was quite an exhausting marathon one person said Additional reporting By Kathy Finn in New Orleans and Lindsay Dunsmuir in Washington Writing by Terry Wade Editing by Jonathan Leff and Tomasz Janowski |
HAL | Shinzo Abe Wins Landslide Reelection In Japan | Monday October 23 2017Pre market futures are up again ahead of today s opening bell where Q3 earnings season shifts to high gear with some of the biggest companies in the world reporting on their businesses this week Congress continues to work on the blueprint for a tax cut reform package which has thus far looked positive for its proponents And Japanese Prime Minister Shinzo Abe has won an overwhelming election victory which may see him become the longest serving PM in that country s history As Zacks Exec VP Kevin Matras points out in his Profit from the Pros piece this morning U S stock indexes are up for now 6 straight weeks He cites not only the tax cut proposal in fostering positive market sentiment but also economic reads from late last week such as Existing Home Sales which further support the strengthening domestic economy For even more positive sentiment regarding Q3 earnings season Zacks Director of Research Sheraz Mian points out that the revisions trend for the December quarter is shaping up to be unusually favorable with growth estimates for Q4 revising upward by more than 9 He does expect these numbers to dwindle a bit over time but this is a forecast that would likely provide a major positive impact for full year 2017 and likely continuing into 2018 Japan s Rising SonShinzo Abe has overseen drastic economic improvements following more radical economic policies early in his tenure as Japan s Prime Minister And with the NKY now up for 14 straight days admittedly not as impressive as 6 weeks of gains here in the U S the Japanese citizenry has marked its vast approval of Abe s administration The Prime Minister has also indicated he wishes to make amendments to the Japanese constitution for the first time since its implementation 70 years ago Presumably these would also pertain to measures that would help grow the Japanese economy and help keep it competitive in the global marketplace Japan has enjoyed economic growth now for a year and a half following literally decades of stagnation And with Abe s ambitious policies continuing to point the way forward he would look to become the longest serving Japanese Prime Minister to serve in that country s history as of November 2019 Q3 Earnings ResultsOilfield services giant Halliburton NYSE HAL posted beats on both top and bottom lines of its Q3 earnings report before today s market open Earnings of 42 cents per share outperformed the Zacks consensus by 4 cents per share Revenues of 5 44 billion also outpaced the consensus estimate of 5 32 billion Over the previous 4 quarters Halliburton beat earnings estimates each time at an impressive 67 average HAL shares are up only modestly ahead of the bell shares are down nearly 20 year to date T Mobile U S NASDAQ TMUS also topped earnings estimates 63 cents per share versus 44 cents expected on quarterly revenues that were a smidge beneath the 10 02 billion expected Post paid churn metrics fell in the quarter whereas post paid connections rose 11 year over year T Mobile U S is trading up 1 in the early market and the stock is 5 year to date Mark VickerySenior EditorToday s Stocks from Zacks Hottest Strategies
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HAL | Elections In Japan | Pre market futures are up again ahead of today s opening bell where Q3 earnings season shifts to high gear with some of the biggest companies in the world reporting on their businesses this week Congress continues to work on the blueprint for a tax cut reform package which has thus far looked positive for its proponents And Japanese Prime Minister Shinzo Abe has won an overwhelming election victory which may see him become the longest serving PM in that country s history As Zacks Exec VP Kevin Matras points out in his Profit from the Pros piece this morning U S stock indexes are up for now 6 straight weeks He cites not only the tax cut proposal in fostering positive market sentiment but also economic reads from late last week such as Existing Home Sales which further support the strengthening domestic economy For even more positive sentiment regarding Q3 earnings season Zacks Director of Research Sheraz Mian points out that the revisions trend for the December quarter is shaping up to be unusually favorable with growth estimates for Q4 revising upward by more than 9 He does expect these numbers to dwindle a bit over time but this is a forecast that would likely provide a major positive impact for full year 2017 and likely continuing into 2018 Japan s Rising SonShinzo Abe has overseen drastic economic improvements following more radical economic policies early in his tenure as Japan s Prime Minister And with the NKY now up for 14 straight days admittedly not as impressive as 6 weeks of gains here in the U S the Japanese citizenry has marked its vast approval of Abe s administration The Prime Minister has also indicated he wishes to make amendments to the Japanese constitution for the first time since its implementation 70 years ago Presumably these would also pertain to measures that would help grow the Japanese economy and help keep it competitive in the global marketplace Japan has enjoyed economic growth now for a year and a half following literally decades of stagnation And with Abe s ambitious policies continuing to point the way forward he would look to become the longest serving Japanese Prime Minister to serve in that country s history as of November 2019 Q3 Earnings ResultsOilfield services giant Halliburton NYSE HAL posted beats on both top and bottom lines of its Q3 earnings report before today s market open Earnings of 42 cents per share outperformed the Zacks consensus by 4 cents per share Revenues of 5 44 billion also outpaced the consensus estimate of 5 32 billion Over the previous 4 quarters Halliburton beat earnings estimates each time at an impressive 67 average HAL shares are up only modestly ahead of the bell shares are down nearly 20 year to date T Mobile U S NASDAQ TMUS also topped earnings estimates 63 cents per share versus 44 cents expected on quarterly revenues that were a smidge beneath the 10 02 billion expected Post paid churn metrics fell in the quarter whereas post paid connections rose 11 year over year T Mobile U S is trading up 1 in the early market and the stock is 5 year to date |
C | Asia stocks retreat on China growth worries Nikkei closed | Investing com Asian stock markets were broadly lower on Tuesday as concerns over China s outlook weighed on appetite for riskier assets in a session absent of guidance from markets in Japan which were closed on holiday During late Asian trade Hong Kong s Hang Seng Index dropped 0 8 while Australia s S P ASX200 shed 0 37 Trading volume in the region was subdued as Japan s Nikkei 225 Index remained closed for a public holiday Shares in Hong Kong were headed for their lowest close since March 8 after China increased fuel prices for the second time in less than six weeks Refiners will charge 7 more for gasoline and 7 8 more for diesel the biggest price increases in more than two years sparking concern growth in the world s fastest growing major economy may slow more than expected Chinese Premier Wen Jiabao lowered the country s economic growth expansion target to 7 5 earlier this month down from 8 over the past seven years Rising gasoline prices pose a downside risk to the U S economic recovery New York Federal Reserve President William Dudley said Monday Shares in Chinese oil producers and refiners failed to get a boost from the price hike Sinopec shares fell 2 9 PetroChina slumped 1 1 while CNOOC dipped 0 6 Shares in property developers performed poorly extending their recent run of declines Shares in Agile Property Holdings dropped 3 5 Evergrande Real Estate Group slumped 2 95 and Sino Land declined 1 Sun Hung Kai Property shares came under selling pressure losing 2 4 after a senior executive at the property group had been arrested by Hong Kong s anti graft enforcement agency as part of an investigation into suspected bribery Financials were broadly weaker ahead of key earnings later this week With 75 of Chinese companies having reported fourth quarter results so far 45 have missed analysts estimates while only 17 have beat them Citigroup said in a report Agricultural Bank of China which will post earnings on Thursday first among the so called Big Four Chinese banks shed 1 4 Meanwhile in Australia raw material producers came under pressure amid concerns over a slowdown in demand from China which was the top consumer for many commodities Shares in OneSteel tumbled 5 35 Alumina dropped 2 while gold producer Newcrest Mining declined 1 15 Mining giant BHP Billiton dipped 0 1 after its chairman reportedly said the miner was revaluating its capital spending plans amid slowing growth in China Looking ahead the outlook for European stock markets was mildly downbeat The EURO STOXX 50 futures pointed to a loss of 0 25 France s CAC 40 futures indicated a decline of 0 3 Germany s DAX futures shed 0 3 while London s FTSE 100 futures slipped 0 35 Later in the day the U S was to produce official data on building permits and housing starts Meanwhile Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington his comments would be closely watched |
C | Euro stocks sharply lower on manufacturing DAX off 1 27 | Investing com European stocks traded sharply lower Thursday dropping for the fourth straight session on contracting manufacturing in China and the euro zone Near the close of European trade the EURO STOXX 50 traded down 1 46 France s CAC 40 fell 1 56 while Germany s DAX traded off 1 27 Meanwhile in the U K the FTSE 100 moved higher 0 79 The equity sell off was fueled after Markit stated that its preliminary euro zone manufacturing purchasing managers index fell to 47 7 in March from a final reading of 49 0 the previous month below expectations for a rise to 49 6 In addition the report indicated that the services purchasing managers index fell to to 48 7 from 48 8 in February Analysts had expected the services PMI to rise to 49 3 in March The data came after a report showed that industrial new orders in the euro zone tumbled by a seasonally adjusted 2 3 in January compared to expectations for a 2 1 drop Earlier in the day data showed that manufacturing activity in Germany slowed to the lowest level in four months in March while the services sector also hit a four month low Sentiment also weakened after a report showed that Chinese manufacturing activity contracted for a fifth consecutive month underlining concerns over a possible slowdown in growth in the world s second largest economy The reports overshadowed data showing that U S jobless claims fell to the lowest level since February 2008 last week The U S Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 17 fell by 5 000 to a seasonally adjusted 348 000 beating expectations for a decline of 3 000 to 350 000 The previous week s figure was revised up to 353 000 from 351 000 Ultra luxury retailer Hermes International climbed 2 3 after posting earnings that exceeded expectations Bank of Ireland plunged 7 4 when Citigroup initiated coverage with a sell recommendation SGL Carbon the German carbon material maker soared 7 8 after reporting a 40 net income spike and a dividend In U S midsession trade stocks are lower with the Dow down 0 49 the S P 500 off 0 63 and the Nasdaq Composite giving back 0 25 Investors are awaiting U K investor confidence and U S new home sales on Friday |
C | Euro stocks trading lower on U K confidence DAX off 0 18 | Investing com European stocks traded lower Friday falling for the fifth straight session as a report indicated lowered confidence in the U K and investors await a U S housing report In midsession European trade the EURO STOXX 50 traded down 0 67 France s CAC 40 fell 0 49 while Germany s DAX traded off 0 18 Meanwhile in the U K the FTSE 100 slipped 0 13 Leading the selling a report from the Nationwide Building Society showed that U K confidence fell from 44 from 47 in January indicating Briton s feel more pessimistic about the future Anticipation is running high that the U S new home sales report released at 10 00 a m New York time will indicate an increase to 325 000 annual rate in February This would mark the fastest growth since December 2010 supporting possible monetary policy change in the world s largest economy On Thursday data showed that manufacturing activity in Germany slowed to the lowest level in four months in March while the services sector also hit a four month low Sentiment also weakened after a report showed that Chinese manufacturing activity contracted for a fifth consecutive month underlining concerns over a possible slowdown in growth in the world s second largest economy The reports overshadowed data showing that U S jobless claims fell to the lowest level since February 2008 last week The U S Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 17 fell by 5 000 to a seasonally adjusted 348 000 beating expectations for a decline of 3 000 to 350 000 The previous week s figure was revised up to 353 000 from 351 000 BT a fixed line operator soared 6 2 after stating it will narrow its pension plan s deficit Whitbread added 1 4 after being named by HSBC named company its favorite hotel stock and increased its estimate for the share price Randgold dropped 2 2 due to Citigroup cutting its rating to neutral from buy due to a coup in Mali where the company operates three mines |
C | Brent Spikes On Egyptian Death Toll | Brent crude oil prices jumped on Thursday after tension in Egypt escalated and reignited worries that the nation s conflict would shut down the Suez Canal where much of the world s crude oil passes The commodity traded at 111 28 at 8 44 GMT on Thursday morning CNBC reported that a state of emergency has been declared in Egypt after riot police and ousted President Mohamed Morsi supporters clashed in deadly riots Egypt has been in a fragile state since the first freely elected president was overthrown Although Egypt itself is not an oil producing country many worry that the conflict in Egypt could spill over the nation s borders and create tension in an already unstable region Supply And LaborSupply worries in Libya also kept Brent prices afloat as labor protests kept the nation s largest oil export terminals from operating normally Libyan oil output has dipped to 600 000 barrels per day in the wake of the protests Economic data from Europe also helped support crude prices as the figures indicated that the recession hit euro zone was finally making a comeback GDP data showed higher than expected growth for the 17 nation bloc as a whole with Germany and France leading the way The data confirmed that a modest euro zone recovery was on the horizon The Taper EffectRecent data from the US also points to growing oil demand however investors are worried that the positive economic data will prompt the US Federal Reserve to begin tapering its stimulus plan in September US retail sales figures showed the nation s consumer spending was on the rise something that many believe will contribute to the Fed s decision to wind down its 85 billion per month bond buying plan c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Private Sector Debt Could Hinder Euro Zone Recovery | The euro steadied above 1 33 on Friday after a choppy day of trading on Thursday The common currency traded at 1 3344 at 7 54 GMT on Friday morning as investors digested this week s slew of data and made their predictions for the currency s future The euro zone finally exited its longest ever recession in the second quarter posting a modest 0 3 percent growth The bloc s recovery was lead by Germany where the region s crisis has had a relatively small effect on the economy However German policy makers are currently reluctant to make any major decisions regarding the bloc s future since general elections are coming up on September 22 With a modest recovery in the second quarter many are questioning whether or not the euro zone can hold on to its progress and completely emerge from its financial crisis According to The Wall Street Journal the region s private sector debt may prove to be an anchor keeping the bloc from recovery With massive amounts of debt to repay companies are not able to invest households are cutting back on spending and banks are unable to lend As the euro zone attempts to lower these debts many economists expect to see only tepid growth if at all As banks attempt to deleverage and meet new stricter requirements they may find it difficult to raise the kind of capital needed to keep from freezing up Euro zone policies have been attempting to recapitalize banks but many are wondering where the money will come from With most of the region s governments struggling for cash themselves banks could be forced to convert some creditors claims into equity The process will likely boost lending rates and lower to the region s already depressed domestic demand With banks households and governments all attempting to lower debt at the same time growth will be a difficult prospect c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Earnings Housing And Minutes Next Week s Got It All | In the coming week the FOMC minutes will take center stage as investors look for cues as to whether the Fed will taper asset purchases in September Also key housing indicators and housing related stocks will be in focus And of course there s plenty of earnings on tap Key EarningsIn the coming week the key earnings are from Hewlett Packard HPQ Home Depot HD and Target TGT Hewlett PackardHewlett Packard is expected to report its third quarter results on Wednesday The company is expected to report EPS of 0 86 vs 1 00 a year ago on revenue of 27 25 billion vs 29 67 billion a year ago Analysts at Morgan Stanley weighed in on the stock ahead of the earnings report The bank has an Overweight rating on the stock and a 28 price target HP is two thirds of the way through a 29K workforce reduction but front end loaded investments in R D and process improvements mitigated savings in F1H13 With cost per employee at the lowest level in five years new product introductions a revamped channel program and improving US enterprise IT demand should begin to drive operating leverage in F2H13 The combination of printer supplies growth plus some Yen benefit less bad PC trends improving storage growth better software deal close rates and services restructuring ahead of plan with slower revenue run off all lead us to believe HP can do better than the 7 Y Y revenue flat gross margin and 1 Y Y OpEx assumptions for F2H13 Currency swings and aggressive server pricing are headwinds that do not fully offset the long list of tailwinds in our view Sustainability of cash flow remains a key investor concern but our in depth analysis of peer cash conversion cycles and HP s historical ranges suggest a low 20 day cash cycle is a reasonable target This combined with fewer restructuring outlays leads to FCF growth in FY14 to 4 share With FCF above EPS for the first time in four years earnings quality is improving and we believe the company will be rewarded for EPS beats with multiple expansion As this plays out our bull case of 8x FY14 FCF of 4 20 or 34 becomes increasingly likely Meanwhile Goldman Sachs is taking the contrarian view on the stock heading into earnings The bank has a Sell rating on the stock and a 17 price target While HP s earnings and cash flow performance have handily exceeded expectations over the past two quarters we continue to believe the company s historical underinvestment and continued end market challenges could force a reset in expectations and we remain below consensus as a result For the July quarter we model EPS of 0 78 versus guidance of 0 84 to 0 87 and consensus of 0 87 While continued savings from recent restructuring actions and a lower reinvestment rate could allow the company to exceed our forecast we believe the secular trends in the business remain impaired While the company s reinvestment rate has been lower than we expected and resulted in higher net savings it remains our view that this strategy is unsustainable and that the company s room to maneuver is growing more limited with each passing quarter We do believe that HP s turnaround efforts have been encouraging thus far but we also believe that expectations for the pace of the recovery and steady state earnings are too high J P Morgan however is neutral on the stock heading into earnings They raised their price target to 29 ahead of the release from 24 50 For Jul Q our revised revenue and non GAAP EPS estimates are 27 09bn and 0 89 versus 27 02bn and 0 85 previously We also are lifting our non GAAP EPS estimates for succeeding quarters Our research indicates that our revenue assumptions for services and imaging segments may have been too cautious Meanwhile our assumptions for PCs servers storage and networking require modest revisions lower Net result is that our revenue estimates change little but the EPS increases are meaningful Our new C2014 non GAAP EPS estimate is 3 75 Considering our Dec 14 price target of 29 the implied P E multiple is 7 7x which trails the current peer group average of 10 6x If HP can continue improving EPS and develop a clear path to YoY revenue growth the stock s trading multiples stand to improve in our view Home DepotHome Depot is expected to report second quarter EPS of 1 20 vs 1 01 a year ago on revenue of 21 72 billion vs 20 57 billion a year ago The report is expected before the market open on Tuesday Deutsche Bank maintained their 80 price target and Hold rating heading into earnings They are looking for Home Depot to raise guidance though Consensus estimate for HD are 3 63 for the year on 4 8 comps compared to current guidance of 3 52 and 4 0 DB is at 3 58 and 4 8 Guidance includes another 4 4b in buybacks on top of the 2 1b bought in 1Q13 DB is estimating another 5 2b including 1 1b in 2Q13 Consistency is the key for HD with investors increasingly comfortable that HD is in control of their business regardless of the macro or competitive environment Therefore we think any color around the potential impact of higher interest rates will be a key focus for investors We also expect an update on the potential to add more debt this year and increase the buyback plan this year to above the already announced 6 5b TargetTarget is expected to report second quarter results on Wednesday before the bell Analysts are looking for EPS of 0 99 vs 1 06 a year ago on revenue of 17 33 billion vs 16 78 billion a year ago J P Morgan recently downgraded the stock to Neutral and kept their price target at 74 We are downgrading TGT to Neutral as the current stock price is just 3 below our December price target of 74 and there are significant pressure points on earnings ahead First the stock is trading at 16 5x our 2013 EPS estimate of 4 35 vs consensus of 4 32 and guidance of 4 25 4 45 adjusted to include Canadian dilution of 0 45 and there is a lot of uncertainty regarding EPS growth into 2014 Second we believe the pressures on the low end consumer persist with the 2 payroll tax increase nearly offsetting 2 9 YTD wage growth and mitigating the lift from TGT s merchandising efforts e g REDcard and PFresh Third this backdrop affects the near term outlook and that plus six fewer selling days between Thanksgiving and Christmas portend a promotional environment in 4Q while TGT continues to play catch up in ecommerce Moreover the comp lift from PFresh is estimated to fall from 130 bps last year to 70 bps this year and 40 bps in 2014 Finally as we look to 2014 the EPS contribution from Canada remains uncertain while representing the single largest driver of expected earnings growth YOY We are modeling 0 08 of accretion vs an estimated 0 45 drag in 2013 representing 43 of our incremental earnings YOY Over the last nine months TGT is up 15 vs the S P 500 increase of 20 Meanwhile Piper Jaffray remains bullish heading into earnings They have an Overweight rating and a 80 price target on Target We remain positive on Target s ability to develop new and innovative programs to gain or maintain market share in key categories The Beauty Concierge program appears to be a successful example having expanded to a total of 200 stores in four markets this summer after debuting in 28 stores in one market last year We believe the expanded Beauty Concierge program can deliver a couple cents of incremental EPS in 2014 and potentially up to 0 15 in 2015 if expanded to half the store base Beyond the beauty category Target continues to test new concepts focused on individual categories such as Ticket streaming video a baby department with dedicated and trained staff expansion of the organic food assortment and renovation of parts of the electronics department for the launch of new video game consoles evidence in our opinion that Target is now evolving with the consumer Assuming base beauty sales in Beauty Concierge stores are currently 1 5M store 2 7B in total annual cost of 50 000 per concierge and a 40 gross margin we estimate the potential EPS contribution to 2014 EPS is in the neighborhood of 0 01 0 02 assuming a 15 25 realized lift in the beauty category Because the markets Target is running the program in are some of the company s better markets we believe the first 200 stores could be generating closer to 2 0M in annual sales suggesting the range could be slightly higher at 0 02 0 03 If the program was expanded to half the U S store base during 2014 we estimate the contribution to 2015 EPS would be 0 05 0 15 based on initial sales of 1 5 2 0M per store Key Economics ReleasesOn the economics calendar next week the FOMC minutes will be in focus as investors fear tapering Also key housing indicators will be in focus MondayEarnings Expected From Vanguard Health Systems VHS Urban Outfitters URBN and Bob Evans Farms BOBE Economic Releases Expected the weekly 3 and 6 month bill auctions TuesdayEarnings Expected From Home Depot HD TJX TJX Medtronic MDT Intuit INTU and Analog Devices ADI Economic Releases Expected German PPI the Chicago Fed National Activity Index the weekly Redbook and a 4 and 52 week bill auction WednesdayEarnings Expected From Hewlett Packard HPQ Target TGT Lowe s LOW Staples SPLS Limited Brands LTD J M Smucker American Eagle Outfitters AEO and Toll Brothers TOL Economic Releases Expected MBA Purchase Applications Existing Home Sales and the FOMC Minutes ThursdayThursdayEarnings Expected From Cato CATO Hormel Foods HRL Dollar Tree DLTR Gamestop GME Abercrombie and Fitch ANF Marvell Tech MRVL and Autodesk ADSK Economic Releases Expected the flash Chinese Eurozone French German and British PMI s are due out both services and manufacturing for all but China Canadian retail sales initial jobless claims PMI flash manufacturing index the FHFA Home Price Index leading indicators the KC Fed Manufacturing Index a speech from Fed President Richard Fisher and China s FDI report