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PCG | PG E proposes board revamp in revised bankruptcy plan | Reuters Bankrupt California power producer PG E Corp said on Saturday it had submitted an updated bankruptcy reorganization plan including a new board of directors and new roles aimed at addressing concerns raised by California Governor Gavin Newsom PG E filed for Chapter 11 protection in January last year citing potential liabilities in excess of 30 billion from deadly wildfires in 2017 and 2018 linked to its equipment Newsom in a public letter to the company on Dec 13 had rejected an earlier PG E reorganization plan saying it lacked major changes in governance and tougher safety enforcement mechanisms mandated under the state wildfire statute Newsom has accused the company of putting profit ahead of maintenance of its power lines and of poorly managing the widespread blackouts PG E used to avoid sparking wildfires during high winds PG E said it believed its updated plan addressed the Newsom s concerns
Aside from the new board the plan would also create two newly expanded roles of Chief Risk Officer and Chief Safety Officer who will both report directly to the company s chief executive the company added in its statement |
VZ | Wednesday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday uncertain
ES pivot 2056 42 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ not yet a buy
Recap
My conditional call for Tuesday worked perfectly Just look at the ES chart It dropped back below the pivot at 3 35AM but then fought back up above for a positive open Then it made one brief stab at the pivot right at 10 45 AM but that failed and it was up up and away from there As I say the conditional call doesn t always work but it works often enough to be useful So now we move on to Wednesday
The Technicals
The Dow Monday night pretty much all the technicals were wrong I kind of had that idea in mind when I made it a conditional call In any case the Dow had a nice 0 79 pop to more than retrace Monday s losses and approach YTD resistance But that still leaves us overbought and with a stochastic more likely to form a bearish crossover than anything So I just had to abstain from this chart last night The VIX Silly me I said the VIX was going higher on Tuesday in the face of 2 3 of a bearish evening star Well that star was out in full force Tuesday with a 7 12 gap down drop in the VIX to complete this pattern That makes this chart bearish despite being oversold Market index futures Last night all three futures were lower at 12 42 AM EST with ES down 0 11 ES had a very nice day Tuesday making back two days worth of losses and breaking resistance at 2057 We re now officially overbought but with the upper BB at 2077 29 and with being in a rising RTC I think ES might want to have a look at that number today Though ES certainly wasn t showing much enthusiasm for that idea last night ES daily pivot Last night the ES daily pivot rose from 2043 58 to 2056 42 That still leaves us above the new pivot so this indicator is still bullish Dollar The dollar posted a 0 29 gain on an unusual red hanging man With indicators still not yet overbought there s enough uncertainty here to keep me from making a call Euro The euro fell just a bit on Tuesday on a nice little star With indicators nearly oversold that seems to imply some bottom formation and our current level around 1 13 is indeed a support line But we also have a bearish RTC trigger so this chart isn t clear at all Hey sometimes that happens Transportation And finally the trans defied my predictions to gain a healthy 0 86 on Tuesday with a nearly bullish engulfing pattern to retrace all of Monday s losses and keep us overbought We re still outside the last rising RTC though so technically that s a bearish trigger We ll see
The market is at something of a crossroads right now The charts in general look fairly bullish but they re near key resistance lines It also seems that the recent rally has largely been fueled by oil and right now oil seems to be running out of gas sorry couldn t resist I think the next move is going to be lower I m just not sure if that will be on Wednesday It could be a doji day So on that note I will just have to call Wednesday uncertain Wednesday should provide more clarity
Single Stock Trader
The 200 day MA acted as support for Verizon NYSE VZ and it gained even more on Tuesday But we remain highly overbought and I m just going to wait for the next pullback to buy in again |
VZ | Thursday Depends On ES Pivot | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday higher only if ES breaks above its pivot else lower
ES pivot 2066 17 Breaking above is bullish
Friday bias uncertain technically
Monthly outlook bias higher
Single stock trader VZ not yet a buy
Recap
Tuesday night I called Wednesday as uncertain saying that it could be a doji day And that s exactly what it was with the Dow down 7 points and the SPX down 0 06 points I think we also got some of the clarity I was looking for so let s get right to it
The Technicals
The Dow On Wednesday the Dow put in a tall doji right on the upper end of Tuesday s gains The indicators moved even more overbought and I take this failure to advance as a bearish sign The VIX I also wrote Tuesday night that a bunch of mumbo jumbo makes this chart bearish despite being oversold Right again as the VIX fell another 1 57 Wednesday completing the bearish evening star But there s no reversal sign yet so it s not out of the question that there could be more downside here today Thursday Market index futures Last night all three futures were mixed at 12 40 AM EST with ES down 0 05 but YM up 0 02 Call it basically flat Tuesday night I wrote that I think ES might want to have a look at the upper BB on Wednesday and that s just what happened with ES just touching the upper BB before falling back to form a nice doji The new overnight took a big pop right after the close but then gave it all back leaving us with a fat red hanging man yesterday though it did start drifting slowly higher in the late evening We ll have to see now if it has the requisite mojo to bust through its pivot ES daily pivot Last night the ES daily pivot rose from 2056 42 to 2066 17 That was enough to just put ES below the new pivot but it seems interested in mounting an attack on it as I write So it s bearish now but only weakly so Dollar The dollar was too tough for me Tuesday night to call but ended putting in a decent 0 25 gain on Wednesday right back to a month long resistance Euro I also couldn t call the euro Tuesday night and it s not surprising given that the euro has been putting in tiny little spinning tops for three days now seemingly stuck around 1 1321 We re oversold but it s looks like last night s breakout attempt has failed leaving us right back where we started Given this lack of direction still no call here Transportation The trans rose 0 28 Wednesday in a bit of bullish divergence But the inverted hammer overbought indicators and a bearish stochastic crossover all suggest lower to come Rising indicators not yet overbought and a rising RTC all suggest the trans might still have enough gas in the tank to motor higher today
With ES so close to its new pivot and looking like it s serious about trying to break through in the early morning hours last night looked like another good choice to do a conditional call If ES can break above its pivot by mid morning Thursday we ll close higher If not we ll close lower Single Stock Trader VZ extended its gains Wednesday While it s annoying to see the bus pull away without you on board well just wait for it to come back There s no law that says you have to trade |
VZ | Friday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Friday higher
ES pivot 2076 00 Holding above is bullish
Next week bias higher technically
Monthly outlook bias higher
Single stock trader VZ topping
Recap
Wednesday night I said that if ES managed to break above its pivot by mid morning Thursday we d close higher Well ES made three charges at the pivot at 2 10 AM 3 AM and 3 40 AM yesterday And the third time was the charm as ES took off and never looked back And we did indeed close higher That just leaves one more day to round out the week so let s take a look at the charts
The Technicals
The Dow The Dow s 110 point advance on Thursday negated Wednesday s doji amid rising volume and handily broke through resistance at 17 889 for its best close YTD While we re now oversold the proximity of the upper BB at 18 069 makes me think the Dow s going to want to take a sniff of that number today Friday The VIX Well whadaya know about that Wednesday night I wrote there could be more downside here on Thursday and the VIX obligingly fell nearly 10 on a gap down red marubozu yesterday That leaves us within sneezing distance of the 200 day MA at 14 51 The momentum is clearly down at this point so I m going to hazard that the VIX takes a peek at the MA today Market index futures Last night all three futures were modestly higher at 1 11 AM EST with ES up 0 04 ES had a nice gain on Thursday just touching its upper BB at the close But that also leaves us right on the edge of the rising RTC and also pretty overbought That makes me think it might be time for some sort of retracement But so far at least ES doesn t seem interested in moving lower ES daily pivot Last night the ES daily pivot rose again from 2066 17 to 2076 00 We remain above the new pivot so this indicator remains bullish Dollar index Wednesday night I noted some strong resistance for the dollar and that proved to be simply too much to overcome so we ended down nearly a full percent That move was enough to form a new bearish stochastic crossover and drop us out of the rising RTC for a bearish setup It all adds up to continued lower on Friday Euro Well the euro managed a small gain on Thursday but it remains mired in its recent congestion zone of 1 1281 to 1 1500 So there s nothing to say here until we see a breakout and there s no way to tell which way it will be If I were trading the euro right now I wouldn t Transportation Wednesday night I wrote the trans might still have enough gas in the tank to motor higher on Thursday and it turned out they had a secret extra reserve tank that was good for another 078 to easily clear resistance at 8971 With this big green marubozu on the tape there s nothing bearish at all here unless we encounter some typical Friday profit taking
The charts were pretty uniformly bullish last night so despite the fact that the Friday before the President s Birthday ie Washington s Birthday holiday is historically pretty bearish it s not clear that will be the case this year So I m just going to go ahead and call Friday higher Single Stock TraderHuh NYSE VZ finally put in a red candle in the form of a dark cloud cover I d look for more downside here Eventually we ll find another buying opportunity |
VZ | Tuesday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday lower
ES pivot 2090 00 Holding below is bearish
Rest of week bias lower technically
Monthly outlook bias higher
Single stock trader VZ topping
Recap
Yaaawn Is this three day weekend finally over Time to wake up and get back to the markets I guess Though I have to admit I kind of enjoyed a three day break That makes me consider that there s no holiday in March But the evil major corporation I used to work for offered something called floating holidays You got a day off and could pick which day to use it on So I see no reason not to be at least as generous with myself as those cheapskates So I m declaring Monday March 16th to be Night Owl Day There will be no Night Owl the Sunday night before the 16th One of the nice things about being your own boss Uh so anyway let s see where this new holiday shortened week might be headed
The Technicals
The Dow Way back last Friday the Dow gained 47 points on a small green candle that nonetheless continued closing in on its upper BB Indicators are now overbought but not so much that touching the BB on Tuesday is out of the question The VIX And also back in ancient history the VIX on Friday gapped down another 4 24 to come within a hair of its 2200 day MA at 14 62 We re still fairly oversold but the last time we were in a similar situation the VIX bounced right off the MA and moved higher So I was looking for some support to kick in here yesterday
Market index futures Last night all three futures were lower at 12 AM EST with ES down 0 47 ES had another good day last Friday with a record close that again touched its upper BB But we re pretty overbought by now and ES may be wanting to rest a spell In any case the new overnight is forming a bearish harami ES daily pivot Tonight the ES daily pivot rose again from 2076 00 to 2090 00 That plus the overnight drop in ES now put it below the new pivot so this indicator turned bearish Dollar After a big drop last Thursday the dollar found some support Friday with a small hammer But the stochastic rolled over big time for a bearish crossover That leaves this chart sort of a tossed up but overall it looks more negative to me Euro And so the euro on Friday produced a mirror image inverted hammer on Friday We do have some real time action Sunday night for this and it s very negative off half a percent That makes a lower close Tuesday look likely Transportation And the trans made it four in a row with a quarter percent gain on Friday that leaves the indicators just short of overbought and still in a rising RTC So in the absence of any bearish signs this one looked higher again Yesterday
It s op ex week once again with all the lunacy that implies And the first day after Valentine s Day is historically quite bearish Last night the charts and the new overnight both seem to be confirming that so I m just going to go ahead and call Tuesday lower Single Stock Trader VZ is another issue that touched its 200 day MA on Friday and the bounced off with a doji But we re still quite overbought and we have a rising RTC exit so I d definitely not be going long here |
VZ | Wednesday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday uncertain
ES pivot 2091 83 Holding above is bullish
Rest of week bias lower technically
Monthly outlook bias higher
Single stock trader VZ moving lower
Recap
Well Mr Market sure got over his Greek existential malaise in a hurry We indeed opened lower in a big way on Tuesday as I expected but by the end of the day the Dow was actually up all of 28 points Go figure It s all Greek to me So let s forget about all this drama and move right on to the charts At least they always play it straight
The Technicals
The Dow It wasn t a big move higher yesterday but it did result in a tall hanging man teetering right on the edge of record territory And with the indicators still overbought one has to wonder how much gas is left in this tank We do have at least a reversal warning here The VIX Monday night I wrote I m looking for some support to kick in here on Tuesday Well I wrote Monday but I meant Tuesday And the 200 day MA kicked right in sending the VIX bouncing with a gap up 7 56 star to form 2 3 of a bearish evening star But it was also enough to exit the descending RTC for a bullish setup so this is a chart to watch on Wednesday With oversold indicators the bull case seems to be stronger here It s an unusual divergence where the VIX and Dow were both up on the same day Market index futures Last night all three futures were barely higher at 12 55 AM EST with ES up just one tick On Tuesday ES continued creeping up its upper BB to remain in a steep rising RTC but with a hanging man Indicators remain quite overbought and the overnight is trading outside the RTC for a bearish setup but is this a top Can t really tell unfortunately And with the overnight flat there s no help there ES daily pivot Last night the ES daily pivot rose a bit from 2090 00 even to 2091 83 But that still leaves us above the new pivot so this indicator is now bullish Dollar index So much for Monday night s hammer The dollar lost another 0 14 on Tuesday to remain in a steep descending RTC with a lopsided spinning top And we re still not yet oversold So this is a reversal sign that requires confirmation as we sit this one out Euro After something of a bump last Thursday the euro has gotten bogged down again this time around 1 1406 a level we ve seen for four days in a row now And with indicators wandering about neither overbought nor oversold there s little direction to this chart and indeed there has been none since we bottomed on January 26th Transportation Yesterday the trans put in an unremarkable small spinning top Still not yet overbought not much to learn here I take a pass on this chart
The Dow is now hard up against all time high resistance and its RSI has actually been falling for a week now while remaining overbought But all our reversal indicators are ones that require confirmation And on top of that we ve got FOMC minutes today Wednesday And it s op ex week To me that all sounds like a good excuse to call Wednesday uncertain and live to trade another day Single Stock TraderVZ indeed dropped right back to its 200 day MA on Tuesday Will this provide support It didn t the last two times we were here and we were a lot less overbought back then than now So I don t think the selling is over and I m not yet looking to buy in again |
VZ | Friday Technicals Move Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Friday lower
ES pivot 2094 00 Holding above is bullish
Next week bias lower technically
Monthly outlook bias higher
Single stock trader VZ bottoming soon
Recap Well the conditional call last night simply did not work out ES broke over its pivot on Thursday but due to bad economic numbers those freakin Greeks or whatever we ended lower anyway It s still a good play just not 100 So with that excitement out of the way let s take a gander at op ex Friday always a good time The technicals The Dow Jones 30 On Thursday the Dow lost 44 points on a second hanging man in a row and one that closed outside the rising RTC for a bearish setup We now have three hanging men in a row making me think Mr Market is trying to tell us something And with indicators remaining overbought it looks like what he s saying is that there s more downside to come The VIX In continuing divergence on Thursday the VIX lost 1 04 on a day the Dow was also down It also caused a bearish RTC setup The overall gestalt of this chart makes it look like it just wants to move lower Market index futures Tonight all three futures are mixed once again just like last night at 12 30 AM EST with ES down 0 05 but NQ up 0 04 ES is clearly having trouble advancing from these elevated levels with now three dojis in a row marking failed attempts to move higher RSI hit 98 61 on Thursday the other indicators have actually begun to move lower and we got a bearish trigger on the rising RTC exit The blah overnight suggests little appetite for any push higher on Friday ES daily pivot Tonight the ES daily pivot dips from 2094 17 to 2094 00 even After crossing the pivot multiple times on Thursday we re now just barely above the new number so this indicator is slightly positive Dollar index Last night I wrote this one looks vaguely bullish Turns out I could have been more assertive since the dollar gained a fair 0 25 on Thursday Now it was with a gap up hanging man OTOH we have a stochastic on the verge of a bullish crossover That all leaves this chart too tough to call once again Euro Last night I noted that the euro seemed to be congesting and wrote I m going to guess that the break when it comes will be lower Well on Thursday it was with the euro closing at 1 1368 its lowest lose in four days With three lower highs in a row now and indicators still a long way from oversold I d say the selling s not over here yet Transportation On Thursday the trans put in a massive topping indicator in the form of a big gravestone doji that just touched their upper BB before closing right on the edge of the rising RTC just short of a bearish setup We remain highly overbought so I d have to say the next move is lower form here
Friday is op ex and historically bearish And I have to say the charts now seem to be leaning in that direction with the lone exception of the VIX However the past two days the VIX has traded in direct correlation with the market highly unusual So overall it looks like I have to call Friday lower That s all she wrote See you again Sunday night Single Stock TraderLast night I wrote there s more downside to come here about Verizon Communications Inc NYSE VZ And there was down another percent as we gapped down under the 200 day MA That also took the indicators off overbought though we remain in a descending RTC I think we re nearing a short term bottom here which would be a good buying opportunity But I need to see the reversal first So we continue to watch and wait |
VZ | Monday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Monday uncertain
ES pivot 2099 33 Holding above is bullish
Rest of week bias lower technically
Monthly outlook bias higher
Single stock trader VZ a swing trade buy
Recap
In a good example of how news trumps technicals on Friday we got some positive news about those Greeks and their perpetual money troubles and so the markets jumped Not that I m complaining since I m always net long As long as I m making money I m happy So let s see how happy I m going to be Monday at 4 PM as we begin the last week of the miserable month of February
The Technicals
The Dow Last week I thought for sure the Dow would break lower following a whole week of hanging men But the Greeks put the kaiboash on that idea and up we went to the tune of 155 points for another record close and reclaiming the 18K level Indicators are all now overbought broken and have lost their predictive power so all I can really see here is the upper BB at 18 296 and the rising RTC IOW nothing bearish here The VIX The VIX is now back in gear falling when the market rises And on Friday it fell a good 6 47 out of its rising RTC for a bearish trigger and then right on through its 200 day MA leaving us with three black crows all cawing lower lower Market index futures Last night all three futures were mixed at 12 31 AM EST with ES down 0 05 On Friday ES smashed through resistance at 2098 to move back into record territory The indicators remain highly overbought but ES has shown an ability for over a year now to keep that up for a long time before moving lower That leaves nothing really to call this chart lower Monday ES daily pivot Last night the ES daily pivot rose from 2094 00 to 2099 33 We re still above the new pivot so this indicator continues to be bullish Dollar After early gains Friday the dollar ended with a 0 16 loss on a red bearish engulfing pattern It does appear to me that after peaking on January 23rd the dollar seems to have lost its way I m looking for some directionless trading the next day or so Euro The euro is also befuddled putting in five dojis in a row with no end in sight Indicators continue to wander between overbought and oversold so to be honest I have no clue where this chart is going Transportation After a gravestone doji Thursday the trans motored higher on Friday anyway though with a hanging man this time We ve now touched the upper BB and the indicators remain extremely overbought and we re hanging on the very edge of the rising RTC for a bearish setup So it looks like there s at least a chance of a move lower on Monday
One thing that concerns me is that the Morningstar Market Fair Value Index has now hit 1 06 its highest level in a year The last time we hit 1 06 was December 26th and that marked the exact top of a nasty week and a half long slide And the chart recently are looking a lot like the run up to the December high too modulo the Greek pop on Friday which might be a one off So I m kind of torn between calling the market higher because of the absence of any outright bearish signs and calling it lower because of some slightly longer term toppishness I see Oh well what the heck I ll just split the difference and call Monday uncertain My personal bias is that I m not looking to go long the next few days Single Stock TraderLast Thursday I wrote that we re nearing a short term bottom regarding Verizon Communications VZ And if you check the chart that s about how it played out with a tall green hammer and oversold indicators It s now looking like a near term buy again |
XOM | Petrobras says Exxon expressed strong interest in pre salt oil | SAO PAULO Reuters U S oil company Exxon Mobil Corp N XOM expressed to Brazil s state controlled company Petrobras SA PETR4 strong interest in the exploration of deep water oil fields off the Brazilian coast Petrobras Chief Executive Pedro Parente said on Tuesday Considering movements towards a strategic partnership we have nothing concrete with Exxon but they have certainly expressed strong interest in the Brazilian pre salt exploration Parente told reporters Earlier on Tuesday The Wall Street Journal reported that Exxon was in talks to gain access to Brazil s deep water oil resources citing people familiar with the matter Petroleo Brasileiro Sa Petrobras familiarly known as Petrobras and Exxon initially declined to comment on the report but later Parente briefly spoke about it on his way out of a seminar in Sao Paulo Exxon is one of the few major oil companies still with no presence in the exploration of the recently discovered large fields off the coast of Brazil Royal Dutch Shell Plc L RDSa sharply increased its operations in the area after acquiring BG Group last year French oil major Total SA PA TOTF did the same recently by closing a strategic partnership with Petrobras Norway s Statoil ASA OL STL has also bought stakes in the oil region Petrobras is looking for partners for some of its projects Earlier on Tuesday Parente said pre salt yields have been above the company s expectations boosting Petrobras cash generation and helping the company to cut its debt load still one of the highest in the global oil industry at slightly below 100 billion |
XOM | ExxonMobil says in talks to buy Singapore s Jurong Aromatics | By Florence Tan and Seng Li Peng SINGAPORE Reuters ExxonMobil N XOM said on Wednesday it is in talks to buy a refining petrochemical complex in Singapore that could boost its fuel and chemical production in Asia We can confirm that we are currently negotiating with the receiver for Jurong Aromatics Corporation Pte Ltd to acquire JAC s assets on Jurong Island an ExxonMobil spokeswoman said While progress is being made no agreement has been reached yet she said The U S oil company is the frontrunner to buy JAC which went into receivership in September 2015 Thomson Reuters publication Project Finance International reported on Tuesday Borelli Walsh had been appointed the receivers and managers of JAC by lender BNP Paribas PA BNPP Lotte Chemical Corp KS 011170 said in March that it had dropped out of the race to buy JAC Costing 2 4 billion JAC s condensate splitter and petrochemical units started operations in Asia in 2014 to produce paraxylene a raw material for textiles and bottles to meet China s demand Singapore is already ExxonMobil s biggest paraxylene production base in the world at 1 million tonnes per year tpy according to its 2016 annual report The proposed JAC acquisition will boost ExxonMobil s paraxylene capacity to 1 8 million tpy and add another 2 5 million tpy of oil products output JAC s debt problems mounted amid the global commodities rout and it stopped operations at the end of 2014 to fix a technical issue The plant was restarted in July 2016 under tolling agreements with BP L BP and Glencore L GLEN Once the deal is inked ExxonMobil could take over the purchase of condensate for JAC from July trade sources said |
XOM | Exxon in talks to buy Singapore refining complex | Exxon Mobil XOM 1 2 says it is in talks to buy the Jurong Aromatics refining and petrochemical complex in Singapore that could increase its fuel and chemical production in Asia Jurong Aromatics whose 2 4B condensate splitter and petrochemical units began operations in 2014 went into receivership in September 2015 Singapore already is XOM s biggest paraxylene production base in the world at 1M metric tons year and the proposed acquisition would boost its paraxylene capacity to 1 8M tons year and add another 2 5M tons year of oil products output |
XOM | Exxon Qatar Petroleum to explore for oil and gas offshore Cyprus | Qatar Petroleum says it will team with Exxon Mobil XOM 1 3 in an oil and gas drilling program off the southern coast of Cyprus in 2018 after signing an exploration and production sharing contract Exploring the Mediterranean s Levant Basin has become more attractive since Eni discovered Egypt s offshore Zohr field in 2015 the biggest gas field in the Mediterranean and estimated to contain 850B cm of gas State owned Qatar Petroleum says a 3D seismic survey already is underway in preparation for the start of exploration drilling next year |
XOM | Exxon plans to market 1 3M tons of LNG from Papua New Guinea plant | Exxon Mobil XOM 0 1 is marketing 1 3M metric tons year of mid term liquefied natural gas volumes from its 19B Papua New Guinea LNG plant reflecting overproduction and an increase in gas reserves a company executive tells Reuters The two train plant with an original nameplate capacity of 6 9M tons year produced 7 9M tons last year making it possible to offer the excess for sale according to the exec The move also is possible as XOM said previously that the likely technically recoverable natural gas from all PNG LNG fields is 11 5T cf 25 higher than an earlier assessment of 9 2T cf |
XOM | Tillerson faces tough talks in Moscow amid increased tensions | By Lesley Wroughton and Yeganeh Torbati WASHINGTON Reuters U S Secretary of State Rex Tillerson s visit to Moscow this week will be an early test of whether the Trump administration can use any momentum generated by a missile attack on a Syrian air base to craft and execute a strategy to end the Syrian war Even before Trump ordered last week s strike in retaliation for a nerve gas attack Tillerson s visit was certain to be dominated by thorny issues including Russian interference in the 2016 U S election an apparent violation of an important arms control treaty and seeing what cooperation if any is possible in the fight against Islamic State Now Tillerson a former oil executive with no diplomatic experience is charged with avoiding a major U S confrontation with Russia while exacting some concessions from Moscow Those include getting rid of Syrian President Bashar al Assad s remaining chemical weapons and pressing Assad to negotiate Syria s future The Kremlin said on Monday Tillerson was not scheduled to meet with Russian President Vladimir Putin during his visit a move that could point to tensions It may also suggest that Tillerson will instead follow strict diplomatic protocol and only meet his direct counterpart Russian Foreign Minister Sergei Lavrov The State Department said last week a meeting had not been confirmed with Putin who met with Tillerson when the Texan headed Exxon Mobil NYSE XOM Russia along with Iran is Assad s primary backer and its intervention in Syria s war has been crucial to ensuring his grip on power although no longer over the entire country Tillerson said he had not seen hard evidence that Russia knew ahead of time about the chemical weapons attack which killed at least 70 people but he planned to urge Moscow to rethink its support for Assad in the April 12 talks I m hopeful that we can have constructive talks with the Russian government with Foreign Minister Lavrov and have Russia be supportive of a process that will lead to a stable Syria Tillerson told ABC s The Week on Sunday The U S cruise missile strike on Thursday meant to dissuade Assad from using chemical weapons again gives Tillerson more credibility with Russian officials and will boost his efforts observers and former officials said Tillerson is due to meet with Russian officials on Wednesday and is expected to meet with Putin and Lavrov The demonstration of the administration s willingness to use force has the potential to add some leverage to the diplomacy said Antony Blinken a deputy to former Secretary of State John Kerry The U S strike ordered less than three days after the gas attack could make it clear to Russia that the United States will hold Moscow accountable for Assad Blinken said Tillerson ought to be very matter of fact in his meetings Blinken said sending Russia a message that If you don t rein him in we will take further action Tillerson said on Thursday that Russia had failed in its responsibility to remove Syria s chemical weapons under a 2013 agreement which he argued showed Russia was either complicit with the gas attacks or simply incompetent Securing a Russian commitment on eliminating Assad s chemical weapons is likely to be first on his agenda said Evelyn Farkas a former deputy assistant secretary of defense in the Obama administration RUSSIAN LEVERAGE WITH ASSAD The talks will be a major test of Tillerson s diplomatic skills As a former chief executive at Exxon Mobil he has experience doing business in Russia but no background in the often public negotiations that international diplomacy requires It also is unclear if Trump who has expressed skepticism about multilateral institutions such as the European Union and United Nations will have patience for the protracted negotiations that a comprehensive deal on Syria would require Russia condemned the missile strike as illegal and Putin said it would harm U S Russia ties Moscow also said it would keep military channels of communication open with Washington but would not exchange any information through them It was an unforeseen turn of events for Trump who praised Putin repeatedly during last year s election campaign and said he would like to work more closely with Russia to defeat Islamic State Just over a week ago top administration officials were signaling that removing Assad is no longer a U S priority But one senior official said it was significant that Russia suspended and did not cancel cooperation with the United States after the air strike Nor did Lavrov cancel Tillerson s visit to Moscow suggesting Russia may be willing to tolerate the single strike As of this weekend the talks were still on They re going to try to draw a line around this incident said Alexander Vershbow a former U S ambassador to Russia during the George W Bush administration They are still not giving up on working with the Trump administration The Trump administration also wants to keep the focus in Syria on defeating Islamic State rather than opening a conflict with Russia or Syria s government Another U S official said one hope is that Moscow will see Tillerson s visit and a discussion about how to cooperate to stop Assad s use of banned weapons as a tacit acknowledgement of Russia s great power status one of Putin s main ambitions The strikes aren t necessarily a bad thing for Russia said Andrew Tabler a fellow with the Washington Institute for Near East Policy Russia s had a very hard time getting President Assad to come to the negotiating table in any kind of meaningful way