FridayEarnings Expected From Ann Inc ANN Economic Releases Expected German GDP report New Home Sales and a speech from Fed Vice Chairman Janet Yellen c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Euro On A High As Investors Exit EMs | The euro reached a new six month high overnight as anticipation of the release of the US Federal Reserve s policy meeting minutes caused investors to pile their money into less risky assets The common currency traded at 1 3406 at 7 07 GMT on Wednesday morning just before the minutes were released Fed Hit EMsEmerging markets have been especially hard hit by the Fed s decision to roll back its 85 billion per month stimulus spending and stocks and currencies in those countries have taken a plunge The Indian rupee has fallen to record lows along with the Indonesian rupiah and the Malaysian ringgit which are at four and three year lows respectively Investors are hoping to find out more clues about the timing of the Fed s tapering plan from the meeting minutes to be released later in the day Most are betting on September as a starting date for the Fed to begin trimming its stimulus spending Luck Of the EuroThe Wall Street Journal reported that the euro has benefited more than other currencies from worries about the Fed s tapering as investors are getting out of carry trades in which they bought high yielding assets from emerging markets using low yielding currencies like the euro With the recent interest rate volatility most are getting rid of emerging markets and pouring their money back into low yielding currencies Due to the economic problems in the eurozone at the beginning of the year the common currency was the popular choice to fund carry trades Now as investors reverse these trades the euro has come out on top c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | AUD Flies High On JPY Weakness Metals Up | The Australian Dollar led the pack higher through the European session as AUD USD tested US 0 9022 EUR AUD fell to A 1 4797 AUD JPY appreciated to 87 40 and GBP AUD tested A 1 7271 A shook off a decline in the June leading index to 0 2 from the prior reading of 0 0 and found a strong bid when it was reported that Chinese August HSBC Markit flash manufacturing PMI improved to 50 1 from the prior reading of 47 7 and above expectations Stronger Chinese manufacturing activity implies greater demand for input materials and China is a major importer of Australian resources The Japanese yen was on the defensive across the board through the European session as USD JPY rallied to 98 44 EUR JPY climbed to 131 50 GBP JPY reached 153 56 and CHF JPY gained to 106 54 Japanese data have been quite weak lately especially this week s July trade balance numbers that dramatically worsened on account of the recently stronger yen Today s data saw July machine tool orders off 12 2 y y down from the prior print of 12 1 The 98 75 area represents a major short term technical level for USD JPY with the 99 92 area as upside resistance Many Japan watchers expect the Abe government and Bank of Japan to step up rhetoric and seek additional JPY weakness The Euro found good demand against most peers through the European session as EUR USD tested US 1 3363 EUR GBP climbed to 0 8573 and EUR CHF reached CHF 1 2346 The Eurozone August composite PMI rallied sharply to 51 7 from the prior reading of 50 5 exceeding expectations as the Eurozone composite services PMI also climbed sharply to 51 0 German August manufacturing PMI improved to 52 0 and French manufacturing PMI was unchanged at 47 7 These data suggest peripheral Eurozone members are picking up some economic slack at the fastest pace since February 2012 Citigroup has changed its ECB forecast and no longer expects the ECB to reduce rates in Q4 Eurogroup Chairman Dijsseelbloem predicted Greece will require another aid package in 2014 The Swiss franc was quite active through the European session as USD CHF moved higher to CHF 0 9248 GBP CHF slumped to CHF 1 4393 and AUD CHF gained to CHF 0 8335 The Swiss July trade balance came in below expectations at CHF 2 38 billion down from the prior reading of CHF 2 82 billion as imports expanded a sharp 3 2 m m and exports were 1 9 m m The British pound was mostly pressured against rivals through the European session as GBP USD tumbled to US 1 5575 and GBP NZD fell to NZ 1 9845 Major U K data expected tomorrow include July BBA loans for house purchases and Q2 GDP numbers with a 0 6 q q expansion expected Gold and Silver appreciated through the European session as Gold tested 1374 33 and Silver reached 23 276 Gold found support around the 1355 07 area and Silver found support from the 22 463 level Stronger demand for the Metals complex as traders reacted to the FOMC meeting minutes from 30 31 July released yesterday Some Fed watchers believe the FOMC minutes were more pessimistic than expected calling into question whether or not the Fed will taper QE policy starting next month Gold and Silver also moved higher on the stronger Chinese PMI data Crude Oil was bid higher through the European session with Brent futures reaching 109 74 and WTI futures testing 104 57 Weekly U S DoE inventories data released yesterday saw crude oil inventories decline 1 428 million barrels just below expectations while the decline in gasoline inventories came in at 4 029 million barrels |
JPM | Wells Fargo profit falls 7 percent as bad loan provisions surge | By Sruthi Shankar Reuters Wells Fargo Co s N WFC quarterly profit fell 7 percent as the No 3 U S bank by assets set aside more than 1 billion to cover bad loans saying its energy portfolio remained under significant stress Shares of Wells Fargo which has said that nearly 2 percent of its loans are to the energy industry fell 0 5 percent to 48 80 in afternoon trading on Thursday Income from all three businesses declined with its largest business community banking reporting a 7 percent fall in the first quarter ended March 31 The increases in losses and nonperforming loans in the first quarter were primarily due to continued challenges in the oil and gas portfolio Chief Risk Officer Mike Loughlin said in a statement Oil prices have dropped by two thirds since 2014 gutting the global energy markets and driving a string of bankruptcies as debt laden drillers default on their loans About a third of listed oil and gas related companies with more than 150 billion in debt are at high risk of bankruptcy this year auditing and consulting firm Deloitte has said This week alone Peabody Energy Corp N BTU the biggest U S coal miner and Energy XXI Ltd O EXXI a major oil and gas producer in Louisiana Texas and the Gulf of Mexico filed for bankruptcy Commercial and industrial loans including those to oil and gas firms rose 7 percent from the fourth quarter to 321 55 billion Non interest costs rose 4 percent as the bank shelled out more for employee benefits and compensation Wells Fargo s mortgage banking revenue rose 3 3 percent to 1 6 billion Although Wells is the largest U S mortgage lender by assets JPMorgan Chase Co N JPM topped Wells in that category during the quarter at 1 9 billion Wells Fargo was among the five big banks failed by U S regulators on Wednesday on their plans for a bankruptcy that would not rely on taxpayer money The net income applicable to common shareholders fell to 5 09 billion or 99 cents per share but total revenue rose 4 3 percent to 22 2 billion The results however beat Wall Street s lowered expectations of a profit of 97 cents per share and revenue of 21 6 billion according to Thomson Reuters I B E S Provisions for bad loans surged nearly 80 percent to 1 09 billion Wells Fargo shares had fallen 11 percent in the first quarter BREAKINGVIEWS Wells Fargo at risk of losing its edge Graphic Stock performance of large cap U S banks in Q1 Graphic Loan performance of large cap U S banks
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HAL | BP reaches 18 7 billion settlement over deadly 2010 spill | By Terry Wade and Kristen Hays HOUSTON Reuters BP LONDON BP Plc will pay up to 18 7 billion in penalties to the U S government and five states to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in U S history The agreement comes on top of the 43 8 billion that BP has already set aside for criminal and civil penalties and cleanup costs BP shares jumped more than 5 percent in New York trading as investors said the British company often mentioned as a potential acquisition target could now turn the page on one of the darkest chapters in its century long history Under the agreement with the U S Department of Justice and the states BP will pay at least 12 8 billion for Clean Water Act fines and natural resource damages plus 4 9 billion to states The payouts will be staggered over as many as 18 years The preliminary settlement subject to all sorts of variables avoids a substantial amount of further litigation The rig explosion on April 20 2010 the worst offshore oil disaster in U S history killed 11 workers and spewed millions of barrels of oil onto the shorelines of several states for nearly three months The agreement which still needs to be approved by courts covers Clean Water Act fines and natural resources damages along with claims by Alabama Florida Louisiana Mississippi and Texas as well as 400 local government entities This is a realistic outcome which provides clarity and certainty for all parties BP Chief Executive Officer Bob Dudley said in a statement For BP this agreement will resolve the largest liabilities remaining from the tragic accident The size of the settlement was slightly more than the 17 6 billion that investors had initially feared BP would be fined for gross negligence under the Clean Water Act alone U S District Court Judge Carl Barbier who has overseen the case was expected to rule on that issue later this year Even then BP would have faced years of lawsuits to address claims by states and by the federal government under a natural resource damage assessment The settlement announced Thursday closes off those remaining liabilities This agreement will not only restore the damage inflicted on our coastal resources by the Deepwater Horizon oil spill it will also allow Louisiana to continue aggressively fighting coastal erosion said Governor Bobby Jindal of Louisiana the hardest hit state It was not immediately clear how BP will fund the settlement BP has shed billions in assets to pay for the spill eroding about one fifth of the earnings base it had before 2010 BP s smaller size among the bigger oil majors has made it vulnerable to potential takeovers especially with the sharp drop in oil prices Companies have been slightly hesitant to make a bid while this has been hanging over it so I think it does clear the way for a potential bid said Joe Rundle head of trading at U K based ETX Capital BP said the government and the states could jointly demand an acceleration of payments if the company were acquired Previous settlements also included an uncapped fund originally set at 7 8 billion to compensate individuals claiming economic harm from the spill BP also settled with Transocean Ltd NYSE RIG which owned the Deepwater Horizon drilling rig and Halliburton NYSE HAL Co which worked on the Macondo well
Now Gulf Coast restoration can begin in earnest It s time to heal the wounds that BP tore in Gulf Coast ecosystems and communities said David Yarnold CEO of the National Audubon Society |
C | European stocks extend global equity rally DAX up 1 | Investing com European stock markets were broadly higher on Wednesday joining a global equity rally as an upbeat assessment of the U S economy from the Federal Reserve and favorable stress test results for a number of major U S banks boosted investor sentiment During European morning trade the EURO STOXX 50 jumped 1 05 France s CAC 40 gained 0 7 while Germany s DAX 30 surged 1 U S stocks had their best day of 2012 on Tuesday closing at multi year highs after the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling The Fed also said strains in the global financial markets have eased Further boosting sentiment the Fed made a surprise announcement of the results of its annual stress test for banks JP Morgan Chase and 14 other financial institutions passed Four including Citigroup failed The stress test results boosted European banks higher with German banking heavyweights Deutsche Bank and Commerzbank jumping 3 15 and 2 85 respectively while French lenders BNP Paribas and Societe Generale added 3 and 2 5 apiece Peripheral lenders were also broadly higher with Italy s Intesa Sanpaolo gaining 2 55 and Spain s Banco Santander climbing 2 15 Meanwhile German utility provider E ON surged 6 after reporting stronger than expected 2011 earnings Sales rose 22 to EUR113 billion during the period Also in Germany luxury clothing maker Hugo Boss soared 8 5 after saying that 2012 operating profit may rise by more than 10 Investors were looking forward to euro zone data on consumer price inflation as well as data on industrial production Elsewhere London s commodity heavy FTSE 100 rose 0 45 to hit the highest level since July boosted by gains in lenders Barclays shares jumped 3 25 Lloyds Banking Group rose 2 15 while HSBC Holdings and Royal Bank of Scotland added 1 and 1 8 respectively Also contributing to gains shares in Legal General Group surged 4 9 after the fourth biggest U K insurer boosted its dividend and said 2011 operating profit rose to GBP1 06 billion above market expectations Meanwhile shares in Home Retail Group rallied 5 5 after JP Morgan upgraded the stock to overweight from underweight Later Wednesday the U K was to release official data on the claimant count change and the unemployment rate In the U S equity markets pointed to a modestly higher open after closing at multi year highs on Tuesday The Dow Jones Industrial Average futures pointed to a gain of 0 1 S P 500 futures eased up 0 1 while the Nasdaq 100 futures indicated a 0 1 gain Later in the day the U S was to produce official data on the country s current account as well as data on import prices and crude oil stockpiles In addition Federal Reserve Chairman Ben Bernanke was also due to speak |
C | U S futures mostly flat with Citigroup in focus Dow up 0 05 | Investing com U S stock futures pointed to a flat open on Wednesday pausing a day after rallying to multi year highs as shares in Citigroup came under pressure following the release of stress test results of the largest U S lenders Ahead of the open the Dow Jones Industrial Average futures pointed to a modest gain of 0 05 S P 500 futures signaled a 0 05 decline while the Nasdaq 100 futures indicated a 0 1 drop Stocks soared on Tuesday with the Nasdaq composite closing above 3 000 for the first time since December 2000 during the dot com boom The Dow settled at the highest level since December 2007 while the S P closed at its highest level since June 5 2008 The upbeat mood carried over to the Asian and European sessions on Wednesday after the Federal Reserve said it saw signs of an improving economy and expected the unemployment rate to keep falling The Fed also said strains in the global financial markets have eased Shares in lenders were expected to be in focus after the Fed made a surprise announcement of the results of its annual stress test for banks late Tuesday According to the results JP Morgan Chase and 14 other financial institutions could maintain adequate capital levels even in a recession scenario while continuing to pay dividends and buy back stock Four including Citigroup failed Citigroup shares dropped 3 4 after the Fed said the bank would have to resubmit their capital plans to the central bank The three other lenders that failed were Ally Financial MetLife and SunTrust Banks MetLife was down 3 5 ahead of the open while SunTrust fell 3 6 The Fed had planned to release the results on Thursday afternoon But it moved up the announcement after JP Morgan declared its dividend increase The bank said it had the Fed s blessing to raise the dividend Meanwhile shares in Cheniere Energy slumped 4 1 after announcing it will sell 17 million shares of common stock in an underwritten public offering Shares in social media website Zynga retreated 1 5 after reports surfaced that it was planning a secondary stock offering with a filing possibly coming as early as Wednesday Across the Atlantic European stock markets were broadly higher with indices extending gains after euro zone finance ministers formally approved a second bailout for Greece The EURO STOXX 50 rallied 1 2 France s CAC 40 jumped 0 8 Germany s DAX surged 1 15 while Britain s FTSE 100 added 0 35 During the Asian trading session Hong Kong s Hang Seng Index dipped 0 15 while Japan s Nikkei 225 Index soared 1 55 to settle at above 10 000 for the first time since July Shares in Hong Kong however turned lower erasing gains of as much as 1 1 after Chinese Premier Wen Jiabao dampened expectations of any near term easing of measures in the property sector Wen said loosening property controls risks chaos in China s housing sector and warned of damage to the economy if a bubble were allowed to develop Later in the day the U S was to produce official data on the country s current account as well as data on import prices and crude oil stockpiles In addition Federal Reserve Chairman Ben Bernanke was also due to speak |
C | European stocks add to gains after Greek aid approval DAX up 1 25 | Investing com European stock markets added to strong gains on Wednesday climbing to the session highs after euro zone finance ministers formally approved a second bailout for Greece During European morning trade the EURO STOXX 50 rose 1 15 France s CAC 40 advanced 0 75 while Germany s DAX 30 surged 1 25 European equities added to gains after Eurogroup head Jean Claude Juncker said euro zone finance ministers had formally approved the release of a second financial aid package for Greece worth EUR130 billion Stocks were already higher after the open following an upbeat assessment of the U S economy from the Federal Reserve on Tuesday and favorable stress test results for a number of major U S banks boosted investor sentiment The stress test results boosted European banks higher with French lenders BNP Paribas and Societe Generale rallying 3 7 and 2 9 respectively while German banking heavyweights Deutsche Bank and Commerzbank rose 3 05 and 3 4 apiece Peripheral lenders also performed strongly with Italy s Intesa Sanpaolo gaining 2 55 and Spain s Banco Santander climbing 1 85 Meanwhile German utility provider E ON surged 6 65 after reporting stronger than expected 2011 earnings Sales rose 22 to EUR113 billion during the period Automakers were broadly higher boosted by the upbeat global economic outlook Volkswagen shares were up 3 1 BMW gained 3 5 while French automaker Peugeot soared 5 Earlier in the day official data showed that industrial production across the euro zone rose in January for the first time in three months while the annualized rate of consumer price inflation was unchanged in February and remained above the European Central Bank s target Elsewhere London s FTSE 100 rose 0 4 to briefly hit the highest level since July boosted by gains in lenders Barclays shares jumped 3 9 Lloyds Banking Group rose 2 4 while Royal Bank of Scotland added 2 75 Also contributing to gains shares in Legal General Group surged 5 6 after the fourth biggest U K insurer boosted its dividend and said 2011 operating profit rose to GBP1 06 billion above market expectations Earlier Wednesday government data showed that the number of people claiming unemployment benefits rose more than expected in February while the unemployment rate held steady at 8 4 the highest level since 1995 In the U S equity markets pointed to a flat open pausing a day after rallying to multi year highs Citigroup shares came under pressure following the release of stress test results of the largest U S lenders The Dow Jones Industrial Average futures pointed to a gain of 0 05 S P 500 futures was flat while the Nasdaq 100 futures also pointed to a flat open In a report released earlier the U S Bureau of Economic Analysis said the country s current account deficit widened to a seasonally adjusted USD124 1 billion in the fourth quarter of last year Separate data showed that U S import prices rose by a less than expected 0 4 in February Also Wednesday Federal Reserve Chairman Ben Bernanke was due to speak |
C | Credit Suisse Bank Impact On Alibaba IPO | The IPO of Alibaba Group is poised to be lead by Credit Suisse Bank Alibaba s public offering is expected to occur before the end of 2013 The past weeks for Alibaba have spurred meetings with investment banks though no official announcement from Alibaba Group Holding Ltd has been made to IPO Expected valuation of Alibaba would be at 60 100 billion and could raise 15 billion The 8 billion loan that was made has also drawn significant attention for the IPO by Alibaba from investment banks Australian and New Zealand Banking Group Deutsche Bank HSBC JPMorgan Mizuho Corporate Bank Citigroup Credit Suisse DBS Bank Morgan Stanley and Goldman Sachs recently offering 500 million in financing Investment bank and executives from firms such as Citigroup Morgan Stanley and Credit Suisse have been involved in meetings causing even more speculation of the IPO with investors Last year Credit Suisse Bank was the lead investment banking adviser to Alibaba when it bought back 7 1 billion worth of its stock from Yahoo Inc leaving Yahoo with a 24 percent investment in the company Billionaire founder and Chairman Jack Ma stated to Wall Street Journal The company was ready for an IPO The challenges with regulation concerns arose in which in an interview China s financial regulators have been excessive and called for greater openness in an industry he said does not serve the majority of Chinese China s financial industry especially the banking industry only serves 20 of clients and I see there are 80 of the clients are not covered by their services he also in the interview Credit Suisse has a history of holding important roles with Alibaba from financing a 2 5 billion deal to take private the Alibaba com business to business unit to purchasing its Yahoo Inc stock buyback Jack Ma spoke last year at the Credit Suisse s Asian investment conference on behalf of Alibaba It is still questionable with Alibaba s IPO and how Asia s financial regulations and regulators will respond to Alibaba s most recent indications of IPO moves |
C | More Market Manipulation Is Wall Street Out Of Control | First it was Libor then currencies then commodities Now the market manipulation game extends to a vehicle known as ISDA fix that is used as a benchmark for pricing only trillions of dollars of worth of transactions Dodd Frank reformed Wall Street right Swaps Probe Finds Banks Manipulated Rate at Expense of Retirees U S investigators have uncovered evidence that banks reaped millions of dollars in trading profits at the expense of companies and pension funds by manipulating a benchmark for interest rate derivatives Recorded telephone calls and e mails reviewed by the Commodity Futures Trading Commission show that traders at Wall Street banks instructed ICAP Plc brokers in Jersey City New Jersey to buy or sell as many interest rate swaps as necessary to move the benchmark rate known as ISDAfix to a predetermined level according to a person with knowledge of the matter By rigging the measure the banks stood to profit on separate derivatives trades they had with clients who were seeking to hedge against moves in interest rates Banks sought to change the value of the swaps because the ISDAfix rate sets prices for the other derivatives which are used by firms from the California Public Employees Retirement System to Pacific Investment Management Co said the person who asked not to be identified because the details aren t public That may run afoul of the 2010 Dodd Frank Act which bars traders from intentionally interfering with the orderly execution of transactions that determine settlement prices The phone calls and e mails emerging since Bloomberg News first reported in April on the rigging of ISDAfix add to growing evidence that banks have gained financially by distorting key financial gauges in world markets on everything from interest rates to currencies to commodities The revelations show the manipulation of the London interbank offered rate or Libor a benchmark for 300 trillion of securities may be the tip of the iceberg The Libor probe has so far led to fines of about 2 5 billion against Barclays Plc BARC UBS AG UBSN and Royal Bank of Scotland Group Plc RBS While the indexes under scrutiny are little known to the public their influence extends to trillions of dollars in securities and derivatives Britain s markets regulator is looking into the currency market where 4 7 trillion is exchanged each day after Bloomberg News reported in June that traders have manipulated key rates for more than a decade As part of the ISDAfix investigation the CFTC has interviewed more than a dozen traders and brokers since May at Barclays and ICAP both based in London and New York based Citigroup Inc and plans to talk with people at 13 other banks as it sifts through 1 million e mails the person said Barclays gave the CFTC recorded phone calls the person said Companies pension funds and investment firms from Calpers the largest U S pension to Newport Beach California based Pimco manager of the world s biggest mutual fund use the kind of derivatives at the heart of the ISDAfix probe to hedge against losses or to speculate on interest rate fluctuations ISDAfix more obscure than Libor has the potential to affect more people s lives because it s used by pension funds to hedge portfolio risks and by most companies or users of fixed income derivatives said Jack Chen a financial consultant in New York who has written about the swaps benchmark and Libor for SFC Associates a financial consulting firm specializing in litigation matters In three years ISDAfix will be the bigger story and could be potentially bigger than Libor in terms of damages he said Representatives from Calpers and Pimco didn t immediately respond to requests for comment ISDAfix is used to value derivatives trades known as swaptions which are options on rate swaps The contracts give the holder the right to swap a fixed for a floating rate obligation at some future point at a predetermined level The amount of derivatives underlying swaptions contracts outstanding as of July 26 totaled 29 5 trillion according to the Depository Trust Clearing Corp ISDA fix rates also help determine everything from borrowing costs on bonds that finance skyscrapers to interest on annuities The benchmark set in five currencies is used to price euro denominated corporate bonds and 550 billion of securities tied to commercial real estate Fluctuations help determine the performance of structured notes bought by wealthy individuals What can be said Why does Wall Street engage in this sort of manipulative activity Because they can I am reminded of what a close friend on the street once shared with me After a scandal in rigging the US Treasury market in the early 90s he said if they took the phones and computer systems out of here and replaced them with sewing machines the Feds would shut the place down I think that simple but true statement still holds |