Now Tabler said the Russians can point to more U S strikes as the price of further intransigence by Assad |
CSCO | Should You Dump Ericsson ERIC From Your Portfolio Now | A lot has been happening in the network infrastructure and 4G deployment field and Ericsson BS ERICAs NASDAQ ERIC has no doubt been quite in the thick of things Even so the company has been in a tough spot in recent times dragged by low investments in mobile broadband and weak demand The beleaguered infrastructure giant s repeated earnings misses eroding profitability and precipitous revenue decline have left investors high and dry The stock has lost 21 3 in the past three months much wider than the s average decline of 4 7 Most of the company s troubles have stemmed from drying up investments by major telecom equipment makers across the world Particularly uncertainty in the financial markets reduced consumer telecom spending and delayed auctions of spectrums pose significant threats for Ericsson The company s revenues and margins in the Networks and IT Cloud segments continue to take a grave beating from adverse industry trends Further in the second quarter 2017 earnings report Ericsson said that it expects a high single digit percentage drop in the market for radio access networks this year which is worse than previously projected Network equipment sales particularly in the North America and Europe markets continue to contract Europe and Latin America the markets with the biggest impact are likely to have an increasingly challenging investment environment in the quarters to come Overall the company expects the negative industry trends and business mix in mobile broadband to prevail this year as well We believe the only potential upside to earnings in the near future depends mostly on expense management Ericsson had earlier announced a restructuring plan to cut costs and streamline the company s focus areas as well as explore options for the media business The company now plans to reduce capitalization of its product platform software release development costs and hardware costs which could cut operating income for the second half of 2017 by SEK 2 9 billion Ericsson further intends to implement cost savings with an annual run rate effect of at least SEK 10 billion 1 2 billion by mid 2018 Thus more restructuring charges are knocking on Ericsson s door and we have a subdued view of operator spending and investments in R D Currently it appears the company s savings plans and job reductions are not nearly enough to counter macroeconomic woes and swiftly declining product demand There is also an elevated risk of market and customer project adjustments which can have a negative impact of SEK 3 5 billion on the operating income in the coming 12 months In the last quarterly report Ericsson s CEO warned that an uncertain market could wipe out as much as SEK 5 billion of operating income over the next year Ericsson plans to accelerate its planned cost cuts and scale back expansion plans that aren t moving as anticipated and refocus on the company s core business of selling networking equipment prior to the anticipated roll out of 5G networks In view of the numerous headwinds several analysts have downgraded Ericsson since September as they have a bleak view of the company s revenues and margins They believe that a rollout of the 5G technology won t provide enough of a boost to the company s revenue base Investors who are looking for exposure to the upcoming 5G upgrade cycle or Internet of Things might look at players like Nokia HE NOKIA Corporation NYSE NOK and Cisco Systems Inc NASDAQ CSCO The consensus analyst community is showing no favor toward the stock either as earnings estimates continue the steep downward trend The Zacks Consensus Estimate for full year 2017 has fallen from earnings of 4 cents to a loss of 1 penny in the past 60 days dragged by three downward estimate revisions versus none upward Ericsson Price and Consensus Nevertheless Ericsson still expects to stabilize its operations amid a difficult market next year and remains hopeful of reaching its targeted operating margin of 12 beyond 2018 Its restructuring plan will help streamline Ericsson s focus areas improve profitability and revitalize its technology and market leadership Ericsson also plans to explore options for the company s media business and review low performing contracts in its managed service business Whether these steps will allow Ericsson to jump back on the growth track remains to be seen However as of now we have a Zacks Rank 5 Strong Sell on the stock as we are deeply concerned over the effect of the restructuring and tough market conditions on the company s profits and share price in the near term Stocks to ConsiderA better ranked stock in the broader sector is Red Hat Inc NYSE RHT carrying a Zacks Rank 2 Buy You can see Red Hat has a robust earnings surprise history with an average positive surprise of 7 driven by three earnings beats over the trailing four quarters Looking for Stocks with Skyrocketing Upside Zacks has just released a Special Report on the booming investment opportunities of legal marijuana Ignited by new referendums and legislation this industry is expected to blast from an already robust 6 7 billion to 20 2 billion in 2021 Early investors stand to make a killing but you have to be ready to act and know just where to look |
CSCO | Ericsson Swisscom Go Live With Telco Cloud Infrastructure | Ericsson BS ERICAs NASDAQ ERIC and telecommunications operator Swisscom recently went live with a full stack telco cloud infrastructure The Swisscom cloud based enterprise service has been deployed on Ericsson s Network Functions Virtualization infrastructure NFVi solution and went into commercial operation last month with the first service in support of small and medium enterprises The two companies collaborated last year when Swisscom chose Ericsson to transform its network infrastructure through the deployment of a full stack telecom cloud solution including Network Functions Virtualization NFV and Software Defined Networking SDN Ericsson s NFVi solution enabled the speed agility and efficiency which Swisscom required to deploy new services and leverage the opportunities presented by 5G and IoT Internet of Things Across the world operators are transforming their networks as they brace up for 5G and IoT and network virtualization remains a key component of a 5G Ready Core network Ericsson Swisscom and EPFL have joined forces with several industry partners in order to develop and trial industrial applications with 5G and IoT technology in diverse areas Per Ericsson 5G has the potential to drive 34 revenue growth for operators in 2026 compared with 2016 For consumers it will roll out fresh applications like augmented reality and 4K video streaming whereas the industries will likely benefit from innovative IoT applications like smart transport and remote healthcare Touted as the next generation of mobile technology 5G achieved rapid momentum over the past year Ericsson remains the first industry player to market with combined core and radio for 5G use cases spearheading the 5G revolution The company continues to aggressively drive progress in 5G technology and is engaged in multiple trial engagements with different operators across the world However when it comes to performance on the bourse Ericsson has been facing tough times indeed The beleaguered infrastructure giant s repeated earnings misses eroding profitability and precipitous revenue decline have left investors high and dry The stock has lost 19 9 in three months time much wider than the s average decline of 4 3 Most of the company s troubles have stemmed from drying up investments by major telecom equipment makers across the world Particularly uncertainty in the financial markets reduced consumer telecom spending and delayed auctions of spectrums pose significant threats for Ericsson Network equipment sales particularly in the North America and Europe markets continue to contract Europe and Latin America the markets with the biggest impact are likely to have an increasingly challenging investment environment in the quarters to come Overall the company expects the negative industry trends and business mix in mobile broadband to prevail this year as well Ericsson plans to accelerate its planned cost cuts and scale back expansion plans that aren t moving as anticipated and refocus on the company s core business of selling networking equipment prior to the anticipated roll out of 5G networks In view of the numerous headwinds we have a Zacks Rank 5 Strong Sell on the stock as we are deeply concerned over the impact of the restructuring and tough market conditions on the company s profits and share price in the near term Investors who are looking for exposure to the upcoming 5G upgrade cycle or IoT might look at players like Nokia HE NOKIA Corporation NYSE NOK and Cisco Systems Inc NASDAQ CSCO Stocks to ConsiderA better ranked stock in the broader sector is Red Hat Inc NYSE RHT carrying a Zacks Rank 2 Buy You can see Red Hat has a robust earnings surprise history with an average positive surprise of 7 driven by three earnings beats over the trailing four quarters Today s Stocks from Zacks Hottest StrategiesIt s hard to believe even for us at Zacks But while the market gained 18 8 from 2016 Q1 2017 our top stock picking screens have returned 157 0 128 0 97 8 94 7 and 90 2 respectively And this outperformance has not just been a recent phenomenon Over the years it has been remarkably consistent From 2000 Q1 2017 the composite yearly average gain for these strategies has beaten the market more than 11X over Maybe even more remarkable is the fact that we re willing to share their latest stocks with you without cost or obligation |
XOM | TOTAL TOT Misses Q3 Earnings Estimates Revenues Beat | Integrated oil and gas company TOTAL S A TO TOT reported third quarter 2016 operating earnings of 84 cents per share 0 76 per share lagging the Zacks Consensus Estimate of 85 cents by a penny Moreover third quarter operating earnings plunged 28 from the year ago tally of 1 17 per share 1 06 per share Total RevenueTotal revenue in the reported quarter came in at 37 41 billion down 8 from 40 58 billion in the year ago quarter Reported revenues also surpassed the Zacks Consensus Estimate of 35 4 billion by 5 5 ProductionTotal hydrocarbon production during the third quarter of 2016 averaged 2 443 thousand barrels of oil equivalent kboe per day up 4 year over year The increase was primarily driven by new project startups partially offset by the security situation in Nigeria and forest fires in Canada In the third quarter liquids production averaged 1 290 thousand barrels per day up 4 Higher liquid production in Europe Central Asia and America drove the overall output level which was partially offset by lower production in the Asia Pacific region Gas production during the quarter was 6 286 thousand cubic feet per day up 5 year over year Soft performance in Africa was more than offset by an increase in production in the Asia Pacific Europe Central Asia and America TOTAL FINA SA Price Consensus and EPS Surprise
Realized PriceIn third quarter 2016 the realized price for Brent was down 9 to 45 90 per barrel from 50 50 in the year ago quarter The average realized liquid price dropped 6 to 41 4 per barrel from the year ago level of 44 0 Realized gas prices tumbled 23 year over year in third quarter 2016 to 3 45 per Mbtu Realized hydrocarbon prices fell 11 to 32 4 per boe from 36 6 in third quarter 2015 Sale Purchase of AssetsIn the third quarter of 2016 TOTAL acquired assets worth 1 018 million primarily comprising the buyouts of Saft and Lampiris On the other hand the company sold assets worth 91 million during the same period Financial UpdateCash and cash equivalents as of Sep 30 2016 were 24 80 billion compared with 25 86 billion as of Sep 30 2015 The net debt to equity ratio was 30 6 at the end of third quarter 2016 up from 26 6 at the end of third quarter 2015 2016 GuidanceTOTAL expects production from the Upstream segment startups to drive its full year performance The company s production level is expected to increase more than 4 in 2016 having attained 4 5 growth in the first half of the year TOTAL continues to work on cost management initiatives and targets cost savings of 4 billion in 2018 A Peer ReleaseExxon Mobil Corp NYSE XOM reported third quarter earnings of 63 cents while the Zacks Consensus Estimate was 60 cents Upcoming ReleasesBP plc NYSE BP is expected to report third quarter earnings on Nov 1 The Zacks Consensus Estimate is pegged at 22 cents Royal Dutch Shell LON RDSa is expected to report third quarter earnings on Nov 1 The Zacks Consensus Estimate is pegged at 54 cents Our ViewTOTAL reported mixed results for the third quarter of 2016 wherein its earnings missed the Zacks Consensus Estimate but revenues topped the same Amid the ongoing weakness in commodity prices TOTAL has successfully lowered operating expenses as per management s plans and is on track to exceed its cost savings target of 2 7 billion for 2016 Meanwhile thanks to its startups TOTAL was able to boost its upstream output by 4 on a year over year basis Going forward the company will continue to benefit from its upstream startups and cost management initiatives Strategic acquisitions and asset divestures will strengthen its portfolio TOTAL s initiatives to increase its clean energy assets through acquisitions will also diversify its operations TOTAL currently has a Zacks Rank 3 Hold You can see Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
PCG | PG E strikes deal with creditors over restructuring | Reuters Bankrupt California power producer PG E Corp N PCG said on Wednesday it had reached a deal on its restructuring with creditors who were pushing for a rival plan
PG E said its creditors led by Elliott Management and Pacific Investment Management Co would drop their reorganization plan and support PG E s proposal pending approval by a bankruptcy court
The bondholders had previously opposed PG E s reorganization plan and in December came out with an updated proposal that included a sweetened offer to California wildfire victims no debt at the reorganized holding company and a new board with residents from California forming the majority of directors
New notes to be issued under PG E s plan will save its customers about 1 billion the company said
California Governor Gavin Newsom on Wednesday reiterated his objection to the bankrupt utility s restructuring plan adding that the company has not done enough to address the concerns that he had raised last month
PG E filed for Chapter 11 protection in January citing potential liabilities in excess of 30 billion from deadly wildfires in 2017 and 2018 linked to its equipment
Separately it came under renewed criticism last year for precautionary power outages to guard against the risk of wildfires posed by extremely dry and windy weather |
PCG | PG E wins support from bondholder group for bankruptcy exit plan | PG E NYSE PCG says it settled its dispute with bondholders including Pimco and Elliott Management over its reorganization removing one of the last remaining roadblocks to an emergence from bankruptcy
The group which holds the majority of PG E s unsecured notes is expected to withdraw its own alternative reorganization plan
PG E still must win backing for its exit plan from California s Gov Newsom who today reiterated his objection and said the company had not done enough to address concerns he raised last month
Newsom who has threatened a state takeover of the utility said the option remains on the table
PCG 8 after hours |
PCG | Is PG E Making Promises It Can Keep | In a statement issued late Wednesday PG E Corp NYSE PCG announced that it had reached an agreement with a bondholder group that had threatened to derail the utility s bankruptcy The so called Ad Hoc Noteholder Committee has agreed to withdraw its alternative plan for PG E s reorganization and to throw its support to the company reorganization plan announced last month That leaves California Governor Gavin Newsom as the remaining holdout challenging the company s reorganization plan that calls for payments totaling 13 5 billion to victims of 2017 and 2018 wildfires caused by faulty PG E equipment and 11 billion to settle claims from insurers The Ad Hoc committee including bond giant Pimco and activist hedge fund Elliott Management among its members The group has now agreed to a deal on how to treat PG E debt existing prior to the bankruptcy filing in January 2019 div connatix margin bottom 1 5em div connatix img margin unset According to PG E s announcement the company will issue new notes that satisfy existing high coupon long dated senior notes senior notes with near term maturities and funded bank debt and reinstate all other senior notes and pay customary debt placement fees and reimbursements In a Wednesday filing with the bankruptcy court Governor Newsom reiterated his previous objections to the company s plan His objections are related to PG E s failure to comply with the requirements of Assembly Bill 1054 that established a Wildfire Fund that limits liability for participating utilities provided that a utility meet the requirement by June 30 of this year PG E s plan to meet the requirements of AB 1054 must be materially amended to incorporate necessary changes to the governance and management provisions enforcement mechanisms and proposed capital structure to allow the necessary transformation of the Utility This is the crux of Newsom s argument The Debtors Plan continues to rely on substantial debt at the holding company secured debt and expensive short term bridge financing all issues the Governor specifically referenced in the December 13 Letter and that taken together leave the reorganized entity with insufficient financial flexibility to make billions of dollars in critically needed safety investments Newsom again raises the issue of a state takeover of PG E saying that he is pursuing strategies that protect the state s interests through further intervention including a state takeover of the Utility In early trading Thursday PG E stock has more than made up for its 5 2 Wednesday loss by adding about 6 to trade at 13 30 in a 52 week range of 3 55 to 25 19
By Paul Ausick |
PCG | Why Shares of PG E Are Soaring Higher Today | What happened
Shares of PG E NYSE PCG traded up more than 10 on Thursday following the bankrupt utility s announcement that it has settled a dispute with a group of powerful creditors The settlement clears a key hurdle in the company s effort to reorganize and should help ensure that equity holders get a payout as part of that reorganization
So what
PG E filed for bankruptcy in January 2019 to deal with an estimated 30 billion in liabilities stemming from the 2018 Camp Fire in Northern California and other wildfires The company s initial plan was to reorganize in such a way that its common shares would retain some value upon emergence but that plan has been challenged at numerous points throughout the last 12 months
In October the judge overseeing the case ruled that creditors could file a rival plan of reorganization one that would not be so friendly to shareholders But PG E in a statement late Wednesday said it had reached an agreement with all claim holders who filed letters in support of that rival plan including heavyweights Elliott Management and Pacific Investment Management Co and that the rival plan would be withdrawn
As part of the agreement PG E has agreed to handle the creditor claims via new notes to be issued by the utility reinstatement of certain senior notes and the payment of debt placement fees and reimbursement PG E said the new notes will save ratepayers about 1 billion
Now what
With creditors now out of the way the last remaining major obstacle standing in the way of PG E is California Governor Gavin Newsom In December Newsom voiced concerns related to governance and accountability and the two sides so far have not been able to come to an agreement
There s reason to hope the two sides can compromise PG E needs state support in order to gain access to state assistance to help deal with future wildfires and the governor needs to make sure the utility s reorganization isn t thrown into disarray causing the lights to go out on constituents But PG E is still a risky stock to own and best left to short term traders until the company is out of bankruptcy |
VZ | Monday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Monday lower
ES pivot 2045 00 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ looking lower
Recap
I wasn t quite sure about last Friday It did look to me like we were running out of gas but I ended up calling it uncertain The resulting 141 point red marubozu wasn t quite the doji I was expecting but it was a bearish sign anyway Last night I found myself running short on time so we re going to have another of my famous Reader s Digest Condensed Night Owls Less for me to write less for you to read I did the research I m just not writing abut every chart We ll get back on track Monday night
The Technicals
ES daily pivot Last night the ES daily pivot fell again from 2045 00 to 2049 58 After falling below the new pivot this indicator now turned bearish
We had some bearish signs in the charts last Friday and that direction got a big boost from Sunday s Greek elections It seems the Greeks now want to welsh on their debts raising again the specter of the dreaded Grexit and the subsequent unraveling of the euro Personally I think the handwriting has been on this particular wall for a while now But Europe seems to prefer pulling the bandaid off agonizingly slowly instead of just getting it over with with one sharp yank Either way the situation over there isn t looking too encouraging Uh where was I Oh yes I m calling today Monday lower Single Stock Trader VZ looks continued bearish |
VZ | Tuesday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday uncertain
ES pivot 2044 67 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ possible reversal
Recap
Well that was interesting All the major averages opened sharply lower on Monday exactly in accordance with my theory of Mr Market being scared stiff of the Greeks But then he apparently thought better of that idea and by the close we were just barely in the green Go figure So with this interesting candle int he books let s see how that factors in for Tuesday
The Technicals
The Dow After a bearish marubozu on Friday the Dow put in a nice hammer on Monday that was just enough to remain in its latest rising RTC It also kept the indicators rising and they ve yet to hit overbought So forget all the bearish warnings from Friday this one now looks bullish again The VIX Significantly on a day the Dow was essentially flat the VIX fell 6 84 canceling a doji from last Friday While we re now oversold there s no support until the 200 day MA at 14 38 so I d say more downside is possible here Market index futures Last night all three futures were modestly higher at 1 10 AM EST with ES up 0 04 After a lower open Monday ES spent the rest of the day slogging higher and that was enough to keep it in its ascending RTC But we re also fairly overbought now and the stochastics are on the brink of a bearish crossover And ES has been unable to break resistance at 2057 for three days now so it s not clear to me there s enough gas in the tank for a move higher Tuesday ES daily pivot Last night the ES daily pivot fell again from 2049 58 to 2044 67 We broke above the old pivot just before the close Monday and remained above the new one so this indicator now turns again bullish Dollar The dollar followed a big advance last Thursday with another gap up jump on Friday so it s not too surprising to see a lower high on Monday but even that still constituted a 0 06 advance There s just no stopping the mighty dollar lately Euro Meanwhile the euro continues to lose around one to two cents a day If this keeps up we ll hit parity even sooner than my August forecast We re now back to September 2003 levels We ve come a long way from the days when rock stars started demanding to be paid in euros instead of dollars Transportation The trans also outperformed the Dow on Monday up 0 65 to retrace about 1 3 of Friday s losses But we re still overbought and the stochastic s next move can only be bearish We re also hanging on to the ragged right edge of the rising RTC so a bearish setup is possible at any moment I m not convinced this one can move higher
I m getting some mixed messages tonight There really isn t enough clarity or consensus in the charts to make any call so I ll just have to call Tuesday uncertain Single Stock Trader
VZ put in a gap down hammer on Monday This may indicate a turnaround but requires a confirmation It s not the perfect buy signal |
VZ | Wednesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday higher
ES pivot 2032 67 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ possible reversal soon
Recap
Wow I m glad I called Tuesday as uncertain because I sure wasn t expecting a nearly 300 point plunge in the Dow yesterday That erases almost all of last week s rally and leaves us close to YTD lows This is a significant move so let s go right to the charts to see how it changes the picture
The Technicals
The Dow Yesterday the Dow dumped over 200 points in its opening five minutes and then kept going lower An anemic rally effort left us down only 291 but technically this move did a lot of damage We fell decisively out of the rising RTC for a bullish setup we sent all the indicators turning lower and we got a clear bearish stochastic crossover This chart now looks distinctly negative The VIX I blew this one badly Monday Night when I said the VIX looked lower Instead it shot up 11 on Tuesday with a gap up spinning top that sent all the indicators higher from oversold and formed a new bullish stochastic crossover We just missed a bullish exit from the descending RTC though and the candle is 2 3 of a bearish evening star With mixed messages this chart is too tough to call Market index futures Last night all three futures were higher at 12 10 AM EST with ES up a significant 0 70 On Tuesday ES put in a bullish harami haven t seen one of those in quite a while now Indicators have come off oversold and Monday night s bearish stochastic crossover has fizzled out So there s at least a suggestion of a move higher here particularly with last night s strong action ES daily pivot Last night the ES daily pivot fell again from 2040 67 to 2032 67 However we are now once again above the new pivot so this indicator continues bullish Dollar The dollar put in a third red candle in a row the first time that s happened in nearly a month and the biggest three day loss in two months And even at that we re still overbought We finally have a fresh bearish stochastic crossover I really have to bite my tongue but I d hazard a wild guess that we could see more downside here on Wednesday You will note that it wasn t too long ago I mentioned the possibility that the dollar might be topping soon Is this it Who knows Euro Holy moly the euro managed to put in two consecutive green candles for the first time since December 9th But with such strong downward pressure it will really take an RTC exit for me to declare a reversal This is one downtown express bus you don t want to be standing in front of Transportation The trans also got hit hard on Tuesday down a percent and a quarter to remain in a new steep descending RTC Even so indicators here yet to leave overbought and we have a new completed bearish stochastic crossover So this chart looks still bearish
The charts in general continue to look fairly bearish with the exception of the futures which seem to be reacting to news that the central bank of Singapore has jumped on the QE bandwagon It was just last Friday I wrote there s still a bunch of central banks we ve yet to hear from It s still not too late to join the race to the bottom OK then that s one more down And following the usual pattern I m going to take a wild guess and claim that we close today Wednesday higher Single Stock Trader VZ still in a steep descending RTC The reversal indicator will be strong when it comes but patience is the key Wait for it |
VZ | Thursday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday lower
ES pivot 2009 75 Holding below is bearish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ not yet a buy
Recap
Holy moly Things sure went south in a hurry on Wednesday I was confident enough Tuesday night to call Wednesday higher in the face of a Fed announcement and as usual every time I go against my rule of calling such days as uncertain I got my head handed to me Ouch Oh well We live to trade another day And that would be Thursday so let s see what s cooking there
The Technicals
The Dow The Dow actually ws positive most of the day yesterday until it fell off a cliff in the final hour to end down nearly 200 points In any case we blasted right through support at 17 315 like buttah stopped only by the lower BB at 17 198 And now the 200 day MA at 17 045 is within easy one day striking distance Our next support line is oddly enough right at the same spot Indicators continue falling but are not yet oversold and the stochastic is in full on bearish mode So there s nothing bullish about this chart last night The VIX Zoom So much for what looked like an incipient bearish evening star Tuesday night It turned into jolly green giant marubozu on Wednesday up a whopping 18 90 That was good for a bullish setup on a bearish RTC and a completed bullish stochastic crossover With indicators now smartly coming off oversold this chart just looks flat out bullish Oof Market index futures Last night all three futures were higher at 12 14 AM EST with ES up 0 20 ES had its worst day since uh let me scroll back here uh well let s just say quite a long time on Wednesday giving up the 2K mark and tumbling to 1991 50 The lower BB is not too far off and the 200 day MA is just beyond that And amazingly we re still not yet oversold So there s nothing technically bullish on this chart last night ES daily pivot Tonight the ES daily pivot dives from 2032 67 to 2009 75 And even that massive plunge wasn t enough to put ES back above the new pivot so this indicator is now distinctly bearish Dollar Tuesday night I wouldn t commit to a move lower on the dollar which was just as well since it resumed it s climb to the stratosphere on Wednesday Forget everything I said about a dollar topping we ain t done yet Euro And of course that means the euro put a quick end to its two day rally with a bearish dark cloud cover Wednesday Looks like we re right back to the old march to zero here The negative overnight pin action supports that idea
Transportation Tuesday night I wrote this chart looks continued bearish and was it ever down another 1 46 on Wednesday leaving us in a steep descending RTC with the indicators all falling off overbought This one still looks outright bearish
Yesterday s action did a lot to take the charts closer to a reversal point but it doesn t look like we re quite there yet And yet with the Dow sitting on its lower BB and ES pretty close there also doesn t seem to be all that much downside available from here But with the SPX Hi Lo index nowhere near a reversal point and the NYSE A D line continuing to put in lower highs I just was not feeling the love last night so I m going to call today Thursday lower I ll be happy to be proven wrong Single Stock Trader VZ is now just off its lower BB and fairly oversold but remains firmly in a descending RTC It s getting close to a buy but isn t quite there yet |
VZ | Tuesday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday uncertain
ES pivot 2003 08 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ in an uptrend
Recap
Well history came to the rescue on Monday as the first day of February made it 11 out of 13 now with the Dow up a healthy 196 points But just looking at the daily candles makes one wonder if Mr Market hasn t gone totally schizo With four down up down up days in a row which way will Tuesday go Uh down Let s check the charts to be sure
The Technicals
The Dow Despite the easy conclusion that since we were up on Monday we should go down on Tuesday the stochastic has given us a good bullish crossover and we ve now exited the descending RT for a bullish trigger So I have to vote higher from here on Tuesday The VIX Sunday night s spinning top was confirmed yesterday with the VIX losing 7 34 on a big inverted hammer that just tickled the upper BB and curved the stochastic around very close to a bearish crossover That spells lower in my book Market index futures Last night all three futures were lower at 12 14 AM EST with ES down 0 42 ES like the Dow has been bouncing around like a pinball lately between 1990 and 2018 We re now at the upper end of that range The difference is that this time the indicators are a lot more oversold than they were before effectively putting more oomph behind the chart Ahh but there s that resistance at 2018 to get by and it didn t look like ES was too interested in testing it last night ES daily pivot Last night the ES daily pivot rose from 1998 42 to 2003 08 That still leaves us about five points above the new pivot so this indicator turns bullish Dollar Sunday night I was loathe to call the dollar lower just because that s been a losing proposition for uh a long time now Nevertheless the dollar did in fact drop 0 28 on Monday confirming two spinning tops in a row That s also a bearish setup on an exit of the latest short rising RTC so all other things being equal the dollar looks lower again from here Euro Last night I noted that when the break comes it should be higher I don t know if it was exactly a break but the euro did advance on Monday to close right on resistance at 1 1350 Indicators are all now clearly rising off oversold and we ve got three days of higher lows However with this resistance Tuesday is make or break for the euro I think there s enough gas in the tank for a move higher but I m just not that certain Transportation The trans are also in good shape after a nice 1 44 gain Monday After bouncing off their lower BB we re now clearly oversold with a stochastic just about to form a bullish crossover This one looks to have more upside potential than downside risk to me
The charts generally looked pretty bullish last night with the lone exception of the futures which are were lower by non trivial amounts Also of concern was this crazy down up down up daily action and the fact that we ve been putting in lower highs for three days now On the other hand recall that Sunday night I wrote Dr Copper looks like he might be getting ready for a move higher and whadaya know the ISE Global Coppe ISC rose nearly 2 on Monday So to my mind that all just adds up to a great big nothing and therefore I call Tuesday uncertain Single Stock Trader Sunday night I declared Verizon Communications NYSE VZ a buy and ka ching it paid off nicely on Monday The faint of heart might want to bail here but I think this trade isn t done yet
Disclaimer I am now long VZ at 46 47 |
VZ | Wednesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday higher
ES pivot 2031 00 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ trade finished 1 3 points
Recap
Monday night I let myself get scared away from making a bullish call largely on the basis of some sagging futures opting instead for a wimpy cop out of uncertain Lesson learned as the Dow shot up over 300 points on Tuesday So the roller coaster ride goes on and on Which way will we wend on Wednesday The charts hold the answer
The Technicals
The Dow I got this much spot on Monday night when I wrote I have to vote higher from here on Tuesday And that was the winning vote with a 1 76 jump in the Dow That was also a bullish RTC trigger a completed bullish stochastic crossover and it sent all the indicators rising off oversold So nothing bearish here last night The VIX And Monday night I also wrote a lot of technical mumbo jumbo spells lower in my book And it was a good spelling lesson as the VIX dumped nearly 11 on Tuesday to fall out of its rising RTC for a bearish setup formed a new bearish stochastic crossover and sent all the indicators scurrying lower I think there s still more downside available from here Market index futures Last night all three futures were mixed at 12 16 AM EST with ES down 0 07 but YM up 0 05 ES had a great day Tuesday But after all the recent turbulence we re still just right back where we were a week ago The momentum is clearly higher at this point ES daily pivot Tonight the ES daily pivot jumps from 2003 08 to 2031 00 We remain above the new pivot so this indicator remains bullish Dollar Monday night I wrote dollar looks lower again from here And so yesterday it gapped down for a huge 1 06 loss and a bearish RTC trigger And a bearish stochastic crossover RSI just went oversold but I don t think that s enough to save the dollar just yet Euro Monday night I was uber cautious on the euro claiming only that I think there s enough gas in the tank for a move higher Well that tank was brimming full with the euro powering to a 1 1491 close on Tuesday That was also good for a bullish setup on a long running 12 17 14 descending RTC exit It also drove RTC to overbought but the other indicators aren t quite there yet so it s not impossible that we go higher again today Wednesday Transportation The trans pretty much mirrored the Dow on Tuesday so all of my comments there apply here too It s looking bullish
After two strong days the temptation is to call for a pause but with the VIX back under 20 and no real bullish signs about I guess I just have to go ahead and call Wednesday higher Single Stock Trader With a nice pop in Verizon NYSE VZ on Tuesday I unloaded it at 47 79 Verizon has now just paid me for a month and a half of their service nyah nyah VZ might go even higher on Wednesday or it might not Either way we now sit back and await the next entry point It s a swing trade not part of my retirement portfolio though it would be a great component for that too |
VZ | Thursday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday uncertain
ES pivot 2034 00 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader VZ topping
Recap
The roller coaster ride continued Wednesday as we were up 100 and then down 60 and in the end the Dow finished all of 7 points higher Crazy stuff So let s see how this changes the charts as we look forward to today Thursday
The Technicals
The Dow After all the sturm und drang was over the Dow ended just about where it started on Wednesday forming a perfect doji and last night a star position With indicators now approaching overbought this is a reversal warning worth heeding The VIX Ya the VIX got me Wednesday Instead of continuing lower it gained 5 77 on a green hammer But the indicators are wandering RSI and momentum were higher but the stochastics continued lower This one was too tough to call last tonight Market index futures Last night all three futures were lower at 12 17 AM EST with ES down 0 15 ES gave up ground on Wednesday with a fat red spinning top on a vaguely dark cloud cover candle But the indicators remain confused with momentum and OBV moving lower but RSI and money flow moving higher and none of them at either extreme That all leaves this chart a conundrum ES daily pivot Last night the ES daily pivot rose from 2031 00 to 2034 00 But now we re below the new pivot so this indicator turns bearish Dollar Tuesday night s bearish stochastic crossover came to an end as on Wednesday the dollar ended gaining 0 47 on a bullish harami making me wonder if that s all there was to this recent pullback And all the indicators have started rising off oversold So the next logical move is higher Euro And the euro put in a hanging man on Wednesday giving up a quarter of Tuesday s gains and forming a bearish stochastic crossover That all looks bad and indeed last night it was already gapping down 0 57 making a lower close look likely on Thursday Transportation Like the Dow the trans put in their own star Wednesday implying a possible reversal here too
The charts are being particularly opaque tonight We have some topping warnings but they all require confirmation So while my personal bias is negative at this point I m going to have to officially call Thursday uncertain Let s just say I m not going long from right here Single Stock Trader
VZ also put in a topping star yesterday making me think I was right to exit on Tuesday I left a bit of money on the table but the alternative would be to sit in front of my computer all day waiting for the top and I just have too much other stuff to do for that That becomes day trading not swing trading Anyway I m expecting a move lower from here |
VZ | Friday Uncertain | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Friday uncertain
ES pivot 2044 83 Holding below is bearish
Next week bias uncertain technically
Monthly outlook bias lower
Single stock trader Verizon Communications NYSE VZ topping
Recap Another night where time has caught up with me so another abbreviated Night Owl The research is done but the text which does take a while to put together is condensed The technicals The Dow A strong and surprising gain here Not yet overbought but near the upper BB so probably a bit more upside left but not much The VIX Last night s uncertainty resolved to the downside Still not oversold so more downside left here Market index futures Tonight all three futures are lower at 12 16 AM EST with ES down 0 06 ES put in a big bullish engulfing candle Thursday but stopped right on resistance at 2056 ES daily pivot Tonight the ES daily pivot rises from 2034 00 to 2044 83 Tonight we remain above the new pivot so this indicator switches back to bullish This pattern now looks toppy to me Dollar index Half a percent dump on Thursday plus oversold indicators plus a stochastic near a bullish crossover but without a reversal candle still can t call this one higher yet Euro Transportation No reversal here either Star was non confirmed with a decent gain No resistance hear and indicators continue rising but not overbought so now looks bullish
I think a move lower is coming soon but it requires confirmation the same thing I was saying last night Only this time I mean it So I m just going to call Friday uncertain That s all she wrote See you again Sunday night Single Stock Trader Inverted hammer hanging man overbought still looks toppy to me not an entry here |
XOM | State Department to approve Keystone pipeline permit on Friday sources | By Valerie Volcovici and Timothy Gardner WASHINGTON Reuters The U S State Department plans to approve on Friday the permit needed to proceed with construction of the Canada to United States Keystone XL oil pipeline a project blocked by former President Barack Obama according to two government sources familiar with the process White House spokesman Sean Spicer said the administration would provide an update on Keystone on Friday but did not offer any details Two government sources who declined to be identified said on Thursday that the pipeline approval would be announced by the White House One of the sources said the State Department was working to get the approval completed before Monday the end of the 60 day timeline under Trump s January executive order for the construction of Keystone and the Dakota Access pipelines The move would mark the beginning of a process that could be lengthy Approvals are needed from state regulators and the project could face legal challenges But Republican President Donald Trump supports Keystone and days after he took office in January ordered its construction That could mean the project proposed in 2008 will eventually be completed The State Department s undersecretary for political affairs Tom Shannon is expected approve the cross border permit for TransCanada Corp s pipeline since Secretary of State Rex Tillerson the former CEO of ExxonMobil NYSE XOM recused himself from the matter The multi billion dollar Keystone pipeline would bring more than 800 000 barrels per day of heavy crude from Canada s oil sands to U S refineries and ports along the Gulf of Mexico via an existing pipeline network in Nebraska Obama had rejected the pipeline saying it would do nothing to reduce fuel prices for U S motorists and would contribute emissions linked to global warming TransCanada resubmitted its permit application after Trump s executive order Spokesman Terry Cunha said the company was working closely with the State Department Monday is the deadline so that s what we re working towards Cunha said Conservatives said they supported quick approval Nick Loris an energy and environment researcher at the Heritage Foundation said approval would reestablish some certainty and sanity to a permitting process that was hijacked by political pandering Environmental groups said they had been prepared for the approval and vowed Thursday to fight the pipeline at every turn with petitions political pressure and mass protests The same communities who defeated this pipeline before indigenous leaders landowners farmers and grassroots activists are ready to fight again said May Boeve director of activist group 350 org Diana Best a Greenpeace climate campaign specialist said We will resist these projects with our allies across the country and across borders FURTHER HURDLES A stretch of Keystone XL also awaits approval from Nebraska regulators Transcanada has to file its pipeline route plans with the state s Public Service Commission which is required to hold public hearings on the proposal Keystone s construction costs could be higher than the 7 billion estimated after it was first proposed said Michael Wojciechowski vice president of Americas oil and refining markets research at Wood Mackenzie Final costs are still to be determined but they have done nothing but go up over time he said
Still there could also be some savings on labor given recent layoffs due to the recent oil price drop he said |
XOM | Tillerson to meet NATO on March 31 ending no show furor | By Robin Emmott and Lesley Wroughton BRUSSELS WASHINGTON Reuters U S Secretary of State Rex Tillerson will meet NATO foreign ministers at a rescheduled gathering on March 31 a senior State Department official said on Friday ending a furor over his earlier decision to skip the event Reuters exclusively reported on Monday that Tillerson had decided not to attend his first meeting with the ministers originally scheduled for April 5 6 raising fears about the new U S administration s commitment to the military alliance But the State Department official said the meeting in Brussels had been brought forward and would now go ahead There was no official statement from NATO Tillerson s potential no show had increased unease caused by U S President Donald Trump s description of NATO as obsolete during his election campaign Trump has since said he strongly supports the alliance but in interviews and speeches he continues to air grievances over what he see as Europe s failure to pay its fair share of protecting the West Tillerson met many of the NATO foreign ministers in Washington this week at a gathering of the coalition fighting Islamic State militants but the meeting in Brussels would be his first formal NATO ministerial Given the U S role as the de facto head of the alliance it is rare for the United States top diplomat to miss a NATO meeting The last time was during the Iraq war in 2003 when Colin Powell was forced to cancel at the last moment Tillerson a former top executive at Exxon Mobil Corp NYSE XOM who worked with the Russian government originally decided to attend a U S visit by the Chinese president instead of the April NATO meeting Reuters reported
The Secretary of State will visit NATO in Brussels on Friday March 31st The visit will come after his trip to Ankara Turkey Details about his schedule are forthcoming the State Department official said on Friday |
XOM | Texas judge kicks Exxon climate lawsuit to New York court | HOUSTON Reuters A federal judge in Texas on Wednesday kicked an Exxon Mobil Corp NYSE XOM lawsuit seeking to thwart two states from pursuing a fraud case over climate change to a Manhattan court saying his court wasn t the best place to resolve the dispute A group of state attorneys general led by New York s Eric Schneiderman brought a securities fraud suit against the world s largest publicly traded oil company in 2015 claiming it misled investors by soft pedaling the dangers of climate change Exxon criticized their case as intended to get the company and others in the oil and gas industry to change their positions on climate change It responded with its own suit in U S District Court in Dallas That suit argued the states conspired with climate activists to target Exxon and the states demands for documents dating back 40 years violated its rights to protection against unreasonable searches and were abusive U S District Judge Ed Kinkeade who earlier sought to question Massachusetts Attorney General Maura Healey over Exxon s claims the original fraud lawsuit was biased ruled in favor of Healey and her New York counterpart He wrote his court was not the proper venue because events at issue in the case took place in New York But the judge s decision questioned whether the two AGs are trying to hide something citing an agreement with climate activists not to publicly discuss their contacts He also said the agreement should be open to discovery by Exxon attorneys Exxon had argued that the requests for documents were as the judge summarized it tools to cultivate the political goals of Healey and New York Attorney General Eric Schneiderman Despite having the case transferred to Manhattan an Exxon spokesman said the company was gratified the judge agreed its claims involve important issues adding We look forward to continuing the case in that court Healey also lauded the decision to move the case saying we will continue to argue that this frivolous lawsuit should be dismissed Amy Spitalnick a spokeswoman for Schneiderman said in a statement that the judge s remarks in the ruling were riddled with factual errors and oil industry spin and said Exxon was free to make the same claims in New York but so far inexplicably have not done so
The case is 4 16 cv 00469 in U S District Court for the Northern District of Texas Fort Worth division |
XOM | Russia s Rosneft hopes Iran rulings can help it beat EU sanctions | By Dmitry Zhdannikov and Vladimir Soldatkin LONDON MOSCOW Reuters Russian oil major Rosneft MM ROSN hopes to benefit from European court rulings that have allowed some Iranian banks to escape from European Union sanctions Russia s largest oil firm has been subject to sanctions since 2014 following Russia s annexation of Ukraine s Crimea region Chief Executive Igor Sechin a close ally of Russian President Vladimir Putin is himself under sanctions Sanctions complicate fund raising for the state run Rosneft and have prevented western companies from helping it develop deepwater shale and Arctic oil deposits including a large venture with Exxon Mobil N XOM Rosneft is attempting to annul EU sanctions in the European General Court following a ruling by the European Court of Justice that the matter can be heard in Brussels Rosneft is challenging the legality of sanctions saying the General Court set a precedent when it annulled some EU sanctions against Iranian banks The decision was later confirmed by the European Court of Justice Rosneft said the Iranian banks had successfully challenged sanctions intended to curb Iran s nuclear program because there was no evidence of wrongdoing by the banks The General Court had recognized that the banks were not involved in Tehran s nuclear activities Rosneft said in legal arguments Rosneft is hoping to benefit from a similar attitude to sanctions imposed over Ukraine The oil firm said it had not committed any illegal actions in any jurisdiction including Ukraine and has nothing to do with the Ukrainian crisis In 2014 the European Court of Justice struck down an EU decision to freeze the assets of Iran s central bank a measure put in place prevent Iran developing nuclear weapons Last year Iran s Bank Mellat also won a case that its assets should not have been frozen It argued that it was not linked to Iran s nuclear program The EU council said it could not comment on the case in the General Court Case T 715 14 as it was still ongoing The timing of its ruling was not immediately known Sarosh Zaiwalla a lawyer who represented Bank Mellat in its case against the EU said there were parallels with Rosneft s position The EU has not been able so far to produce any evidence that Rosneft was involved in or supported in any way the conflict in Ukraine he said
In 2016 an EU court ruled that EU sanctions on Bank Mellat were imposed illegally because of lack of evidence of any involvement by Mellat in Iran s nuclear program Zaiwalla said |
CSCO | Ubiquiti UBNT Poised For Growth Amid Industry Challenges | Wireless equipment player Ubiquiti Networks Inc s NASDAQ UBNT shares have charted a steady upward trajectory in the recent times having appreciated 8 3 in the past year This is in stark contrast to its which has declined 6 1 on an average over the same time frame Broadly speaking Ubiquiti designs manufactures and sells broadband wireless solutions globally In fact the company s shares have actually appreciated manifold when compared with the industry average over the last five years Let s dig in to find the company s economic moats and explore why it has been outperforming its peers consistently Ubiquiti s Community ForumTo begin with the company stands out from its competitors as it has a unique business model and marketing strategy Ubiquiti actually relies on community evangelism and word of mouth marketing instead of using highly paid sales persons The company is committed toward reducing its operational costs by using this self sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of Ubiquiti Community Consistent R D OutlayUbiquiti also spends significantly toward research and development activities for developing innovative products and state of art technology The company regularly launches innovative products at a fraction of the cost of the competing firms Its unique business model helps regulate a highly efficient R D culture The company has impressive design capabilities including hardware design and software design The company s strategic product launches at disruptive prices have helped it beat rivals to a great extent Margin ExpansionUbiquiti has by far the best operating margins among its peers with consistent net margin expansion over the last five years It competes with players like Cisco Systems Inc NASDAQ CSCO the Aruba arm of Hewlett Packard Enterprise Company NYSE HPE Brocade Communications Systems Inc NASDAQ BRCD and Huawei Ubiquiti currently boasts a net profit margin of nearly 30 Disciplined ManagementRobert Pera Ubiquiti s founder and CEO has long since maintained that his focus is on the long term success of the company and not on quarter to quarter earnings revenues or cost variations He owns about 71 of the company Figures Don t LieIn its last reported fiscal fourth quarter 2017 results Ubiquiti s revenues steered past the higher end of its guidance and also grew 23 1 on a year over year basis Its adjusted earnings also rose 8 7 year over year Refreshingly for a technology company there is hardly any difference between its GAAP and non GAAP earnings due to a conspicuous lack of stock based compensation Have a look at the company s bottom line trend over the past five years compared to the industry average The company also released optimistic guidance for fiscal 2018 with projected revenues of 1 0 1 15 billion and earnings of 3 70 4 30 per share At the mid point this translates to earnings growth of about 30 Currently the Zacks Consensus Estimate for fiscal 2018 earnings is pegged at 3 40 a share on sales of 946 million This indicates that the company s is positioned very well for the future Summing UpWe believe that Ubiquiti s strength basically comes down to disruptive price performance and innovation The company is simply selling its products for less because it has trumped its competitors with superior product design and also because it has been an extremely responsive company when it comes to adding features desired by competitors Ubiquiti currently has a Zacks Rank 3 Hold You can see 5 Trades Could Profit Big League from Trump Policies If the stocks above spark your interest wait until you look into companies primed to make substantial gains from Washington s changing course Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals tariffs lower taxes higher interest rates and spending surges in defense and infrastructure |
XOM | ExxonMobil XOM Earnings Beat On Project StartUps In Q3 | ExxonMobil Corp NYSE XOM posted better than expected third quarter 2016 earnings Project startups along with favorable volume and mix effects led to the outperformance This was offset partially by lower oil and gas realizations lower refining margins and an increased downtime in Nigeria
The company reported earnings of 63 cents per share beating the Zacks Consensus Estimate of 60 cents The bottom line however deteriorated from 1 01 per share in the year ago quarter
Total revenue in the quarter decreased to 58 677 million from 67 344 million in the year ago quarter The top line also came in below the Zacks Consensus Estimate of 60 562 million
Operational Performance
Upstream Quarterly earnings for the segment declined 738 million from the third quarter of 2015 to 620 million Lower realizations for liquids and gas affected earnings by 880 million However volume and mix effects helped earnings to rise by 80 million
Production averaged 3 811 million barrels of oil equivalent per day MMBOE d down almost 3 year over year Liquids production totaled 2 2 million barrels per day down 120 000 barrels per day Increased downtime in Nigeria led to the output decline which was negated partially by project startups
Natural gas production however was 9 6 billion cubic feet per day up 77 million cubic feet per day from the prior year period Project startups led to the improvement
Downstream The segment recorded profits of 1 2 billion down 804 million from the July to September quarter of 2015 Decreased refining margins hurt earnings by 1 6 billion
ExxonMobil s refinery throughput averaged 4 4 million barrels per day down 2 1 from the year earlier level
Chemical This unit contributed approximately 1 2 billion which is 56 million less than the third quarter of 2015 Weak margins lowered earnings by 10 million However favorable volume and mix effects drove earnings by 20 million
Financials
During the quarter ExxonMobil generated cash flow of 6 3 billion from operations and asset sales The company returned 3 1 billion to shareholders through dividends Capital and exploration spending decreased 45 year over year to 4 2 billion EXXON MOBIL CRP Price Consensus and EPS Surprise
Other News
ExxonMobil discovered potential recoverable oil resources on the Owowo field located off the coast of Nigeria The company estimates recoverable resources of 500 million and one billion barrels of oil It is to be noted that the field was drilled safely to 10 410 feet at almost 1 890 feet depth of water
Zacks Rank
ExxonMobil currently has a Zacks Rank 3 Hold Some better ranked players in the energy sector are Ultra Petroleum Corp OTC UPLMQ EQT Midstream Partners LP NYSE EQM and Helix Energy Solutions Group Inc NYSE HLX
Ultra Petroleum is likely to witness year over year earnings growth of 148 4 for the current year The company sports a Zacks Rank 1 Strong Buy You can see
EQT Midstream is projected to witness year over year earnings growth of almost 14 for the current year It carries a Zacks Rank 1
Helix Energy posted an average positive earnings surprise of 56 42 over the last four quarters The company has a Zacks Rank 2 Buy
Confidential from Zacks
Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
PCG | FEMA official rips PG E s deal with California wildfire victims | The Federal Emergency Management Agency is defending its effort to collect 3 9B in claims from PG E PCG 2 9 for relief it provided after the utility s power lines sparked deadly wildfires in 2015 18
A top FEMA official yesterday criticized PG E and fire victims lawyers for negotiating a deal that could put the U S government in the position of trying to claw back money it already has paid to people who lost family members homes and businesses
It really quite frankly boggles my mind why the fire victims lawyers would appear to want to relieve PG E of its responsibility and make California and FEMA the enemy here FEMA regional administrator Robert Fenton said
Fenton also expressed frustration that FEMA could be forced to seek money from the 13 5B fire settlement for some of the same losses the agency already doled out even though FEMA was excluded in the confidential negotiations that led to the deal
PG E and fire victims lawyers repeatedly have asserted that the government agencies are not entitled to a cent from the settlement fund |
VZ | Wednesday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday lower
ES pivot 2022 92 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader sell VZ
Recap
It was looking really good for my conditional call on Tuesday as the Dow exploded right out the gate for 266 points after ES broke above its pivot But then things started to unravel and by the bell the Dow ended down 27 points Oh well It s a good play but not perfect and it s not entirely clear why it didn t work So anyway now let s move on to Wednesday
The Technicals
The Dow On Tuesday the Dow produced the biggest spinning top I think I ve ever seen stretching from 17 923 to 17 572 a 351 point intraday swing But that action was enough to complete the bearish crossover I spoke of Monday night So this chart looks even more bearish now The VIX On Tuesday the VIX gained another 5 exiting a descending RTC for a bullish trigger and a completed bullish stochastic crossover so it just looks like higher again on Wednesday Note also that RSI has begun moving higher before ever getting near oversold another bearish sign Market index futures Last night all three futures were lower at 1 21 AM EST with ES down 0 47 ES now has a clear new falling RTC going a completed bearish stochastic crossover OBV ran a crazy low negative 3 3 million and some non trivial bearish knock on last night looking to make it a four day losing streak There was zip zero nada bullish about this chart last night ES daily pivot Last night the ES daily pivot fell again from 2028 67 to 2022 92 After a brief run higher ES has now fallen back well below its new pivot soe this indicator is once again bearish Dollar The dollar got its mojo back on Tuesday punching 0 34 higher on a bullish engulfing candle back to near its recent highs It looks to me like its gearing up for another assault on those levels Euro After Monday s tall hanging man the euro rolled over on Tuesday saved only by recent support around 1 1769 It staged something like a comebacklast night Calling the euro higher today Wednesday on that basis isn t catching the falling knife it s catching the falling Acme safe and that never ends well Transportation The trans put in a red spinning top Tuesday but with a new bearish crossover from a low level this looks continued bearish
Whatever uncertainty I had Monday night looks to have been resolvedlast night and the resolution is negative Accordingly I m just calling Wednesday lower Single Stock Trader VZ was one of only 11 Dow stocks that managed a gain on Monday but did it on an ugly red gap up spinning top Since VZ s rallies have been shorter than its pullbacks lately at 47 18 I m calling this one a swing trade sell |
VZ | Thursday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday higher
ES pivot 2002 75 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias higher
Single stock trader waiting on new VZ entry
Recap
It was another wild day on Wall Street Wednesday as the Dow plunged 128 points in the opening sixty seconds and kept on going lower until a post lunch rally kicked in to end only down 187 You can t blame oil which actually rose for once Who knows maybe it was the Charlie Hebdo Put whatever that is Bottom line that was then this is now And today is the only thing that matters So it s back to the charts as we devine the future yet again The Technicals The Dow Making it a four day losing streak the Dow put in a fat hammer Wednesday But it also made a bearish stochastic crossover So hmmm what s up with that Well we got the lower BB not too far away at 17 190 and support before that at 17 363 so right now I d say we could see more downside but it s limited and a reversal is due soon The VIX The daily VIX is often the most telling chart of the day and so it was on Wednesday as the VIX gapped up 4 47 but on a red marubozu that just touched its upper BB at 23 12 While we still have a completed bullish stochastic crossover this sort of candlestick action looks distinctly bearish to me Market index futures Last night all three futures were higher at 12 36AM EST with ES up a respectable 0 49 On Wednesday ES put in a nice hammer that nearly touched its lower BB intraday Last night s rally which had a bullish piercing pattern position moved the indicators back higher Also OBV is coming off its crazy low values negative 4 2M This provides some minor confirmation of the hammer and gives at least a suggestion of a move higher on Thursday ES daily pivot Last night the ES daily pivot fell again from 2022 92 to 2002 75 That plus an evening rally in ES was enough to put us back above the new pivot so this indicator now turns bullish
Dollar The dollar put in a tall doji neither hammer nor hanging man on Wednesday as it continued to congest around 62 40 USDUPX The bounce off the upper BB and indicators about to fall off overbought suggest that the next move is lower Euro Whereas the euro on Wednesday simply put in a classic star near the lower end of Tuesday s action seemingly looking for support itself Given that the last monthly close lower than this was November 2003 I d have to think a move higher is on the way Or maybe the euro is just doing a Kodak and marching inexorably towards zero Transportation On Wednesday the trans dropped another 0 86 but on a red hammer that just touched its lower BB at 8585 intraday The last two bottoms formed that way so I m going to guess there s at least even odds that we go higher on Thursday
What a difference a day makes Tuesday night things were looking bearish and last night I was seeing a lot of positive signs Enough in fact for me to change course and call today Thursday higher Single Stock TraderI called a top in VZ at 47 18 Tuesday night and it indeed moved lower Wednesday to 46 97 But it s still not a buy again so for now we re on the sidelines watching |
VZ | Tuesday Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher
ES pivot 2011 75 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader waiting on new VZ entry
Recap
Well after a three day weekend there s not much to recap However we ll cut right to the chase because the big news this week is the imminent announcement of QE from the ECB and that s sure to be a market mover So just bear in mind that my call right now is entirely modulo ECB
The Technicals
The Dow On Friday the Dow had a nice day with a bullish engulfing pattern that just touched its lower BB The stochastic is close to a bullish crossover The VIX On Friday the VIX put in a classic bearish engulfing pattern that just touched the upper BB for a 6 43 loss and a bearish stochastic crossover So this one looks lower Tuesday Market index futures Last night all three futures were higher at 12 18 AM EST with ES up 0 15 perhaps in anticipation of an ECB move ES daily pivot Last night the ES daily pivot rose again from 1999 17 to 2011 75 Even at that we remain above the new pivot so this indicator remains positive Dollar On Friday the dollar broke out of a seven day congestion zone but with an inverted hammer that just touched its upper BB This might be a sign of a move lower but lately that s always a risky call Euro The euro just keeps right on sinking Nothing to see here move along Transportation Like everything else the trans on Friday made a big bullish engulfing candle up 1 25 turning all the indicators upwards This one looks like there s more upside left
Technically I m seeing enough positive signs to call Tuesday higher But that s all pending whatever the ECB announces QE comes out we look like heroes No QE and we re zeros For that matter it may not happen Tuesday at all It s just wait and see right now Single Stock TraderVZ had an unexpected breakout on Friday that took it right to its upper BB We missed that move But seeing as we re now overbought and at resistance I want to wait and see what today brings here |
VZ | Wednesday Higher | The Hoot
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Wednesday higher
ES pivot 2013 58 Holding above is bullish
Rest of week bias uncertain technically
Monthly outlook bias lower
Single stock trader waiting on new VZ entry
Recap
I don t like Monday holiday weeks They throw me off for the rest of the week In any event Tuesday s indecision reflected I think a general feeling that everyone must be on ECB watch With that in mind let s see if we can make any sense of Wednesday
The Technicals