C | How Strong Is The US Economy | Summary The examined the odds of recession Today s let s take a more granular look at the economy In the first half of the year the US economy expanded GDP at 1 4 SAAR Faster than Q4 near zero but well below the 2 stall speed Yet most economists expect acceleration in the next few months continuing through 2015 or 2016 Does the data give us clues about the future Other posts in this series appear at the end My guess the same forecast as I have given for the past 4 years continued slow growth ContentsA relatively bright part of the picture employmentThe great hope constructionManufacturing activity risingConfidence Polls Asset prices paint a sunny pictureOther posts in this seriesFor More Information 1 Employment a relatively bright part of the picture Let s look at the for July All numbers are in thousands a Jobs added during the past 12 months from selected industries from the Establishment report NSA 2 296 1 7 Total the Household report shows hours up 2 payrolls up 4 016 0 1 Manufacturing Feel the revival 021 2 4 Mining Logging the future of jobs according to some conservatives 166 2 8 Construction the great hope of many economists 437 2 1 Wholesale retail trade Still adding jobs despite Wal Mart Amazon477 3 3 Leisure Hospitality average hourly pay 56 of the average of all jobs 638 3 5 Business Professional ServicesGrowth in the Federal employment civilian not including contractors or postal workers since Obama took office in January 2008 97 thousand 5 It peaked in April 2011 dropping 45 thousand 3 since then b About those well paying manufacturing jobs that so many optimists get juiced about America average hourly earnings are 1 6 higher than that for all jobsaverage weekly earnings are 19 9 higherThey are better because workers work longer c Job growth is mostly in part time jobs New jobs since March from the Household report SA 978 Total187 Full time 20 of the total 791 Part time 80 feel the recovery d Let s look at UnemploymentThe analysts at BLS calculate six measures of unemployment from narrow to broad definitions None is more real than the others none are easily comparable to the rough estimates of unemployment during the 1930s the first reliable surveys were in the early 1940s U 3 is the headline metric The broadest is U 6 These are not seasonally adjusted Any way you count it unemployment has decreased during the past year But slowly especially slowly given the large Federal deficit and extreme monetary stimulus The broader the measure the slower the decline U 1 down 14 U 6 down 6 Not seasonally adjusted Why have Republicans opposed most of the measures that might stimulate employment growth Robert Reich suggests an answer harsh but plausible 2 Construction the great hope for a stronger economy The Census report for June shows us the current rate of growth in this improving but still depressed industry It s volatile month to month so let s look at longer periods 5 1 growth of June YoY NSA 4 9 annualized growth during the past 4 months SA Strong but not boomtown Let s look forward at starts of single family homes SA Growth of multi unit housing is growing but is a small fraction of total construction and has a smaller multiplier eg furniture sales landscaping than building single family homes Starts of single family homes peaked in September and went negative in March as shown in this graph of monthly starts SAAR Mortgage rates spiked up sharply in May and June How much will this slow construction 3 Manufacturing activity rising Let s see the Census and Orders for June New orders are a leading indicator YTD first half of 2013 YoY up 1 8 June YoY up 6 0 If exports and auto sales continue to grow exports could continue to boost the economy 4 Confidence polls and asset prices paint a sunny pictureThe strong confidence polls and rising asset prices are often cited as an indication that the economy is growing stronger That s nice since Fed policy is focused on increasing both Are confidence polls and market prices reliable predictors of the future While there are periods of good correlations there is little research showing that market prices are reliable guide to future trends in the economy Nor is there any reason to expect them to be so Shifts in market prices can have real world effects but not always the ones predicted nor of the scale predicted The relationship between confidence polls eg builders confidence consumer confidence is even less reliable It is beyond the scope of this post to discuss the role of confidence as a driver of economic growth that s for another day In brief I consider it grossly exaggerated What about markets servants of the invisible hand Perhaps instead of deifying markets we should return to Adam Smith s original and narrow concept of the invisible hand It does not say that markets predict the future or refer to the government private market dichotomy nor does he claim that it produces an acceptable level of macroeconomic stability From The Wealth of Nations 1776 Book IV Chapter II As every individual therefore endeavours as much as he can both to employ his capital in the support of domestic industry and so to direct that industry that its produce may be of the greatest value every individual necessarily labours to render the annual revenue of the society as great as he can He generally indeed neither intends to promote the public interest nor knows how much he is promoting it By preferring the support of domestic to that of foreign industry he intends only his own security and by directing that industry in such a manner as its produce may be of the greatest value he intends only his own gain and he is in this as in many other cases led by an invisible hand to promote an end which was no part of his intention Nor is it always the worse for the society that it was no part of it By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it I have never known much good done by those who affected to trade for the public good It is an affectation indeed not very common among merchants and very few words need be employed in dissuading them from it |
C | Major Currency Pairs Analysis Euro Rising | EUR USD The 17 nation currency rose after separate data showed Italy s recession eased in the second quarter The euro traded at almost a seven week high against the dollar after a report showed Germany s factory orders rebounded in June more than economists forecast adding to signs the region is recovering Stronger than expected German factory orders have been encouraging and support the view that economically the European outlook is finally beginning to turn Camilla Sutton head of currency strategy at Bank of Nova Scotia wrote in a note to clients The euro gained 0 4 percent to width 624 height 468 GBP USD U K house prices rose for a sixth month in July and will continue to increase as an improving economy boosts confidence according to a report by Halifax Central Bank Governor Mark Carney will present the central bank s assessment of the use of thresholds and interest rate guidance in the Inflation Report as requested by the government Five year gilts dropped for a sixth day as the Debt Management Office sold 4 5 billion pounds 6 91 billion of the securities The pound was little changed at 1 5370 after rising to 1 5390 the highest since July width 624 height 468 USD JPY The Bank of Japan will expand its record easing by June next year as inflation remains distant from its 2 percent target The bank last month confirmed a median forecast of board members that prices will rise 1 9 percent in the fiscal year starting April 2015 coinciding with the end of its stated two year time horizon for meeting its target The projection excludes the effects of a planned two step sales tax increase in April next year and October 2015 The bank will add stimulus in the first three months of 2014 as the pace of price gains is slow compared to a BOJ inflation forecast that is too optimistic said Kiki Murashima Citigroup Inc s chief economist in width 624 height 468 USD CAD Canada s weakened as commodities including oil the nation s biggest export dropped for a third day The currency traded at almost a two week low versus the U S dollar amid speculation an Aug 9 report will say Canada s economy failed to create as many jobs in July as economists forecast after data last week showed U S payrolls grew less than projected Canadian government bonds fell pushing 10 year GCAN10YR yields almost to a two year high Canadian currency depreciated 0 1 percent to C 1 0371 per U S dollar USD CAD width 624 height 468 |
C | Can Germany Lead Euro Zone From Recession | The euro was strong Wednesday morning trading near a seven week high after German factory orders beat analysts expectations and rebounded in June The common currency had gained 0 4 percent by 6 11 GMT on Wednesday as hopes rose that the euro zone s two year economic slow down was nearing its end Hopeful DataBloomberg reported that German factory orders increased by 3 8 percent in June beating analyst expectations of only a one percent rise The factory order data revived hope that Europe s largest economy was getting back on track after factory orders fell by 0 5 percent in May On Tuesday the International Monetary Fund urged Germany to resume its leadership role in the euro zone and help lead the region out of its financial crisis once and for all With upcoming elections in September German politicians have been hesitant to make any major changes as they campaign for the general elections IMF Says Avoid AusterityAt its annual conference with German policy makers IMF officials pressured the nation to stay away from austerity minded policies as the German economy remains highly reliant on external demand which is likely to slow in the near term Germany has been under fire recently as calls were made for the nation to move away from its reliance on its huge trade surplus and shift towards promoting internal demand Moving forward the IMF has recommended that German policy makers consider more aggressive stimulus to encourage internal demand growth and lead the euro zone in creating a more integrated framework within the 17 member bloc Although the German economy is forecast to grow modestly in 2013 and 2014 the IMF cautioned that the success of the German economy is largely dependent on growth in the euro zone as a whole something the fund says is far from certain c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Brent On Longest Losing Streak Since April | Brent crude oil slid on Wednesday as easing supply concerns and caution ahead of key data from the US and China put pressure on prices The commodity traded at 107 82 at 6 54 GMT on Wednesday morning marking its fourth consecutive session drop and its longest losing streak since April Hope From IranA new more moderate Iranian president has given the West hope of a diplomatic resolution to tension over Iran s controversial nuclear program Iranian President Hassan Rouhani has proved to be willing to resume talks with Western Diplomats in an effort to repair the nation s strained relationship with Western nations CNBC reported that Rouhani recently offered an olive branch to US leaders which has given the world hope that the two will come to an agreement regarding Tehran s nuclear development facilities Despite promising words some analysts say that such statements could be for posturing and that the two will not come to a real resolution any time soon Data WaitUpcoming data from the US and China could mitigate some of the losses but investors remain cautious Chinese factory output retail sales and export data is all due this week which most are expecting to point to a modest recovery in the world s second largest oil consuming nation Investors will also be watching for inventory data from the US which will give insight into the nation s current demand Recent data from the American Petroleum Institute showed a 3 66 million barrel drop in crude stocks last week as refinery output increased The US Energy Information Administration will release inventory data later on Wednesday which will give investors more insight c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Oil And Gold Analysis Crude Drops Gold Gains | CLCrude dropped capping the biggest four day slide in nine months as Federal Reserve officials indicated that they may pare bond purchases that have bolstered the economy and energy demand Crude declined 0 9 percent after Fed Bank of Chicago President Charles Evans said yesterday he would clearly not rule out a decision to begin curbing buying in September An Energy Information Administration report showed that U S crude supplies fell for the fifth time in six weeks GOLDThe weaker dollar is helping gold Sterling Smith a Chicago based commodity futures specialist at Citigroup Inc said in a telephone interview The market will continue to remain nervous until we get some clarity about the tapering timetable from the Fed he said Gold gained 0 2 percent to settle at 1 285 30 an ounce |
C | Brent Ends Losing Streak On Chinese Data | Brent crude oil ended its four day losing streak on Thursday after Chinese data restored hope that the global economy was on the mend and improved the future demand outlook The commodity climbed toward 108 and traded at 107 44 at 8 25 GMT on Thursday morning After several weeks of questionable data China seems to be getting back on track as imports and exports both rose beyond analyst expectations in July Bloomberg reported that Chinese exports were 5 1 percent higher in July than they were at the same time last year The figure far exceeded the 2 percent increase predicted by analysts who were taking into account June s 3 1 percent drop Imports also improved and grew by 10 9 percent The data lent support to Brent prices as crude oil imports jumped to a record high of 6 15 million barrels per day However some worry that the sharp increase in oil imports could lead to growing stockpiles which would decrease the nation s imports in coming months Gains from positive Chinese data were mitigated by renewed worries about the US Federal Reserve s decision to cut back on stimulus spending Many are anticipating the Fed s stimulus tapering will begin as soon as next month something that would reduce liquidity in the commodities market and boost the dollar s value Despite reassurance from Libyan officials oil supply from the African nation has been more than halved due to protests which have shut down major oil fields The demonstrations have kept the nation s oil shipments to a minimum since Tuesday and moving forward further shutdowns are expected c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Here s A Surprising Way To Play A Europe Rally | U S Global s Portfolio Manager Tim Steinle is usually soft spoken and mild mannered so our ears perked up when he recently belted out Europe is Rocking After a lengthy period of stagnant growth and lackluster results the gradual crescendo of improving economic data that s been coming out of Europe lately certainly commands attention As our resident expert of the European economy Tim has been listing several economic indicators that were turning positive during the investment team s morning meetings While our entire team keeps track of the economic data and political policies of all the developed G 7 and emerging E 7 countries in the world Tim keeps his finger on the pulse of European countries at all times in his hunt for outsized opportunities for the Emerging Europe Fund EUROX I previously shared how economic releases have been beating expectations as shown in the eurozone s spiking Citigroup Economic Surprise Index GDP is recovering too with expectations that the year over year growth rate will significantly improve over the next year and a half Positive surprises and improving economic growth aren t the only indications that the region s economy is becoming healthier Manufacturing appears to be on the mend The latest reading of the purchasing manager s index PMI was at a two year high and topped the 50 mark This indication of expansion hasn t happened since July 2011 And the PMI in Europe expanded at a faster pace than estimated Economic confidence in the region has also been rising In July it reached a 15 month high Generally when sentiment turns positive businesses invest more and consumers spend more We believe this improving confidence will potentially spur positive third quarter economic growth and help the eurozone to exit its recession The area s fiscal situation isn t in dire straights as it has been According to BCA Research structural deficits peaked four years ago As a result during the 2009 to 2012 period the biggest fiscal drags as a percent of potential GDP were concentrated in Europe namely in Greece Portugal Spain and Ireland four of the five members of the group formerly known as the PIIGS Fiscal drag happens when a government s net fiscal position doesn t cover the desired net savings of the private economy Looking ahead at the 2012 to 2015 period the largest fiscal drags are expected to be in other areas of the world Based on data from the European Central Bank the government credit impulse is improving which should help to lift the euro area economy out of its endless recession says BCA It s no wonder Tim is cheering Europe on as these economic data points have important implications for global investors Consider the area s PMI which Morgan Stanley Research found to be a six month leading indicator of earnings per share EPS While the EPS for European stocks has remained relatively flat over recent months it s expected to follow PMI and move up Here s another reason to look at the area Europe has low valuations compared to the rest of the world Take a look at the normalized price to earnings P E ratio which is trading at close to a record valuation low according to Morgan Stanley Research Compared to U S stocks and world equities European stocks are trading at a significant discount Take the CE3 which are the Czech Republic Hungary and Poland These countries are integral to the supply chain in Europe and dependent on domestic demand as well as its export growth We aren t the only ones pounding the table for emerging European countries Credit Suisse came out with a report recently with a bold headline Going Overweight Europe Bullish CE3 The report makes a case for the Czech Republic Hungary and Poland as the countries that have cheap markets cheap currencies which are commodity importers and are not overheating says Credit Suisse The firm cites numerous positive data including the CE3 s lead indicators moving together with Germany an improving outlook for employment recovering real retail sales wage growth and regional credit growth Stay tuned for Europe s much anticipated return to the limelight But before Europe plays before a sold out crowd you might want to get your portfolio a front row seat Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure as well as economic and political risk By investing in a specific geographic region a regional fund s returns and share price may be more volatile than those of a less concentrated portfolio The Emerging Europe Fund invests more than 25 of its investments in companies principally engaged in the oil gas or banking industries The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund s performance more volatile The Citi Economic Surprise Index is a measure that tries to capture how well the data is coming in relative to economic expectations The Purchasing Manager s Index is an indicator of the economic health of the manufacturing sector The PMI index is based on five major indicators new orders inventory levels production supplier deliveries and the employment environment The MSCI Europe Index IHPXF is a free float adjusted market capitalization index that is designed to measure developed market equity performance in Europe The MSCI USA Index EUSA is a free float adjusted market capitalization weighted index designed to measure equity market performance in the U S The MSCI World Index URTH is a capitalization weighted index that monitors the performance of stocks from around the world |
JPM | Dow jumps triple digits thanks to China data and JP Morgan | Investing com Wall Street moved higher on Wednesday on positive Chinese trade data and an earnings report from JP Morgan that beat consensus driving financial stocks higher
At 15 32GMT or 11 32ET the Dow Jones rose 150 points or 0 84 while the S P 500 gained 17 points or 0 83 and the tech heavy NASDAQ Composite traded up 63 points or 1 29
Global stocks had started Wednesday s session on a positive note after Chinese exports rose for the first time in nine months with an 11 5 jump that blew past consensus expectations for a 2 5 increase The data provided signs that the slowdown in the world s second largest economy may not be as deep as investors feared
JPMorgan Chase Co NYSE JPM added to the positive sentiment after beating consensus with its first quarter earnings despite a 6 6 decline in profit The financial sector celebrated the news as the SPDR S P Bank rose almost 3
Meanwhile oil recovered from losses of near 2 that were driven by news earlier on Wednesday that Saudi Arabia s oil minister Ali al Naimi played down the prospect of an output freeze at Sunday s meeting of major oil producers in Doha
A recovery in oil prices later ensued after the Energy Information Administration reported that crude inventories had increased by 6 6 million barrels much higher than 1 85 million barrel build expected by analysts
To explain the price move some experts pointed to 4 2 million barrel decline in gasoline inventories compared to the drop of 1 4 million expected by analysts Also of note the Cushing crude oil inventories representing the major delivery point for West Texas slumped by 1 77 million barrels
In any case at 15 34GMT or 11 34ET oil had returned to losses seen just prior to the release of the data Specifically U S crude futures lost 0 90 to 41 79 a barrel while Brent oil traded down 0 97 to 44 27
In U S economic news retail sales unexpectedly fell 0 3 in March underlining concern for the recuperation of the American consumer
Producer price inflation in the U S fell unexpectedly in March while core prices were also lower The Fed tends to consider the latter as a better gauge for longer term inflationary pressure since they exclude the volatility in food and energy categories
Lastly the Commerce Department said on Wednesday that business inventories a key component of gross domestic product slipped 0 1 percent in February which was in line with economists expectations |
JPM | JPMorgan passes up chance to counter Sanders criticism | By David Henry NEW YORK Reuters JPMorgan Chase Co NYSE JPM has been lambasted by Democratic presidential candidate Bernie Sanders but Chief Executive Jamie Dimon opted not to fire back on Wednesday while reviewing quarterly results and taking questions about his latest failure with regulators No comment Dimon quickly responded on a conference call with reporters when asked about Sanders recent statement that JPMorgan was among companies destroying the moral fabric of the nation Nor was Dimon willing to respond to a follow up question about the tone of the U S presidential campaign To drive home the refusal his top communications adviser Joseph Evangelisti stepped in and said We re not going to comment on political statements Dimon also turned away from the chance to make his case again that JPMorgan s size is an advantage In the past he has argued that JPMorgan the biggest U S bank by assets is good for customers shareholders and the country because of the stability and efficiency that come with its scale and diverse mix of business JPMorgan s earnings came on the same day that federal regulators gave the bank and four other big banks a failing grade for their plans to show that they can be quickly and safely dismantled in bankruptcy Dimon said JPMorgan will correct its plan |
HAL | BP settles oil spill related claims with Halliburton Transocean | Reuters BP Plc L BP has settled with oilfield services provider Halliburton Co N HAL and contract driller Transocean Ltd N RIG cross claims related to the 2010 Gulf of Mexico oil spill the worst offshore disaster in U S history BP still faces a potential fine of up to 13 7 billion under the U S Clean Water Act Transocean which owned the Deepwater Horizon rig had settled its Clean Water Act liability for 1 billion The U S government never sued Halliburton under the Act one person familiar with the case said We have now settled all matters relating to the accident with both our partners in the well and our contractors BP spokesman Geoff Morrell said in an email Transocean said BP would pay the company 125 million in compensation for legal fees it incurred adding the companies will mutually release all claims against each other The company added BP will also discontinue its attempts to recover as an additional insured under Transocean s liability policies that will accelerate the company s recovery of about 538 million in insurance claims Transocean also said it would pay about 212 million to a fund set up to pay out claims to people and businesses harmed by the spill subject to the approval by U S District Court for the Eastern District of Louisiana We applaud Transocean for adding to the settlement funds established in the Halliburton settlement to help compensate people and businesses for their losses said co lead plaintiffs attorneys Stephen Herman and James Roy Transocean said it intends to make the payments using cash on hand In September a U S judge ruled that BP was mostly at fault and that Transocean and Halliburton were not as much to blame Halliburton which did the cementing work for BP s well had earlier blamed BP s decision to use only six centralizers for the blowout that spilled millions of barrels of oil for 87 days Halliburton said in September that it reached a 1 1 billion settlement for a majority of claims related to its role in the oil spill
London based BP has already taken 43 8 billion in pretax charges for clean up and other costs |
HAL | Halliburton HAL Down 14 7 Since Earnings Report Can It Rebound revised | It has been about a month since the last earnings report for Halliburton Company NYSE HAL Shares have lost about 14 7 in that time frame underperforming the market
Will the recent negative trend continue leading up to the stock s next earnings release or is it 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 drivers Second Quarter 2017 Results Halliburton reported better than expected second quarter profit thanks to improved utilization and pricing gains in North America Halliburton s adjusted income per share from continuing operation excluding special items came in at 0 23 above the Zacks Consensus Estimate of 0 19 the twelfth consecutive quarterly outperformance Moreover revenues of 4 957 million missed the Zacks Consensus Estimate of 4 844 million North American Market Continues to Gather StrengthAlong the results Halliburton also sounded optimistic in its view that the North American land market is improving rapidly driven by increased utilization and pricing particularly for pressure pumping As it is rig counts have generally been rising during the last year since plunging to an all time low of 404 in May 2016 with the addition of a flood of new units As a proof of the recovery Halliburton grew its domestic land revenue by nearly 25 sequentially ahead of the U S land rig count growth of 21 Additionally the international market seems to have bottomed out with regional sales rising 7 from the first quarter on heightened Latin American activity together with increased well completion and drilling services in Europe and Africa However pricing pressure continued with the slowdown in Middle East stimulation services Segmental PerformanceOperating income from the Completion and Production segment was 397 million turning around from the year ago loss of 32 million and the previous quarter s income of 147 million helped by strong pressure pumping activity and improved pricing in the U S land market But Halliburton s Drilling and Evaluation unit profit dropped from 154 million in the second quarter of 2016 to 125 million this year and was only marginally ahead of the 122 million earned in the Mar quarter The setback was on account of pricing pressure partly offset by higher drilling activity in Mexico Venezuela and Colombia a seasonal rebound in the North Sea and Russia plus increased fluid services in Asia Pacific Balance SheetHalliburton s capital expenditure in the second quarter was 327 million As of Jun 31 2017 the company had approximately 2 139 million in cash cash equivalents and 10 816 million in long term debt representing a debt to capitalization ratio of 54 7
How Have Estimates Been Moving Since Then
Following the release investors have witnessed an upward trend in fresh estimates There have been six revisions higher for the current quarter While looking back an additional 30 days we can see even more upward momentum There have been eight moves up in the last two months In the past month the consensus estimate has shifted by 7 4 due to these changes Halliburton Company Price and Consensus
VGM Scores
At this time Halliburton s stock has a poor Growth Score of F however its Momentum is doing a lot better with a B However the stock was allocated a grade of D on the value side putting it in the bottom 40 for this investment strategy
Overall the stock has an aggregate VGM Score of F If you aren t focused on one strategy this score is the one you should be interested in
The company s stock is suitable solely for Momentum based on our styles scores
Outlook
Estimates have been trending upward for the stock The magnitude of these revisions also looks promising Notably the stock has a Zacks Rank 3 Hold We are expecting an inline return from the stock in the next few months
NOTE We have reissued this article to correct an error The original version published earlier today August 24 2017 should no longer be relied upon |
HAL | Halliburton HAL Down 14 7 Since Earnings Report Can It Rebound | It has been about a month since the last earnings report for Halliburton Company NYSE HAL Shares have lost about 14 7 in that time frame underperforming the market
Will the recent negative trend continue leading up to the stock s next earnings release or is it 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 drivers Second Quarter 2017 Results Halliburton reported better than expected second quarter profit thanks to improved utilization and pricing gains in North America Halliburton s adjusted income per share from continuing operation excluding special items came in at 0 23 above the Zacks Consensus Estimate of 0 19 the twelfth consecutive quarterly outperformance Moreover revenues of 4 957 million missed the Zacks Consensus Estimate of 4 844 million North American Market Continues to Gather StrengthAlong the results Halliburton also sounded optimistic in its view that the North American land market is improving rapidly driven by increased utilization and pricing particularly for pressure pimping As it is rig counts have generally been rising during the last one year since plunging to an all time low of 404 in May 2016 with the addition of a flood of new units As a proof of the recovery Halliburton grew its domestic land revenue by nearly 25 sequentially ahead of the U S land rig count growth of 21 Additionally the international market seems to have bottomed out with regional sales rising 7 from the first quarter on heightened Latin American activity together with increased well completion and drilling services in Europe and Africa However pricing pressure continued with the slowdown in Middle East stimulation services Segmental PerformanceOperating income from the Completion and Production segment was 397 million turning around from the year ago loss of 32 million and the previous quarter s income of 147 million helped by strong pressure pumping activity and improved pricing in the U S land market But Halliburton s Drilling and Evaluation unit profit dropped from 154 million in the second quarter of 2016 to 125 million this year and was only marginally ahead of the 122 million earned in the Mar quarter The setback was on account of pricing pressure partly offset by higher drilling activity in Mexico Venezuela and Colombia a seasonal rebound in the North Sea and Russia plus increased fluid services in Asia Pacific Balance SheetHalliburton s capital expenditure in the second quarter was 327 million As of Jun 31 2017 the company had approximately 2 139 million in cash cash equivalents and 10 816 million in long term debt representing a debt to capitalization ratio of 54 7
How Have Estimates Been Moving Since Then
Following the release investors have witnessed an upward trend in fresh estimates There have been six revisions higher for the current quarter While looking back an additional 30 days we can see even more upward momentum There have been eight moves up in the last two months In the past month the consensus estimate has shifted by 7 4 due to these changes Halliburton Company Price and Consensus
VGM Scores
At this time Halliburton s stock has a poor Growth Score of F however its Momentum is doing a lot better with a B However the stock was allocated a grade of D on the value side putting it in the bottom 40 for this investment strategy
Overall the stock has an aggregate VGM Score of F If you aren t focused on one strategy this score is the one you should be interested in
The company s stock is suitable solely for Momentum based on our styles scores
Outlook
Estimates have been trending upward for the stock The magnitude of these revisions also looks promising Notably the stock has a Zacks Rank 3 Hold We are expecting an inline return from the stock in the next few months |
C | Gold trades lower on Greek fears Chinese growth cut | Investing com Gold futures traded lower Monday as renewed Greek debt fears and China cutting economic growth forecasts weighed on the precious metal On the Comex division of the New York Mercantile Exchange gold futures for April delivery traded at USD1 703 95 a troy ounce during U S afternoon trade giving back 0 34 It earlier fell by as much as 0 98 to trade at a two day low of USD1 695 55 a troy ounce Gold futures were likely to find support at USD1 689 95 a troy ounce the low from February 29 and short term technical resistance exists at USD1 726 95 the high from March 1 Gold prices plunged 3 45 last week as traders exited long positions after Federal Reserve Chairman Ben Bernanke diminished expectations for more U S monetary easing last week While last week s drop damaged the near term technical outlook for the precious metal many knowledgeable market analysts expect prices to recover in the long term Wall Street bank Citigroup said in a report earlier that it sees gold prices surging towards USD2 400 an ounce by the end of 2012 with prices eventually hitting USD3 400 an ounce in the coming years However the bank warned of price weakness in the short term and said there is a real danger that there may be a correction to USD1 600 an ounce Greek fears weighed on the precious metal as investors are awaiting to determine how many private bond holders will agree to write down their sovereign debt holdings by the March 8 deadline Greece has set a 75 participation rate as the limit for proceeding with the transaction Private investors are urged to forgive Greece 53 5 of their principal and swap their remaining holdings for new Greek bonds and notes from the European Financial Stability Facility This is causing much trepidation as Germany s DSW investor protection group has advised private creditors to reject the offer Meanwhile China reduced its growth target to 7 5 in 2012 marking the lowest number since 2004 This reduction stroked fears of lessening demand for goods and services in the world s second largest economy China will also aim for inflation to remain steady at 4 unchanged from its 2011 goal The U S dollar slipped against its major counterparts with the U S dollar index giving back 0 14 to 79 38 in late U S trade Elsewhere on the Comex silver for May delivery plunged 2 34 to trade at USD33 72 a troy ounce while copper for May delivery gave back 1 14 to trade at USD3 86 a pound |
C | Gold futures off 6 week low with Greece debt swap in focus | Investing com Gold futures edged higher on Wednesday taking cues from the currency market as investors continued to monitor developments surrounding Greece s debt swap deal while some bargain buying emerged following the previous day s steep decline On the Comex division of the New York Mercantile Exchange gold futures for April delivery traded at USD1 675 45 a troy ounce during early European morning trade edging 0 2 higher It earlier rose by as much as 0 3 to trade at a session high USD1 679 25 a troy ounce Prices fell to USD1 663 75 on Tuesday the lowest since January 26 Gold futures were likely to find support at USD1 663 75 a troy ounce Tuesday s low and resistance at USD1 709 75 Tuesday s high Gold s gains came as the euro pushed higher against the U S dollar coming off an almost two week low The dollar index which tracks the performance of the greenback against a basket of six other major currencies was down 0 2 to trade at 79 74 Gold remains more sensitive to moves in the euro dollar exchange rate in the short term than to rising risk aversion which in the past has been a positive driver of prices Wall Street lender Citigroup said in a report Tuesday that Gold this year has been driven by exchange rate mechanisms The report added that At some point if confidence over Europe evaporates you would think that should be positive for gold but you still have to keep an eye on the dollar gold trade off Although gold s appeal as a safe haven is boosted during times of economic uncertainty the euro zone s debt crisis has done little to bolster appetite for the precious metal A weakening euro and stronger dollar have weighed on gold instead Markets remained jittery ahead of the March 8 deadline for bondholders to join the agreement under which they will exchange their existing Greek government bonds for new paper in a swap deal There is uncertainty over how much participation Greece will see for its bond swap The Greek government has set a minimum 75 participation rate to proceed A failure to agree on the swap would put the country back on the brink of a messy sovereign debt default and could reignite fears about the collapse of the single currency Meanwhile market participants noted some bargain buying as the previous day s 2 drop created buying opportunities for investors Gold s losses accelerated Tuesday after prices broke below their 200 day moving average indicating a downward momentum in prices Market participants said that fresh sell orders were triggered once prices fell below a key technical support level close to USD1 675 an ounce The precious metal last fell below its 200 day moving average on December 15 Elsewhere on the Comex silver for May delivery rose 0 5 to trade at USD32 95 a troy ounce while copper for May delivery added 0 5 to trade at USD3 757 a pound |
C | Gold pares gains as markets await Greek PSI deal | Investing com Gold futures pared gains on Wednesday coming off the session high as the euro turned lower against the U S dollar amid concerns that Greece and its private bondholders will not meet Thursday s deadline to complete a debt swap deal On the Comex division of the New York Mercantile Exchange gold futures for April delivery traded at USD1 674 65 a troy ounce during U S morning trade easing up 0 15 It earlier rose by as much as 0 65 to trade at a session high USD1 683 55 a troy ounce Gold futures were likely to find support at USD1 663 75 a troy ounce Tuesday s low and the lowest since January 26 and resistance at USD1 709 75 Tuesday s high Gold prices took cues from the currency market on Wednesday tracking movements in the euro The single currency turned lower against the U S dollar re approaching a three week low as markets were jittery ahead of the deadline for Greece s private creditors to sign off on a debt swap deal The Institute of International Finance said earlier 30 members of its private creditor investor committee for Greece plan to participate in the swap They hold EUR81 billion of outstanding debt or 39 3 of the eligible privately held paper A participation rate of more than 75 of creditors is required for Greece to secure a EUR130 billion bailout in order to avoid a default when a bond repayment due on March 20 Gold remains more sensitive to moves in the euro dollar exchange rate in the short term than to rising risk aversion which in the past has been a positive driver of prices The dollar index which tracks the performance of the greenback against a basket of six other major currencies was up 0 1 to trade at 79 97 reversing an earlier loss of as much as 0 25 Wall Street lender Citigroup said in a report Tuesday that Gold this year has been driven by exchange rate mechanisms The report added that At some point if confidence over Europe evaporates you would think that should be positive for gold but you still have to keep an eye on the dollar gold trade off Meanwhile some bargain buying helped support prices as the previous day s 2 drop to the lowest level in six weeks created attractive entry points for investors to return to the market Gold futures tumbled on Tuesday with losses accelerating after prices broke below their 200 day moving average close to USD1 675 triggering fresh sell orders and indicating a downward momentum in prices Global financial service provider Barclays said in a report earlier that Gold still faces near term hurdles such as bouts of dollar strength broad risk reduction and profit taking Still this is a healthy correction and in our view the broader macro backdrop remains gold favorable given the negative interest rate environment longer term inflationary concerns and lingering sovereign debt uncertainties Elsewhere on the Comex silver for May delivery rose 0 35 to trade at USD32 89 a troy ounce while copper for May delivery shed 0 4 to trade at USD3 722 a pound |
C | Gold higher on weak U S dollar Greek fears | Investing com Gold futures traded higher Wednesday as the U S dollar weakened amid concerns that Greece and its private bondholders will not meet Thursday s deadline to complete a debt swap deal On the Comex division of the New York Mercantile Exchange gold futures for April delivery traded at USD1 683 45 a troy ounce during U S afternoon trade advancing 0 68 It earlier hit a high of USD1687 55 and a session low of USD1671 95 Gold futures were likely to find support at USD1 663 75 a troy ounce Tuesday s low and the lowest since January 26 and resistance at USD1 709 75 Tuesday s high Gold prices followed the currency market on Wednesday tracking movements in the euro The single currency turned higher against the U S dollar as investor s embraced risk ahead of the deadline for Greece s private creditors to sign off on a debt swap deal The Institute of International Finance said 30 members of its private creditor investor committee for Greece plan to participate in the swap They hold EUR81 billion of outstanding debt or 39 3 of the eligible privately held paper A participation rate of more than 75 of creditors is required for Greece to secure a EUR130 billion bailout in order to avoid a default when a bond repayment due on March 20 Gold remains more sensitive to moves in the euro dollar exchange rate in the short term than to rising risk aversion which in the past has been a positive driver of prices The dollar index which tracks the performance of the greenback against a basket of six other major currencies was down 0 15 to trade at 79 78 Citigroup said in a report Tuesday that Gold this year has been driven by exchange rate mechanisms The report added that At some point if confidence over Europe evaporates you would think that should be positive for gold but you still have to keep an eye on the dollar gold trade off Meanwhile some bargain buying helped support prices as the previous day s 2 drop to the lowest level in six weeks created attractive entry points for investors to return to the market Gold futures tumbled on Tuesday with losses accelerating after prices broke below their 200 day moving average close to USD1 675 triggering fresh sell orders and indicating a downward momentum in prices Elsewhere on the Comex silver for May delivery climbed 1 85 to trade at USD33 39 a troy ounce while copper for May delivery advanced 0 83 to trade at USD3 77 a pound |
C | U S shares higher on better than expected payrolls Dow up 0 16 | Investing com U S shares opened higher Friday as non farm payrolls beat forecasts and Greek settlement hopes lifted equity sentiment Near the open of U S trade the Dow Jones Industrial Average gained 0 16 the S P 500 index climbed 0 14 while the Nasdaq Composite advanced 0 33 The gains were powered by better than expected non farm payroll figures The 227 000 increase in payrolls followed a revised 284 000 gain in January that was bigger than first estimated Labor Department figures indicated The median projection of economists in a Bloomberg News survey called for a 210 000 rise in February employment The jobless rate held at 8 3 percent Greece revealed that 95 7 of bondholders cooperated in its debt swap deal but only after it used an option to force participation Holders tendered EUR152 billion of Greek law bonds representing 85 8 in response to the offer to swap their holdings The International Swap and Derivative Association determination committee will meet at 1 p m London time to determine if a credit event has occurred in Greece In addition euro zone finance ministers will meet at the same time to clarify if the swap was successful enough to warrant the EUR130 billion rescue package for the island nation Citigroup gained 0 7 on the economic numbers Starbucks added 2 2 after announcing it will launch a home coffee brewing machine Molycorp rallied 8 2 after announcing its largest takeover with a buy out of Neo Material in a USD1 3 billion deal Handgun maker Smith Wesson shot 12 higher after beating third quarter analyst earning estimates In mid European trade the EURO STOXX 50 added 0 09 France s CAC 40 climbed 0 25 while Germany s DAX advanced 0 53 Meanwhile in the U K the FTSE 100 traded up by 0 28 |
C | USD JPY And U S Bonds An Elliott Wave Look | USD is under pressure across the board after worse than expected U S Existing Home Sales numbers 5 08M vs 5 27M exp U S bonds are up which means it is the lower U S yields that are driving the USD JPY down On that pair we can see prices now slightly below channel support line that may cause a downtrend continuation later in sessions and days ahead if today pair will close somewhere around 99 00 or lower We will adjust the wave count if 100 15 level will be taken out Here is a detailed outlook for U S bonds tracking a double zig zag from the lows Prices are now already in wave c of a second zig zag that may hit resistance around 136 later this week Keep in mind that the larger trend for this market is still down and that current rally from 132 is probably a pause in the bear market |
C | Euro Zone Consumer Confidence Improves | The euro neared 1 32 on Wednesday morning as the dollar slumped on weak US economic indicators Data from the US gave the US Federal Reserve reason to delay the rolling in of its 85 billion per month bond buying scheme Dollar SellingUS housing data has been consistently disappointing recently and the result has been rising pressure for dollar selling Federal Reserve Chairman Ben Bernanke told investors last week that the US central bank s bond buying program is flexible and could be tapered at any time Now investors are watching US indicators carefully for clues about a timeline for the reduction of the bank s stimulus spending In the euro zone optimism is on the rise according to the European Commission The Wall Street Journal reported that consumer confidence in the eurozone went up from June to July providing some hope that a revival in domestic spending could be on the horizon The data showed that consumer confidence rose to 18 8 in July from 17 4 in June The data marks the eighth increase in as many months New SurveyHowever a more comprehensive consumer insight study released on Tuesday also showed some troubling discrepancies between euro zone members The Eurobarometer survey results showed that 77 percent of Germans would describe the current economic situation as good That sentiment is not echoed in several other eurozone members like Greece Spain and Portugal where less than 5 percent agreed In Italy Ireland and France only 10 percent agreed with their German neighbors The discrepancies in perception served to highlight the growing rift between northern and southern European nations as the eurozone attempts to fix its broken financial system c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Silver Decline Becomes Zinc Gains | The bear market in silver is poised to turn around the fortunes for zinc as miners reduce production and end the seven year glut in the industrial metal Silver makes up 40 percent of the value of byproducts from zinc mining and helps reduce costs for mineral companies HSBC Holdings Plc says Its 33 percent slump in the past seven months added about 130 a metric ton or 7 percent to average zinc production costs according to CRU the London based research company Zinc demand will exceed supply by about 4 000 tons in 2014 from a 44 800 ton surplus this year the average of 14 analyst estimates compiled by Bloomberg show Companies from Terramin Australia Ltd TZN to Yukon Zinc Corp said they are curbing unprofitable operations Prices will rise 3 6 percent to an average of 1 952 50 in the fourth quarter and 2 000 in the following three months according to the median of as many as 14 analyst estimates Silver fell as investors lost faith in precious metals as a store of value Citigroup Inc is forecasting the lowest annual average in five years in 2014 A falling silver price effectively raises the cost curve in the zinc industry said Andrew Keen the global head of metals and mining equity research at HSBC in London who has covered metals markets for more than two decades It doesn t have to fall as far as it used to to trigger closures of mine capacity |