The Dow The Dow had a big day Tuesday down early triple digits But the traders must have had a good lunch because soon thereafter it began moving higher to end the day up a whopping 4 points The resulting star is a reversal warning but one which requires confirmation So we re left to wait wonder The VIX Monday night I wrote this one looks lower Tuesday and danged if that isn t just what happened with the VIX down another 5 It s a gap down star but is also a bearish stochastic crossover so I don t think we re done going lower Market index futures Last night all three futures were higher at 12 25 AM EST with ES up 0 17 on Tuesday ES put in a small green spinning top but it was enough to break out of a descending RTC for a bullish setup Indicators now rising just off oversold a completed bullish stochastic crossover rising OBV and positive pin action last night all point to continued higher today Wednesday ES daily pivot Last night the ES daily pivot rose from 1999 17 to 2013 58 And even with that jump we re still above the new pivot so this indicator continues to be bullish
Dollar I refrained from calling the dollar lower Monday night in the face of an inverted hammer Good thing too because the dollar just kept right on climbing yesterday up another half percent The last time we had a monthly close this high was way back in March 2009 And still no end in sight despite impossibly overbought indicators Euro And naturally the euro remained in free fall Tuesday this time closing at 1 1554 Extrapolating the descending RTC it looks like the euro will hit parity by the end of the year Remember you heard it here first Transportation Monday night I wrote This one looks like there s more upside left and indeed there was with the trans up a nice 0 96 on Tuesday This green marubozu also broke out of the descending RTC for a bullish setup completed the bullish stochastic crossover and sent the indicators higher except for RSI which in an unusual move went a bit lower But it looks like the rally isn t over yet
All the positive signs from Monday night remained in place last night so ECB or no I m just going to go ahead and call Wednesday higher Single Stock Trader
VZ gained a bit more on Tuesday but hit its upper BB again though on a tall dragonfly doji With overbought indicators I d not buy here If anything it might be time to start thinking about a quick short except that this isn t a good week for it not with the ECB in the wings |
VZ | Thursday Going Higher | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Thursday higher
ES pivot 2021 50 Holding above is bullish
Friday bias uncertain technically
Monthly outlook bias lower
Single stock trader waiting on new VZ entry
Recap
The market just continued treading water on Wednesday as everyone awaits the big announcement from the ECB today Right now the only question is whether or not it s already been baked in Personally I don t think that s entirely the case But perhaps the charts will shed some light on this subject as we continue on to the end of the week
The Technicals
The Dow Just more uncertainty from the Dow on Wednesday this time in the form of a lopsided spinning top that after another triple digit excursion resulted in just a 39 point advance Technically though this chart remains bullish probably reflecting the market s expectation of QE from the ECB The VIX Tuesday night I wrote I don t think we re done going lower Good thinking too because after a doji day the VIX just kept right on descending down another 5 23 yesterday on a giant bearish engulfing candle That s still nowhere near enough to drive the indicators oversold and the stochastic is still in full on bearish crossover mode so there are still no bullish signs on this chart Market index futures Last night all three futures were higher at 12 22 AM EST with ES up 0 20 Tuesday night I wrote a bunch of things all point to continued higher on Wednesday And sure enough ES had a decent day yesterday continuing out of its descending RTC for a bullish trigger Indicators are now off oversold but continue rising and there was some more positive pin action last night so it looks like the traders are expecting good news from the ECB today Thursday ES daily pivot Last night the ES daily pivot rose again from 2013 58 to 2021 50 Once again we remain above the new pivot so this indicator remains bullish Dollar The dollar had a rare down day on Wednesday but even so managed a green hanging man What it does today will depend in large measure on the ECB so no call here Euro Amazingly the euro actually closed higher on Wednesday its first green candle in seven sessions But two inverted hammers does not make a rally so we ll just have to wait and see what the ECB says today That s sure to move the euro Transportation Tuesday night I wrote it looks like the rally isn t over yet And indeed it wasn t as the trans packed on another 0 45 on Wednesday with three white soldiers and a bullish trigger on the descending RTC exit Indicators still not yet overbought though so I m going to guess there s still room to run here today
Obviously the big news today is the ECB s QE announcement Right now the technicals are looking like the market is gearing up to move higher so I m just going to assume that someone knows something I don t not hard to do and call Thursday higher
Single Stock Trader
VZ remains in a rising RTC and it looks like my calls for a short term top Tuesday night were premature With non confirmation of Tuesday s doji it just looks like it will continue higher |
VZ | S P 500 Weekly Earnings Update Core Growth On Track | At breakfast this morning while perusing John Butter s weekly Factset missive on S P 500 earnings John noted that the expected Q4 14 earnings growth rate for the key benchmark is now nearing the post 2009 low that we saw in Q3 12 of flat to 0 1 year over year growth
Per Thomson Reuters This Week in Earnings as of Friday January 23rd 2015 Q4 14 earnings were expected to increase 3 5 which if you have been tracking our prior blog updates from earlier this month where I noted that Energy is likely costing the S P 500 3 4 in quarterly earnings growth Ex Energy Q4 14 S P 500 earnings growth is likely 6 6 5
And therein lies the issue normally by this point in the quarter the S P 500 earnings growth starts to tick higher after the undue pessimism that seems to grip analysts the last month of each quarter and then the first few weeks of each quarter dissipates and the cold light of actual earnings reports shows that the world isn t falling completely apart
There is no question though with the Financial sector negative revisions many non operating and depending on how litigation expenses are treated the 4th quarter and 2015 earnings outlook has become murkier
That said with the number of large cap Technology and Industrial companies poised to report this coming week I do think Q4 14 earnings growth will be closer to high single digits than low single digits
By the end of this coming week about half of the S P 500 will have reported Q4 14 earnings
For 2015 the Energy sector earnings per Thomson Reuters is a drag on the current S P 500 s 5 7 expected growth rate by 40 Assuming Energy is close to the 10 earnings weight market cap of the S P 500 that means Energy is a 4 drag on expected S P 500 earnings growth as it stands right now Does that number get better or worse from here Ex Energy then 2015 expected earnings growth is still close to 10 at 9 7 at this point in time
However we are still quite early in 2015 and that expected earnings growth number will likely come down as we progress through the year
So what s the point The earnings picture is more clouded and murky than normal given Energy s influence We hear from a number of commodity Basic Materials companies this coming week which has been a tougher sector than Energy
The forward 4 quarter earnings estimate this week fell to 123 49 from 124 91 which is a sharp drop of 1 42 which combined with last week s sequential drop of 1 44 means that the forward estimate has declined by 1 86 over just the last two weeks
The P E ratio on the forward estimate is 16 6 x
The PEG ratio is now 4 36
The earnings yield on the S P 500 is 6 02 versus last week s 6 19
The y y growth rate of the forward 4 quarter estimate as of Friday 1 23 15 was 3 81 also down sharply over the last two weeks
Since January 1 the sectors which have shown upwardly revised earnings expectations for the 4th quarter of 2014 are
Consumer Staples to 0 2 from flat growth expected on January 1 15
Health Care to 18 expected growth from 17 6 growth expected in January 1 15
Industrials to 11 growth from 9 9 on January 1 15
Basic Materials to 0 6 from 2 as of January 1 15
Technology to 10 8 from 8 9 as of January 1 15
This is the more normal pattern we expect to see at this point in the year
For full year 2015 only Telecom has seen better expected earnings growth for the full year after this week than on January 1 15 to 5 7 from 4 9 which I consider somewhat important since Verizon NYSE VZ reported this past week and the conventional wisdom is that there is a price war now occurring in the cellular business Both Verizon and AT T NYSE T were slightly positive on the week
AT T s weekly chart is poised at a very critical level A break below 31 75 31 90 on this week s earnings report and the stock could be done That being said the 5 5 dividend yield on T is very inviting and we ve actually used the stock as a bond proxy within client accounts We exited that trade this week and await T s earnings report this week
Our largest sector overweights for clients remain Technology and Financials the leaders from the 1980s and 1990s bull market simply because relative to their expected growth rates in my opinion Tech and Financials offer the best value and they in my opinion remain steeped in the stigma of the tech bear market in the early 2000s and the 2008 Financial recession |
XOM | Trump s proposal to scrap Chemical Safety Board draws criticism | By Gary McWilliams Reuters President Donald Trump s proposal to do away with the federal agency that investigates chemical accidents drew sharp criticism from environmental labor and safety advocates who said that eliminating the watchdog would put American lives at risk Christine Todd Whitman the former U S Environmental Protection Agency head on Thursday called the proposal to get rid of Chemical Safety Board CSB and cut EPA funding short sighted saying both have long been an industry target for advocating greater public information on chemicals If you want to put the American people in danger this is the way to do it she said of the president s proposal to cut the CSB s funding entirely from the 2018 federal budget The chemical industry has fought back from the beginning The CSB investigates major chemicals accidents to search for their causes and makes recommendations that could prevent a recurrence It has no regulatory power but is influential because its recommendations are often adopted by industry labor government officials the EPA and Occupational Safety and Health Administration The president on Thursday outlined a plan for fiscal 2018 discretionary spending which exclude programs like Social Security that removes allocations for 19 independent bodies including the CSB and Corporation for Public Broadcasting The CSB which has an annual budget of about 12 million defended its work saying its work has broadly improved safety As this process moves forward we hope that the important mission of this agency will be preserved the agency said in a statement Chemical and energy industry officials offered limited comment on the proposal Petroleum and refining industry groups Exxon Mobil Corp NYSE XOM BP plc LON BP and Tesoro Corp NYSE TSO did not respond or declined to comment directly on the potential phase out The American Chemistry Council a trade group that represents major chemicals producers said in a statement it would work with the administration and Congress to ensure EPA has funding to carry out essential responsibilities It did not comment directly on the CSB The American Petroleum Institute the oil industry trade group said it looked forward to working with the administration and Congress as all of these issues work their way through the budget process Michael Wright director of health safety and environment at the United Steelworkers union said the CSB s recommendations generally have been welcome by labor and industry One such recommendation that stemmed from a fatal 2005 refinery incident included barring portable trailers that cannot withstand an explosion The board s reviews of major accidents have proved significant Its probes have led to industry standards on worker fatigue greater reporting of hazardous chemicals to first responders and have prompted companies to keep workers not directly involved in projects out of harm s way In California many of the board s safety recommendations have been drafted into law For example the state worker safety agency known as Cal OSHA has doubled its investigative staff based on CSB recommendations This is one of the best bargains in Washington said the USW s Wright If it has prevented even one accident it has saved far more money than its budget over its entire history Its probe of the fatal Deepwater Horizon rig explosion was controversial because of its two year length and extensive need for outside help The work led to new standards for safety in the offshore oil industry and in well equipment But some recommendations have not been yet been implemented After a fatal 2013 explosion in West Texas that killed 12 first responders the CSB proposed facilities that store large amounts of fertilizer be covered by emergency planning laws that give first responders more information That remains open
Beth Rosenberg a former CSB board member and now an assistant professor at Tufts University School of Medicine said the CSB does excellent work other countries admire this agency She said opponents don t know what they re doing here or how useful this board is |
XOM | Tillerson avoids public conflict with Trump over budget | By Arshad Mohammed and John Walcott WASHINGTON Reuters While he has swallowed a big budget cut and had the White House veto his chosen deputy Secretary of State Rex Tillerson is avoiding a public conflict with U S President Donald Trump over his department s budget six current and former U S officials said on Thursday Instead Tillerson privately resisted a 37 percent budget cut that some White House officials sought and he convinced Trump he needed more time to identify where savings could be made two current and one former official told Reuters As a result the White House proposed on Thursday a reduction of some 28 percent on U S diplomacy and foreign aid Tillerson isn t opposed to cutting the budget at all but he figured out that he couldn t win head to head battles with the president and the people close to him so he s pursuing a different strategy arguing that he can t make wise decisions about what to cut until he s more familiar with his department and its budget said one of the current officials a State Department veteran Tillerson said in Tokyo on Thursday that his department s current spending is simply not sustainable and that he accepted the challenge Trump had given him He is making a very sensible calculation said a former U S official noting that Congress not the president holds the purse strings and is almost certain to reject many of the administration s proposed cuts You state your loyalty to the president and then you know that you will not actually have to live with the president s budget It is not yet clear however whether Trump and Tillerson have significant policy differences or if he can defend his department against some of Trump s closest aides such as Steve Bannon who want to dismantle parts of the federal government and limit U S engagement with the world said three of the current and former officials The former Exxon Mobil Corp N XOM CEO has faced multiple challenges in his first weeks as chief U S diplomat including unpredictable policy pronouncements from Trump White House officials vetoed Elliot Abrams Tillerson s choice for deputy secretary the department s second highest post one of the current officials said With that job still vacant it has not been possible to fill the department s other senior positions Despite that defeat Michael Anton a National Security Council spokesman said the White House holds Tillerson in high regard President Trump has the utmost confidence in the Secretary of State and looks forward to Mr Tillerson implementing a bold agenda to revitalize American foreign policy Anton said A White House official said Tillerson has had good access to the president including multiple lunches dinners and meetings Tillerson dined with Trump on Monday the night before he flew to Asia Tillerson has kept a low profile since joining the administration seven weeks ago spending little time with key State Department officials and only holding his first news conference on Thursday in Tokyo He has drawn criticism from many State Department officials who believe he has failed to cultivate potential allies in Trump s cabinet and on Capitol Hill Chas Freeman a seasoned diplomat since the Nixon administration said Tillerson s low key style might be a survival tactic
If he says something he runs a big risk of getting crosswise with Trump Freeman said This may be a Fabian strategy referring to the Roman statesman Fabius who defeated the Carthaginian general Hannibal by avoiding frontal conflict |
XOM | Smoothly but warily U S and China stick to script in Tillerson visit | By Yeganeh Torbati and Ben Blanchard BEIJING Reuters Despite a long list of potential pitfalls U S Secretary of State Rex Tillerson s visit to China the first by a senior member of the Trump administration passed off relatively smoothly although there were no tangible gains to show On the positive side there was none of the awkwardness of the kind seen in Washington as President Donald Trump and German Chancellor Angela Merkel held the first summit meeting between two of the West s biggest allies Even a tweet from Trump criticizing China the night before Tillerson landed in Beijing did not at least in public create any discord As Tillerson wrapped up his visit on Sunday Chinese President Xi Jinping praised his active efforts in making a smooth transition of the U S China relationship to the Trump era Tillerson and the Chinese officials he met Foreign Minister Wang Yi and State Councillor Yang Jiechi struck a positive note only hinting at differences in their positions For setting up a new tone it s a good start said Sun Zhe the co director of the China Initiative of Columbia University s School of International and Public Affairs It seems that Donald Trump s administration is coming back to the normal track trying to work with China to solve problems No formal agreements were announced in the visit although the two sides said they would work together on North Korea and countering its rapidly developing nuclear and ballistic missile programs Wrapped up in the tightly scripted proceedings however was a sense that the world s two biggest economies were warily testing each other out as the new administration settles down in Washington They seemed to be reserving airing of differences for another occasion The potential points of conflict are many some inherited and some that have come up since Trump took office in January The United States has started to deploy missile defenses in South Korea that China views as a threat Washington believes Beijing could do more to rein in Pyongyang s weapons programs and prominent Trump administration officials and Trump himself have bashed China s trade practices China s currency policy and the row in the South China Sea have been bugbears for years Even Tillerson said during his confirmation hearing in January that China had offered empty promises to pressure North Korea but had failed to do so and that it had proven a willingness to act with abandon in the pursuit of its own goals But the proceedings in Beijing were kept firmly devoid of tensions as both sides worked on laying the groundwork for an expected meeting between Trump and Xi in the United States later this year IMPORTANT SYMBOLISM William Cohen a former U S defense secretary said Tillerson s visit was important for both sides The symbolism here is going to be as important as the substance he told Reuters on the sidelines of a conference in Beijing Because the substance will come later One Beijing based Western diplomat said it was in Xi s interests to be nice to Trump for now as China does not want any distractions or external instability ahead of a tricky leadership transition at a key Communist Party congress in Beijing likely in October Tillerson s visit to Asia he went to Japan and South Korea before China was closely watched A former chief executive of Exxon Mobil NYSE XOM the 64 year old has no previous experience as a diplomat but nonetheless has had deep exposure to dealing with foreign leaders in countries with interests opposed to or in competition with those of the United States China has had at times confrontational relationships with Tillerson s predecessors John Kerry and Hillary Clinton and did not like being lectured by them on human rights in particular Last year while at an annual strategic China U S dialogue in Beijing Kerry expressed concern at Beijing s controversial law on foreign non governmental organizations and about human rights problems in China Clinton was seen in Beijing as the architect of the U S pivot to Asia something China was deeply suspicious of She ended a 2009 visit to China by attending services at a state sanctioned church having a conversation with women s rights activists and doing a short Web chat Tillerson made brief mention of human rights and religious freedom while in Beijing but had no known meetings with activists or engagements with civil society representatives Christian rights lawyer Zhang Peihong who has represented Christian activists in China said he had not expected Tillerson to make a big deal about human rights It would have been better if he d talked about it as these are universal values Zhang told Reuters He must have had his reasons DISPUTE IN S KOREA But Tillerson s diplomatic inexperience showed in at least one instance when in an interview published on Saturday he appeared to accuse the South Korean government of lying about the details of his visit Unnamed South Korean officials had told the Korea Herald newspapers that Tillerson s fatigue was to blame for not having a meal with any officials in Seoul as opposed to his lengthier meetings with Japanese counterparts Tillerson disputed that in an interview with the Independent Journal Review a conservative outlet whose reporter was the sole media representative invited to travel with the secretary of state
They never invited us for dinner then at the last minute they realized that optically it wasn t playing very well in public for them so they put out a statement that we didn t have dinner because I was tired Tillerson said according to a transcript of the interview |
XOM | Saudi king s Asia tour trumpets Aramco s moves downstream | By Henning Gloystein SINGAPORE Reuters Saudi King Salman s lavish tour of Asia arriving in each country on a golden escalator with 400 tonnes of luggage had a hardnosed marketing mission to cement the kingdom s place as leading oil supplier to the world s biggest consumer region The string of deals inked on his three week tour to Malaysia Indonesia Japan and China also point to a fresh strategy one to increase Saudi leverage over refined product and petrochemical markets known as the downstream sector Our strategy is about growth in the downstream said Amin Nasser chief executive officer of state oil company Aramco told Reuters on Sunday The growth in that sector is very important and anything integrated between refining petrochemical with marketing and distribution is of interest to us Saudi Arabia s main influence on oil markets has been via the Organization of the Petroleum Exporting Countries OPEC of which it is the de facto leader But OPEC s ability to control prices by turning the oil pumping spigots on and off has waned as non OPEC producers like Russia and more recently U S shale drillers have ramped up output and eroded its grip on market share One indication of a shift in Saudi strategy came on the first leg of the tour in Kuala Lumpur Aramco signed a deal to take a 7 billion investment in a joint venture with Malaysia s state oil company Petronas in a refinery and petrochemical project known as RAPID Refinery and Petrochemical Integrated Development THE WINDOW Under construction in Malaysia s southern Johor state RAPID is just across a narrow strait from Singapore Asia s oil trading hub Some 70 percent of the oil for the project set to start in 2019 will come from Saudi Arabia giving the kingdom a key outlet for its crude in Asia the world s fastest growing market It is Armaco s largest refinery project outside the kingdom Aramco also recently made a deal with Indonesia s Pertamina over a 5 billion expansion of the country s largest oil refinery for which Armaco will supply the crude The investments are intended to enhance Aramco s competitive position in Southeast Asia said Ihsan Buhulaiga a Saudi economist The Malaysian investment also allows the Saudis to join the hub of refineries in and around Singapore that help determine fuel prices in the region Price agency S P Global Platts assesses dozens of fuel products during a set time every day based on deliveries in and out of this region Platts calls it Market on Close but traders dub it the window and it influences pricing of oil products worth billions of dollars each day While crude and fuel products by many companies flow in and out of the pricing region known as FOB Straits But the only refineries now in this price region are operated by U S Exxon NYSE XOM Anglo Dutch Royal Dutch Shell LON RDSa and Singapore Petroleum Corp SPC owned by PetroChina When you control refining capacity with the capability to deliver petroleum products into the window you have access to a physical outlet which also plays a key role in daily price discovery said John Driscoll director of consultancy JTD Energy in Singapore ARAMCO IPO The Saudi move deeper into refineries and petrochemical plants would likely help the potential valuation of Aramco in what could be the world s largest ever initial public offering Deputy Crown Prince Mohammed bin Salman who oversees the kingdom s economic policy has said the sale is expected to value Aramco at 2 trillion or more Analysts have estimated a valuation between 1 trillion and 1 5 trillion Singapore along with Hong Kong and Tokyo have been mentioned as possible exchanges where Aramco s shares would be traded The primary listing will be on Saudi Arabia s domestic exchange and Riyadh is also looking at New York or London for the secondary listing Aramco s joint ventures in Malaysia Indonesia and elsewhere are not only aimed at increasing its refining capacity Its new deals in the region would also greatly increase its participation in the petrochemical sector which involves all forms of plastics and where profits have soared thanks to strong demand We have capacity of about 5 4 million barrels per day of participated refining capacity and our target is to reach 10 million barrels by 2030 Aramco s Nasser said Ultimately the big prize is China where the Saudis signed deals that could be worth as much as 65 billion during the last leg of the king s Asian tour covering energy manufacturing and even a theme park in the kingdom The deals included a memorandum of understanding between Aramco and China North Industries Group Corp Norinco to look into building refining and petrochemical plants in China John Sfakianakis director of the Riyadh based Gulf Research Centre said that the trip was the beginning of a long term strategy of Saudi Arabia to open itself to Asian investors and vice versa as part of its Vision 2030 policy to diversify its economy beyond crude exports |
XOM | Republican green groups seek to temper Trump on climate change | By Emily Flitter NEW YORK Reuters President Donald Trump s outspoken doubts about climate change and his administration s efforts to roll back regulation to combat it have stirred a sleepy faction in U S politics the Republican environmental movement The various groups represent conservatives Catholics and the younger generation of Republicans who unlike Trump not only recognize the science of climate change but want to see their party wrest the initiative from Democrats and lead efforts to combat global warming Conservative green groups such as ConservAmerica and republicEn along with politically neutral religious groups such as Catholic Climate Covenant and bipartisan groups such as the Citizens Climate Lobby have ramped up efforts to recruit more congressional Republicans to work on addressing climate change since Trump s election Conservative environmental advocates promote what they call free enterprise solutions to climate change like a carbon tax That stands in contrast to the approach of liberal environmentalists under former President Barack Obama who backed bans on certain kinds of oil drilling and regulations aimed at discouraging petroleum use But whatever their differences the conservative groups say they have an important role to play Conservatives now have a chance to earn back the trust of Americans on environmental issues said Alex Bozmoski director of strategy for republicEn They can lead in a completely different direction that actually grows the economy while cutting greenhouse gasses The activists efforts have not swayed anywhere near a majority yet on Capitol Hill Only 20 or so of the 237 Republicans in the U S House of Representatives have spoken out on climate change this year But they hope to build a big enough bloc in Congress or enough influence at the White House to temper Trump s agenda Lobbying has yielded some early results a pro environment voting bloc in Congress the Climate Solutions Caucus for example has signed on more Republicans in the last two months than in it had in the final year of Obama s administration its first year in existence Urged on by a coalition of conservative and religious groups including the Catholic Climate Covenant a handful of additional Republicans have also signed a congressional resolution pledging to address climate change The resolution was non binding but it represented a direct challenge to Trump s climate stance a high profile signal of dissent within his party It s like Alcoholics Anonymous you ve got to first recognize you ve got a problem before you can deal with it said Mark Sanford a Republican Congressman from South Carolina who signed the resolution Melinda Pierce legislative director for the more than 100 year old Sierra Club environmental group said she was happy to see enlightened Republicans beginning to act on climate change But Pierce added Legislative action is a long time away based on at least the Republican leadership Pierce also said she was skeptical of free enterprise solutions advocated by conservative environmental groups like republicEn which she said sounded to her like we have to pay them not to pollute Jose Aguto associate director of the Catholic Climate Covenant said Republicans are the only major political party in the world not convinced by climate change Once they accept the reality and science of climate change we will have reached a tipping point in the political will for solutions TRUMP HOAX Trump has raised the hackles of many environmentalists since taking office He has overturned several Obama era environmental regulations and last week he proposed slashing the Environmental Protection Agency budget by 31 percent During his presidential campaign Trump called climate change a hoax and vowed to pull the United States out of the Paris accord a global pact to fight it tapping into a well of Republican concern that the United States energy habits would be policed by the United Nations But Republican bias against climate science is out of step with the majority of Americans A Reuters Ipsos poll shows a majority of Republican supporters agree the United States should play a leading role in combating climate change It shouldn t surprise anyone that more and more Republicans are interested in this issue said Republican Representative Carlos Curbelo of Florida This issue was regrettably politicized some 20 or so years ago and we are in the process of taking some of the politics out THE WHITE HOUSE On Feb 8 representatives from a newly formed group of Republican statesmen the Climate Leadership Council including former Treasury secretaries Henry Paulson and James A Baker met with senior administration officials to push a carbon tax We got a very respectful hearing said the council s CEO Ted Halstead We ve also been meeting with Republicans on the Hill and have found open minds The White House did not comment on the meetings Billionaire Republican donor and environmental advocate Andy Sabin meanwhile said he has been speaking directly with White House officials in hope of becoming Trump s unpaid climate change adviser modeled on the role of fellow billionaire Carl Icahn in advising Trump on regulation Focusing on health concerns would be the most effective way to get Trump to try to slow climate change said Sabin a precious metals magnate When asked about the chances of Sabin getting the position a White House spokeswoman said We don t have an announcement at this time SNO BALLED Republican Senator James Inhofe incurred public ridicule two years ago after marching into the Capitol Building with a snowball claiming the cold weather disproved Obama s climate change claims This year republicEn used the incident as part of a humorous rallying call on Valentine s Day Volunteers delivered greeting cards to lawmakers quoting Secretary of State Rex Tillerson in his former role as chief executive officer of Exxon NYSE XOM declaring climate change to be a serious risk warranting thoughtful action Along with the card were coconut coated cakes called Sno Balls a photograph of Inhofe and a poem
Roses are red snowballs are white together we ll get the solution right |
XOM | Exclusive Tillerson plans to skip NATO meeting visit Russia in April sources | By Arshad Mohammed and John Walcott WASHINGTON Reuters U S Secretary of State Rex Tillerson plans to skip a meeting with NATO foreign ministers next month in order to stay home for a visit by China s president and will go to Russia later in April U S officials said on Monday disclosing an itinerary that allies may see as giving Moscow priority over them Tillerson intends to miss what would have been his first meeting of the 28 NATO allies on April 5 6 in Brussels so that he can attend President Donald Trump s expected April 6 7 talks with Chinese President Xi Jinping at Trump s Mar a Lago resort in Florida four current and former U S officials said Skipping the NATO meeting and visiting Moscow could risk feeding a perception that Trump may be putting U S dealings with big powers first while leaving waiting those smaller nations that depend on Washington for security two former U S officials said Trump has often praised Russian President Vladimir Putin and Tillerson worked with Russia s government for years as a top executive at Exxon Mobil Corp NYSE XOM and has questioned the wisdom of sanctions against Russia that he said could harm U S businesses A State Department spokeswoman said Tillerson would meet on Wednesday with foreign ministers from 26 of the 27 other NATO countries all but Croatia at a gathering of the coalition working to defeat the Islamic State militant group NATO Secretary General Jens Stoltenberg was due to have arrived in Washington on Monday for a three day visit that was to include talks with U S Defense Secretary James Mattis and to take part in the counter Islamic State meetings The State Department spokeswoman said Tillerson would not have a separate NATO focused meeting the 26 foreign ministers in Washington but rather that they would meet in the counter Islamic State talks After these consultations and meetings in April he will travel to a meeting of the G7 Group of Seven in Italy and then on to meetings in Russia she added saying U S Undersecretary of State for Political Affairs Tom Shannon would represent the United States at the NATO foreign ministers meeting GRAVE ERROR Representative Eliot Engel the senior Democrat on the U S House of Representatives foreign affairs committee said that Tillerson was making a mistake by skipping the Brussels talks Donald Trump s Administration is making a grave error that will shake the confidence of America s most important alliance and feed the concern that this Administration simply too cozy with Russian President Vladimir Putin Engel said in a written statement I cannot fathom why the Administration would pursue this course except to signal a change in American foreign policy that draws our country away from western democracy s most important institutions and aligns the United States more closely with the autocratic regime in the Kremlin he added A former U S official echoed the view It feeds this narrative that somehow the Trump administration is playing footsie with Russia said the former U S official on condition of anonymity You don t want to do your early business with the world s great autocrats You want to start with the great democracies and NATO is the security instrument of the transatlantic group of great democracies he added Any Russian visit by a senior Trump administration official may be carefully scrutinized after the director of the Federal Bureau of Investigation on Monday publicly confirmed his agency was investigating any collusion between the Russian government and Trump s 2016 presidential election campaign Trump has already worried NATO allies by referring to the Western security alliance as obsolete and by pressing other members to meet their commitments to spend at least 2 percent of gross domestic product on defense Last week he dismayed British officials by shrugging off a media report forcefully denied by Britain that the administration of former President Barack Obama tapped his phones during the 2016 White House race with the aid of Britain s GCHQ spy agency A former U S official and a former NATO diplomat both speaking on condition of anonymity said the alliance offered to change the meeting dates so Tillerson could attend it and the Xi Jinping talks but the State Department had rebuffed the idea The former diplomat said it was vital to present a united front toward Moscow The North Atlantic Treaty Organization was created in 1949 to serve as a bulwark against the Soviet Union
Given the challenge that Russia poses not just to the United States but to Europe it s critical to engage on the basis of a united front if at all possible the diplomat said Additional Reporting by Jonathan Landay Writing by Arshad Mohammed Editing by Lisa Shumaker Simon Cameron Moore |
XOM | U S reverses course and offers new dates for NATO talks | By Arshad Mohammed and Robin Emmott WASHINGTON BRUSSELS Reuters U S Secretary of State Rex Tillerson proposed new dates on Tuesday for a NATO meeting the State Department said after he initially decided to skip the talks and rebuffed the alliance s efforts to reschedule them Tillerson s decision to miss his first meeting with NATO foreign ministers set for April 5 6 in Brussels unsettled European allies who worried it reopened questions about U S President Donald Trump s commitment to the alliance Reuters exclusively reported on Monday that Tillerson would stay in the United States to attend Trump s expected April 6 7 talks with Chinese President Xi Jinping in Florida U S officials also said Tillerson would visit Russia later in April The alliance had offered to change the meeting dates so Tillerson could attend both it and the Xi talks but the U S State Department rebuffed the idea a former U S official and a former NATO diplomat both speaking on condition of anonymity said on Monday On Tuesday State Department spokesman Mark Toner said the department put forward new dates for a meeting when Tillerson could come noting that such a decision would have to be made by consensus among the 28 NATO members We are certainly appreciative of the effort to accommodate Secretary Tillerson Toner told reporters We have offered alternative dates that the secretary could attend He also sought to allay European concerns by saying that the United States remains 100 percent committed to NATO It was not yet clear if the NATO meeting would be rescheduled to accommodate Tillerson During his election campaign and on the eve of taking office in January Trump called the North Atlantic Treaty Organisation obsolete although he has since said he strongly supports the alliance UNFORTUNATE SYMBOLISM No matter how you spin it this is unfortunate symbolism said one senior European diplomat of Tillerson s plan to skip the April 5 6 NATO Brussels meeting saying it undid the work of Trump s vice president and defense minister who visited NATO headquarters in February to provide reassurances after Trump s criticism of the alliance NATO Secretary General Jens Stoltenberg was in Washington on Tuesday Posing for photographs with Defense Secretary James Mattis he declined to answer a reporter s questions on what signal it sent that Tillerson did not plan to attend the meeting according to a reporter who attended the session Some allies particularly in the former Soviet bloc are acutely sensitive to any sign of waning U S interest in their defense as they deal with a more assertive Russia Concerns that Trump is too close to Russian President Vladimir Putin whom the West has sought to isolate for annexing Crimea from Ukraine in 2014 made Tillerson s expected visit to Brussels all the more pressing European allies said Tillerson worked with Russia s government for years as a top executive at Exxon Mobil Corp NYSE XOM and has questioned sanctions against Moscow that he said could harm U S businesses We needed to hear his vision for the alliance said a diplomat due to attend the April ministerial meeting NATO s quarterly meetings are closed door sessions over about two days in which governments discuss security strategies and approve top secret documents designed to guide the nuclear armed alliance in areas ranging from training in Afghanistan to defenses against Iranian missiles Given the U S role as the de facto head of the alliance it is rare for the country s top diplomat to miss a NATO meeting The last time was during the Iraq war in 2003 when Colin Powell was forced to cancel at the last moment Trump himself is expected in Brussels for a NATO summit in May although the date is still under discussion NATO has proposed holding that meeting on May 25 a NATO diplomat said Several diplomats said they were unhappy that Tillerson had not offered to hold a NATO meeting in Washington later this week given that most alliance foreign ministers and Stoltenberg will be there for a meeting of an international coalition against the Islamic State militant group
A State Department spokeswoman said on Monday night that all NATO members except Croatia would be at those talks On Tuesday Toner said Croatia would in fact attend saying the department had made a late night gaffe and adding in no way do we want to diminish Croatia s valuable role within the alliance |
XOM | U S sticks to global transparency initiative after Congress repeal | By Valerie Volcovici and Nerijus Adomaitis WASHINGTON OSLO Reuters The United States remains committed to the principles and goals of the global transparency initiative to fight corruption in managing revenues from oil gas and mineral extraction it said on Wednesday There were doubts about U S participation in the Extractive Industries Transparency Initiative EITI after Congress killed the resource extraction rule that required companies such as Exxon Mobil NYSE XOM to disclose taxes and other fees paid to foreign governments such as Russia The EITI which was founded in 2003 and which the U S joined in 2014 sets a global standard for governments to disclose their revenues from oil gas and mining assets and for companies to report payments made to obtain access to publicly owned resources as well as other donations The U S Interior Department remains committed to the principles and goals of EITI including transparency and good governance of the extractive sectors Heather Swift a spokesperson for Interior Secretary Ryan Zinke said in an email to Reuters Industry sources familiar with EITI implementation said the United States was already pulling out in all but name but could formally remain a member until its progress assessment scheduled to start in April 2018 Azerbaijan left the group in March after the EITI board chaired by Sweden s former prime minister Fredrik Reinfeldt suspended its membership over concerns about limits on civic freedoms The EITI initiative was primarily aimed at developing nations and most of its members are in Africa But Britain Germany and Norway also joined while France and Australia have also expressed interest Democratic Senator Ben Cardin and former Republican Senator Richard Lugar authors of legislation encouraging U S participation in EITI said withdrawal would harm national interests Such a retreat is a retreat from our values which give America its strength and its moral leadership in the world they said in a joint statement Jonas Moberg head of EITI s secretariat in Oslo said the United States continued to be the part of the global initiative but if it decided to leave it wouldn t be the end of the initiative now being implemented in 51 countries Should the administration of President Trump decide to bring an end to EITI implementation we are not concerned that it would be a decision followed elsewhere he added in an email to Reuters The International Council on Mining and Metals ICMM which represents 23 leading mining companies has said companies that work in EITI member countries will still have to abide by strict disclosure rules despite the recent U S legal changes |
XOM | Exxon must confer with New York AG on Tillerson emails judge | By Karen Freifeld NEW YORK Reuters A New York state judge on Wednesday ordered ExxonMobil NYSE XOM Corp to work with New York s attorney general to recover lost emails from an account once used by U S Secretary of State Rex Tillerson when he was the oil company s chief executive Justice Barry Ostrager of the State Supreme Court in Manhattan also ordered Exxon by March 31 to turn over documents from its management committee that had been subpoenaed by Eric Schneiderman the attorney general Schneiderman had issued the subpoena in November in connection with his probe into whether Exxon misled investors and the public about climate change At a court hearing on Wednesday a lawyer for the attorney general said Exxon had just made a bombshell revelation that it had lost a year of emails from an account that Tillerson had used but under the alias Wayne Tracker Tillerson used the alias account to send and receive information about climate change and other matters Schneiderman said in a March 13 letter to the court Schneiderman said Exxon failed to disclose the Wayne Tracker account and that it had been uncovered during the review of other materials The letter also said Exxon had produced 60 documents bearing the Wayne Tracker email but had not said the account was Tillerson s Exxon responded that the account was proper enabling Tillerson to communicate easily with other Exxon officials and set up because of the flood of email that Tillerson already received It has also said it does not consider the lost emails significant and that copies of many would already have been turned over to the attorney general In December Tillerson left Exxon where he had also been chairman and stepped down as chairman of the American Petroleum Institute trade group
The discovery of Tillerson s account came after disclosures that former Secretary of State Hillary Clinton and current Vice President Mike Pence when he was Indiana s governor had used previously undisclosed accounts to send and receive mail electronically |
XOM | Eni Announces Dispatch Of First Crude Cargo From Kashagan | Eni SpA TO E recently announced that the first batch of export crude oil has been dispatched from the onshore processing plant of the massive Kashagan oil field The field was re opened a little while back upon successful replacement of pipelines Production is now estimated to increase up to a first level of 180 000 barrels per day The consortium for the development of Kashagan aims for a production level of 370 000 barrels per day by the end of 2017 Located in the North Caspian Sea the giant oilfield is about 80 kilometers southeast of Atyrau in Kazakhstan Kashagan is one of the largest oil fields discovered in the last four decades and is estimated to hold reserves of 35 billion barrels of oil in place In fact the oil field is considered to be one of the most complex and challenging industrial projects worldwide in terms of its size the specifications as well as the environmental and logistical characteristics involved Kashagan is operated by NCOC North Caspian Operating Company which operates within the North Caspian Sea Production Sharing Agreement NCSPSA Eni has a stake of 16 81 in the project Other partners include KazMunayGas ExxonMobil Corporation NYSE XOM Royal Dutch Shell LON RDSa plc Total SA TO TOT CNPC and Inpex holding 16 88 16 81 16 81 16 81 8 33 and 7 56 respectively ENI MI ENI SPA ADR Price
Eni with its consolidated subsidiaries is engaged in oil and gas electricity generation petrochemicals oilfield services and engineering industries The company s major business segments are Exploration and Production E P Gas and Power and Refining and Marketing The company conducts its major exploration and production activities for hydrocarbons Eni operates these activities out of Italy Croatia North Africa West Africa the North Sea the Gulf of Mexico the Middle and Far East the Caspian Sea Australia and Latin America Currently Eni carries a Zacks Rank 3 Hold You can see Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
PCG | PG E Plunges as It Races to Meet Governor Bankruptcy Demand | Bloomberg Pacific Gas Electric Co NYSE PCG shares plummeted after California Governor Gavin Newsom rejected its bankruptcy restructuring plan forcing the company to make sweeping changes to meet his demands
The state s largest power company has until Tuesday to address conditions that Newsom laid out in a letter late last week rejecting its reorganization proposal The governor said the current plan falls woefully short of meeting requirements of a key state law and insisted on changes that could reshape PG E including an entirely new board and the option for a takeover
The company s shares fell as much as 23 in New York Its most actively traded bonds rose as Newsom s move bolsters a rival reorganization plan proposed by a group of bondholders
Newsom s rebuke upends PG E s restructuring just as the path toward a smooth exit next year seemed to be clearing The San Francisco based company in bankruptcy after its equipment caused massive wildfires earlier this month reached a 13 5 billion settlement with victims of the blazes The deal however is dependent on the governor s support and his determination that the reorganization complies with a state law that would provide financial assistance for future fire costs
His list of demands might be hard for the company to accept putting the whole Chapter 11 timeline in jeopardy said Jared Ellias a bankruptcy law professor at the University of California Hastings He could have asked for something akin to changing the drapes Instead it s more like he is asking them to change their floor plan
In his letter to PG E Chief Executive Officer Bill Johnson Newsom said the bankruptcy resolution must yield a radically restructured and transformed utility that is responsible and accountable He called for a better financial plan clearly defined safety metrics and a streamlined process for a state or third party takeover if warranted He also said he doesn t expect that the post confirmation board will include any current directors
PG E said its plan meets state law and is the best course forward for all stakeholders
We ve welcomed feedback from all stakeholders throughout these proceedings and will continue to work diligently in the coming days to resolve any issues that may arise the company said in a statement Friday
Under the settlement agreement the company has to modify the plan in a manner acceptable to the governor by Tuesday
What Bloomberg Intelligence Says
California Governor Gavin Newsom s broad objections to PG E s exit plan may require substantial changes in financial and governance structures
Kit Konolige Senior utilities analyst
Click here to view the research
Newsom who took office just weeks before PG E filed the largest ever utility bankruptcy in January faces political pressure to show dramatic changes The company s role in deadly wildfires has provoked widespread public outrage which was exacerbated in October after a series of mass blackouts designed to keep its power lines from sparking blazes during dry windy conditions The governor threatened a state takeover of the company after the outages if it couldn t improve its operations
After the company exits bankruptcy Newsom really needs it to succeed Ellias said It could put his entire career as governor in jeopardy if this company isn t successful
A recent poll by the University of California at Berkeley showed that a majority of the state s voters are in favor of changing the way PG E operates with one third wanting an end to it as an investor owned utility
Already a California lawmaker is planning to introduce legislation that would turn PG E into a government owned utility And a group of mayors and local officials have floated a proposal to make it a customer owned cooperative
Rival Bid
Newsom s demands could give a boost to Elliott Management Corp Pacific Investment Management Co and the other bond holders proposing the alternative restructuring strategy It calls for injecting 20 billion in cash into PG E in exchange for most of the equity in the company
PG E s 6 05 senior unsecured notes maturing in 2034 gained about 1 2 cents on the dollar to 107 7 cents at 9 24 a m in New York according to Trace bond price data
In a statement Thursday Elliott blasted PG E s own restructuring proposal saying it would saddle the company with an additional 10 billion in debt limit its safety investments and turn the utility into a junk bond issuer
In his letter Newsom raised similar concerns that PG E s debt heavy plan wouldn t allow for the company to make billions of dollars of needed safety investments
All of this contributes to a reorganized company that in my judgment will not be positioned to provide safe reliable affordable electric service he said |
PCG | PG E submits multi party proposal for California wildfires | Reuters PG E Corp N PCG said on Tuesday it submitted a multi party settlement agreement related to the 2017 and 2018 wildfires in Northern California to the California Public Utilities Commission CPUC The proposal prohibits the energy utility from seeking 1 625 billion in wildfire related costs from customers The settlement also proposes that PG E pay 50 million for shareholder funded system enhancements specifically on the company s electric transmission and distribution system PG E s stock jumped about 4 to 11 34 after the closing bell
The settlement agreement with wildfire victims forms the cornerstone of PG E s plan to exit bankruptcy The company sought bankruptcy protection from creditors in January following thousands of legal claims from at least 22 fires |
PCG | PG E Newsom Clash Over a Clause That May Allow State Takeover | Bloomberg A clause that would allow California to take over bankrupt utility giant PG E Corp NYSE PCG under certain circumstances has emerged as a big sticking point in negotiations between the company and Governor Gavin Newsom
Newsom wants the power company to include a provision in its reorganization proposal that would allow the state to take control of its assets if it fails to meet performance and safety metrics Negotiating such a clause has become one of the biggest challenges in talks between the company and the governor s office people familiar with the situation said asking not to be identified because the information isn t public
Newsom s support is crucial to PG E s efforts to exit the biggest utility bankruptcy in U S history by a state imposed deadline of June 30 The power giant filed for Chapter 11 in January after its power lines were tied to deadly blazes that erupted across Northern California in 2017 and 2018 leading to an estimated 30 billion in liabilities
Now that PG E has reached settlements with wildfire victims and their insurers two groups at the center of its reorganization Newsom s sign off becomes the biggest obstacle in the company s efforts to get a restructuring deal done
The governor has been clear about the state s requirements a new and totally transformed entity that is accountable and prioritizes safety Newsom s office said in a statement Critically important to that is ensuring that the new entity has the flexibility to fund this transformation These points are not negotiable
PG E intends to comply with the state s requirements and will continue to address the demands raised by the governor in his letter the San Francisco based company said
PG E has been engaged in constructive dialogue to address those concerns with the common objectives of having PG E be safe sound and financially stable upon emergence from Chapter 11 the company said in its statement PG E expects this dialogue to continue
The company s shares rose 5 to 11 47 at 3 39 p m in New York
Governor s Approval
Any reorganization would have to be approved by a state utility commission that the governor appoints And the company will have to prove to Newsom s office that it has fully resolved its bankruptcy and past wildfire liabilities by June if it wants to participate in a new fire insurance fund to avoid future catastrophic losses
Read PG E Will Have to Answer to California s Newsom Just Not Today
Newsom has also ordered PG E to replace its entire board and come up with a better financing plan that s cost neutral for its customers and isn t so dependent on expensive short term bridge financing The company and the governor s office are working on those demands people familiar with the talks said
Meanwhile a rival restructuring plan being pitched by PG E bondholders including Pacific Investment Management Co and Elliott Management Corp already includes a clause that would allow for a state takeover But the option would only kick in if the company is found guilty of willful misconduct related to a future fire and only if the blaze burns than 5 000 buildings according to documents obtained by Bloomberg
The creditors plan hasn t been approved in bankruptcy court or by the governor s office and faces its own challenges |
PCG | PG E creditors offer California wildfire victims 13 5 billion in cash upfront | By Kanishka Singh
Reuters PG E Corp s N PCG creditors have sweetened their offer to California wildfire victims saying they are now prepared to pay 13 5 billion in cash upfront according to a letter sent on Friday to state governor Gavin Newsom
Current terms of the settlement deal approved by a U S bankruptcy judge on Tuesday call for half of the settlement to be financed with stock in a newly reorganized PG E
In the letter the bondholders led by Elliott Management said their latest proposals will make sure individual victims are prioritized as they should be and will address demands Newsom had raised earlier
Newsom said on Dec 13 that the settlement had lacked major changes in governance and tougher safety enforcement mechanisms mandated under the state wildfire statute It would also leave the company with a weakened capital structure and limited ability to withstand future financial and operational headwinds
The new plan calls for no debt at the reorganized holding company and a new board with residents from California forming the majority of directors
It also allows for a takeover of PG E by the state if the company is found to have caused any single future wildfire that destroys more than 5 000 structures
PG E said after the disclosure of the letter that it is continuing to talk with the stakeholders Newsom s office did not immediately respond to a request for comment after business hours on Friday
PG E said earlier it had reached a deal with labor safety and customer advocacy groups calling for regulators to allow PG E to implement some rate increases for funding wildfire prevention efforts and safety improvements
A term sheet submitted with Friday s letter showed utility customer rate increases will be capped at 3 through 2023
PG E filed for Chapter 11 protection in January citing potential liabilities in excess of 30 billion from deadly wildfires in 2017 and 2018 linked to its equipment
It came under renewed criticism this year for precautionary power outages to guard against the risk of wildfires posed by extremely dry and windy weather |
PCG | Why Shares of PG E Lost More Than Half Their Value in 2019 | What happened
Shares of PG E NYSE PCG lost 54 2 of their value in 2019 according to data provided by S P Global Market Intelligence vastly underperforming the S P 500 Considering that the California based utility filed for bankruptcy early in the year investors are fortunate the stock didn t fall further
PCG vs S P 500 data by YCharts
So what
PG E filed for bankruptcy in January to deal with an estimated 30 billion in liabilities stemming from the 2018 Camp Fire in Northern California In many cases that s the end of the story for equity holders with shares often wiped out as part of the reorganization process However from the beginning PG E built its reorganization plan around the common shares retaining some value upon emergence
There have been a lot of ups and downs along the way The judge overseeing the case in October ruled that creditors could file a rival plan of reorganization one that would not be so friendly to shareholders That caused PG E to scramble to win backing from some key creditor groups including wildfire victims
In December California Governor Gavin Newsom voiced his own concerns related to governance and accountability calling into question whether PG E would be able to eventually access a state managed fund being set up to help utilities handle future wildfire claims
Now what
PG E remains in bankruptcy protection The company appears on track to reorganize using its own shareholder friendly plan but creditor groups remain opposed and further twists are possible
If things go according to plan there s at least the possibility that the shares have some room to run prior to the company s emergence But as we saw in 2019 things seldom go as planned during bankruptcy And PG E management might decide in the months to come to give creditors a bigger piece of the equity pie or take other actions that would eat into the value of individual shares in order to ensure a smooth exit from bankruptcy
Long term shareholders are not likely to be made whole regardless of what happens with PG E shares down more than 80 over the past three years We re finally moving toward the closing chapters of the PG E bankruptcy saga but investors should probably avoid the stock until the reorganization is complete |
VZ | Telecom Stocks Down On Fears Of Lower Q4 Earnings | Telecom stocks took a beating yesterday after leading wireless carriers AT T Inc NYSE T and Verizon Communications Inc hinted at expectations of lower profits in the ensuing fourth quarter owing to intense competition
Yesterday AT T s chief financial officer expressed fears of facing considerably wider fourth quarter churn rate than the year ago quarter However the company expects to add customers in spite of this AT T also expects higher promotional expenses to hurt wireless service margins in the said quarter Nevertheless the company expects full year 2014 wireless service margins to remain flat or show an uptick in comparison to 2013
On Dec 8 2014 Verizon Communications announced expectations of lower earnings in the final quarter of 2014 owing to higher promotional expenses and price cuts These strategies are likely to impact the company s wireless segment EBITDA and EBITDA service margin as well
Following these developments investors apprehensions surrounding the fourth quarter earnings of telecom companies have increased considerably This is evident from the consequent share price slump of 2 9 4 1 3 8 and 8 3 for AT T Verizon Communications Sprint Corp NYSE S and T Mobile US Inc NYSE TMUS Inc respectively
Pricing War Intensifies
In an effort to expand customer base telecom companies are spending heavily on promotion and are also offering lucrative discounts For a limited period AT T offered its Mobile Share Value customers a 15 GB shareable data plan for 100 Before this AT T customers could avail only 10 GB of data for the same amount This marks the second data plan price cut by the company in two months
In the beginning of December this year Sprint Corporation further intensified the wireless pricing war in the U S after the company claimed that it will reduce the phone bills of AT T and Verizon Communications customers by 50 if they switch to Sprint s network
On Dec 9 2014 T Mobile unveiled a new family plan Simple Choice Under this new scheme the company is offering unlimited 4G LTE data at only 100 a month on a shared basis for two people It also includes the option of adding a maximum of 10 users for charges of 40 for each extra line
Our Take
We believe earnings and wireless service margins of telecom companies will be affected in the coming quarter owing to increased marketing expenses and higher churn rate Moreover lucrative discount will intensify competition among carriers as retail customers will have more options to choose from However the continuous shift of customers to high margin 4G LTE network and availability of more bandwidth after the completion of AWS 3 spectrum are some positives for big telecom operators |
VZ | Tuesday Lower | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday lower
ES pivot 2024 58 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
ES Fantasy Trader closed
Recap It s always nice to have my first call of the year be correct and while I would have been happier if the market had been up 331 points instead of down my analysis proved correct Oil apparently is back to ruling the market s the black liquid took another dive on Monday So let s take a look at the charts and see where we re going next
The Technicals
The Dow It s looking a lot like a re run of last month as the Dow tanked 1 86 on Monday I was right to be cautious about the reversal here But last night we were quite oversold though the stochastic had yet to start curving around for a bullish crossover So I d say the reversal is near but maybe not Tuesday The VIX The VIX similarly ignored its own reversal sign Friday with a 12 pop on Monday It s now gone overbought and the candle is an inverted hammer so there s more of a chance the next move could be lower from here but it isn t a slam dunk Market index futures Last night all three futures were lower once again at 12 45 AM EST the ES was down 0 06 Yesterday the ES took another big leg lower and that was finally enough to drive all the indicators quite oversold Notably the stochastics has begun that characteristic curve around that signals its intent to form a bullish crossover though we re not quite there yet Meanwhile we re still in a descending RTC so it s too soon to call the all clear ES daily pivot Last night the ES daily pivot fell again from 2050 75 to 2024 58 After a disastrous day Monday we remain well below the new pivot so this indicator remains bearish Dollar Last night I thought the dollar might take a rest after a big gap up Nope Instead it took another gap up to levels not seen since July 2010 And on the monthly chart the current candle looks nothing like the inverted hammer that marked the 2010 top So it continues to look like there s more upside left here Euro Meanwhile the beleaguered euro just kept doing what it does best digging itself a hole A very very deep hole Last night I wrote there s still no sign of an end to the current slide not a very hard call to make and wouldn t you know we gapped down to close this time at 1 1947 I also wrote Next support is 1 1763 a number I d not be surprised to see fairly soon and I m sticking by that Transportation Last night I wrote This is a fairly bearish chart That proved to be the case indeed as the trans cratered 2 66 on Monday in a move I feel was overdone It was enough to drive the indicators oversold but not to set up the stochastic for a bullish crossover But this chart now has the look of a reverse exponential and that always means the end is near Always
I think we re getting near a reversal point but it doesn t look like the selling is done quite yet Oil in particular seems to have no support at all I do think we ll see a move higher later this week but not right away Accordingly I call today Tuesday lower I ll be happy to be proven wrong Single Stock TraderOK in 2015 I m going to try something new I call it the Single Stock Trader I pick a stock and make buy sell calls on it And the stock I pick is Verizon NYSE VZ Why Verizon Well I m a customer of Verizon so I know something about the company I also think they re overcharging me so I d like to get some of my money back from them Right now we re on the sidelines waiting for an entry point VZ has just gone oversold but I don t see my favorite reversal signs bullish stochastic crossover and RTC exit yet So we wait |
VZ | Wednesday Depends On ES Pivot | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Wednesday higher only if ES breaks above its pivot else lower
ES pivot 2000 75 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