C | Midday Markets It s Raining Earnings | Midway through trading Thursday the Dow traded down 0 45 percent to 15 472 81 while the NASDAQ rose 0 14 percent to 3 584 45 The S P also fell declining 0 26 percent to 1 681 57 Top Headline General Motors Co GM reported a better than expected Q2 profit GM s quarterly earnings dropped to 1 2 billion or 0 75 per share from 1 5 billion or 0 90 per share in the year ago period Excluding one time items General Motors earned 0 84 per share beating analysts estimates of 0 76 per share Its revenue increased 4 to 39 1 billion from 37 6 billion versus estimates of 38 37 billion Equities Trading UP Facebook FB shot up 24 22 percent to 32 93 after the company reported stronger than expected second quarter results Shares of Baidu BIDU got a boost shooting up 9 64 percent to 124 30 on upbeat Q2 results Boston Scientific BSX was also up gaining 11 23 percent to 10 69 after the company posted a profit in the second quarter Equities Trading DOWN Shares of Crocs CROX were down 21 44 percent to 13 34 after the company reported downbeat Q2 results and issued weak forecast for the third quarter PulteGroup PHM was down falling 9 23 percent to 16 75 on downbeat Q2 results DR Horton DHI shares tumbled 6 70 percent to 19 78 after the company reported weaker than expected FQ3 revenue Commodities In commodity news oil traded up 0 05 percent to 105 44 while gold traded up 0 68 percent to 1 329 10 Silver traded up 0 70 percent Thursday to 20 16 while copper rose 0 11 percent to 3 18 Euro Zone European shares were mostly lower today The UK economy grew 0 6 in the second quarter versus the earlier three month period The German Ifo business confidence index surged to 106 2 in July versus 105 9 in June The Spanish unemployment rate declined to 26 26 in the second quarter from 27 16 The Spanish Ibex Index surged 1 09 percent and the Italian FTSE MIB Index dropped 0 07 percent Meanwhile the German DAX declined 0 96 percent and the French CAC 40 dropped 0 17 percent while U K shares fell 0 49 percent Economics US jobless claims increased by 7 000 to 343 000 in the recent week ended July 20 versus a revised 336 000 in the earlier week However economists were estimating claims to surged to 342 000 US durable goods orders gained 4 2 in June However economists were estimating a 2 3 increase The Bloomberg Consumer Comfort Index rose to 27 30 in the week ended July 21 versus a prior reading of 28 40 Natural gas supplies rose 41 billion cubic feet for the week ended July 19 the US Energy Information Administration reported However analysts were expecting a rise between 47 billion cubic feet and 51 billion cubic feet The Kansas City Fed Manufacturing Index rose to 6 00 versus a prior reading of 5 00 However economists were expecting a reading of 0 00 The Treasury is set to auction 7 year notes Data on money supply will be released at 4 30 p m ET c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Midday Markets Go Red Zynga Talks Down Q3 | Following the market opening Friday the Dow traded down 0 43 percent to 15 489 25 while the NASDAQ dropped 0 29 percent to 3 594 66 The S P also fell declining 0 38 percent to 1 683 90 Top Headline Yesterday Zynga ZNGA issued a weak outlook for the current quarter However the company reported upbeat Q2 results Zynga posted a quarterly loss of 15 8 million or 0 02 per share versus a year ago loss of 22 8 million or 0 03 per share For the current quarter Zynga expected an adjusted loss of 0 09 per share to 0 05 per share However analysts were expecting a loss of 0 02 per share Equities Trading UP Activision Blizzard ATVI shot up 14 59 percent to 17 40 after Vivendi SA announced its plans to sell its majority stake in Activision Blizzard for 8 2 billion Shares of LogMeIn LOGM got a boost shooting up 7 87 percent to 30 55 after the company reported upbeat Q2 results and lifted its forecast Starbucks SBUX was also up gaining 7 percent to 72 94 on upbeat earnings Equities Trading DOWN Shares of Expedia EXPE were down 26 08 percent to 47 95 after the company reported downbeat second quarter results Zynga ZNGA was down falling 16 86 percent to 2 91 after the company issued a weak outlook for the current quarter Cirrus Logic CRUS shares tumbled 12 75 percent to 17 73 after the company reported weaker than expected Q1 revenue Commodities In commodity news oil traded down 0 46 percent to 105 00 while gold traded down 0 41 percent to 1 324 00 Silver traded down 1 09 percent Friday to 19 94 while copper fell 2 28 percent to 3 11 Euro Zone European shares were mostly lower today The Spanish Ibex Index surged 0 92 percent and the Italian FTSE MIB Index dropped 0 13 percent Meanwhile the German DAX declined 0 64 percent and the French CAC 40 gained 0 56 percent while U K shares fell 0 38 percent Economics The Reuter s University of Michigan s final index of consumer sentiment surged to 85 1 in July versus an initial reading of 83 9 However economists were estimating a reading of 84 0 c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | Is Europe Ready To Take Off | One year ago European Central Bank President Mario Draghi announced that the central bank had the political will to do whatever it takes to save the euro Now the worst may be over as suggested by stronger economic data coming out of Europe It appears the Continent is finally on the road to a sustained recovery For the past few years the U S has been one of the best places to invest In fact the S P 500 Index has experienced its strongest bull market ever according to LPL Financial Highlighted by Bloomberg Businessweek since the market bottomed in March 2009 the S P 500 Index has bested all bull runs since 1949 climbing 154 percent over the past four years This year alone through July 26 the S P 500 Index increased 20 percent By comparison the Stoxx Europe 600 Index is up about 10 percent Although European stocks underperformed the area offers a better potential value as equities sell at 11 8 times estimated 2014 earnings compared with price to earnings multiples of 13 7 for the S P says Barron s After the U S s huge run is it possible the country will be handing off the baton across the Atlantic for the next leg of the relay race Here are a few areas of strength that could send European stocks higher 1 Europe is taking analysts by surprise Take a look at the sudden divergence in Citigroup s Economic Surprise Index in Europe compared to the U S The indices calculate the difference between economic data releases and survey data A positive reading suggests economic releases are beating expectations a negative reading indicates that the market expects better economic data than is actually released Recently economic surprises in Europe have spiked to a reading of nearly 57 This is significantly higher than the U S s which has been hovering under zero since April 2 Europe s economic growth is improving The European Union EU has had its share of difficulties but the Continent seems to have turned a corner reports Barron s This is shown in the chart below where GDP has had negative year over year growth each quarter over the past year Looking forward the area is anticipated to make significant progress By the end of 2014 the growth rate could be around 1 7 percent Even though Europe has had pockets of turbulence such as the event in Cyprus the eurozone has overcome the threat of systemic failure and dispelled concerns about its long term viability The economy is being rebuilt says Barron s 3 Some of the riskiest European stocks are showing relative strength Airlines are considered one of the most economically sensitive areas of the market with stock prices especially volatile during times of weakness So when you see certain airline companies gaining relative strength it s time to take a closer look Relative strength is a metric we use to compare the performance of different groups of stocks or sectors to identify areas of the market that are recent strong performers Being quick to recognize relative strength can provide an edge as long as you act quickly In short we believe investors should buy into strength and avoid the weak Of the entire airline industry European and U S carriers dominate the positive momentum list according to data from BMO Capital Markets Asian carriers on the other hand are showing significant weakness says BMO Take a look at the year to date returns as of July 26 2013 Themes to Capitalize OnMake sure your portfolio takes advantage of the many opportunities throughout Europe Emerging Europe especially benefits from a European recovery says Portfolio Manager Tim Steinle of the Emerging Europe Fund EUROX These developing countries are economically tied to their western counterparts through established export trade putting them in an excellent position to benefit from the Continent s recovery Here are only a few examples More than 80 percent of Czech and Hungarian exports head to Western Europe and about 50 percent of Polish and Turkish goods are exported to Western Europe In addition we expect a continued convergence of European countries The integration process is currently underway with emerging countries in the east working to meet the European Union s standards that include living standards GDP environmental standards regulatory standards and infrastructure The quest for membership is a vote of confidence in Europe and its institutions says Barron s Next year Latvia likely will join the EU giving up its own currency in exchange for the euro Lithuania also is expected to join the euro according to Barron s It appears that Europe is ready for a take off Is your portfolio on board Disclosure Please consider carefully a fund s investment objectives risks charges and expenses For this and other important information obtain a fund prospectus Read it carefully before investing Distributed by U S Global Brokerage Inc Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure as well as economic and political risk By investing in a specific geographic region a regional fund s returns and share price may be more volatile than those of a less concentrated portfolio The Emerging Europe Fund invests more than 25 percent of its investments in companies principally engaged in the oil gas or banking industries The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund s performance more volatile The S P 500 Stock Index is a widely recognized capitalization weighted index of 500 common stock prices in U S companies The Dow Jones STOXX 600 Index is an index of 600 stocks representing large mid and small capitalization companies in the developed countries of Europe Citigroup s The Citi Economic Surprise Index is a measure that tries to capture how well the data is coming in relative to economic expectations All opinions expressed and data provided are subject to change without notice Some of these opinions may not be appropriate to every investor None of the U S Global Investors Funds held any of the securities mentioned as of June 30 2013 |
BMY | U S sues Deutsche Bank for alleged tax fraud seeks 190 million | By Jonathan Stempel NEW YORK Reuters The U S government on Monday sued Deutsche Bank AG DE DBKGn seeking to recoup more than 190 million from the German bank over alleged tax fraud more than 14 years ago According to a complaint filed in the U S District Court in Manhattan Deutsche Bank used insolvent shell companies to conduct a series of fraudulent conveyances designed to hide taxable gains from the U S Internal Revenue Service U S Attorney Preet Bharara said the case arose from Deutsche Bank s late 1999 purchase of a corporation that was sitting on an unrealized 150 million gain in shares of drug maker Bristol Myers Squibb Co N BMY The government said that to avoid a potential 51 million of federal income taxes on the gain Deutsche Bank in 2000 sold the stock for below fair value to the shell companies which paid for them with short term loans These shell companies in turn sold the stock to a different Deutsche Bank entity triggering the tax liability only to then repay the loans leaving them without funds to pay taxes Through fraudulent conveyances involving shell companies Deutsche Bank tried to make its potential tax liabilities disappear Bharara said in a statement This was nothing more than a shell game The 190 million sought includes the alleged unpaid taxes penalties and interest In a statement Deutsche Bank spokeswoman Renee Calabro said the bank fully addressed the matter in a 2009 agreement with the IRS in which the government had abandoned the theory that the bank was liable for the taxes While it is not clear to us why we are being pursued again for the same taxes we plan to again defend vigorously against these claims she said Wells Fargo Bank NA N WFC whose predecessor First Union National Bank was trustee for a trust set up for the transactions was also named as a defendant in that capacity A spokesman Ancel Martinez declined to comment
The case is U S v Deutsche Bank AG et al U S District Court Southern District of New York No 14 09669 Reporting by Jonathan Stempel in New York Editing by Andre Grenon and Diane Craft |
JPM | U S regulators to notify some banks their living wills are flawed WSJ | WASHINGTON Reuters U S regulators are preparing to notify some of the country s largest banks including JPMorgan Chase Co N JPM that they have submitted flawed living wills the Wall Street Journal reported on Tuesday citing people familiar with the matter A living will refers to a bank s plan for how it would wind down operations during a crisis without the help of public money At least half of the eight U S banks labeled systemically important meaning they could significantly damage the American financial system if they encountered distress are expected to receive harsh verdicts on their plans for how they would handle a potential bankruptcy without a federal bailout the Journal reported The Federal Deposit Insurance Corporation and the Federal Reserve the two regulators reviewing the wills declined to comment to Reuters on the report Reuters was unable to verify the story
Under the Dodd Frank Wall Street reform law banks must submit the plans annually Banks that submit plans that regulators do not find credible can face higher capital requirements and stricter regulation |
JPM | JPMorgan cuts 5 percent of Asia wealth management jobs source | By Saeed Azhar and Sumeet Chatterjee SINGAPORE HONG KONG Reuters JPMorgan Chase Co N JPM has cut 30 jobs or 5 percent of its headcount at its Asia wealth management business a source with direct knowledge of the matter said as the U S bank sharpens its focus on tapping wealthier clients The job cuts would affect the bank s Singapore and Hong Kong offices the source said declining to be identified because they were not authorised to speak publicly on the subject JPMorgan said in a statement that Edwin Lim market manager for North Asia high networth clients had left the firm A spokeswoman declined to comment further on job cuts The cuts highlight a decision by the bank to refocus on upper end Asian clients with 10 million in investable surplus known as ultra high networth individuals up from a 5 million threshold earlier the source said In March last year JPMorgan said it had decided to position its Asia wealth management unit as one private bank serving both the rich and the super rich aligning its business model with other regions With 4 7 million individuals with 1 million in liquid financial assets Asia Pacific is the largest and fastest growing wealth region according to Cap Gemini PA CAPP and RBC But some Western banks have recently retreated from the wealth management business in Asia due to rising costs regulatory risks and competition British lender Barclays L BARC earlier this month agreed to sell its wealth and investment management business in Hong Kong and Singapore to Oversea Chinese Banking Corp OCBC SI OCBC At J P Morgan we constantly review our coverage to ensure that clients are aligned with the advisors who are best suited to meet their needs the JPMorgan spokeswoman said in the statement Our integrated team approach to service our clients will remain unchanged and fully covered the statement said adding the bank remained open to hiring more in the region to grow its wealth management business JPMorgan s shift in strategy for its wealth management unit began a few months ago and saw the departure of several private bankers who were targeting the high networth segment typically with about 5 million liquidity private banking sources said
Peter Flavel the former JPMorgan chief executive of private wealth management at Asia Pacific joined Royal Bank of Scotland Group PLC s L RBS Coutts Co and Adam Co in February |
JPM | Top 5 Things to Know In the Market on Wednesday | Here are the top five things you need to know in financial markets on Wednesday April 13
1 China s exports rise at fastest pace in a year
Growth returned to Chinese exports in March for the first time in nine months with an 11 5 jump that blew past consensus expectations for a 2 5 increase
At the same time a less than expected decline in imports suggested that there was still strength to be found in the world s second largest economy
Global stocks moved higher on the trade data with London s FTSE 100 marking new 2016 highs Mining stocks led the gains in the City on hopes that the jump in Chinese exports would push demand for core ingredients like commodities upward
2 Oil drops as hopes dashed for production freeze inventories rise more than expected
Market participants took profits in black gold on Wednesday after Saudi Arabia s oil minister Ali al Naimi played down the prospect of an output freeze in the al Hayat newspaper
The remarks came after reports on Tuesday that Russia and the kingdom had reached a consensus on a deal expected to be announced at Sunday s meeting of major oil producers
Furthermore data from industry group the American Petroleum Institute showed late Tuesday that oil stockpiles had risen by 6 2 million barrels far above the consensus estimate for a build of 1 0 million
The Energy Information Administration was due to publish official inventory data later on Wednesday Analysts expect a build of 1 85 million barrels
U S crude oil futures fell 1 47 to 41 45 at 9 54AM GMT or 5 54AM ET while Brent oil traded down 1 12 to 44 19
3 JP Morgan to set the tone for U S financial stocks earning season
JPMorgan Chase Co NYSE JPM will be reporting quarterly earnings on Wednesday at approximately 10 45AM GMT or 6 45AM ET in what will be the first report from the U S financial sector
Markets will get their first glimpse at how U S banks fared in the first quarter in an environment marked by low interest rates and financial market volatility
Analysts are expecting first quarter reports in the financial sector to show a 9 2 decline in earnings and a 0 2 rise in sales
4 BoC and U S data ahead on Wednesday
Currency traders will focus on movements in USD CAD as the Bank of Canada announces its monetary policy decision and the update in its economic forecasts at 14 00GMT or 10 00AM ET The Canadian central bank is expected to leave interests unchanged at 0 50
Investors will also digest U S retail sales and the producer price index for March at 12 30GMT or 8 30AM GMT February business inventories at 14 00GMT or 10 00AM ET and the Fed Beige Book at 18 00GMT or 14 00ET
5 BoJ insists on the possibility of more easing
Bank of Japan BoJ board member Yutaka Harada did not rule out cutting interest rates further into negative territory especially if big risks materialize
He did admit on Wednesday that could not say whether these risks were currently present but his remarks came ahead of the BoJ s next policy decision on April 28
The dollar was trading broadly higher on Wednesday with USD JPY moving away from a 17 month low |
JPM | JP Morgan beats on Q1 EPS | Investing com JP Morgan reported better than expected first quarter earnings on Wednesday thanks to growth in loans from consumer business although revenue came in below consensus
Specifically the bank reported earnings per share EPS of 1 35 with revenue of 24 1 billion
Analysts had expected an EPS of 1 26 with revenue of 24 79 billion
Shares in JPMorgan Chase Co NYSE JPM gained 1 89 to 60 40 in the pre market immediately after the report
The report kicked off the earnings season for the U S financial sector where experts expect a 9 2 decline in earnings and a 0 2 rise in sales |
JPM | U S futures point to higher open earnings from JPMorgan ahead | Investing com Wall Street futures pointed to a higher open on Wednesday as investors eyed the release of fresh earnings reports and as higher oil prices were expected to continue supporting equities
The blue chip Dow futures were up 0 51 the S P 500 futures climbed 0 56 while the tech heavy Nasdaq 100 futures advanced 0 73
JPMorgan Chase NYSE JPM was set to post first quarter results before the market opens on Wednesday The U S lender was also in the spotlight following reports saying that had cut 30 jobs at its Asia wealth management business
Market participants were also expected to focus on energy related stocks on Wednesday Oil prices pulled back amid profit taking after surging to a five month high on Tuesday following reports Russia and Saudi Arabia had already reached a deal on an oil output freeze
The report came ahead of a highly anticipated meeting between major oil producers from the Middle East and Russia scheduled in Doha next Sunday
Commerce Bancshares Inc and Titan Machinery Inc were among the other U S companies scheduled to report quarterly results on Wednesday
Later in the day the U S was set to release data on retail sales and producer price inflation |
JPM | Peabody world s top private coal miner files for bankruptcy | By Tracy Rucinski and Tom Hals Reuters Peabody Energy Corp N BTU filed for U S bankruptcy protection on Wednesday after a sharp drop in coal prices left it unable to service debt of 10 1 billion much of it incurred for an expansion into Australia The Chapter 11 bankruptcy filing from Peabody the world s biggest private sector coal producer ranks among the largest in the commodities sector since energy and metal prices began to fall in mid 2014 as once fast growing markets such as China and Brazil started to slow Unlike most large corporate bankruptcies Peabody s filing did not sketch out a plan for cutting debt although it said it expected its mines to continue to operate as usual Peabody estimated its assets at 11 0 billion and liabilities at 10 1 billion as of the end of 2015 according to court documents The St Louis based company said its planned sale of mines in New Mexico and Colorado had fallen through and that its Australian operations were excluded from the bankruptcy filing Peabody has secured 800 million in debtor in possession financing from both secured and unsecured creditors including a 500 million term loan 200 million bonding accommodation facility and a letter of credit worth 100 million it said This process enables us to strengthen liquidity and reduce debt build upon the significant operational achievements we ve made in recent years and lay the foundation for long term stability and success in the future Peabody Chief Executive Officer Glenn Kellow said in a statement Shares of Peabody which closed at 2 07 on Tuesday were halted on Wednesday Debt troubles for Peabody date back to its 5 1 billion leveraged buyout of Macarthur Coal in 2011 just when prices peaked for the metallurgical coal that the Australian company supplies to Asian steel mills As demand for metallurgical coal fell particularly in China Peabody s financial woes intensified The company took a 700 million writedown on its Australian metallurgical coal assets last year At home the U S shale boom of the past few years made natural gas competitive with thermal coal and the Obama administration s environmental regulations raised operational costs 2016 will probably go down as the worst year in history for U S coal JPMorgan NYSE JPM said in an analyst note to clients on Tuesday U S production declined 31 percent in the first quarter from a year earlier although stockpiles still remain high the note said Producers accounting for about 45 percent of U S coal output have filed for bankruptcy in the current industry downturn based on 2014 government figures Peabody reached an agreement with New York Attorney General Eric Schneiderman in November to amend its disclosures to warn investors that concerns about the environmental impact of coal consumption could have a significant impact on demand for its products While coal use has stalled globally largely because of China s economic slowdown and efforts to protect domestic miners and rein in rampant pollution most analysts expect consumption to remain stable or rise in the future Some 500 coal fired power stations are under construction Eighty percent of them are in the Asia Pacific region where consumption is still growing in emerging markets as well as developed economies such as Japan and South Korea
The case is in the U S Bankruptcy Court for the Eastern District of Missouri St Louis case number 16 42529 |
HAL | Dollar Diddles In The Middle | Tuesday July 25 Five things the markets are talking about
The mighty US dollar is looking for conviction and that is not expected to come ahead of tomorrows FOMC rate decision 2 00 pm EDT
The markets this week are moving to the beat of company and industry dynamics as investors brace for the tomorrows Fed decision when U S policy makers will weigh robust global growth against meagre inflation and mixed U S economic data Expectations are for policy makers to keep rates on hold as the market searches for clues to the fate of the Fed s balance sheet which should be key
Overnight the dollar has surrendered some of its short lived gains as concerns about the U S economy and politics returned to the fore Global equities trade mixed while gold is heading for it s first loss in four sessions and crude oil gets a lift for a second day supported by the Saudi s promise yesterday to further cut crude exports
1 Stocks mixed bag
In Japan the Nikkei share average edged down 0 1 overnight in choppy trade as investors braced for the outcome of the Fed s two day policy meeting that begins this morning The market is also concerned that the long term rising trend in the broader Topix maybe somewhat hitting toppish levels it fell 0 3 in the session
Note The techies note that the Topix is falling below its 25 day moving average on a closing basis for the first time in three months
In Hong Kong stocks finished flat as gains in the technology sector were outweighed by declines concentrated in energy and industrials stocks The Hang Seng index ended up 0 02 after yesterday s posted two year high on Monday The Hang Seng China Enterprise CEI was down 0 35
In China the major stock indexes retreated overnight led lower by resource firms after their recent strong rally The blue chip CSI300 index fell 0 6 while the Shanghai Composite Index lost 0 2
In Europe most indices are trading in the black led higher by the Spanish Ibex and the FTSE100 which have rebound after sharp falls yesterday Investor sentiment has been further boosted following a strong German Ifo reading for July see below marking a post reunification high Earnings continue to be at the forefront
U S stocks are set to open little changed
Indices STOXX 600 0 5 at 381 0 FTSE 0 8 at 7433 DAX 0 3 at 12248 CAC 40 0 6 at 5159 IBEX 35 1 1 at 10556 FTSE MIB 0 7 at 21478 SMI 0 6 at 8955 S P 500 Futures flat
2 Oil extends gains as Saudi pledges export curbs gold lower
Oil prices have extended yesterday s gains after Saudi Arabia pledged to curb exports from next month Gains have also been supported by a warning from Halliburton NYSE HAL that the growth in North America s rig count was showing signs of plateauing a possible threat to U S shale oil production
Brent crude for September delivery is up 22c or 0 5 at 48 82 a barrel after settling up 1 1 yesterday U S West Texas Intermediate WTI futures are up 23c or 0 5 at 46 57 a barrel
In Russia yesterday OPEC and non OPEC producers discussed extending their deal to cut output by 1 8n bpd beyond March 2018 if necessary
The Saudi s indicated that they would limit its crude exports to 6 6m bpd next month almost 1m bpd below the levels of a year ago while Nigeria voluntarily agreed to join the deal by capping or cutting its output from 1 8m bpd once it stabilizes at that level up to now Nigeria had been exempt from the output cuts
Crude price direction now looks forward to today s U S API oil inventory numbers 04 30 am EDT The market is expecting a drawdown of 3m barrels last week
Ahead of the U S open gold prices are a tad softer 0 3 to 1 251 87 an ounce after hitting a one month high in the previous session buoyed by political uncertainty in the U S as investors wait for tomorrow s Fed decision
3 Yields EU US spreads widen
U S Treasuries are drifting about in a narrow range with looming debt supply creating a bias toward slightly higher yields
Note The U S Treasury will sell 26B 2 year notes today 34B 5 year notes tomorrow and 28B 7 year notes Thursday
Aside from traders having to make room to take down supply global yields direction will depend on tomorrows FOMC meeting and Friday s initial report on U S Q2 GDP
The Fed is not expected to hike rates but the market is looking for any change in tone from policy makers especially since they have leaned towards being a little dovish in recent weeks U S 10 Year yield is trading atop of 2 27
Euro data yesterday showing Germany s private sector growing at a slower pace in July while French business activity slowed more than expected last month to a six month low gave investors another incentive to move back into fixed income that have been rattled by concerns over tapering
German Bunds have backed up 1 bps to 0 52 while French OAT s are little changed at 0 75 UK Gilts have added less that 1 bps to 1 191
4 Dollar diddles in the middle
The EUR 1 1652 got a lift this morning after Germany s Ifo business sentiment surged see below to a record high in July but it stays short of Monday s 23 month peak of 1 1683 with investors cautious ahead of tomorrow s FOMC rate announcement Some EUR bears remain wary that the single units recent strong rise may soon dampen German exporter sentiment
Overnight USD JPY hit a five week lows below 110 85 before rebounding The two new Bank of Japan BoJ board members Kataoka and Suzuki in their inaugural press conference showed that they are a team player under Governor Kuroda and helped the pair regain a foothold above the psychological 111 00 level to trade at 111 44
Note The new board members replace Kiuchi and Sato who were dissenters Yen bears believe that the incoming members will support the camp for QE