ES Fantasy Trader closed
Recap Yep I figured as much The Dow dumped another 130 points on Tuesday to make it five in a row lower for the broader market But the interesting thing is that the market is actually easier to call when it s moving up or down than when it s just drifting sideways So let s take a gander at how Tuesday s dive changes the picture The Technicals The Dow The Dow just kept on tumbling Tuesday enough to drive its indicators extremely oversold Though we re not yet near the lower BB the stochastic is in prime position to form a bullish crossover I m over the catching the falling knife business so the most I ll say is that it looks like we re nearing a reversal here The VIX On Tuesday the VIX emitted what I believe to be a good reversal sign It gained 6 but did it on a tall spinning top that just touched its upper BB along with quite overbought indicators and a stochastic that is ever so close to a bearish crossover I give it better than even odds of moving lower today Wednesday Market index futures Last night all three futures were higher at 12 AM EST with ES up On Tuesday ES extended its losing streak to five giving up 2000 in the process but also driving the indicators extremely oversold Meanwhile we actually saw an uptick overnight which caused a bullish stochastic crossover This was different from lately so perhaps the selling is about over for now ES daily pivot Last night the ES daily pivot fell again from 2024 58 to 2000 75 This time that was just enough to leave ES sitting right below the new pivot A break above would be bullish Dollar index After a big gap up red candle Monday the dollar gained more on Tuesday but with a doji sitting right on the upper BB Considering how overbought the dollar is short term this just might be a sign that the dollar will take a rare break on Wednesday though the overall trend is still inexorably higher Euro And nothing new in euro land as we closed down again Tuesday this time to 1 1921 The bots are shorting the euro hard in a kick em while they re down effect with OBV now running an amazing 3 million And last night was surprise still lower 1 1883 The 1 1763 I ve been talking about isn t so far away now Transportation What is it with the trans You d think that of any sector lower oil would help this one But nooo the trans continued to underperform in a big way on Tuesday down a big 1 65 to break support at 8747 Indicators are now quite oversold but we remain in a steep descending RTC However it s encouraging that we bounced off the lower BB I d say that a reversal is at hand here if not today then more likely Thursday
We re getting a bunch of reversal signs in the charts However oil continued to move lower last night and the SPX Hi Lo index was only down to 68 not the level from which reversals come The Morningstar Market Fair Value Index has though come way down from a year long high of 1 06 on 12 26 to 1 02 but I think we still need to wring out another tick or two here before turning bullish So the picture is mixed And because of the proximity of ES to its pivot I m going to try a conditional call if ES can break above its pivot by mid morning Wednesday we ll close higher else lower Single Stock Trader Recall that we re watching Verizon Communications Inc NYSE VZ here now and only Verizon And interestingly VZ was one of the few Dow components that rose on Tuesday And in fact it triggered all my classic indicators So at yesterday s close at 47 18 I am now officially calling VZ a swing buy |
VZ | Tuesday Depends On ES Pivot | The Hoot
Actionable ideas for the busy trader delivered daily right up front
Tuesday higher only if ES passes its pivot else lower
ES pivot 2028 67 Holding below is bearish
Rest of week bias uncertain technically
Monthly outlook bias higher
ES Fantasy Trader closed
Recap
Sometimes being nervous is a good thing I called Monday lower in the face of some bullish candles and it paid off with a 97 point decline in the Dow This market continues to run on oil but we ll look at the rest of the charts just in case
The Technicals
The Dow On Monday the Dow produced a fat red spinning top that only briefly managed to trade above Friday s close The indicators have begun moving lower before ever hitting overbought a bearish sign And the stochastic is squeezing its lines in preparation for a bearish crossover Net net this chart now looks bearish The VIX I didn t want to commit to this chart last night but the bullish piercing pattern prevailed and the VIX shot up 11 68 on Monday putting an end to its recent and short downtrend The indicators have stopped moving lower and the stochastic is gearing up for a bullish crossover Same story with VVIX so I d say we have a good shot at more upside today Market index futures Last night all three futures were higher at 12 21 AM EST with ES up 0 15 ES looks bearish on a daily basis after Monday s fall as the stochastic just made a bearish crossover The other indicators are confused though with RSI and OBV rose but momentum and money flow fell Go figure ES daily pivot Last night the ES daily pivot fell again from 2042 83 to 2028 67 We remain about 3 5 points below the new pivot so this indicator remains bearish Dollar index Sunday night I called the dollar lower but it still managed to eke out a 0 04 gain though admittedly on a stubby red candle The indicators remain crazy overbought and this candle peeled off the upper BB and it s in evening star configuration so I m going to hazard a guess that the dollar gasp goes lower on Tuesday Euro Sunday night I thought the euro might go higher yesterday Silly me It was one and done for that as the euro just gave up all of Friday s gains though on a lopsided doji But indicators are still oversold and still rising so I m taking a pass here today Transportation Falling about the same as the Dow yesterday everything I wrote about that applies here too End of story
We now have a down Friday followed by a down Monday and that s a bearish sign And with no sign of any new support in oil the overall gestalt was fairly bearish last night Which made me wonder why the futures were all moving higher And with ES so close to its pivot that makes it a good time to try another conditional call So we re going to claim that if ES can break above its pivot by mid morning today Tuesday we ll close higher otherwise lower Single Stock Trader Sunday night I wrote that I still see more upside potential than downside risk at 46 76 And indeed VZ was one of the few gainers in the Dow yesterday That was enough to generate a bullish RTC setup And indicators continue to rise so this stock remains a buy We ll sell when a sell signal appears Right now 47 08 ain t it |
XOM | Tillerson used email alias at Exxon to talk climate New York attorney general | By Karen Freifeld NEW YORK Reuters U S Secretary of State Rex Tillerson the former chairman and chief executive of Exxon Mobil Corp used an alias email address while at the oil company to send and receive information related to climate change and other matters according to New York Attorney General Eric Schneiderman The attorney general s office said in a letter on Monday that it found Tillerson had used an alias email address under the pseudonym Wayne Tracker from at least 2008 through 2015 Wayne is Tillerson s middle name The letter was sent to a New York state judge overseeing Schneiderman s investigation into whether Exxon misled shareholders and the public about climate change In a statement on Monday Exxon spokesman Alan Jeffers said The email address Wayne Tracker exxonmobil com is part of the company s email system and was put in place for secure and expedited communications between select senior company officials and the former chairman for a broad range of business related topics Jeffers said the company had provided 2 5 million pages of documents in response to a subpoena from Schneiderman s office and would respond to the claims in the letter in court filings A State Department spokeswoman declined to comment on the matter The letter seen by Reuters said Exxon had not previously disclosed the alias account It asked the judge to order Exxon to explain whether documents from the Wayne Tracker email and 34 additional accounts assigned to other Exxon executives and board members had been preserved The letter said that Exxon had produced some 60 documents bearing the Wayne Tracker email but never said it was used by Tillerson for relevant communications at Exxon It asked the court to order Exxon to identify whether any other email accounts were used by Tillerson Exxon s top executives and in particular Mr Tillerson have made multiple representations that are at the center of OAG s attorney general s office investigation of potentially false or misleading statements to investors and the public the letter said
The case is People of the State of New York v PricewaterhouseCoopers and Exxon Mobil Corporation NYSE XOM New York State Supreme Court New York County No 451962 2016 |
XOM | Wall St lower ahead of Fed decision as oil sinks | U S stocks were lower Tuesday ahead of an expected rate hike by the Fed The DJI was off 0 15 at 11 30 ET The S P 500 fell 0 42 The tech heavy Nasdaq composite lost 0 42 The odds of a rate hike at Wednesday s FOMC meeting currently stand at 93 Energy stocks led the market lower as oil slumped after Saudi Arabia hiked output last month NYSE Exxon was down 0 39 at 81 10 The dollar was firm supported by rate expectations |
XOM | Tillerson s email alias was prompted by business needs Exxon says | By Ernest Scheyder HOUSTON Reuters U S Secretary of State Rex Tillerson while chief executive of Exxon Mobil Corp N XOM used an alias for emails with employees and board members because his primary account was jammed with too many messages the oil company said on Tuesday New York Attorney General Eric Schneiderman who is investigating whether Exxon misled shareholders and the public about climate change wrote to a judge on Monday accusing Exxon of not previously disclosing the alias and Tillerson s climate change communications through it Exxon denied trying to hide anything This was not an alias used to discuss only climate change Exxon spokesman Alan Jeffers said on Tuesday It was an account used for everyday business by senior executives who needed to reach Tillerson who left the company at the end of 2016 to become secretary of state Tillerson received thousands of emails a day from climate change activists and others at his regular address Rex W Tillerson ExxonMobil com and that made it difficult to parse which messages were important to promptly address Exxon s business operations Jeffers said Tillerson used the email alias for eight years and sent thousands of messages Sixty four of those sent and received met the parameters for Schneiderman s climate change subpoena and were turned over to New York officials Jeffers said The email alias was Wayne Tracker ExxonMobil com Wayne is Tillerson s middle name and Tracker is likely a reference to his past involvement in the Boy Scouts of America Although Trump has vowed to reverse climate change steps taken by former President Barack Obama Exxon has said it believes it must address climate change On Monday it said ExxonMobil believes the risk of climate change is clear and warrants action Darren Woods who succeeded Tillerson as Exxon s CEO in January does not use an email alias nor does any other Exxon employee Jeffers said Use of the email alias was seized upon by environmentalists on Tuesday who said it revealed a pattern of deception If they had nothing to hide than why the secret email account said Jamie Henn of 350 org an environmental group Exxon plans to respond to Schneiderman in a court filing within the next several days Jeffers said
The case is People of the State of New York v PricewaterhouseCoopers and Exxon Mobil Corporation New York State Supreme Court New York County No 451962 2016 |
XOM | Tillerson to press China on North Korea in tough first Asia trip | By David Brunnstrom and Yeganeh Torbati WASHINGTON Reuters U S Secretary of State Rex Tillerson faces a tough first trip to Asia this week when the former oil executive will seek to reassure nervous allies facing North Korea s growing nuclear and missile threat and press China to do more on perhaps the most serious security challenge confronting President Donald Trump Tillerson will visit Japan and South Korea before heading to Beijing where he is expected to firm up a U S visit by Chinese President Xi Jinping next month to meet Trump as the leaders of the word s two largest economies But the chances of Tillerson persuading China to do more to curb North Korea s weapons programs while in Beijing appear scant given China s anger at the deployment of a U S anti missile system in South Korea last week and Trump s repeated threats to impose punitive tariffs on Beijing to correct a large trade imbalance Tillerson faces a delicate task in South Korea which is in political turmoil after former President Park Geun hye was ousted last week in a corruption scandal The prospects of a victory by South Korea s liberal opposition in elections to be held within two months has raised questions about the future there of the U S made Terminal High Altitude Area Defense THAAD missile defense system which China objects to as its radar can penetrate China s territory Beijing has sought to pressure Seoul to drop THAAD In Seoul on Friday Tillerson will meet the acting president Prime Minister Hwang Kyo ahn and Foreign Minister Yun Byung se He is not scheduled to see opposition figures a State Department official said raising questions about the durability of any agreements China says its influence has limits with neighbor and ally North Korea which launched four more ballistic missiles last week and is working to develop nuclear tipped missiles that can reach the United States Beijing has proposed that the United States and South Korea halt joint military drills in return for North Korea suspending nuclear and missile activities an idea Washington and Seoul have rejected ROOM FOR MANEUVER WITH CHINA A Trump administration official said Tillerson s position on THAAD would be uncompromising but suggested there might be room for concessions elsewhere to win more Chinese cooperation on North Korea THAAD is non negotiable the official told Reuters This is one of those things where Beijing is just going to have to adapt to or live in a perpetual cycle of outrage But this is a chance to lay down a marker on what we would need from China and to hear from them what they would want to see in return Everyone is eyes open that they are not going to give us anything on North Korea without something in return Tillerson is likely to raise the possibility of secondary sanctions on Chinese firms doing business with North Korea While the official said nobody is going to be negotiating core American interests there may be other areas of emphasis in the U S China relationship to discuss You can only fight on so many fronts at once and given that the North Korean threat is accelerating there is an opportunity for us to prioritize Chinese assistance there and perhaps not prioritize areas of disagreement we might otherwise be very vocal about Tillerson will be in China on Saturday and Sunday to meet Xi State Councilor Yang Jiechi and Foreign Minister Wang Yi A media report on Monday said Trump planned to host Xi for a two day summit tentatively set for April 6 7 The official confirmed the visit was likely next month including stops by Xi in Washington and Trump s Mar a Lago resort in Florida but the dates still had to be fixed TRIP WILL BE CLOSELY SCRUTINIZED Tillerson will arrive in Tokyo late on Wednesday for the start of a trip that will be closely watched by those trying to assess how well a former Exxon Mobil NYSE XOM executive who had previously never held public office can navigate complex and tense diplomatic situations with huge security and economic stakes It will also be scrutinized to see to what extent he has Trump s ear in a White House where factions appear to be competing for influence Tillerson who had dinner with Trump at the White House on Monday will fly without the normal press contingent on his plane that has traditionally accompanied U S secretaries of state since the days of Henry Kissinger in the 1970s Tillerson will meet Japanese Prime Minister Shinzo Abe and Foreign Minister Fumio Kishida and are expected to discuss Japan s plans to step up missile defense and possible deployment of THAAD there as well as Trump s concerns about the U S trade imbalance with Japan The Trump administration is reviewing its policy towards North Korea and has said all options are on the table including military strikes
Officials have sought to play down the military option given the risk of North Korean retaliation They say sanctions and even an eventual reopening of international talks with North Korea provided it shows a willingness to halt its weapons programs are preferred |
XOM | Despite budget cuts Tillerson works to win long term influence | By Arshad Mohammed and John Walcott WASHINGTON Reuters While he has swallowed a big budget cut had his chosen deputy vetoed and been dismissed as invisible in his own building Secretary of State Rex Tillerson is playing a patient game to gain influence by avoiding public conflicts with the White House six current and former U S officials said on Thursday The former Exxon Mobil Corp NYSE XOM CEO faces multiple challenges in his unfamiliar role as chief U S diplomat including a boss in U S President Donald Trump who makes unpredictable policy pronouncements and does not take kindly to criticism or contradiction said four current officials Relations between U S presidents and their chief diplomats have varied widely in history but those between Trump and Tillerson are especially important because of potential conflicts between the unsettled state of the world and Trump s America First agenda two of the officials said As a result they said speaking on the condition of anonymity Tillerson is trying to keep a low profile which is his natural instinct and seeking a way to make his case on foreign policy without being drawn into losing battles One case in point is Thursday s White House proposal to cut spending on U S diplomacy and foreign aid by some 28 percent a sign that the State Department and U S Agency for International Development are not Trump priorities On Thursday in Tokyo Tillerson said the State Department s current spending is simply not sustainable and accepted the challenge Trump had given in proposing to cut more than a quarter of his agency s budget He is making a very sensible calculation said a former U S official noting that Congress not the president holds the purse strings You state your loyalty to the president and then you know that you will not actually have to live with the president s budget NO WAY TO WIN HEAD TO HEAD BATTLES Two current and former officials said Tillerson is no stranger to cost cuts having lived through waves of them at Exxon and they suggested that he had convinced the White House to allow him to make many of the cuts himself Tillerson isn t opposed to cutting the budget at all but he figured out that he couldn t win head to head battles with the president and the people close to him so he s pursuing a different strategy arguing that he can t make wise decisions about what to cut until he s more familiar with his department and its budget said one veteran State Department official Michael Anton a National Security Council spokesman said Tillerson is held in high regard at the White House President Trump has the utmost confidence in the Secretary of State and looks forward to Mr Tillerson implementing a bold agenda to revitalize American foreign policy Anton said While he is delaying some of the drastic cuts the White House wanted it is far from clear that Tillerson can prevail over Trump aides such as Steve Bannon who want to dismantle parts of the federal government and limit U S engagement with the world said three of the current and former officials The White House veto of Elliot Abrams Tillerson s choice for deputy secretary the department s second highest post drove that point home one of the current officials said Despite that defeat a White House official said Tillerson has good access to the president including multiple lunches dinners and meetings Tillerson dined with Trump on Monday the night before he flew to Asia INVISIBILITY CLOAK Tillerson s low profile he held his first news conference on Thursday in Tokyo seven weeks after becoming secretary of state has brought criticism from the media and many State Department officials that he remains invisible and has failed to cultivate potential allies in Trump s cabinet and on Capitol Hill Chas Freeman a retired diplomat who served as the U S ambassador to Saudi Arabia and as the lead interpreter for former President Richard Nixon s 1972 visit to China said Tillerson s low key style might be a survival tactic
If he says something he runs a big risk of getting crosswise with Trump Freeman said This may be a Fabian strategy referring to the Roman statesman Fabius who defeated the Carthaginian general Hannibal by avoiding frontal conflict |
XOM | Tillerson s use of email alias at Exxon entirely proper Exxon attorneys | Reuters U S Secretary of State Rex Tillerson s use of an alias email address while he was chief executive at Exxon Mobil Corp NYSE XOM was entirely proper attorneys representing the company said in a letter to a New York court on Thursday New York Attorney General Eric Schneiderman who is investigating whether Exxon misled shareholders and the public about climate change wrote to a judge on Monday accusing Exxon of not previously disclosing the alias and Tillerson s communications through it Tillerson had used the alias email address while at the oil company to send and receive information related to climate change and other matters It alias email address allowed a limited group of senior executives to send time sensitive messages to Mr Tillerson that received priority over the normal daily traffic that crossed the desk of a busy CEO The purpose was efficiency not secrecy attorneys at the law firm Paul Weiss Rifkind Wharton Garrison LLP said Had Tillerson set up the alias email address with the purpose of secrecy emails to the account would have avoided any reference to Tillerson as the intended recipient the attorneys said Obtaining publicity not information appears to have been the real goal of the New York Attorney General s March 13 letter the attorneys said The New York Attorney General s March 13 letter asked the judge to order Exxon to explain whether documents from the alias email and 34 additional accounts assigned to other Exxon executives and board members had been preserved Exxon has provided 2 5 million pages of documents in response to a subpoena from Schneiderman s office but those documents include only 160 emails from Exxon management
More than 16 months after receiving our subpoena Exxon is just now admitting it may not have preserved or produced the emails of its former CEO who used an alias email account We look forward to addressing these and the other issues our letter raised in court Amy Spitalnick press secretary at the office of the New York attorney general said in an email |
XOM | ExxonMobil XOM Enters Into A Multi Year Agreement With NBA | Oil giant ExxonMobil Corporation NYSE XOM recently announced that it has inked a multi year agreement with the National Basketball Association NBA According to this deal NBA will be ExxonMobil s official marketing partner in the United States and China The partnership will be marketing ExxonMobil s Mobil 1 motor oil Notably this is the first major partnership between the flagship brand and a key sport other than motor racing The financial terms of the deal have been kept under wraps We note that ExxonMobil advertised on the television during the Rio Olympics to highlight its work on clean energy in the midst of pressure to counter global warming Hence we expect the aforesaid deal to further benefit the company ExxonMobil is the world s best run integrated oil company with an impressive track record of high return on capital employed As the largest publicly traded oil company ExxonMobil has long been a core holding for investors seeking defensive as well as continued dividend growth
EXXON MOBIL CRP Price The OPEC s decision to cut oil production amid an already oversupplied commodity market might help in oil price recovery Since ExxonMobil s production comprises a significant amount of oil it will be able to sell the commodity at higher prices This in turn will allow it to share more profits from its upstream business with its shareholders Notably ExxonMobil also has a huge base of chemical and refining operations that should continue to support growth even if its upstream operations underperform The company s existing oil and gas development project pipeline is among the best in the industry ExxonMobil s strength lies in its balanced operations strong financial flexibility and continuous efficiency and cost control The company s efforts to build an unconventional resource portfolio both in North America and overseas reflect its aim to increase production through higher exposure to large energy resources with long reserve life and low field declines Despite the collapse in natural gas prices ExxonMobil expects unconventional gas to play a dominant role in the future supplies owing to the rapid decline in conventional production The company possesses more than 8 million unconventional acres in North America Some better ranked players from the energy sector include Enviva Partners LP NYSE EVA NGL Energy Partners LP NYSE NGL and Evolution Petroleum Corp NYSE EPM Both these stocks sport a Zacks Rank 1 Strong Buy Enviva Partners posted a positive earnings surprise of 20 51 in the preceding quarter NGL Energy Partners has a mixed earnings surprise history The partnership posted positive earnings surprise in two of the last four quarters It reported a positive earnings surprise of 1480 0 in the preceding quarter In the last reported quarter Evolution Petroleum Corp delivered a positive earnings surprise of 350 00 Coming to the earnings surprise history the company beat estimates in two of the last four quarters Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
PCG | PG E says its distribution lines caused no deadly fires in 2019 | By Tom Hals Reuters California utility PG E Corp N PCG has determined there were no lives or structures lost in 2019 wildfires that may have been caused by its distribution lines according to a Friday court filing The company also said it found 218 instances of damage from wind or falling vegetation that could have caused wildfires if it had not taken the controversial step of shutting power to millions of customers during high winds in late October The company filed for Chapter 11 bankruptcy in January to deal with 30 billion of liability from wildfires linked to its equipment in 2017 and 2018 On Wednesday U S Bankruptcy Judge Dennis Montali ruled PG E is subject to the legal doctrine of inverse condemnation which holds the company strictly liable for fires tied to its equipment even if the utility was not negligent The ruling was a victory for wildfire victims who are pursuing PG E for compensation and the company s stock fell around 5 in early Friday trading before recovering most losses To try to prevent fires PG E has been using the mass blackouts during high winds and low humidity Six of the 10 most destructive wildfires in California history have been caused by electrical equipment or power lines The company also said in Friday s filing with the U S District Court in San Francisco that a broken PG E cable reported in the area of Northern California s massive Kincade Fire last month was last inspected on July 19 Fire officials in California have not determined the cause of the Kincade Fire which raced through Sonoma County wine country charring more than 75 000 acres 30 351 hectares destroying hundreds of structures and forcing thousands to flee PG E was responding on Friday to questions from Judge William Alsup about late October fires to determine if the company has complied with terms of its probation imposed after a felony conviction over a 2010 pipeline explosion Alsup has ordered the company to adopt wildfire safety measures and to appoint a board of directors committee to be responsible for implementing those steps He barred the company from issuing dividends until it is in compliance The company has been accused of cutting corners on maintenance including on equipment blamed for last year s Camp Fire the most expensive in California history which killed more than 80 people and destroyed the town of Paradise
PG E has said it strongly disagrees with allegations it failed to perform necessary upgrades |
PCG | PG E failed to inspect transmission lines that caused deadly 2018 wildfire state probe | By Kanishka Singh Reuters Bankrupt California power producer PG E Corp N PCG did not properly inspect and replace transmission lines before a faulty wire sparked a wildfire that killed more than 80 people in 2018 a probe by a state regulator has concluded The Caribou Palermo transmission line was identified as the cause of the Camp Fire last year which virtually incinerated the Northern California town of Paradise and stands as the state s most lethal blaze PG E failed to maintain an effective inspection and maintenance program to identify and correct hazardous conditions on its transmission lines as are necessary to promote the safety and health of its patrons and the public a 700 page report by the California Public Utilities Commission said The report was dated Nov 8 2019 It was released to the public on Monday The probe concluded that PG E s inspection shortcomings were part of a pattern of inadequate execution of those tasks In response to the report PG E acknowledged the role of its equipment in the fire and apologized We remain deeply sorry about the role our equipment had in this tragedy and we apologize to all those impacted by the devastating Camp Fire the company told Reuters in an emailed statement adding that it accepted the probe s conclusion that the company s electrical transmission lines caused that fire The utility filed for bankruptcy in January citing potential civil liabilities of more than 30 billion from wildfires linked to its gear Last week U S Bankruptcy Judge Dennis Montali ruled that PG E is strictly liable for fires tied to its equipment even if the utility was not negligent PG E was fined 1 6 billion for a deadly 2010 gas pipeline explosion in San Bruno California The refiled story fixes typo in headline |
PCG | PG E Could Have Prevented Deadly California Fire State Says | Bloomberg Bankrupt utility giant PG E Corp NYSE PCG for years failed to properly inspect and maintain its transmission system an oversight that led a live wire to fall and ignite the deadliest blaze in California history last year state investigators said
A PG E crew hadn t climbed and inspected the tower and hook that failed sparking the catastrophic Camp Fire in 17 years a California Public Utilities Commission investigation made public Monday shows The company would ve discovered that the hook had worn down if it had checked the tower and its timely replacement could have prevented the blaze from happening the commission s safety division said in the nearly 700 page report
The identified shortcomings in PG E s inspection and maintenance of the incident tower were not isolated but rather indicative of an overall pattern of inadequate inspection and maintenance of PG E s transmission facilities the agency said in its findings
The November 2018 Camp Fire killed 85 people burned down tens of thousands of homes and all but destroyed the Northern California town of Paradise It ultimately led to PG E s undoing saddling the company with crippling liabilities In January the company declared the biggest utility bankruptcy in U S history amid an estimated 30 billion in damages tied to that wildfire and a series of others that broke out across Northern California in 2017
PG E shares fell as much as 3 7 Tuesday
PG E said in an emailed statement that it accepts the conclusion in the report that its power line caused the Camp Fire We remain deeply sorry about the role our equipment had in this tragedy and we apologize to all those impacted the company said
California fire investigators had already identified PG E s equipment in a previous report as the ignition source of the Camp Fire The utility commission s probe revealed more detail on the rules that PG E broke leading up to the blaze identifying 12 violations The findings may result in fines or penalties imposed by the five member panel
The district attorney of Butte County where the Camp Fire broke out and California s attorney general were still deciding whether to file criminal charges related to the blaze
Estimating Liabilities
The report is hitting just as PG E prepares for a federal court case that will determine exactly how much in wildfire liabilities it s responsible for In the coming months a judge will hold hearings to decide on the size of claims stemming from the Camp fire and 2017 blazes The outcome could serve as the foundation of a restructuring plan that PG E hopes will have it emerging from bankruptcy by the middle of next year
The commission s report described PG E s routine inspections as inadequate failing to detect defective hooks and other equipment prone to failure One so called C hook close to the transmission failure showed a material loss of over 50 in one section according to the investigation
Based on PG E s own maintenance manual the report said this is a hazardous Priority A condition which requires immediate response and continued action until the condition is repaired Butte County prosecutors asked the state to collect the hook as evidence
PG E said it has accelerated inspections since the 2017 and 2018 blazes and has completed an unprecedented process to inspect every element of our electric system within the high threat fire areas The company said it has checked almost 730 000 transmission distribution and substation structures and more than 25 million electrical components in those areas
Adds shares in fifth paragraph |
PCG | PG E nearing 13 5 billion deal with wildfire victims BBG | Reuters Bankrupt California power producer PG E Corp N PCG is close to finalizing terms for a 13 5 billion payout to victims of wildfires ignited by its power lines Bloomberg reported on Wednesday citing people familiar with the matter
Shares of the company rose about 13 to 9 62
The payment will be made half in cash and the rest in stock in the newly reorganized utility the report said
The settlement could mark a major step towards a resolution of the company s bankruptcy proceedings and give it a big win over a rival group of noteholders that so far had the support of a committee representing the victims
PG E said it will continue to work with individual claimants to fairly and reasonably resolve their claims |
PCG | California power producer PG E files amended reorganization plan | By Kanishka Singh Reuters California power producer PG E Corp N PCG said late on Thursday that it has filed for an amended reorganization plan adding that it remains on track to getting the plan confirmed before a June 2020 deadline to exit bankruptcy The development comes less than a week after the company said it reached a 13 5 billion settlement with victims of some of the most devastating wildfires in California s modern history PG E has settled all major wildfire claims and resolved disputed release provisions between insurance companies and wildfire victims it said on Thursday The company also said its plan can be fully funded through its capital structure including the 12 billion equity backstop commitments that PG E received last week The acceptance or rejection of the plan may not be obtained until the approval of a disclosure statement by the bankruptcy court PG E s attorneys said in a court filing on Thursday On Thursday consumer advocate Erin Brockovich voiced support for the company s reorganization plan She is known for having fought PG E in court over water contamination a case depicted in an Academy Award winning film starring Julia Roberts This approach will also enable the company to continue to help meet the state s climate and clean energy goals Brockovich said adding that the plan was compensating the victims fairly The utility had previously reached a 1 billion settlement with cities counties and other public entities and an 11 billion agreement with insurance carriers related to the wildfires It filed for Chapter 11 protection in January citing potential liabilities in excess of 30 billion from wildfires in 2017 and 2018 linked to its equipment A probe by a state regulator concluded earlier this month that the company did not properly inspect and replace transmission lines before a faulty wire sparked a wildfire that killed more than 80 people in 2018 PG E came under renewed criticism this year for precautionary power outages to guard against the risk of wildfires posed by extremely dry and windy weather as regulators and consumer activists labeled the company s outages as being too broad without appropriate communication to customers |
PCG | California governor rejects PG E bankruptcy reorganization plan | By Tom Hals and Steve Gorman Reuters California Governor Gavin Newsom on Friday rejected a bankruptcy reorganization plan submitted by PG E Corp N PCG the state s largest investor owned utility saying its proposal fails to meet the requirements of a recently enacted wildfire law The decision by Newsom sent to PG E in a letter complicates the company s push to exit bankruptcy and provide billions of dollars to victims of devastating wildfires in 2017 and 2018 sparked by the utility s power lines The embattled utility now has until Tuesday to further amend its plan to Newsom s satisfaction but his criticism of the reorganization package as it was presented by PG E a day earlier was sweeping Newsom said the plan lacks major changes in governance and tougher safety enforcement mechanisms mandated under the state wildfire statute known as Assembly Bill 1054 which was enacted in July The governor also said PG E s plan including a proposed 13 5 billion settlement with victims of wildfires blamed on its power lines would leave the company with a weakened capital structure and limited ability to withstand future financial and operational headwinds In my judgment the amended plan and the restructuring transactions do not result in a reorganized company positioned to provide safe reliable and affordable service to its customers as required by AB 1054 Newsom wrote PG E in a statement after release of the governor s letter disputed Newsom s findings that its reorganization plan fails to live up to the criteria of the wildfire law We believe it does and is the best course forward for all stakeholders the company said We ve welcomed feedback from all stakeholders throughout these proceedings and will continue to work diligently in the coming days to resolve any issues that may arise State approval of reorganization plan is a necessary step before PG E can submit the proposal for a vote by creditors and final approval from a bankruptcy judge in San Francisco PG E filed for Chapter 11 bankruptcy protection in January citing projected civil liabilities in excess of 30 billion from wind driven blazes in 2017 and 2018 sparked by its equipment Those included a wildfire last year that killed 85 people and destroyed the town of Paradise ranking as California s deadliest wildfire on record BLACKOUTS FOR SAFETY In recent months PG E resorted to widespread power shut offs that left hundreds of thousands of its customers without electricity for days at a time during periods of extremely high winds and dry conditions But the blackouts enraged consumers regulators and politicians including Newsom who accused PG E of failing through greed and mismanagement to invest in proper maintenance and upgrades of its power system over the years PG E has denied putting profits ahead of public safety but acknowledged it needed to do a better job of protecting the grid from fire hazards Newsom had floated the idea of a state takeover of the utility if it failed to satisfy his demands and has insisted that whatever entity emerges from bankruptcy must be completely transformed and more accountable The governor s finding that PG E s reorganization plan must comply with the new law AB 1054 is a prerequisite for the utility s proposed civil settlement with wildfire victims The law creates a wildfire liability fund that investor owned utilities can access for wildfire claims provided the utilities contribute toward the fund and make a combined 5 billion five year investment toward improvement in their electrical grids To participate in the fund PG E must exit bankruptcy by June 30 putting intense pressure on the utility to resolve its complicated Chapter 11 quickly Prior to its 13 5 billion deal with victims the company recently reached an 11 billion settlement with insurance companies and a 1 billion settlement with local governments for fire losses
Bondholders led by Elliott Management opposed the reorganization plan championed by PG E However the 13 5 billion compensation package agreed to by the utility more generous than expected makes it much more difficult for bondholders to upend PG E s plans |
VZ | Verizon Shares Fall As Competition Grows | Verizon NYSE VZ shares significantly dropped in trading on Tuesday after the company revealed strong customer growth and the roll out of 4G devices but at the cost of a highly competitive and promotion filled fourth quarter As a result the high number of consumers taking advantage of its deals may add pressure to its wireless business s EPS and EBIDTA in the near term The company also revealed that more of its current customers have cancelled their services in favor of other competitors this quarter than in the quarter prior or the same quarter last year due to heavy promotions from rivals Due to its strong reputation and network Verizon has been able charge consumers a premium for its wireless service for a long time However deals and discounts from its competitors are starting to have a negative impact on the company On December 9th Citigroup analyst reiterated a Neutral rating on Verizon and lowered his 2014 and 2015 EPS estimates following the company s announcement He noted the national U S wireless carriers now face unfavorable conditions in 2015 relating to slower industry revenue growth higher capacity costs and a tougher regulatory backdrop while they incubate different strategies to create a path to long term revenue growth Rollins currently has a 63 success rate recommending stocks with a 12 5 average return per recommendation He has rated Verizon 6 times with 60 success Robert W Baird analyst also cut his rating for Verizon from Outperform to Neutral on December 9th Power fears that Verizon is taking more of a hit from competitors than in the past Power currently has a 62 success rate recommending stocks with a 9 6 average return per recommendation He has rated Verizon 4 times with a 8 9 average return per recommendation Will Verizon overcome this hurdle and come out ahead or is the competition too much to handle On average the top analyst consensus for Verizon is Hold |
XOM | Russia s Putin to meet ExxonMobil President Kremlin spokesman | MOSCOW Reuters Russia s President Vladimir Putin was scheduled to meet president of oil major ExxonMobil N XOM Darren Woods on Thursday Kremlin spokesman Dmitry Peskov said
The meeting was set to take place at the end of the day in Moscow Peskov told reporters on a conference call without giving further details |
XOM | U S State Department rethinks plan not to take media on Asia trip | WASHINGTON Reuters The U S State Department held out the possibility on Thursday that Secretary of State Rex Tillerson might take reporters with him to Asia after it initially broke with decades of tradition by telling the media he would not We are still working out the logistics for this trip so we cannot yet speak definitively as to whether we ll be able to accommodate any press on the Secretary s plane State Department spokesman Mark Toner wrote in an email Going forward the State Department will do everything it can to accommodate a contingent of traveling media on board the Secretary s plane The State Department told reporters earlier this week that Tillerson would not take any of them on a March 15 19 trip to Japan South Korea and China countries of strategic military and economic interest to the United States Major news organizations complained among them the BBC CNN New York Times Washington Post and Reuters North Korea which fired four ballistic missiles into the sea off Japan s northwest coast on Monday angering both South Korea and Japan is likely to be a key topic of Tillerson s trip Asked earlier this week why Tillerson was not taking media with him a State Department official speaking on condition of anonymity told reporters the plane is too small to accommodate he carries a much smaller footprint in terms of personnel and that s not just press Toner did not respond when asked whether Tillerson had tried to get a larger Air Force plane or how the department would respond to critics who described the plan as self defeating Former Secretary of State Madeleine Albright and other past State Department officials questioned Tillerson s plan saying that by including reporters the chief U S diplomat could make the administration s case and prevent other countries from dominating coverage of U S policy Albright secretary of state under Democrat Bill Clinton told MSNBC s Andrea Mitchell Reports on Wednesday taking the news media demonstrates a U S commitment to a free press President Donald Trump a Republican has accused news outlets of fake news and called journalists the enemy of the people Richard Boucher a retired U S diplomat who served as State Department spokesman from 2000 to 2005 under Albright as well as Republicans Colin Powell and Condoleezza Rice could not recall a time during his tenure when reporters did not fly on the plane Since becoming secretary of state on Feb 1 Tillerson a former Exxon Mobil Corp NYSE XOM chief executive has traveled to Germany and Mexico in both cases inviting fewer media than his predecessors for at least the last 50 years Veteran State Department television correspondent Marvin Kalb said William Rogers Richard Nixon s first secretary of state began taking press with him in 1969 and with rare exceptions such as Henry Kissinger s secret trip to China in 1971 that had remained the practice |
XOM | Tillerson has recused himself from Keystone pipeline issues State Dept | WASHINGTON Reuters U S Secretary of State Rex Tillerson has recused himself from issues related to TransCanada Corp s application for a permit for the Keystone XL pipeline the State Department said in a letter on Thursday to the environmental group Greenpeace He has not worked on that matter at the Department of State and will play no role in the deliberations or ultimate resolution of TransCanada s application said the letter from Katherine McManus the State Department s deputy legal adviser McManus letter came after Greenpeace wrote to officials at the State Department and the Office of Government Ethics on Wednesday urging Tillerson recuse himself from any decisions on the multibillion dollar pipeline given his former role as chief executive officer of Exxon Mobil Corp NYSE XOM Greenpeace argued in its letter that Exxon Mobil would directly and predictably benefit from the approval of Keystone XL because the firm has investments in Canadian oil sands Tillerson recused himself from the matter in early February McManus wrote TransCanada tried for more than five years to build the 1 179 mile 1 897 km pipeline until President Barack Obama rejected it in 2015 TransCanada resubmitted its application for the Keystone project in January after Obama s White House successor Donald Trump signed an order smoothing its path The line is designed to link existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in Illinois en route to the Gulf of Mexico Exxon has a majority stake in Imperial Oil a Calgary Alberta based company that operates the Kearl oil sands project in northern Alberta Exxon Mobil could benefit from the approval of the pipeline if it has specific contracts or agreements with TransCanada either to transport their Canadian tar sands production or to receive such shipments at their U S refineries Greenpeace wrote in its letter on Wednesday Tillerson wrote in a January letter to McManus that for one year after his resignation from Exxon Mobil he will not participate personally and substantially in any particular matter involving specific parties in which I know that Exxon Mobil is a party or represents a party unless I am first authorized to participate
He also wrote that on a case by case basis he would recuse himself from participation in any particular matter involving specific parties in which I determine that a reasonable person with knowledge of the relevant facts would question my impartiality in the matter unless I am first authorized to participate |
XOM | Order for Venezuela to pay Exxon 1 4 billion in damages overturned lawyer | By Alexandra Ulmer CARACAS Reuters A World Bank tribunal s order for Venezuela to pay 1 4 billion in damages to Exxon Mobil Corp NYSE XOM over nationalizations has been annulled a lawyer for the Venezuelan government said on Thursday The case at the World Bank s International Centre for Settlement of Investment Disputes is one of many arising from nationalizations during late President Hugo Chavez s 1999 2013 rule of the South American OPEC member country We were confident all along that our position was correct and are very pleased that the annulment committee agreed Venezuela s lawyer George Kahale said A reduction to the overall 1 6 billion award would be welcome news to President Nicolas Maduro s cash strapped government as it faces heavy foreign debt repayments amid a deep economic recession that has led to widespread shortages The ICSID ruling dated Thursday said portions of the award were annulled but did not give a breakdown of figures A spokesman for the U S based oil company Todd Spitler did not confirm financial details but said Exxon Mobil will continue to evaluate its legal rights and determine next steps Venezuela had challenged the 2014 award with various arguments including that a previous decision from Paris based International Chamber of Commerce to award Exxon 908 million should be deducted from the ICSID award Chavez the firebrand socialist leader whose rule was cut short by death from cancer nationalized a range of oil ventures including the Cerro Negro heavy crude project and a smaller project called La Ceiba both operated by Exxon Despite its appeal of the World Bank court s initial ruling in the Exxon case Venezuela s government had hailed that as a success because the company had been seeking compensation of up to 10 billion Chavez led a wave of takeovers that also encompassed the electricity telecoms metal and agricultural sectors Many companies deemed the takeovers unlawful and Venezuela faces more than 20 international arbitration cases
Supporters of Chavez s nationalizations say he was right to take back control of Venezuela s commodities riches to channel the profits into social programs at home rather than profits for multinational companies |
XOM | Kremlin says President Putin met new Exxon CEO | MOSCOW Reuters Kremlin spokesman Dmitry Peskov told reporters on Friday that President Vladimir Putin had met new Exxon Mobil NYSE XOM chief executive officer Darren Woods on Thursday Russia s energy minister Alexander Novak and Rosneft head Igor Sechin attended the meeting according to the spokesman This is a very big company and it is a major investor This is why it receives special treatment Peskov said in reference to Exxon Mobil
He also said Moscow will keep working on improving the environment for all foreign investors |
CSCO | ETFs In Focus Post Cisco Results | After the closing bell on Wednesday one of the tech primes Cisco Systems NASDAQ CSCO reported fiscal fourth quarter results While the networking giant met our estimates on both earnings and revenues it once again disappointed investors with a bleak revenue guidance Earnings of 55 cents per share came in line with the Zacks Consensus Estimate Revenues of 12 13 billion also met our estimates but declined for the seventh consecutive quarter falling 4 year over year The networking leader has been transitioning its traditional business of high end switches and routers to high growth areas such as security the Internet of Things and cloud computing As a result Cisco expects revenues to decline 1 3 year over year for the ongoing fiscal first quarter 2018 Earnings per share are expected in the range of 59 61 cents the midpoint of which is much above the Zacks Consensus Estimate of 55 cents see The bleak revenue guidance took a toll on investors sentiments pushing CSCO shares down 2 5 in after hours trading yesterday Currently Cisco has a Zacks Rank 3 Hold with a VGM Style Score of B and boasts a dismal Rank in the bottom 37 indicating that some pain is in store for the stock ETFs to WatchGiven this ETFs having the largest allocation to this network giant will be in focus over the coming days Investors should closely monitor the movement in these funds and grab the opportunity when it arises or avoid if the stocks drags them down iShares North American Tech Multimedia Networking ETF SNX IGN This ETF provides a concentrated exposure to domestic multimedia networking securities by tracking the S P North American Technology Multimedia Networking Index Holding 24 securities in its basket Cisco takes the second spot with a 9 05 allocation The product has accumulated 63 7 million in its asset base while sees a lower volume of around 19 000 shares a day Expense ratio comes in at 0 48 The fund has added 4 2 in the year to date time frame and has a Zacks ETF Rank of 3 with a High risk outlook read First Trust NASDAQ Technology Dividend Index Fund This fund provides exposure to the dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index The product has amassed about 716 1 million in its asset base and trades in moderate volume of about 75 000 shares per day The ETF charges 50 bps in annual fees and holds about 88 securities in its basket Of these firms CSCO occupies the third position making up roughly 8 2 of the assets In terms of industrial exposure the fund allocates more than one fourth portion in semiconductor and semiconductor equipment followed by software 15 4 diversified telecom services 14 7 technology hardware storage peripherals 12 7 and communications equipment 10 5 The fund is up 9 6 so far this year First Trust Nasdaq Cybersecurity ETF This ETF follows the Nasdaq CTA Cybersecurity Index which measures the performance of companies engaged in the cyber security segment of the technology and industrials sectors It has accumulated 274 2 million in its asset base The fund charges 60 bps in annual fees and trades in a moderate average daily volume of about 94 000 shares In total the product holds 30 stocks in its basket with Cisco taking the second spot at 6 3 It is skewed toward the software industry at 48 6 while communications equipment rounds off the next spot at 23 5 of assets The fund has risen about 8 3 in the year to date time frame read PowerShares Dynamic Networking Portfolio This fund follows the Dynamic Networking Intellidex Index holding 30 securities in its basket Out of these Cisco is the fourth firm accounting for a 5 2 share From a sector look communication equipment accounts for 42 of the portfolio followed by 36 in software and programming The fund is unpopular and illiquid in the broad tech space with AUM of 24 1 million and average daily volume of about 4 000 shares It charges 63 bps in annual fees and has gained 8 7 in the year to date time frame PXQ has a Zacks ETF Rank of 2 or Buy rating with a High risk outlook Want key ETF info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing ETFs each week |
XOM | Royal Dutch Shell RDS A Downgraded Get Out While You Can | On Sep 28 Zacks Investment Research downgraded Royal Dutch Shell LON RDSa plc Europe s largest energy producer to a Zacks Rank 5 Strong Sell placing it in the bottom 5 of all stocks that Zacks ranks Why the Downgrade The commodity price rout has brutalized Shell s revenues and earnings What s more the outlook remains grim with fundamentals suggesting that the odds are firmly stacked against a sustained rally That s the reason we are predicting a 47 drop in Shell s EPS this year Deep in the red for a long time the group s stock price has declined precipitously for good reason Shares remain down about 8 over the past quarter and longer term have dived 31 in the last 24 months a significant fall considering its status as a blue chip stock Detailed AnalysisSimilar to other companies exploring for and producing oil and gas the results of Shell s upstream division are directly exposed to commodity prices Consequently with oil price collapsing to a 12 year low of 26 21 in Feb and natural gas unable to breach the key psychological level of 3 per MMBtu the second largest oil company by market value after Exxon Mobil Corp NYSE XOM has seen its revenues earnings and cash flows hit hard Shell s dismal track record of earnings surprise history lagging estimates in each of the last four quarters point to its struggles to protect cash flows from the ongoing commodity price weakness Moreover the supermajor is experiencing signs of weakness in the refining business suggesting that the unit which saved it when crude prices plunged could now be a drag In fact Royal Dutch Shell s second quarter downstream unit profits fell 39 from the comparable period of 2015 As the going gets tough the integrated major long considered a safe harbor with a strong balance sheet and substantial dividend is being forced to offload assets in order to survive the cataclysmic energy price scenario Shell has also found it difficult to digest its 50 billion mega acquisition of BG Group Apart from the obvious rise in net debt and reduction of liquidity the combined group s Shell BG capital expenditure stands at 29 billion in 2016 still quite high by industry standards This is expected to place a substantial burden on the group s leverage and credit metrics As part of the effort to create a leaner structure following the deal The Hague based group has promised to liquidate 30 billion worth of assets by 2018 But till date Shell has been slow to progress on its plan triggering fears of a shortfall As it is Shell is suffering from marginal or falling returns reflecting its struggle to replace reserves as access to new energy resources becomes more difficult Given the large base achieving growth in oil and natural gas production has anyways been a challenge for the company over the last many years Royal Dutch Shell s exposure to production in the vulnerable and violence prone regions in Nigeria poses additional risk As a result of these bearish factors the tendency for a downward estimate revision has been more obvious in recent times In fact the Zacks Consensus Estimate for the third quarter has moved down by 6 cents or 10 to 57 cents per share over the last 60 days The Zacks Consensus Estimate for the full year is 1 78 down 17 cents or 9 in the same timeframe ROYAL DTCH SH A Price and Consensus
Stocks That Warrant a LookWhile we expect Royal Dutch Shell to perform below its peers and industry levels in the coming months and see little reason for investors to own the stock the entire energy landscape isn t in a decline as there are some interesting choices out there that could be bought In particular one can look at CONE Midstream Partners L P NYSE CNNX and Ultra Petroleum Corp OTC UPLMQ Both stocks sport a Zacks Rank 1 Strong Buy You can see Headquartered in Canonsburg PA CONE Midstream Partners is a master limited partnership focused on natural gas and condensate gathering in the Marcellus Shale in Pennsylvania Ohio and West Virginia It surpassed estimates in each of the last four quarters at an average rate of 19 38 Houston Texas based Ultra Petroleum is an independent energy firm engaged in the acquisition development exploration and production of oil and gas properties The 2016 Zacks Consensus Estimate for this company is 77 vents representing 148 earnings per share growth over 2015 The next year s average forecast is 2 53 pointing to 229 growthConfidential from Zacks Beyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
PCG | California utility PG E s stock tumbles as wildfire spreads | By Noel Randewich
SAN FRANCISCO Reuters Shares of bankrupt California power utility PG E Corp N PCG extended losses on Monday as investors worried that its equipment might be responsible for wildfires spreading in northern California
After a brief trading halt caused by its rapid fall PG E s stock was down 16 bringing its loss to nearly 50 since late Wednesday when the Kincade Fire started in Sonoma County and rapidly became the worst blaze in California
Crews on Sunday lost ground against the wind driven fire that has blackened part of the state s picturesque wine country and driven 190 000 people from their homes The Kincade Fire is the worst of more than a dozen major blazes that have damaged or destroyed nearly 400 structures and prompted Governor Gavin Newsom to declare a statewide emergency
While the cause of the Kincade Fire has not been determined it appears to have erupted near the base of a damaged high voltage transmission tower owned by PG E which is California s largest investor owned utility and serves the northern part of the state
California s wildfires generally erupt in the fall as hot dry winds blow westward High wind forecasts prompted PG E to shut off power to about 940 000 customers in 43 counties on starting on Saturday to guard against the risk of touching off more wildfires The utility said the protective blackouts could last two days
PG E filed for Chapter 11 bankruptcy protection in January citing potential liabilities in excess of 30 billion from major wildfires in 2017 and 2018 linked to its equipment Its stock market value has shrunk to under 3 billion from 25 billion a year ago |
PCG | California regulator to investigate utilities mass fire prevention power outages | By Steve Gorman Reuters California regulators said on Monday they will open a formal probe of whether utilities violated any rules by cutting power to millions of residents for days as a precaution during recent periods of high winds and heightened wildfire risks The investigation was urged by safety and enforcement staff of the California Public Utilities Commission after more than 1 million homes and businesses were left without electricity on Monday mostly from planned public safety power shut offs on an unprecedented scale The announcement did not single out any utilities by name but the overwhelming bulk of the shut offs were implemented by Pacific Gas and Electric Co a unit of PG E Corp N PCG California s largest investor owned utility PG E filed for bankruptcy in January citing some 30 billion in civil liability from major wildfires sparked by its equipment in 2017 and 2018 including last year s Camp Fire which killed 85 people and incinerated most of the Northern California town of Paradise That fire ranks as the state s deadliest on record Responding to the latest windstorms over the weekend PG E turned off electricity to 970 000 homes and workplaces in 38 counties in northern and central California encompassing millions of people across more than half of PG E s service area of 70 000 square miles That tally far surpassed the previous record planned outage of 730 000 customers during high winds two weeks ago By Monday evening as the latest winds began to subside PG E crews had restored electricity to 325 000 customers utility spokeswoman Tamar Sarkissian said She said the company had some 6 000 technicians in the field patrolling power lines making repairs and turning electricity back on Even as power was being gradually restored PG E said it was considering yet another round of power shut offs due to more high winds forecast for later in the week The precautionary blackouts have drawn sharp criticism from the governor and state regulators as being too widespread and disruptive as well as poorly managed and communicated to the public earlier this month HELD TO ACCOUNT California Governor Gavin Newsom has said PG E is largely to blame for its own predicament arguing that corporate greed and mismanagement kept the utility from upgrading its infrastructure while wildfire hazards have steadily worsened over the past decade He has vowed that under the leadership of the new Public Utilities Commission president he appointed in July Marybel Batjer utilities such as PG E would be held to account for their lapses The agency s statement on Monday said its enforcement division will ask commissioners in the next 30 days to open an investigation of the outages The inquiry will examine utility compliance with agency regulations any resulting violations and potential actions to ensure utilities are held accountable the statement said Fines of up to 100 000 per violation per day and additional penalties can be assessed for violations of commission rules and regulations agency spokesman Christopher Chow said PG E was previously assessed a record 1 6 billion penalty for the unsafe operation of one of its gas pipelines that exploded in San Bruno California near San Francisco in 2010 In addition the commission said it would ensure that customers do not end up charged for services they failed to receive during the blackouts Batjer also plans to reevaluate the protocols for precautionary power shut offs and consider how utilities can minimize future outages In response to the commission s action PG E said We are constantly working to minimize the impact of these safety shut offs while prioritizing public safety The sole purpose of these power shut offs is to reduce the risk of catastrophic wildfire in the communities that we serve
PG E acknowledged last week that a major wildfire in Sonoma County wine country erupted near a damaged a transmission tower owned by the utility at about the time a live high voltage line carried by that tower malfunctioned |
PCG | Stronger winds whip California fires as power cut and homes evacuated | LOS ANGELES Reuters Wind driven wildfires burned largely uncontrolled in tinder dry California early on Tuesday as firefighters battled blazes threatening thousands of homes in a race against time with even stronger gusts expected later
Thousands of residents have already fled and hundreds of thousands of others were left in the dark with power companies cut off electricity to try to prevent more fires being sparked by snapped cabling in the brushland
I know this moment generates a tremendous amount of anxiety California Governor Gavin Newsom said on Monday about the two major blazes burning at opposite ends of the state
The latest fire broke out near the Getty Center museum housing priceless artworks on the west side of Los Angeles hundreds of miles from where crews were fighting the biggest and most destructive fire the Kincade north of San Francisco
Los Angeles Lakers basketball great LeBron James Terminator actor and former California Governor Arnold Schwarzenegger as well other celebrities said on Twitter they had been forced to leave their homes
Weather forecasters are forecasting there could be worse to come
The worst of this weather is coming later today and tonight Marc Chenard a forecaster with the National Weather Service s Weather Prediction Center said early on Tuesday
The winds in the south will really pick up 50 to 70 mph with some gusts up to 80 mph in the Los Angeles mountain area
The so called Santa Ana winds in the south could hit their worst levels of the season and last into late Thursday Chenard said adding that northern California will not be spared either
Until at least Wednesday in the bone dry wine country about 70 miles north of San Francisco winds will hit up to 65 mph in the mountain areas and 35 mph in the valleys and coast he said
POWER CUTS
Pacific Gas and Electric Company PG E N PCG said early on Tuesday that almost 600 000 more electric customers would have their power shut off starting early in the day as a fire prevention measure ahead of the wind storms
This is on top of the 970 000 customers already shut off although about half of those were restored by Monday night the company announced
As of early Tuesday the Kincade fire had scorched more than 74 000 acres destroyed 123 homes and other structures and was 15 percent contained as it burned across parts of Sonoma County s picturesque wine country state fire officials said
The governor said he was confident that firefighters had secured enough perimeters around the Kincade fire that it no longer posed an imminent threat to two communities north of Santa Rosa although he conceded the fight was not over
The so called Getty fire covered more than 600 acres in the scrub covered hills around Interstate 405 near some of the city s most expensive homes
It destroyed eight structures and was 5 percent contained officials said
The Getty fire prompted the University of California at Los Angeles about 2 miles 3 km from the Getty Center to close for the day along with a number of public schools
Los Angeles Fire Chief Ralph Terrazas said his firefighters had told him they were literally overwhelmed in the early hours of the Getty fire They had to make some tough decisions on which houses they were able to protect