The AUD A 0 7923 is little changed However attention now turns to two key events later this evening down under June quarterly inflation data 09 30 pm EDT and a speech on the labor market and monetary policy from Reserve Bank of Australia RBA Governor Lowe 11 05 pm EDT
5 German Business Sentiment Surges to Record High in July
Data this morning showed that German business sentiment surged to a record high last month and the Ifo institute described the mood among German companies as euphoric
The Ifo s business climate index rose to 116 0 points comfortably beating June s record of 115 2 points and the markets forecast of 114 9 points
Digging deeper German companies were more upbeat about their current business situation and their six month outlook |
HAL | The Energy Report Oil Drawdowns Across The Board | Shale Pains and OPEC
Oil prices are on the rise as Saudi Arabia pledges to reduce oil exports and the fact that US shale pains are becoming more obvious to the market Halliburton NYSE HAL is warning that the US oil rig count is about to plateau or peak shale which we predicted in my recent energy webinar and for an article I wrote on the Fox Business Network website
The Houston Chronicle reported that while oil service firm Halliburton saw its revenue jump in the second quarter as its North American hydraulic fracturing business boomed the company expects the pace of growth to slow Halliburton s executive chairman Dave Lesar said that the rig count growth is showing signs of plateauing and customers are tapping the brakes said Lesar who will remain executive chairman until he retires at the end of 2018
Marketwatch reported that shares of Anadarko Petroleum NYSE APC APC 0 34 fell more than 3 late Monday after the oil and gas exploration and production company reported a larger than expected second quarter loss Anadarko said it lost 415 million or 76 cents a share in the quarter compared with a loss of 1 36 a share in the second quarter of 2016 Adjusted for certain items the company lost 423 million or 77 cents a share in the quarter Some of this loss was due to a Colorado pipeline explosion but also due to shale oil losses
Zero Hedge reported about Anadarko s big miss and said that what should be far more concerning to shale bulls and perhaps oil bears is that the company admitted that it can no longer support its capital spending budget and it would cut its 2017 capital budget by 300 million becoming the first major U S oil producer to do so because of depressed oil prices In March Anadarko had forecast total 2017 capex of 4 5 billion to 4 7 billion a continuation of the recent CapEx rebound which troughed in Q3 2016 In other word this lack of investment and eventual shale pullback will reduce once again the outlook for US shale oil supply
It seems most oil analysts are not seeing this potential pullback in US shale supply Zero hedge reports that Horseman Global s Russell Clark in his latest letter to investors said that the rising decline rates of major US shale basins and the increasing incidents of frac hits also a cause of rising decline rates have convinced me that US shale producers are not only losing competitiveness against other oil drillers but they will find it hard to make money at some point debt investors start to worry that they will not get their capital back and cut lending to the industry Even a small reduction in capital would likely lead to a steep fall in US oil production If new drilling stopped today daily US oil production would fall by 350 thousand barrels a day over the next month
This is what I am hearing from producers in the oil patch Investors and the energy junk bond market is looking bad and investment capital for shale projects is falling I covered all of this in my recent webinar that you can still get In the heat of the oil rig frenzy when folks were claiming that shale producers could produce oil even in the thirties I warmed that they were getting ahead of themselves The realities of losing money on every barrel and trying to make up for it in volume or debt for that matter is not a winning long term strategy Hopefully shale investors got the message through the shale oil excitement
Rig counts in the Key Permian basin region have been stopping and uncompleted wells have been rising The warning signs are there
OPEC really must get some credit as the market unlike the last OPEC announcement is taking it as a positive Saudi Arabia showed it will do whatever it takes saying it will limit exports to 6 6 million barrels a day in August 1 0 million lower than last year While it appears that Libya and Nigeria at this point have no formal quota Libya will be allowed to keep increasing production to 1 25 million barrels a day Nigeria is expected to cap or reduce production if they sustain production of 1 8 million barrels a day Even though those are not hard and fast quotas the market knows that they will at least have a cap somewhere Besides we might need some Nigerian and Libyan sweet to offset US shale condensate loses
Oil drawdowns are going to start to matter We should see another 3 million barrel drawdown in crude supply this week We should also see equivalent drawdowns in the oil products At some point the market is going to realize we are draining the oil inventories at a record pace and that will wipe away the surplus faster than people think |
HAL | The Corn And Ethanol Report Busy Day Ahead | Busy Day Ahead
This morning we have June Home Sales at 9 00 A M EIA Energy Stocks at 9 30 A M Dairy Product Sales at 2 00 P M FOMC Meeting and more Earnings On the corn front the market is fighting on a lesser percentage of good to excellent rating weather and carryover from last year The Grain complex was a little higher in the overnight electronic session The September corn is currently trading at 369 which is up a of a cent The trading range has been 370 to 367
On the Ethanol front there were no trades posted in the overnight session The August contract settled at 1 505 and is currently showing 1 bid at 1 491 and 1 offer at 1 511 and Open Interest evaporating to 202 contracts
On the Crude Oil front the API showed a whopping draw of 10 1 million barrels and with the last couple of draws this is significant especially the news from OPEC Halliburton NYSE HAL and Anadarko OPEC will stick to export and production cuts and Halliburton and Anadarko will decrease shale production at these current price levels The September contract is currently trading at 4826 which is 37 points higher The trading range has been 4859 to 4816 and if the EIA confirms this draw this morning we will be flirting with 50 a barrel in no time
On the Natural Gas front August contract goes off the board tomorrow so we switch are focus to the September contract which is currently trading at 2 906 which is 2 cents lower The trading range has been 2 951 to 2 905 |
HAL | The Energy Report Oil Steals The Show As Inventory Rises | Give me those Old Time Fundamentals
Oil prices had its biggest up move of the year rising 3 3 on lower supply and higher demand I don t mean to be so fundamental about the fundamentals but in truth that s why we soared
Oil prices surged even before the American Petroleum Report API reported another massive crude oil crude withdrawal The 10 23 million barrel draw if confirmed by the Energy Information Administration EIA means that US oil supply is down almost 55 million barrels since the end of March even as the Strategic Petroleum Reserve added over 13 million of barrels of oil into the marketplace
The API brings the total inventory for crude oil in 2017 to a net draw of 7 534 million barrels the first net draw for 2017 since January according to Oilprice So we see that OPEC and non OPEC cuts do matter As I told Marketwatch the API reported crude supply draw erases the myth that shale can offset OPEC and non OPEC cuts barrel for barrel
This comes as we get reports of surging oil demand in China and in the US against a back of more pledges of cutbacks and warnings for oil service companies and producers that shale output may have topped out David Lesar Halliburton NYSE HAL CEO and President said in an earnings call that rig count growth is showing signs of plateauing and customers are tapping the brakes Anadarko Petroleum s Al Walker the company s chief executive officer cited current market conditions that require lower capital intensity given the volatility of margins realized in this operating environment
China s economy is growing faster than even the Chinese government predicted and that is raising the forecast for Chinese oil demand Reports show that China oil demand is expected to rise by 400 000 barrels as its own domestic production plummets as those Chinese teapot refineries run hard
Zhang Haichao vice president of SINOPEC Group HK 2386 told Reuters that Chinese crude oil imports are expected to exceed 400 million tons this year China crude imports are running 13 8 percent above a year ago coming in at 8 55 million barrels of oil a day
The UPI also reported yesterday that A militant attack on a crude oil pipeline in Nigeria has sidelined more than 100 000 barrels of oil per day the head of a state oil company announced Maikanit Baru the head of the Nigerian National Petroleum Corp said as yet identified saboteurs caused a breach on a major transit artery curbing 150 000 barrels of oil per day The rupture from the Trans Niger pipeline came as parties to a committee monitoring a production agreement coordinated by the Organization of Petroleum Exporting Countries of which Nigeria is a member met to consider its impacts
Today we will await the EIA to see if this surge in US oil demand continues Surging US gasoline and diesel demand has come back with a vengeance after many thought that US demand had strictly changed some of the demand numbers were under reported or influenced by transitory factors and the data looks like it is going to make up for lost time
US oil production numbers will be closely watched as well to see if there is sign of sputtering output We are predicting that US shale output will soon start to disappoint High decline rates and uncompleted wells will start to reduce oil output expectations API said gasoline inventories rose 1 903 million barrel build for the week ending July 21 compared to analyst expectations that inventories for the fuel would fall by 1 25 million barrels
Platts is reporting that the US Treasury Department is crafting sanctions which would prohibit the import of Venezuelan crude oil into the US one of several sanctions options the White House is considering in response to an expected vote Sunday in Venezuela an administration source said Tuesday But the Trump administration which has studied the impact of the potential crude oil import sanctions on the US refining sector is not expected to impose Venezuelan oil sanctions at least in the near term the source said Treasury is preparing them but that doesn t mean they ll implement them the source said |
HAL | The Energy Report Are Oil Supplies In Balance | Shell LON RDSa Versus Shale
Who says that the U S oil supply picture in not getting in balance Oil supply in the US fell by 7 2 million barrels down over 50 million barrels since the end of March It would have been over 60 million barrels if it were not for the reclassification of oil released from the Strategic Petroleum Reserve That puts supply at the lowest level this year and 7 1 below last year US crude production faltered last week a sign that US shale producers are getting wobbly Yet Shell posted better than expected blow away earnings as opposed to shale firms that are struggling to stay solvent
Shell revenue came in at 72 13 billion vs expected 67 78 billion according to Reuters in a bright spot for bigger oil Shell made money on reefing as strong margins and growing demand against a backdrop of near record productions for products boosted the bottom line Reuters reported that Shell s net profit on a current cost of supplies CCS basis at 3 6 billion up a whopping 245 percent from 1 billion for the second quarter of 2016 Shells CEO said that Shell promised to remain very disciplined to avoid seeing earnings impacted by the low prices of oil He also suggested that oil prices lately have been driven by market sentiment and not fundamentals
Shell s good fortunes are not being repeated in the shale front Yesterday Hess Oil said it would be cutting spending and exploratory expenditures forecast to 2 15B from original guidance of 2 25B after posting a bigger than expected loss This comes after the CEO at Halliburton NYSE HAL said that rig count growth is showing signs of plateauing and customers are tapping the brakes Hess sold assets in the Permian basin but is still trying to entice investors with the promise of more oil The Hess cut was lower than Anadarko s 300 million capex cut due to losses on shale oil production Sanchez Energy also announced 75 million to 100 million in 2018 spending cuts as shale oil is not yielding them a profitable price
This comes as U S oil production fell by 19 000 barrels a day Most of the drop was in Alaska and the lower 48 saw production rise in the Gulf of Mexico but shale production gains are still below estimates of growth More cuts in capex and rig counts slow down decline rates and capped wells could hurt as many shale guys are bleeding cash OPEC cuts do matter and there are clear signs the market is on a path to a much tighter market than we have had since the global financial crisis
Still oil is overbought technically and we need to see sustained follow through or consideration to perhaps make that big move We have kept a bullish outlook as we knew that despite the price the oil market was focusing on present supply and not future tightness due to a change in market players that the future would some day come That day is here and now and we still maintain that oil can break out and hit 70 by the end of the year Oil inventories globally will continue to drain a record pace at elevated prices Shale producers will be in the process of pulling back for the rest of this year
Shale at this point is not a swing producer Unlike Saudi Arabia that can quickly raise or lower output in a crisis shale producers have a much slower reaction time Someday shale will get there but they are not there yet
Gasoline demand also soared once again as concerns about demand are now in the rear view mirror Supply also fell by 1 million barrels U S oil exports and exports of diesel and gasoline gain as the US becomes refiner to the world Venezuelan sanctions have not hit their oil exports yet but if it does US gas prices will pop Tensions with Iran and Nigerian oil disruption added support |
HAL | Oil s Big Comeback | The oil market is finally getting it that supplies are falling as geopolitical risks are rising and OPEC is going to clamp down on members that are over producing quotas In the meantime the US oil rig count increased by just 2 rigs this week as shale producers are making some cutbacks Our Summer Solstice turnaround on oil that we covered in our webinar is coming together almost on cue as the outlook for higher oil prices in the second half of the year is back on track
OPEC needs to get some credit Since the market dismissed OPEC s extension of cuts and tanked prices near 42 00 a barrel they hurt many shale producers causing warnings from Halliburton NYSE HAL that the sector is going to pull back After a slew of capital cut announcements by producers now comes word from OPEC that they will hold a meeting with some non OPEC members Aug 7 8 in Abu Dhabi to assess how the group can increase compliance with production cuts OPEC wants to crackdown on the cheaters and continue to drain global supply that has already fallen at breakneck speed since the end of March U S crude inventories have fallen by 10 percent from their March to 483 4 million barrels Low prices have also encouraged strong demand as gas demand in the US has surged dismissing arguments that it has recently topped out while demand from India China and Europe is surging The Saudis also gave support to oil when they said that would reduce exports to 6 6 million barrels a day That led to others like the UAE and Kuwait to pledge to reduce exports
The US may impose more sanctions on the Venezuelan oil infantry after strongman Nicolas Maduro slaughtered his own people and continues to pillage what is left of the Venezuelan economy Over the weekend the U S called the election of Nicolas Maduro a sham and a statement was issued that The United States stands by the people of Venezuela and their constitutional representatives in their quest to restore their country to a full and prosperous democracy We will continue to take strong and swift actions against the architects of authoritarianism in Venezuela including those who participate in the National Constituent Assembly because of today s flawed election At this point there are no sanctions on Venezuelan oil but on the industry itself That will make it harder for Venezuela to keep production rising and ultimately will mean a higher cost for US drivers who will feel the impact of reduced shipments of heavy crude into the United States
Russia retaliated against US sanctions leading to more concerns about where we go next North Korea also set off more missiles that theoretically could hit the Untitled States The Trump adminstration lashed out at China claiming that they need to do more to reign in North Korea
Dow Jones reported that in Europe a production outage at Shell LON RDSa s 404 000 barrel per day Pernis refinery in the Netherlands following a fire sent benchmark European diesel margins which reflect the profit made from refining crude oil into the road fuel to their highest since November 2015 at 14 60 per barrel
We are looking for more drawdown in oil supply this week as the great rebalancing is underway It will be just a matter of time and we will see many start to raise their oil price forecast soon after they just lowered them Weather needs to be watched as well as Tropical Storm Emily formed in the Eastern Gulf Of Mexico |
C | Crude oil slumps after IMF G 20 raise global growth concerns | Investing com Crude oil futures dropped from a nine month high on Monday as concerns grew that the recent rally in energy prices could create a drag on the global economic recovery while some profit taking also weighed as investors continued to monitor tensions between Iran and the West On the New York Mercantile Exchange light sweet crude futures for delivery in April traded at USD108 84 a barrel during U S morning trade slumping 0 84 It earlier fell by as much as 1 3 to trade at a session low USD108 26 a barrel On Friday prices rose to USD109 92 a barrel the highest since May 4 International Monetary Fund Managing Director Christine Lagarde said in a statement after a weekend meeting of finance ministers from the Group of 20 nations in Mexico that the world economy is not out of the danger zone amid fragile financial systems high public and private debt and rising oil prices Lagarde added that G 20 nations must strengthen their economies against further shocks including higher crude prices Wall Street lender Citigroup said in a report published over the weekend that it expects the pace of economic recovery seen in the final months of 2011 to lose momentum in the near term The investment bank cited concerns over an economic contraction in Europe a slowdown in China and weaker core retail sales momentum in the U S as factors Meanwhile markets were also jittery as Germany s parliament was preparing to vote later Monday on a EUR130 billion bailout package for Greece which was agreed upon by euro zone finance ministers last week Ratings agency Moody s said earlier that while a second bailout for Greece was an important step forward the risk of a default remained high Oil traders continued to monitor tensions between Iran and the West and a potential disruption to oil supplies from the region According to industry sources Saudi Arabia increased exports sharply in the past week and is offering extra supplies to its biggest customers worldwide in an effort to make up for lost Iranian supplies Comments by U S Treasury Secretary Timothy Geithner that the Obama administration was weighing the circumstances that could warrant tapping the nation s strategic oil reserves may have prompted investors to book profits Crude oil prices advanced in each of the past seven trading sessions leading up to Monday the longest streak of gains since January 2010 The April contract rallied nearly 9 5 in the past two weeks as the oil market was dominated by growing concerns over a disruption to Iranian oil exports The stand off between Iran and Western countries has dominated sentiment in the oil market for weeks raising fears that the escalating row over Tehran s nuclear program could lead to an oil export halt a disruption to shipping traffic in the Strait of Hormuz or military conflict Last week and IMF official said that a halt of Iran s oil exports to Organization for Economic Cooperation and Development countries could trigger a 20 30 spike in oil prices Iran produces about 3 5 million barrels of oil a day making it the second largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia Elsewhere on the ICE Futures Exchange Brent oil futures for April delivery retreated 1 to trade at USD124 19 a barrel with the spread between the Brent and crude contracts standing at USD15 35 Brent futures have rallied nearly 15 since the start of 2012 as geopolitical and production issues in Iran the North Sea South Sudan Syria and Yemen tightened supplies |
C | Oil trades lower on demand concerns profit taking | Investing com Crude oil futures traded lower Monday as concerns that the recent rally in energy prices may dampen the global economic recovery while some profit taking also contributed to the lower prices as investors continued to monitor tensions between Iran and the West On the New York Mercantile Exchange light sweet crude futures for delivery in April traded at USD108 97 a barrel during U S afternoon trade giving back 0 73 It earlier hit a session low USD108 26 a barrel and a high of USD109 76 per barrel On Friday prices rose to USD109 92 a barrel the highest since May 4 Starting the oil demand bearishness International Monetary Fund Managing Director Christine Lagarde said in a statement during a meeting in Mexico with the Group of 20 nations that the world economy is not out of the danger zone amid fragile financial systems high public and private debt and rising oil prices Adding to the selling pressure Citigroup said in a report published over the weekend that it expects the pace of economic recovery seen in the final months of 2011 to lose momentum in the near term The investment bank cited concerns over an economic contraction in Europe a slowdown in China and weaker core retail sales momentum in the U S as factors Meanwhile markets were nervous as Germany s parliament was preparing to vote later Monday on a EUR130 billion bailout package for Greece which was agreed upon by euro zone finance ministers last week Ratings agency Moody s said earlier that while a second bailout for Greece was an important step forward the risk of a default remained high increasing euro zone oil demand worries Oil traders continued to monitor tensions between Iran and the West and a potential disruption to oil supplies from the region Counteracting the bullish Iranian tension Saudi Arabia increased exports sharply in the past week and is offering extra supplies to its biggest customers worldwide in an effort to make up for lost Iranian supplies Comments by U S Treasury Secretary Timothy Geithner that the Obama administration was weighing the circumstances that could warrant tapping the nation s strategic oil reserves may have prompted investors to book profits Crude oil prices advanced in each of the past seven trading sessions leading up to Monday the longest streak of gains since January 2010 The April contract rallied nearly 9 5 in the past two weeks as the oil market was dominated by growing concerns over a disruption to Iranian oil exports Tensions between Iran and Western countries has dominated sentiment in the oil market for weeks raising fears that the escalating pressure over Tehran s nuclear program could lead to an oil export halt a disruption to shipping traffic in the Strait of Hormuz or military conflict Last week the IMF stated that a halt of Iran s oil exports to Organization for Economic Cooperation and Development countries could trigger a 20 30 spike in oil prices Iran produces about 3 5 million barrels of oil a day making it the second largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia Elsewhere on the ICE Futures Exchange Brent oil futures for April settlement gave back 1 24 to trade at USD123 92 a barrel with the spread between the Brent and crude contracts standing at USD14 97 Brent futures have rallied nearly 15 since the start of 2012 as geopolitical and production issues in Iran the North Sea South Sudan Syria and Yemen tightened supplies |
C | European stocks remain lower after data DAX tumbles 1 13 | Investing com European stock markets remained sharply lower on Monday as sentiment was hit by sustained concerns over Greece s debt crisis and after downbeat economic data from the euro zone During European afternoon trade the EURO STOXX 50 dropped 0 97 France s CAC 40 declined 0 72 while Germany s DAX 30 tumbled 1 13 Investors were eyeing the March 8 deadline for bondholders to join the agreement under which they will exchange their existing Greek government bonds for new paper in a swap deal Sentiment was hit earlier after data showed that investor confidence in the euro zone for March improved less than expected remaining in negative territory for the eighth consecutive month A separate report showed that the services sector in the single currency bloc contracted at a faster rate than initially expected in February shrinking for the fifth time in six months Also Monday official data showed that retail sales across the euro zone rose for the first time in five months in January increasing by a seasonally adjusted 0 3 defying expectations for a 0 1 decline Financial stocks remained broadly lower with shares in German lenders Deutsche Bank and Commerzbank tumbling 2 13 and 3 11 respectively while France s BNP Paribas and Societe Generale declined 1 79 and 1 89 Peripheral lenders also contributed to losses Shares in Italian Unicredit and Intesa Sanpaolo plummeted 1 21 and 1 32 while Spain s BBVA and Banco Santander sank 1 82 and 1 73 Meanwhile Germany based chemical company BASF SE lost 1 55 after Citigroup downgraded the shares to neutral from buy citing a potential risk to earnings from chemicals if the price of crude oil continues to increase In London FTSE 100 dropped 0 47 as data showed that the service sector index in the U K declined more than expected in February U K lenders continued to track their European counterparts lower Shares in HSBC Holdings retreated 1 43 and Barclays plunged 1 36 while the Royal Bank of Scotland slumped 1 28 Mining giants Rio Tinto and Bhp Billiton added to losses with shares declining 2 84 and 1 55 respectively Rio Tinto said earlier that it will review its Bell Bay aluminum smelter in Australia because of rising costs and falling prices for the lightweight metal On the upside BP surged 1 53 as Europe s second biggest oil company reached a USD7 8 billion settlement with businesses and individuals over the 2010 Deepwater Horizon oil rig disaster In the U S equity markets pointed to a lower open The Dow Jones Industrial Average futures pointed to a fall of S P 500 futures signaled a 0 45 decline while the Nasdaq 100 futures indicated a 0 44 loss Later in the day the U S was to produce government data on factory orders while the Institute of Supply Management was to release a report on service sector growth |
C | European shares lower on China cut Greek worries DAX down 0 79 | Investing com European shares traded lower Monday ending a two day rally as a cut in China s economic growth forecast and renewed Greek fears weighed on equities Near the close of European trade the EURO STOXX 50 fell 0 64 France s CAC 40 gave back 0 39 while Germany s DAX dropped 0 79 Meanwhile in the U K the FTSE 100 moved lower by 0 61 The stock negative sentiment was fuelled by China reducing its growth target to 7 5 in 2012 marking the lowest number since 2004 This reduction stroked fears of lessening demand for European goods and services in the world s second largest economy China will also aim for inflation to remain steady at 4 unchanged from its 2011 goal In Greek news investors are awaiting to determine how many private investors agree to write down their sovereign debt holdings by the March 8 deadline Greece has set a 75 participation rate as the limit for proceeding with the transaction Private investors are urged to forgive Greece 53 5 of their principal and swap their remaining holdings for new Greek bonds and notes from the European Financial Stability Facility This is causing much trepidation as Germany s DSW investor protection group has advised private creditors to reject the offer Meanwhile in the United States the Institute for Supply Management s index of non manufacturing industries advanced to 57 3 in February from an earlier reading of 56 8 Steel makers Salzgitter and Kloeckner Co gave back 5 4 and 3 1 respectively after Salzgitter stated it was impossible to provide a forecast due to the euro zone crisis Rio Tinto the world s largest mining company fell 3 9 on declining copper prices and China s growth forecast cut Weir Group dropped 4 7 on a Citigroup downgrade to sell on the mining pump maker In bullish news Elekta soared 8 7 after the world s second largest maker of radiation surgery equipment said its orders jumped 45 in the 3 months to January 31 In U S midsession trade stocks are lower with the Dow off 0 49 the S P 500 down 0 65 and the Nasdaq trading lower by 0 84 Investors are awaiting Australia s interest rate decision U K retail sales and Canadian manufacturing activity on Tuesday |
C | Profits Double At Goldman Sachs | Another US bank has announced a rise in its profits with Goldman Sachs GS confirming it has doubled the amount it made in the second quarter of the year Despite the ongoing testing financial conditions the bank revealed that it made 1 9 billion 1 2 billion in the three months to the end of June This was a rise from the figure of 927 million that was recorded by the bank during the same period last year Employee pay accrued during the period was also shown to be up for the quarter after it was found to have increased by a quarter to 3 7 billion Impressive returns on its own investments in shares and debts were among the top reasons for Goldman Sachs being able to enjoy such a strong second quarter of the year Citigroup Wells Fargo and JP Morgan have all announced their profits rose in Q2 2013 in the last few weeks providing a positive sign for the state of the economic recovery in the US Disclosure FX Solutions assumes no responsibility for errors inaccuracies or omissions in these materials FX Solutions does not warrant the accuracy or completeness of the information text graphics links or other items contained within these materials FX Solutions shall not be liable for any special indirect incidental or consequential damages including without limitation losses lost revenues or lost profits that may result from these materials The products offered by FX Solutions are leveraged products which carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors Ensure you fully understand the risks involved and seek independent advice if necessary |
C | Falling Exports Bad Sign For Euro Zone GDP | The euro traded steadily at 1 31 on Wednesday morning as investors awaited US Federal Reserve Chairman Ben Bernanke s testimony before congress Dollar CautiousLast week Bernanke s remarks that the Fed was planning to continue its 85 billion per month stimulus plan into 2014 sent the dollar tumbling Now although no surprises are expected from the testimony investors are cautious about the dollar ahead of Bernanke s report In the euro zone data suggested the region has had yet another quarter of recession as both imports and exports fell in May The Wall Street Journal reported that euro zone exports fell 2 3 percent and imports slipped 2 2 percent The figures marked the second consecutive month of sharp drops in exports and the largest month to month change since June 2011 Huge JumpThe data also showed a trade surplus of 15 2 euros in May a huge jump from last year s figure of 6 6 billion euros However the surplus is the result of a six percent drop in imports rather than increasing exports which indicates weak domestic demand Although some analysts have predicted that the euro zone would see a gradual recovery over the course of 2013 and could eventually turn to growth in 2014 the predictions are largely dependent on the state of the rest of the world s economies as well At the moment the global economy is struggling to pick up which is reducing the market for euro zone goods Without a demand for its exports the euro zone will find it difficult to pull out of the ongoing recession Waiting On The ECBThe data has many looking to the European Central Bank s next policy meeting and wondering if the bank will cut interest rates from 0 5 percent to 25 percent c 2013 Benzinga com Benzinga does not provide investment advice All rights reserved |
C | U S Bonds USD CHF Gold And The DAX | When Bernake speaks about QE tapering and the economy it s time to keep an eye on US bonds We turn bullish earlier this week and prices are moving nicely higher since then However wave 4 is now approaching some key resistance levels so be aware of a possible reversal in days ahead Lets see how market will react at former wave 4 USD CHF made new low hour or two back so now we have five waves down in wave C which means that trend may change in the very near future for a minimum three wave rise We however would be tracking a larger bullish recovery if market will bounce in five wave back to 0 9500 Next support for wave C comes in at 0 9320 USD CHF 1h title CHF width 600 height 601 GOLD spiked to a new high for few cents which means that market is most likely in wave v of c If thats the case then we know that reversal in trend may follow soon because market could be in final part of a corrective rally from June low We will keep an eye on evidences of an impulsive weakness for a confirmed change in trend For now prices are up and can hit 1315 if move extends after Bernankes testimony German DAX is in uptrend mode now moving up in red wave v that is final leg of a blue wave iii which has a room for a push up to 8350 in the near future where we can see 161 8 extension of wave i measured from wave ii low |
C | MDC Holdings Hooker Furniture Double Digit Yields | There are 2 dividend stocks in our Covered Calls Table which are currently offering high options yields MDC Holdings MDC and Hooker Furniture HOFT We previously wrote about MDC and its call options continue to offer good yields Both of these companies have gotten an earnings boost from the US Housing Recovery and look to be on track for continued earnings growth over this year and next year 40 year old MDC is a homebuilder based in Denver Co which sells its new homes throughout the US under the name Richmond American Homes Virginia based HOFT is a a home furnishings marketing and logistics company Which together with its subsidiaries designs imports manufactures and markets residential furniture products in the US Dividends MDC pre paid 3 of its 2013 quarterly dividends in December 2012 to avoid a higher dividend tax rate for its shareholders It should pay its next 25 dividend in November 2013 Options Neither of these companies are high dividend stocks but they do offer high options yields via their November covered call options which are far enough out of the money that you can also potentially participate in some price gains There s also an attractive put selling trade for MDC which is listed in our Cash Secured Puts Table There are 3 basic scenarios for these covered call trades A Static The stock doesn t rise to or above the option strike price before or near the ex dividend date in which case you keep the shares and you collect the dividend and option B Assigned The stock does rise to or above the option strike price before or near the ex dividend date in which case you must sell the shares and you collect the price gain and option but no dividend C Assigned after ex dividend date The stock does rise to or above the option strike price AFTER the ex dividend date in which case you must sell the shares and you collect the price gain option and the dividend Performance Like other homebuiders MDC has pulled back in price over the past few weeks due to concerns that Fed tapering will continue escalate rates and slow down housing demand HOFT is under 4 below its 52 week high Financials Both firms work on low Operating Margins and HOFT has a cleaner balance sheet being debt free Author Robert Hauver copyright 2013 DeMar Marketing All Rights Reserved Disclosure Author was short MDC put options at the time of this writing Disclaimer This article was written for informational purposes only Author not responsible for any errors omissions or actions taken by third parties as a result of reading this article |
C | Oil And Gold Analysis Crude Rises Gold Advances | CLCrude oil Intermediate raised to a 15 month high as U S jobless claims declined and equities advanced bolstering economic optimism The economy looks good said Jeff Grossman president of New York based BRG Brokerage and a New York Mercantile Exchange floor trader Crude is working its way higher in sympathy with the stock market Crude grade had been typically the more expensive grade until mid 2010 Stockpiles at the hub dropped 3 57 million barrels in the two weeks ended July 12 to 46 1 million GOLDGold advanced for the third time in four days on signs of increasing physical purchases Japan s biggest gold retailer said today its sales rose threefold in the second quarter from the previous three months as lower prices attracted consumers There are signs of firming demand from China to Japan Barclays Plc wrote in a July 15 report Through yesterday prices rebounded 8 4 percent since reaching a 34 month low on June 28 as the decline spurred more buying of coins bars and jewelry Physical demand is keeping the gold market alive Sterling Smith a Chicago based commodity futures specialist at Citigroup Inc said in a telephone interview We also saw some technical buying come in |
JPM | U S shale oil firms feel credit squeeze as banks grow cautious | By Swetha Gopinath and David Henry Reuters Nearly two years into an epic oil rout U S shale drillers that have upended global energy markets are finally feeling a credit squeeze as banks make their biggest cuts yet to their loans Every six months oil and gas producers and their banks negotiate how much credit they should be given based on the value of their reserves in the ground In previous reviews banks were willing to offer borrowers some leeway encouraged by producers hedges against falling prices and their ability to keep cutting costs in step with crude s slide that began in mid 2014 This time with many companies hedges largely gone and crude prices used in the reviews as much as 20 percent lower than six months earlier banks are getting tough Just a few weeks into the current round of talks more than a dozen companies have had their loans cut by a total of 3 5 billion equivalent to a fifth of available credit according to data compiled by Reuters Graphic At that rate 10 billion more of bank credit will disappear as a remaining 50 billion or so of credit lines come under scrutiny in talks that stretch into May Companies and bankers contacted by Reuters declined to comment beyond their public statements due to the sensitive nature of the talks The squeeze puts further pressure on the shale industry to sell assets cut jobs and drilling and shrink capital spending It also raises the risk that more companies will tip into bankruptcy Banks are also under more pressure now from regulators to limit their energy related risks as the downturn drags on The next credit review in the autumn could take an additional toll if oil prices now below 40 a barrel do not rebound Any company that does not have a widely profitable base at this current price is going to find it very very hard said Christian Ledoux senior portfolio manager at South Texas Money Management About 36 percent of some 150 energy companies with speculative grade debt will probably default on their obligations by the end of next year if oil holds around 35 a barrel said Tarek Hamid senior U S credit analyst at JPMorgan Chase Co NYSE JPM More than 50 North American oil and gas producers have entered bankruptcy since early 2015 according to a Reuters review of regulatory filings and other data ANTI HOARDING Oil and gas producers rely on revolving credit to finance day to day operations and cuts force them to looks for cash elsewhere Clayton Williams Energy Inc N CWEI for example which had its credit line slashed to 100 million from 450 million borrowed the difference from Ares Management LP N ARES an alternative asset investor that charged triple the rate of the banks Fearing that falling crude prices and reserve values could push many companies into default companies and bankers have been also renegotiating financial performance tests and claims on assets while resetting the borrowing limits Some companies including Eclipse Resources Corp N ECR and California Resources Corp N CRC have disclosed that banks have agreed to loosen or even suspend minimum financial requirements to give them more flexibility Sometimes banks rewrite clauses that might have allowed lower classes of lenders to throw borrowers into default and suddenly trigger repayment requirements and cause bankruptcies according to lawyers and analysts tracking the talks Typically bank lenders don t want second and third lien lenders to have that first bite at the apple said Lindsay Sparks a partner at law firm Paul Hastings LLP To the alarm of banks some highly indebted companies such as Linn Energy LLC O LINE drew heavily on their credit lines ahead of their loan talks lawyers and analysts said A spokesman for Linn declined to comment This defensive measure has emerged as a somewhat surprising and troubling trend with broad ramifications for lenders said FBR Co analyst Chad Mabry In response some banks have insisted on anti hoarding provisions that would give them more say over what companies do with cash and other assets that could go toward repaying the loans In February Phil Rykhoek chief executive of Denbury Resources Inc N DNR told investors after loan talks with a syndicate of banks that lenders agreed to easier financial tests in exchange for accepting such a provision The anti hoarding provision limits how much cash Denbury can hold before drawing more on its credit line It was not directed at Denbury Rykhoek said as much as it was a new defensive by banks in response to seeing other companies draw on their lines to take lender cash with them as they approached bankruptcy
It was very important to them Rykhoek said |
HAL | Wall St ends flat small caps rebound in volatile day | By Yasmeen Abutaleb NEW YORK Reuters U S stocks ended flat in a volatile session on Thursday as energy stocks rebounded and investors bought beaten down shares especially small caps The S P broke a three day string of losses recovering from a drop of as much as 1 percent to close with the slimmest of gains Earlier it had briefly dipped below its 150 day moving average a level it hasn t closed below since November 2012 In late trading investors temporarily set aside worries about weak economic growth and rich valuations that have hit stocks of late and added to volatility The CBOE Volatility Index VIX Wall Street s favored gauge of investor anxiety closed at 16 16 down 3 3 percent after earlier reaching 17 98 its highest since March Small cap stocks also reversed direction The Russell 2000 ended up 1 percent and is now down about 9 3 percent from its March record exiting correction territory We re going to have to wait a few days and see whether this can be a meaningful bottom relative to what we ve seen so far said Bruce McCain chief investment strategist at Key Private Bank in Cleveland Ohio The Dow Jones industrial average DJI fell 3 66 points or 0 02 percent to 16 801 05 the S P 500 SPX gained 0 01 points to 1 946 17 and the Nasdaq Composite IXIC added 8 11 points or 0 18 percent to 4 430 20 The S P s 0 01 point gain was its smallest since April 24 2013 Markets had been pressured early after a press conference by European Central Bank head Mario Draghi whose discussion of additional stimulus for the euro zone disappointed some investors European stocks finished with steep losses Energy stocks which had been down for much of the session gained 0 4 percent U S crude rebounded after falling below 90 for the first time since April last year and Brent crude also finished well off the day s lows Friday s market direction will likely be determined by the September jobs report expected to show 215 000 jobs added The number of Americans filing new claims for unemployment benefits unexpectedly fell last week pointing to a stronger labor market About 7 7 billion shares changed hands on U S exchanges above the 6 1 billion average last month according to data from BATS Global Markets The largest percentage gainer on the New York Stock Exchange was Wayfair N W up 30 1 percent while the largest percentage decliner was Atento SA N ATTO down 13 6 percent Advancing issues outnumbered declining ones on the NYSE by 1 645 to 1 429 for a 1 15 to 1 ratio on the upside on the Nasdaq 1 730 issues rose and 959 fell for a 1 80 to 1 ratio favoring advancers
The benchmark S P 500 index posted three new 52 week highs and 25 new lows the Nasdaq Composite recorded 21 new highs and 164 new lows Editing by Nick Zieminski |
HAL | Oil stocks go their separate ways | By Chuck Mikolajczak NEW YORK Reuters Investors have wrung their hands over the last several weeks over the effect of lower oil prices on the broader S P 500 but the relationship between the two is actually starting to break down Crude prices had dropped more than 10 percent in the trading week ended Dec 12 That was largely responsible for a 3 5 percent drop in the S P 500 as investors fled stocks over concerns about energy sector bonds corporate earnings and expectations for world economic demand That seemed to change Thursday The S P 500 surged while oil fell a potential change in sentiment among investors looking to focus on sectors that may benefit from an accelerating U S economy The proof is that oil turned down and the market said Oh that was yesterday s news today we re moving ahead said Quincy Krosby market strategist at Prudential Financial in Newark New Jersey Bank of America Merrill Lynch credit strategist Hans Mikkelsen credited the decoupling partly to Fed Chair Janet Yellen s Wednesday news conference She explained how declining oil prices are expected to be a net positive for the U S economy Furthermore she went out of her way to dismiss any downward pressure on inflation as transitory Investors may have already priced in the effect of cheaper oil on energy sector earnings and are now starting to weigh the positives for other sectors In its 2015 global outlook fund manager Pimco said the fall in energy costs because it is largely supply driven should ultimately help growth in major economies including the United States Japan and the euro zone Fourth quarter energy sector earnings are expected to decline 19 2 percent from a year ago on October 1 growth of 6 6 percent was expected You will see some pain in the short term because of fourth quarter earnings said James Liu global market strategist at JPMorgan Funds in Chicago So the broad S P 500 will take a hit based on that but over the next several quarters it is clearly going to be a good thing As recently as Tuesday the 10 day correlation between the S P 500 SPX and Brent crude stood at 0 97 meaning each moved in almost perfect sync with the other The correlation has been breaking down and last stood at 0 42 with Brent stumbling 3 1 percent while the S P 500 surged 2 4 percent on Thursday According to data from S P energy has fallen to a market share representation of 8 31 percent from 9 7 percent at the end of the third quarter as names such as Denbury Resources N DNR Nabors Industries N NBR and Halliburton N HAL have each tumbled more than 35 percent With investors hoping oil prices have at least stabilized as Brent hovers around the 60 mark selling pressure could resume on equities if the downward march for oil begins again weighing on the broader S P index and tightening the correlation
This story changes date to Dec 19 from Dec 18 Additional reporting by Caroline Valetkevitch Editing by Nick Zieminski |
HAL | The Zacks Analyst Blog Highlights Kinder Morgan Schlumberger And Halliburton | For Immediate Release
Chicago IL July 21 2017 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 includeKinder Morgan Inc NYSE KMI NYSE Schlumberger Ltd NYSE and Halliburton Co NYSE
Today Zacks is promoting its Buy stock recommendations
Here are highlights from Thursday s Analyst Blog
Halliburton vs Schlumberger Which Is Better Pre Earnings
Analysts have made their predictions Now it s time for the actual results Energy infrastructure provider Kinder Morgan Inc NYSE kicked off the energy earnings season when it reported second quarter results yesterday after the market close
Now it s the turn of the oil services companies providers of technical products and services to drillers of oil and gas wells to come out with Apr Jun numbers which are likely to provide a better understanding of the sector s prospects in the near future In particular key oil services earnings scheduled for release over this week and the next includingSchlumberger Ltd NYSE and Halliburton Co NYSE assume greater significance
The world s largest oilfield services provider Schlumberger is scheduled to report on Jul 21 while smaller rival Halliburton will release its second quarter earnings report on Monday Jul 24 As such this may be a good time to consider which of these is a better stock Both of them carry a Zacks Rank 3 Hold You can see
Let s dive in
Schlumberger and Halliburton are both major players in the industry which is ranked a lowly 208 out of the 256 industries in our coverage bottom 19 The broader sector of which it is a part is also staring down the barrel currently sitting at the bottom of the Zacks Sector Rank 16 out of 16 To learn more visit
Price Performance
Schlumberger and Halliburton shares have suffered this year as have shares of all oil related companies to reflect the commodity s price slide and uneven outlook That said both have done better than their peers While the Zacks Oil and Gas Field Services Industry has lost 28 4 Halliburton is down by just 15 7 year to date and Schlumberger has witnessed its share price decrease by 19 7 since Jan
Earnings History and ESP
Halliburton has an incredible history when it comes to beating earnings estimates Investors should note that Halliburton hasn t missed earnings estimates since mid 2014 As far as recent history is concerned the TX based firm delivered earnings beat in each of the trailing four quarters with an average positive earnings surprise of 68 49 On the other hand Schlumberger has delivered positive surprises in just two of the prior four quarters with an average earnings surprise of a modest 4 55
The situation does not change when considering values as well with Halliburton clocking in at 15 79 while Schlumberger s reading stands at 3 33 You can uncover the best stocks to buy or sell before they re reported with our
Dividend Yield
Schlumberger s dividend yield over the last one year period is 2 97 higher than the broader industry s figure of 2 12 With a dividend yield of 1 58 Halliburton shareholders earn significantly lower dividend yield than Schlumberger as well as the industry at large
Valuation
Compared with the S P 500 the Oil and Gas Field Services industry is undervalued This implies that the industry has the potential to gain in the near future The industry has an average trailing 12 month EV EBITDA enterprise value to earnings before interest tax depreciation and amortization ratio which is often used to value oil and gas stocks given their significant debt levels and high depreciation and amortization expenses of 8 56 which is below the S P 500 average of 11 01 Hence it might be a good idea not to stay away from stocks belonging to this industry
Coming to the two stocks under consideration with an EV EBITDA ratio of 34 16 Halliburton is overvalued compared to the S P 500 and the industry However though Schlumberger also looks pricey compared to the industry and the S P 500 with an EV EBITDA ratio of 11 69 it defeats Halliburton decisively
Investment Style
According to the Zacks Halliburton has a Value Score of D Growth Score of A and Momentum Score of A This stock is therefore most suitable for growth and momentum investors
Schlumberger has a Value Score of D Growth Score of C and Momentum Score of F which means that the stock is best avoided
Other Metrics
Schlumberger s expected EPS growth for 3 5 years is 16 10 This is better than Halliburton s growth rate of 8 00
Also beta for Schlumberger is 1 02 which shows marginally less volatility than Halliburton s beta of 1 04
Net profit margin for Schlumberger is 4 95 This is way better than Halliburton s net profit margin of 0 29
Also Schlumberger has a lower leverage as evident by its debt to equity ratio of 0 40 compared with Halliburton s ratio of 1 20
Conclusion
The comparative analysis shows Halliburton has witnessed a more favorable share price movement throughout the year possesses a fantastic surprise history which means it is more predictable and boasts of a better style score Additionally it carries a much higher ESP reading of 15 79 as against Schlumberger s figure of 3 33
However Schlumberger is superior when considering dividend yield and valuation Moreover when considering EPS growth profit margin and debt load Schlumberger is clearly a better stock
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HAL | Whiting Petroleum WLL What Will Q2 Earnings Unveil | Domestic oil and gas explorer Whiting Petroleum Corp NYSE WLL is set to release second quarter 2017 results after the closing bell on Wednesday Jul 26 In the preceding three month period the Denver CO based company reported stronger than expected results on robust output and cost control Coming to earnings surprise history Whiting Petroleum has a mixed record its missed estimates in 2 of the last four quarters Whiting Petroleum Corporation Price and EPS Surprise Let s see how things are shaping up for this announcement Factors to Consider This QuarterOil prices have been on a freefall over the past few weeks erasing all the gains associated with the OPEC led output cut The continued rise in domestic production thanks to soaring shale output have dragged down the commodity well below the psychologically critical 50 threshold This will hamper Whiting Petroleum s earnings and cash flowsHowever efficiencies on the production front might be able to mitigate some of the damage The company expects to maintain a flat to rising production profile in the upcoming few quarters despite asset sales Moreover Whiting Petroleum has been able to reduce costs that will provide some buffer amid the tumbling commodity prices Earnings WhispersOur proven model does not conclusively show that Whiting Petroleum will beat estimates this quarter That is because a stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold to be able to beat consensus estimates You can uncover the best stocks to buy or sell before they re reported with our That is not the case here as you will see below Zacks ESP Earnings ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate is 5 26 This is because the Most Accurate estimate stands at a loss of 20 cents while the Zacks Consensus Estimate is pegged narrower at a loss of 19 cents Zacks Rank Whiting Petroleum s Zacks Rank 4 Sell further decreases the predictive power of ESP making us less confident of an earnings surprise call As it is we caution against Sell rated stocks Zacks Ranks 4 and 5 going into the earnings announcement especially when the company is seeing negative estimate revisions Share Performance Shares have fallen 41 8 during the second quarter as against the loss of 16 9 Over the last 12 months Whiting Petroleum stock has lost 37 4 Stocks to ConsiderWhile earnings beat looks uncertain for Whiting Petroleum here are some energy firms you may want to consider on the basis of our model which shows that they have the right combination of elements to post earnings beat this quarter TransCanada Corp TO TRP has an Earnings ESP of 7 84 and a Zacks Rank 1 The energy infrastructure developer is expected to release earnings results on Jul 28 You can see Halliburton Co NYSE HAL has an Earnings ESP of 10 53 and a Zacks Rank 3 The oilfield services provider is anticipated to release earnings on Jul 24 EQT Corp NYSE EQT has an Earnings ESP of 12 50 and a Zacks Rank 3 The oil and gas company is likely to release earnings on Jul 27 Will You Make a Fortune on the Shift to Electric Cars Here s another stock idea to consider Much like petroleum 150 years ago lithium power may soon shake the world creating millionaires and reshaping geo politics Soon electric vehicles EVs may be cheaper than gas guzzlers Some are already reaching 265 miles on a single charge With battery prices plummeting and charging stations set to multiply one company stands out as the 1 stock to buy according to Zacks research It s not the one you think |
HAL | Why Halliburton Stock Is Rated A Buy With Caution Before Earnings | Halliburton NYSE NYSE HAL is a large cap company that operates within the energy equipment and services industry Its market cap is 39 billion today and the total one year return is 3 46 for shareholders
Halliburton stock is underperforming the market It s beaten down but it reports earnings next week So is it a good time to buy To answer this question we ve turned to the Investment U Stock Grader Our Research Team built this system to diagnose the financial health of a company
Our system looks at six key metrics
Earnings per Share EPS Growth Halliburton reported a recent EPS growth rate of 98 58 That s above the energy equipment and services industry average of 58 5 That s a great sign Halliburton s earnings growth is outpacing that of its competitors
Price to Earnings P E The average price to earnings ratio of the energy equipment and services industry is 182 29 And Halliburton s ratio comes in at 113 77 It s trading at a better value than many of its competitors
Debt to Equity The debt to equity ratio for Halliburton stock is 121 36 That s above the energy equipment and services industry average of 67 51 That s not a good sign Halliburton s debt levels should be lower
Free Cash Flow per Share Growth Halliburton s FCF has been higher than that of its competitors over the last year That s good for investors In general if a company is growing its FCF it will be able to pay down debt buy back stock pay out more in dividends and or invest money back into the business to help boost growth It s one of our most important fundamental factors
Profit Margins The profit margin of Halliburton comes in at 0 75 today And generally the higher the better We also like to see this margin above that of its competitors Halliburton s profit margin is above the energy equipment and services average of 4 08 So that s a positive indicator for investors
Return on Equity Return on equity gives us a look at the amount of net income returned to shareholders The ROE for Halliburton is 30 80 and that s below its industry average ROE of 9 77
Halliburton stock passes four of our six key metrics today That s why our Investment U Stock Grader rates it as a Buy With Caution |
C | Crude oil at fresh 9 month high after U S claims inventory data eyed | Investing com Crude oil futures hit a fresh nine month high on Thursday adding to gains after a report showed that U S jobless claims held steady near the lowest level since March 2008 last week while traders awaited key U S supply data On the New York Mercantile Exchange light sweet crude futures for delivery in April traded at USD106 66 a barrel during early U S morning trade gaining 0 35 It earlier rose by as much as 0 5 to trade at USD106 80 a barrel the highest since May 5 2011 The U S Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending February 18 held steady at 351 000 confounding expectations for an increase of 3 000 to 354 000 Jobless claims have remained below 400 000 a level historically associated with an improving labor market in 15 of the past 17 weeks Oil traders have been paying close attention to readings on U S employment levels for signs that people are returning to work thus driving more and using more energy Also supporting prices German research institute Ifo said its Business Climate Index rose to a seven month high of 109 6 in February from a reading of 108 3 the previous month surpassing expectations for an increase to 108 8 The data fuelled hopes that the euro zone s largest economy was weathering the impact of the debt crisis in the region and may avoid slipping into a recession The dollar index which tracks the performance of the greenback versus a basket of six other major currencies was down 0 36 to trade at 79 02 Meanwhile markets continued to monitor tensions between Tehran and Western powers Iran s military started a four day air defense exercise in a 190 000 square kilometer area in southern Iran to protect nuclear sites threatened by possible Israeli attacks on Wednesday Israel and the U S have previously stated that all options are on the table in ensuring the Islamic Republic does not acquire atomic weapons Oil traders were awaiting the U S Energy Information Administration s closely watched weekly report on U S stockpiles of crude and refined products to gauge the strength of oil demand in the world s largest oil consumer The report was expected to show that U S crude oil stockpiles rose by 1 0 million barrels last week while gasoline supplies were forecast to decrease by 0 3 million barrels After markets closed Tuesday the American Petroleum Institute an industry group said that U S crude inventories rose by 3 6 million barrels last week while gasoline stockpiles advanced 0 31 million barrels This week s U S EIA report comes out a day later than usual because the government and financial markets were closed for the Presidents Day holiday Elsewhere on the ICE Futures Exchange Brent oil futures for April delivery rallied 1 15 to trade at a nine month high of USD124 28 a barrel with the spread between the Brent and crude contracts standing at USD17 62 Wall Street lender Citigroup said that Brent prices are expected to rise in the near term to USD127 a barrel a level last seen in July 2008 while New York traded crude was forecast to hit USD115 a barrel for the first time since September 2008 A retest of the all time high at USD147 50 a barrel for Brent now looks to be the danger the bank said Brent futures have rallied nearly 9 since the start of 2012 as geopolitical and production issues in Iran the North Sea South Sudan Syria and Yemen tightened supplies |
C | Crude oil futures off 9 month high after U S supply gain | Investing com Crude oil futures edged lower on Wednesday retreating from a nine month high after a report showed a larger than expected increase in U S oil supplies On the New York Mercantile Exchange light sweet crude futures for delivery in April traded at USD105 94 a barrel during U S morning trade shedding 0 37 It earlier rose by as much as 0 5 to trade at USD106 80 a barrel the highest since May 5 2011 Crude prices traded at USD106 01 prior to the release of the Energy Information Administration data The U S EIA said in its weekly report that U S crude oil inventories rose by 1 6 million barrels in the week ended February 17 above expectations for a 1 0 million barrel increase U S crude supplies fell by 0 2 million barrels in the preceding week Total U S crude oil inventories stood at a five month high of 340 7 million barrels as of last week remaining in the upper limit of the average range for this time of year Total motor gasoline inventories decreased by 0 6 million barrels beating expectations for a 0 3 million barrel decline after rising by 0 4 million barrels in the preceding week This week s U S EIA report comes out a day later than usual because the government and financial markets were closed for the Presidents Day holiday Meanwhile markets continued to monitor tensions between Tehran and Western powers Iran s military started a four day air defense exercise in a 190 000 square kilometer area in southern Iran to protect nuclear sites threatened by possible Israeli attacks on Wednesday Israel and the U S have previously stated that all options are on the table in ensuring the Islamic Republic does not acquire atomic weapons Meanwhile Wall Street investment bank Goldman Sachs recommended traders buy September crude futures on the NYMEX amid speculation supplies will tighten after the reversal of the Seaway pipeline in June We believe that the better trading opportunity may currently lie in WTI crude futures for the contract months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the US Gulf Coast the bank said The 500 mile pipeline co owned by Enterprise Products Partners and Enbridge will allow oil to move out of the glutted Midwest and into the U S Gulf Coast refining hub Goldman added that it expects the spread between September U S crude and Brent futures to narrow to USD5 a barrel in six months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the U S Gulf Coast WTI West Texas Intermediate prices will be closely tied to Brent prices with WTI likely trading at a USD3 to USD5 a barrel discount reflecting the pipeline tariff economics Elsewhere on the ICE Futures Exchange Brent oil futures for April delivery eased up 0 1 to trade at USD122 99 a barrel with the spread between the Brent and crude contracts standing at USD17 05 Wall Street lender Citigroup said that Brent prices are expected to rise in the near term to USD127 a barrel a level last seen in July 2008 while New York traded crude was forecast to hit USD115 a barrel for the first time since September 2008 A retest of the all time high at USD147 50 a barrel for Brent now looks to be the danger the bank said Brent futures have rallied nearly 9 since the start of 2012 as geopolitical and production issues in Iran the North Sea South Sudan Syria and Yemen tightened supplies |
C | Crude oil retests 9 month highs on German Confidence U S Jobs | Investing com Crude oil futures traded higher Thursday as German confidence and U S job numbers combined with Iranian tensions lifted the commodity to nine month highs On the New York Mercantile Exchange light sweet crude futures for delivery in April traded at USD106 83 a barrel during U S afternoon trade gaining 0 55 The oil rally was spurred when Germany posted better than expected business climate index figures The Munich based Ifo institute s business climate index climbed to 109 6 in February from 108 3 in January However the European Commission changed its November economic growth forecast for 0 05 growth to a 0 3 contraction in the euro zone The EU expects the economy to shrink 1 3 in Italy and give back 1 in Spain Trying to ease the worry European Union Economic and Monetary Commissioner Olli Rehn stated Although growth has stalled we are seeing signs of stabilization in the European economy Economic sentiment is still at low levels but stress in financial markets is easing In Greek news German Chancellor Angela Merkel stated she will keep the pressure on Greece to meet its debt cutting pledge as many remain skeptical of Greek s true intentions Applications for jobless benefits in the U S were unchanged in the week ending February 18 at 351 000 This marks the fewest number of people on unemployment benefit rolls since 2008 signaling continued improvement in the world s largest economy Meanwhile markets continued to monitor tensions between Tehran and the West Iran s military started a four day air defense exercise in southern Iran to protect nuclear sites threatened by possible Israeli attacks on Wednesday Israel and the U S have previously stated that all options are on the table in ensuring the Islamic Republic does not acquire atomic weapons Earlier investment bank Goldman Sachs recommended traders buy September crude futures on the NYMEX amid speculation supplies will tighten after the reversal of the Seaway pipeline in June We believe that the better trading opportunity may currently lie in WTI crude futures for the contract months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the US Gulf Coast the bank said The 500 mile pipeline co owned by Enterprise Products Partners and Enbridge will allow oil to move out of the glutted Midwest and into the U S Gulf Coast refining hub Goldman added that it expects the spread between September U S crude and Brent futures to narrow to USD5 a barrel in six months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the U S Gulf Coast WTI West Texas Intermediate prices will be closely tied to Brent prices with WTI likely trading at a USD3 to USD5 a barrel discount reflecting the pipeline tariff economics Elsewhere on the ICE Futures Exchange Brent oil futures for April settlement gained 0 12 to trade at USD123 03 a barrel with the spread between the Brent and crude contracts standing at USD15 75 Wall Street lender Citigroup said that Brent prices are expected to rise in the near term to USD127 a barrel a level last seen in July 2008 while New York traded crude was forecast to hit USD115 a barrel for the first time since September 2008 A retest of the all time high at USD147 50 a barrel for Brent now looks to be the danger the bank said Brent futures have rallied nearly 9 since the start of 2012 as geopolitical and production issues in Iran the North Sea South Sudan Syria and Yemen tightened supplies |
C | Crude oil futures Weekly outlook February 27 March 2 | Investing com Crude oil prices rallied for a seventh day on Friday settling at a nine month high as market sentiment continued to be dominated by growing concerns over a disruption to Iranian oil exports while renewed optimism in the U S economy and indications that the debt crisis in the euro zone is improving lent further support On the New York Mercantile Exchange light sweet crude futures for delivery in April settled at USD109 70 a barrel by close of trade on Friday rallying 4 95 over the week Crude prices rose to USD109 92 a barrel earlier Friday the highest since May 4 Oil futures advanced in each of the past seven trading sessions the longest streak of gains since January 2010 as traders continued to monitor developments surrounding Iran The International Atomic Energy Agency said in a report Friday that Iran was making progress with its nuclear program by enriching uranium The report comes after IAEA inspectors were refused permission by Tehran to visit the Parchin military base during two days of talks that ended last week It is suspected the complex houses a secret underground nuclear facility Fears over a disruption to oil flow from Iran were underscored after the Islamic Republic said earlier in the week that it halted sales of crude oil to British and French companies in an escalation of a dispute over the Islamic Republic s nuclear program The head of Iran s state oil company warned that if other European nations continued hostile acts it would stop exporting oil to them as well The pre emptive sales embargo by Iran comes in response to tighter sanctions on the country after European Union states agreed in late January to stop importing Iranian crude from July 1 Growing tensions between Iran and Israel also remain in focus There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing Israel and the U S have previously stated that all options are on the table in ensuring the Islamic Republic does not acquire atomic weapons Iran is the world s third largest oil exporter after Saudi Arabia and Russia The threat of a major supply disruption from the country has helped support oil prices in recent weeks Risk appetite was also boosted by improving U S data A report by the University of Michigan on Friday showed that its index consumer sentiment rose to 75 3 this month from 75 in January On Thursday the U S Department of Labor said that the number of individuals filing for initial jobless benefits in the week ending February 18 held steady at 351 000 the fewest since March 2008 The U S is the world s largest oil consuming nation accounting for nearly 21 of global oil demand Meanwhile optimism that the debt crisis in the euro zone is easing lent further support to oil prices On Friday Greece launched a bond swap offer to private sector creditors formally inviting them to exchange their holdings of government debt for new securities Euro zone developments have dominated trading in the oil market for the last several months with prices broadly tracking investor sentiment toward the region s ongoing debt crisis Wall Street investment bank Goldman Sachs recommended traders buy September crude futures on the NYMEX amid speculation supplies will tighten after the reversal of the Seaway pipeline in June We believe that the better trading opportunity may currently lie in WTI crude futures for the contract months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the US Gulf Coast the bank said The 500 mile pipeline co owned by Enterprise Products Partners and Enbridge will allow oil to move out of the glutted Midwest and into the U S Gulf Coast refining hub Goldman added that it expects the spread between September U S crude and Brent futures to narrow to USD5 a barrel in six months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the U S Gulf Coast WTI West Texas Intermediate prices will be closely tied to Brent prices with WTI likely trading at a USD3 to USD5 a barrel discount reflecting the pipeline tariff economics Elsewhere on the ICE Futures Exchange Brent oil futures for April delivery settled at a nine month high of USD125 31 a barrel by close of trade on Friday The Brent contract added 3 6 over the week with the spread between the Brent and the crude contracts standing at USD15 61 a barrel Meanwhile euro denominated Brent futures rose to a record high EUR93 60 a barrel exceeding the previous high of EUR93 46 hit on July 3 2008 Brent prices were boosted after Goldman Sachs recommended traders buy Brent contracts for July 2012 to take advantage of rising prices Upside price risks are rising as the market finds itself in the unprecedented situation in which OPEC spare capacity is at a trough just as a world economic recovery is gaining momentum the investment bank said in a report published Tuesday Crude output in Sudan Yemen Nigeria and the North Sea is also lower hurt by geopolitical and production issues Wall Street lender Citigroup said that Brent prices are expected to rise in the near term to USD127 a barrel a level last seen in July 2008 while New York traded crude was forecast to hit USD115 a barrel for the first time since September 2008 A retest of the all time high at USD147 50 a barrel for Brent now looks to be the danger the bank said In the week ahead markets will be watching developments in the euro zone with investors eyeing the uptake on Wednesday s refinancing operation by the European Central Bank as well as the outcome of votes in Finland and Germany on Greece s bailout Investors will also be focusing on Wednesday s U S data on fourth quarter economic growth in order to gauge the strength of the country s economic recovery as well as testimony from Fed Chairman Ben Bernanke Oil traders will also continue to monitor lingering tensions between Iran and the West |
C | Copper futures decline as global growth concerns weigh | Investing com Copper futures retreated on Monday as sentiment was weighed by fears high oil prices would hurt the global economic recovery as well as ongoing concerns over the euro zone s debt crisis On the Comex division of the New York Mercantile Exchange copper futures for May delivery traded at USD3 839 a pound during European morning trade shedding 0 81 It earlier fell by as much as 0 95 to trade at a session low USD3 837 a pound Crude oil prices traded close to USD109 a barrel in New York while Brent oil rose above USD124 in London fuelling concerns that the economic recoveries in the U S and Europe could get derailed and potentially hurt Asian growth The world economy is not out of the danger zone amid fragile financial systems high public and private debt and rising oil prices International Monetary Fund Managing Director Christine Lagarde said in a statement after a weekend meeting of finance ministers from the Group of 20 nations in Mexico Wall Street lender Citigroup said in a report published over the weekend that it expects the pace of economic recovery seen in the final months of 2011 to lose momentum in the near term The investment bank cited concerns over an economic contraction in Europe a slowdown in China and weaker core retail sales momentum in the U S as factors Copper is sensitive to the global economic outlook because of its widespread uses in construction and manufacturing Prices came under further pressure after a weekend meeting of the Group of 20 finance ministers and central bankers failed to make progress on increasing the size of the International Monetary Fund s lending capacity The G 20 postponed a decision on a global bailout package to address the debt crisis in the euro zone and said any decision on outside help will be conditional upon on European governments increasing the size of their firewall in the next two months Markets were also jittery as Germany s parliament was preparing to vote later Monday on a EUR130 billion bailout package for Greece which was agreed upon by euro zone finance ministers last week Europe as a region is second in global demand for the industrial metal Prices have tracked investor sentiment toward the euro zone s debt crisis in recent months Elsewhere on the Comex gold for April delivery fell 0 5 to trade at USD1 767 55 a troy ounce while silver for May delivery dropped 0 6 to trade at USD35 20 a troy ounce |
C | Cotton futures edge higher after USDA exports rebound | Investing com Cotton futures were up for a second day on Monday amid indications of robust demand for U S supplies after data showed that U S export sales of the fiber spiked last week On the ICE Futures U S Exchange cotton futures for May delivery traded at USD0 9073 a pound during European afternoon trade gaining 0 64 It earlier rose by as much as 0 95 to trade at a two day high of USD0 9097 a pound The U S Department of Agriculture said Friday that U S farmers sold 185 200 bales of cotton in the week ended February 16 a 75 surge from the previous week It also reported 22 000 bales of optional origin sales to China while cotton for export inspected at U S ports totaled 326 200 bales which exceeds the average amount needed to meet USDA s current projections for the 2011 12 crop year China is both the world s largest producer and consumer of the fiber Cotton traders have been focusing on prospects for increased Chinese demand in recent months after the country started a cotton stockpile in September to protect domestic farmers interests However that program is expected to end next month Meanwhile gains were limited amid concerns that the recent rally in oil prices could create a drag on the global economic recovery The world economy is not out of the danger zone amid fragile financial systems high public and private debt and rising oil prices International Monetary Fund Managing Director Christine Lagarde said in a statement after a weekend meeting of finance ministers from the Group of 20 nations in Mexico Wall Street lender Citigroup said in a report published over the weekend that it expects the pace of economic recovery seen in the final months of 2011 to lose momentum in the near term Demand for cotton as a non food agricultural commodity is seen as more closely linked to economic conditions and consumer sentiment than that for other farm crops Despite recent gains USDA chief economist Joe Glauber estimated prices will average USD0 80 per pound in the 2012 13 season which begins August 1 as global production was expected to outweigh demand Last week the USDA said that U S farmers planted nearly 10 less cotton for next season as the market remains fixated on the current season s problems The USDA is scheduled to release another report on cotton plantings on March 30 The Prospective Plantings report is based on a poll of farmers planting intentions and is closely watched by the cotton futures market Elsewhere on the ICE Futures Exchange coffee futures for May delivery rose 0 3 to trade at USD 2 0455 a pound while sugar futures for May delivery eased up 0 1 to trade at USD0 2528 a pound |
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