Los Angeles Mayor Eric Garcetti told a news conference property losses could rise urging residents in the mandatory evacuation zone which encompasses more than 10 000 homes and businesses to get out quickly
The cause of the Kincade fire in Sonoma County where 190 000 people were ordered to evacuate remained under investigation |
PCG | California fire threatens PG E s plan to raise 14 billion | By Jim Christie
SAN FRANCISCO Reuters A wildfire raging in California threatens to destroy more than homes and businesses it could also undermine bankrupt PG E Corp s N PCG plan to raise 14 billion to finance the crisis stricken utility s turnaround plan
If the fire becomes large enough investors could walk away from their commitment to finance the California power utility s bankruptcy plan That would put in doubt the company s plan to provide up to 8 4 billion to victims of past fires blamed on the company s equipment
In Sonoma County north of San Francisco the Kincade Fire has burned more than 75 000 acres in PG E s service area since breaking out on Oct 23 forcing evacuation orders for some 180 000 people
The fire has destroyed 124 structures and more than 90 000 are threatened amid strong winds and dry weather according to CalFire California s fire fighting agency
The number of structures destroyed is key to PG E s bankruptcy exit plan Any fire this year caused by PG E that destroys more than 500 homes or commercial structures would trigger a clause in the financing agreement that would allow investors to back out The agreement has a similar termination clause for next year
PG E said in court filings last week it has agreements to sell 14 billion of stock to affiliates of investment firms such as Abrams Capital Management LP Knighthead Capital Management LLC and Soros Fund Management
The cause of the Kincade Fire has not been determined But it ignited near a broken wire on a PG E transmission tower raising concerns that the company s equipment may again be to blame for a massive wildfire
The San Francisco based power producer in January filed for Chapter 11 bankruptcy protection anticipating its liabilities from massive wildfires in 2017 and 2018 blamed on its equipment could top 30 billion
One of the blazes November s Camp Fire leveled the town of Paradise and destroyed more than 14 000 structures in the deadliest and most destructive in California s modern history
PG E s main priority in its bankruptcy is paying thousands of wildfire victims which it expects to do with 34 billion in debt financing and its 14 billion in equity commitments
Wildfire victims have rejected PG E s plan and back a competing proposal by a group of the company s bondholders
Several investment firms that have committed to buy PG E stock declined to comment or did not respond to requests for comment
A principal at one firm however said the firms are standing by their commitments noting they could simply choose to waive the termination clause even if the number of structures destroyed by the Kincade Fire tops 500
Losses from the blaze so far appear small and a determination on its cause could be some time off he added
It took state investigators over a year to determine that PG E was not at fault for October 2017 s Tubbs Fire which struck Santa Rosa California and was the state s most destructive wildfire until the Camp Fire
PG E spokesman James Noonan said the company and state authorities are only beginning to investigate what triggered the Kincade Fire
It s too soon for us to be talking about an event for which there is no official cause he added
Shares of PG E Corp closed up more than 32 percent at 5 03 after a sharp selloff in recent days triggered by the Kincade Fire |
PCG | PG E to offer 13 5 billion in compensation to wildfire victims Bloomberg | Reuters Bankrupt California power producer PG E Corp is offering 13 5 billion in compensation to wildfire victims as part of a restructuring plan Bloomberg reported on Monday citing people with knowledge of the situation The same amount has been offered to the victims by a rival group of noteholders led by Pacific Investment Management Co and Elliott Management Corp according to the report PG E sought Chapter 11 bankruptcy protection in January after massive wildfires struck Northern California in 2017 and 2018 which were blamed on its equipment A lawyer for the committee of wildfire victims said last month their claims may be worth 13 5 billion Reuters reported PG E had previously proposed to provide 8 4 billion in compensation but the victims sided with the noteholders in the hopes of getting more money PG E and the victims were in talks on Monday Bloomberg reported
PG E did not immediately respond to Reuters request for a comment |
XOM | Exxon to invest 20 billion on U S Gulf Coast refining projects | By Ernest Scheyder
HOUSTON Reuters Exxon Mobil Corp N XOM the world s largest publicly traded oil producer said on Monday it would invest 20 billion through 2022 to expand its chemical and oil refining plants on the U S Gulf Coast
The investments at 11 sites should create 35 000 temporary construction jobs and 12 000 permanent jobs Chief Executive Darren Woods said in a speech at CERAWeek the world s largest gathering of energy executives
Some of the expansions began in 2013 but the scope of the project is now growing and the timeline extended Exxon said
Woods ran Exxon s refining division before becoming CEO two months ago and the new spending benefits a sector with which he has significant experience and comfort Investments in the high margin projects should help ease concerns from Wall Street that Exxon s growth potential especially in oil and gas exploration and production is sliding
Exxon Mobil is building a manufacturing powerhouse along the U S Gulf Coast Woods said These businesses are leveraging the shale revolution to manufacture cleaner fuels and more energy efficient plastics
The investments across Texas and Louisiana will take advantage of cheap shale gas to make plastics and other chemicals for export The strategy builds on prior steps Exxon and peers including Dow Chemical Co N DOW have taken in the wake of the American shale expansion which sharply cut production costs
The supply is here The demand is there We want to keep connecting those dots Woods said
Exxon last month pledged to boost this year s spending by 16 percent to expand operations especially in shale production after the company posted a better than expected quarterly profit helped by rising oil prices and lower costs
U S President Donald Trump who tapped former Exxon CEO Rex Tillerson for secretary of state praised the company s spending plans as an example of a true American success story Most of the permanent jobs are expected to pay more than 100 000 per year
This is exactly the kind of investment economic development and job creation that will help put Americans back to work Trump said
When asked if Trump was taking credit for an investment program that began under former President Barack Obama in 2013 White House spokesman Sean Spicer said that Exxon made it clear to the president it was investing more in the United States because of his push for fewer regulations and tax relief
The bulk of the expansion will take place in Beaumont Texas with plans to expand polyethylene production oil refining capacity and liquefied natural gas exports
Exxon also will increase its lubricant manufacturing capacity and potentially build a new refinery to produce ethane a key building block for chemical production
CLIMATE CHANGE
Woods spent the larger part of his speech discussing climate change an area for which Exxon has come under attack in the past year The global economy can grow while also improving the climate he said
I believe the assumption that affordable energy and a cleaner environment are a zero sum game is mistaken he said It underestimates the power of technology
Woods highlighted Exxon s research into carbon capture sequestration biofuels and other areas as ones helping the company expand its operations beyond oil and gas
The only way to keep winning in a competitive market is to keep innovating he said
Hoping to stem at least some of the environmental controversy Exxon in January just after Woods became CEO named an environmentalist to its board of directors |
CSCO | Cisco CSCO Stock Dips On Revenue Decline | Cisco Systems Inc NASDAQ CSCO just released its fourth quarter and full fiscal year 2017 financial results posting earnings of 0 55 per share and revenues of 12 13 billion Currently Cisco is a Zacks Rank 3 Hold and is down 2 60 to 31 50 per share in after hours trading shortly after its earnings report was released
Cisco Systems Inc CSCO
Met earnings estimates The company posted earnings of 0 55 per share which excludes 0 07 from non recurring items matching the Zacks Consensus Estimate of 0 55 per share
Met revenue estimates The company saw revenue figures of 12 13 billion billion meeting our consensus estimate of 12 13 billion
Cisco reported that its total fourth quarter revenues were down 4 year over year while product revenue dipped by 5 from the year ago period The company s revenues in North and South America dropped by 6
Cisco s quarterly earnings fell by 3 year over year The company s quarterly operating cash flow rose 5 from the year ago period to 4 billion
The San Jose California based company reported full year fiscal 2017 revenue of 48 billion which marked a decrease of 2 from fiscal 2016
Cisco s reported full year fiscal 2017 GAAP earnings 1 90 which is flat from full year fiscal 2016 On a non GAAP basis the company s earnings rose 1 to 2 39 a share
Cisco projects that its first quarter 2018 revenues will decline between 1 and 3 year over year The company expects GAAP earnings of 0 48 a share to 0 53 a share and Non GAAP ESP of 0 59 to 0 61
We had another strong quarter and a transformative year CEO Chuck Robbins said in a statement
We made tremendous progress transitioning our business to more software and recurring revenue and delivered on our commitment to accelerate innovation in our core and across the portfolio The network has never been more critical to business success and we are building the network of the future
Here s a graph that looks at Cisco s Price Consensus and EPS Surprise history Cisco Systems Inc Price Consensus and EPS Surprise Cisco Systems Inc is the worldwide leader in networking for the Internet Cisco s Internet Protocol based networking solutions are the foundation of the Internet and most corporate education and government networks around the world Cisco provides the broadest line of solutions for transporting data voice and video within buildings across campuses or around the world
Check back later for our full analysis on Cisco s earnings report
The Hottest Tech Mega Trend of All
Last year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
XOM | The Zacks Analyst Blog Highlights Rice Energy Schlumberger Exxon Mobil TransCanada And Petrobras | For Immediate Release
Chicago IL September 28 2016 Zacks com announces the list of stocks featured in the Analyst Blog Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets Stocks recently featured in the blog include Rice Energy Inc NYSE Schlumberger Ltd NYSE Exxon Mobil Corp NYSE XOM NYSE TransCanada Corp NYSE and Petrobras NYSE
Today Zacks is promoting its Buy stock recommendations
Here are highlights from Tuesday s Analyst Blog
Oil Gas Stock Roundup
It was a week which saw oil prices retest the psychologically important 45 per barrel level while natural gas futures briefly climbed to a 20 month high
On the news front domestic energy explorer Rice Energy Inc NYSE has struck a deal to buy fellow independent Vantage Energy for approximately 2 7 billion while oilfield services major Schlumberger Ltd NYSE won a huge new contract with Venezuela s state oil company
Overall it was a good week for the sector West Texas Intermediate WTI crude futures added 2 to close at 44 48 per barrel while natural gas prices edged up by a meagre 0 2 to 2 955 per million Btu MMBtu See the last Oil Gas Stock Roundup here
Oil prices notched up a weekly gain after the U S Energy Department s inventory release showed that crude stockpiles recorded a surprise drop As per the federal government s EIA report oil inventories decreased by a massive 6 2 million barrels for the week ending Sep 16 2016
A relatively strong refining activity for this time of year led to the big stockpile drawdown with the world s biggest oil consumer Following the third consecutive unexpected weekly inventory decline the current supplies at 504 6 million barrels are at their lowest level in 7 months
Apart from the bullish government data oil prices were also supported by the decision by Federal Reserve not to raise interest rates As widely expected the U S central bank opted to leave the current 0 25 0 50 rate unchanged This led to dollar weakness that made the greenback priced crude more affordable for investors holding foreign currency
The commodity was also helped by heightened expectations that prominent oil producing countries may make headway on a production freeze deal Statements made by various members of OPEC over the weekend suggested that an agreement could be arrived at
Meanwhile natural gas eked out a miniscule gain following another below average build the 20th in a row which further narrowed the supply overhang But to a large extent this was offset by predictions of tepid demand with sudden change in forecasts that showed cooler weather ahead
Recap of the Week s Most Important Stories
1 Upstream energy player Rice Energy Inc recently announced its decision to acquire Vantage Energy for roughly 2 7 billion including debt
The acquisition likely to conclude by the fourth quarter will provide Rice Energy access to 231 000 net acres in the Marcellus and Ohio Utica with roughly 1 164 drilling locations Following the deal the company has increased its 2016 exploration and production capital budget to 735 million from 660 million
During the second quarter net production from the assets came in at 399 million cubic feet equivalent per day Rice Energy added that it will drop down a part of the acquired midstream properties which include 30 miles of dry gas gathering and compression properties to Rice Midstream Partners LP for a consideration of 600 million
2 Oilfield services provider Schlumberger Ltd has been contracted for a major drilling project in Venezuela The said pact is for one of the world s largest drilling projects for Venezuela s national oil company Petroleos de Venezuela S A or PDVSA Reportedly the latter is planning to drill a total of 480 new wells in the Orinoco region targeting an extra 250 000 barrels of oil per day over the next 30 months
Per the agreement Schlumberger will be responsible for drilling 80 wells in an extra heavy oil field in the Orinoco Belt as part of a 3 2 billion project It is to be noted that Schlumberger will be the only public company among the three contractors for the major project
This project is quite an exception to Schlumberger s recent strategy of cutting back on its projects in Venezuela due to worsening payment delays by PDVSA Also since 2014 the company has shed more than 500 million in Venezuelan assets Read more
3 U S supermajor Exxon Mobil Corp s NYSE 2 5 billion bid to acquire Singapore s InterOil Corp was approved by the shareholders of the latter The merger which required approval by two thirds of InterOil shareholders saw more than 80 of the shareholders vote in favor of the proposed transaction Exxon Mobil currently carries a Zacks Rank 3 Hold You can see
In Jul Exxon Mobil had placed a bid for InterOil to enhance its liquefied natural gas position in Papua New Guinea Exxon Mobil had managed to outbid French energy giant Total SA PA TOTF backed Oil Search s offer of about 2 2 billion to buy part of InterOil s stake in the potentially lucrative Elk Antelope gas field The bidding war came to an end as Oil Search abandoned its pursuit of InterOil owing to a weaker balance sheet than its rival
With the deal receiving the approval of InterOil shareholders the merger is left with only its final hurdle the transaction needs to be okayed by the Supreme Court of Yukon where InterOil is established After this approval Exxon Mobil which now has a 33 share of the Papua New Guinea liquid natural gas project will receive an additional 36 5 stake as part of the merger Read more
4 Major North American energy infrastructure company TransCanada Corp NYSE announced that it has offered 848 million to buy Columbia Pipeline Partners L P the master limited partnership affiliate of its newly acquired Columbia Pipeline Group Inc unit
The Canadian oil company also announced its intention to take control of the other 53 8 million outstanding units in Columbia Pipeline Partners for 15 75 per common unit The offer signifies a premium of about 3 over the limited partnership closing price of 15 30 on Sep 23 2016
In Jul TransCanada purchased the Columbia Pipeline Group Inc unit for 13 billion which included debt of 2 8 billion The Canadian pipeline operator has been reviewing its strategic options for its master limited partnership holdings ever since
5 Brazil s troubled state run energy giant Petrobras NYSE declared a steep cut its capital spending budget for the period 2017 21 The company also announced its intention to accelerate disposal of assets over the same duration
The largest integrated energy firm in Brazil reduced its five year capital budget for the 2017 21 period by nearly 25 or 24 3 billion to 74 1 billion Of the total 82 5 will be allocated toward E P activities The company had projected capital budget of 98 4 billion at the beginning of this year Notably the previous estimation was also lower than 130 3 billion declared in 2015
For the 2015 16 period Petrobras reaffirmed plans of asset sales worth as much as 15 1 billion The company intends to raise an additional 19 5 billion through divestments and partnerships between 2017 and 2018 Petrobras also foresees sale of assets worth 40 billion over the next 10 years Through these divestments the company intends to reduce debt and exit from peripheral businesses such as biofuels fertilizers and petrochemicals to focus on the most profitable deep water projects Read more
Today Zacks is promoting its Buy stock recommendations
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XOM | Crude Oil Spikes 4 8 On OPEC Agreement To Cut Oil Output | On Wednesday crude oil futures saw a nice boost spiking 4 88 to 46 85 per barrel in late afternoon trading after it was announced that OPEC had reached an agreement to cut its oil output for the first time since 2008
Today s crude oil bump however is still well below the highs seen back in 2014 where oil was going for over 100 a barrel
Sources told that the group would reduce output to 32 5 million barrels per day bpd from current production of 33 24 million bpd
Leaders of OPEC or the Organization of Petroleum Exporting Countries have spent the last two days in Algiers discussing the potential for a cut in oil output According to the the meeting was a direct result of Iran saying it would be open to considering capping its total output at 4 million bpd which is an increase from the current 3 6 million a day said Iran s oil minister Bijan Zanganeh
However Saudi Arabia a leading member of OPEC is in favor of a plan that would slash nearly 1 million bpd of oil from the overall market over the next year as well as require Iran to hold its production at around 3 7 million bpd a proposition Mr Zanganeh has soundly rejected the WSJ continues
While this resolution of sorts means good things for the energy industry boosting economies of oil rich countries and brightening business prospects of oil giants it only means higher prices at the pump for consumers
Other companies in the industry seeing a boost today include Exxon Mobil Corp NYSE XOM up around 4 3 in late afternoon trading as well as Royal Dutch Shell LON RDSa and BP LON BP Plc NYSE BP up 3 08 and 3 45 respectively The VelocityShares 3x Long Crude Oil an ETF that is composed entirely of WTI crude oil futures was up big today too gaining almost 15 at one point Wednesday |
XOM | The Zacks Analyst Blog Highlights Exxon Mobil Royal Dutch Shell BP And VelocityShares 3x Long Crude Oil | For Immediate Release
Chicago IL September 29 2016 Zacks com announces the list of stocks featured in the Analyst Blog Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets Stocks recently featured in the blog include Exxon Mobil Corp NYSE XOM NYSE Royal Dutch Shell LON RDSa NYSE BP LON BP Plc NYSE and VelocityShares 3x Long Crude Oil NYSEARCA
Today Zacks is promoting its Buy stock recommendations
Here are highlights from Wednesday s Analyst Blog
Crude Oil Spikes 4 8 on OPEC Agreement to Cut Output
On Wednesday crude oil futures saw a nice boost spiking 4 88 to 46 85 per barrel in late afternoon trading after it was announced that OPEC had reached an agreement to cut its oil output for the first time since 2008
Today s crude oil bump however is still well below the highs seen back in 2014 where oil was going for over 100 a barrel
Sources told that the group would reduce output to 32 5 million barrels per day bpd from current production of 33 24 million bpd
Leaders of OPEC or the Organization of Petroleum Exporting Countries have spent the last two days in Algiers discussing the potential for a cut in oil output According to the the meeting was a direct result of Iran saying it would be open to considering capping its total output at 4 million bpd which is an increase from the current 3 6 million a day said Iran s oil minister Bijan Zanganeh
However Saudi Arabia a leading member of OPEC is in favor of a plan that would slash nearly 1 million bpd of oil from the overall market over the next year as well as require Iran to hold its production at around 3 7 million bpd a proposition Mr Zanganeh has soundly rejected the WSJ continues
While this resolution of sorts means good things for the energy industry boosting economies of oil rich countries and brightening business prospects of oil giants it only means higher prices at the pump for consumers
Other companies in the industry seeing a boost today include Exxon Mobil Corp NYSE up around 4 3 in late afternoon trading as well as Royal Dutch Shell NYSE and BP Plc NYSE up 3 08 and 3 45 respectively The VelocityShares 3x Long Crude Oil NYSEARCA an ETF that is composed entirely of WTI crude oil futures was up big today too gaining almost 15 at one point Wednesday
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PCG | PG E says more potential power cuts could hit about 209 000 customers | Reuters PG E Corp N PCG said on Monday about 209 000 customers could be hit by potential power cutoffs this week less than two weeks after its most recent unprecedented shut offs hit more than 730 000 homes and workplaces in northern California
The bankrupt Californian power producer said the latest cuts were intended to avoid its equipment sparking wildfires in hot weather
This afternoon the company began its 48 hour advance notifications to customers that it may be proactively turning power off for safety and conducting a Public Safety Power Shutoff PSPS on late Wednesday evening it said
The power cutoffs may affect 15 California counties and are likely to be much smaller in scope than the Oct 9 12 PSPS event the company said
It activated its emergency operations on Sunday night because of a possible strong and dry offshore wind
The primary phase of weather risk was expected to last about 18 to 24 hours from Wednesday evening through the middle of Thursday PG E had said on Sunday
The company s handling of recent power outages has been criticized for being too widespread with insufficient communication with customers
The outages are the latest in a string of events for which PG E has been widely criticized The utility filed for bankruptcy in January citing potential civil liabilities in excess of 30 billion from major wildfires linked to its transmission wires and other equipment
The notifications to customers about the upcoming power cutoffs left many of them frustrated with some complaining on social media
I just got notified PG E may turn off my power again this Wednesday They just turned it off 10 days ago for 3 days This can t go on Power is a necessity not a luxury a customer said on Twitter
Another resident tweeted It s causing anxiety and money every single time I work from home and this is impacting my ability to do my job |
VZ | Connecting Africa To The World | Africa is the most promising investment destination of the next 20 years And it won t be foreign development aid or Western generosity that makes the continent boom but rather the doggedness and ingenuity of its own people As an investor you want to be part of this by owning shares of some of Africa s world class companies
Looking at Africa today you see the same pioneering spirit that defied all odds to settle the American West in the late 1800s Consider a phone and internet infrastructure company based in southern Africa Liquid has done something that no Western company would have the audacity to do String fiber optic cable from South Africa through Botswana and Zimbabwe and across the Zambezi river into Zambia a landlocked country deep in Africa s interior All work had to be completed by day as using work lights attracts wild animals and a section of cable was dug up by elephants and had to be reburied These are not problems faced by Verizon NYSE VZ or AT T NYSE T to say the least
Liquid unfortunately is not a publically traded company But my favorite play on the rise of Africa most certainly is South African mobile phone operator MTN Group Ltd JO MTNJ which trades in the U S under the OTC ticker symbol MTNOY
MTN Group can be thought of as Africa s AT T or Verizon Wireless It is headquartered in South Africa but it has more than 200 million customers spanning 22 countries across Africa and the Middle East And roughly a quarter of its subscribers are from Nigeria Africa s largest economy and one of its fastest growing
Why invest in African mobile phones Let me count the reasons
The mobile phone is the single most important possession of the emerging global middle class We may think of our phones as primarily a source of entertainment But in much of the developing world a mobile phone is a vital lifeline to the connected world and even an important medium for money transfers Africa will have its booms and busts along the way but I do not see demand for mobile services abating any time in the foreseeable future
Looking at the fundamentals there is a lot to like about MTN Group stock Revenues and earnings are up by more than a third since 2008 a period in which growth has been hard to come by in most markets MTNOY trades at a reasonable price earnings ratio of 14 5 and pays a respectable growing dividend currently yielding 4 6 In the past five years it has grown its dividend by about 40 Though fair warning Exchange rates can skew ADR payouts
Is there anything not to like here
Well first I should state the obvious MTN Group is based in Africa and does business in the world s most dangerous hotspots It s a leading provider in Syria and Iran for crying out loud This is a company that is constantly exposed to macro risk
But it s also a company that has proven very capable of operating in those environments over its history There could be short term bumps but overall MTNOY should be able to navigate whatever unexpected surprises come its way And its willingness to jump into markets that would give most executives heartburn gives it a first mover advantage in the countries with the fastest potential growth rates
Currency fluctuations are also a problem and weakness in the South African rand have been a major drag on the returns of U S investors But here too I expect to see improvement The rand is one of the cheapest currencies in the world according to the U S investors should get a nice one two punch in the next year a rising stock price in South Africa combined with a rising currency value should make the U S traded ADR shares a solid performer
Disclosure Charles Lewis Sizemore CFA is the editor of and chief investment officer of the investment firm Sizemore Capital Management |
VZ | Africa Is The New China | Africa is the most promising investment destination of the next 20 years And it won t be foreign development aid or Western generosity that makes the continent boom but rather the doggedness and ingenuity of its own people As an investor you want to be part of this megatrend by owning shares of some of Africa s world class companies
I ve made no secret of the fact that I m a major Africa bull over the long term and I m serious when I say that Africa is the new China With Chinese labor costs rising and with India a chronic dysfunctional mess the African continent is the only large geographic bloc with the potential for Chinese like growth in the decades ahead It s the last major investment frontier
African growth is real Per capita GDP has more than doubled in the past decade And 7 of the 10 fastest growing countries in the world are in Africa The Economist noted last year that Lion Economies such as Ghana and Rwanda are reminiscent of Asian Tiger Economies South Korea and Taiwan at an earlier stage of development
Importantly for my investment thesis Africa is developing a robust middle class for the first time in its history According to estimates by the African Development Bank and the World Bank Africa s middle class is already well over 300 million people or about a third of the population It s a block of consumers comparable in size to the middle classes of China and India More conservative estimates put the number closer to 120 million people but we don t need to split hairs Whichever estimate you use we re talking about a lot of consumers
Of course not all African consumers spend their days sipping lattes and playing on iPads Africa is a frontier market in the truest sense of the word much of the continent is at a very low level of development But the companies investing there today are the ones that will deliver a massive payoff for their investors down the road
In his history of the world Why the West Rules For Now Ian Morris writes about the advantage of backwardness and the logic applies to Africa today When you are starting at zero and let s face it much of sub Saharan Africa is about as close to zero as you can get you have little in the way of sunk costs and legacy technology to deal with You can leapfrog existing technology and embrace the new Why would you invest billions of dollars stringing phone lines across your country when you can skip that step altogether and just build cheaper cell towers
Looking at Africa today you see the same pioneering spirit that defied all odds to settle the American West in the late 1800s Consider a phone and internet infrastructure company based in southern Africa Liquid has done something that no Western company would have the audacity to do string fiber optic cable from South Africa through Botswana and Zimbabwe and across the Zambezi river into Zambia a landlocked country deep in Africa s interior All work had to be completed by day using work lights attracts wild animals you see and a section of cable was dug up by elephants and had to be reburied These are not problems faced by Verizon NYSE VZ or AT T NYSE T to say the least
Liquid unfortunately is not a publically traded company But my favorite play on the rise of Africa most certainly is South African mobile phone operator MTN Group JO MTNJ trading in the U S as OTC MTNOY
MTN Group can be thought of as Africa s AT T or Verizon Wireless It is headquartered in South Africa but it has more than 200 million customers spanning 22 countries across Africa and the Middle East And roughly a quarter of its subscribers are from Nigeria Africa s largest economy and one of its fastest growing
Why invest in African mobile phones Let me count the reasons
The mobile phone is the single most important possession of the emerging global middle class We may think of our phones as primarily a source of entertainment But in much of the developing world a mobile phone is a vital lifeline to the connected world and even an important medium for money transfers Africa will have its booms and busts along the way but I do not see demand for mobile services abating anytime in the foreseeable future
Looking at the fundamentals there is a lot to like about MTN Group stock Revenues and earnings are up by more than a third since 2008 a period in which growth has been hard to come by in most markets MTNOY trades at a reasonable price earnings ratio around 16 and pays a respectable growing dividend currently yielding 3 8 In the past five years it has grown its dividend by about 40 Fair warning Exchange rates can skew ADR payouts
Currency fluctuations are a problem and weakness in the South African rand have been a major drag on the returns of U S investors But here too I expect to see improvement The rand is one of the cheapest currencies in the world according to the U S investors should get a nice one two punch in the next year a rising stock price in South Africa combined with a rising currency value should make the U S traded ADR shares a solid performer
It s time to ring up profits in MTNOY this ace performer is ready to take advantage of the last great economic frontier
Disclosure Charles Lewis Sizemore CFA is the editor of and chief investment officer of the investment firm Sizemore Capital Management |
XOM | CEO Tillerson faces internal skeptics crisis battling White House | By Lesley Wroughton and Yeganeh Torbati WASHINGTON Reuters One of Rex Tillerson s first directives as U S secretary of state was an order to senior staff that his briefing materials not exceed two pages It was a reflection of Tillerson s management style honed at the helm of Exxon Mobil NYSE XOM an oil company known for its relentless focus on efficiency and one reason his closest aides at the State Department refer to him as the CEO rather than the Secretary More than a dozen current and former U S officials familiar with briefing procedures said Tillerson s predecessors would typically request far more detailed information His aide R C Hammond said the directive reflected Tillerson s focus on key facts rather than lack of interest in finer points of foreign policy He is asking people to be efficient with their information Hammond said adding that if Tillerson needed more information he would ask for it He is a decision maker and he needs the facts in front of him As a first time government official with no prior diplomatic experience Tillerson faces close scrutiny over how successful he will be in managing both the State Department bureaucracy and its relations with Donald Trump and his administration Senior State Department officials who have attended meetings with Tillerson say they find him sociable and a man of substance whose direct manner and probing questions reflect his training as an engineer seeking to solve problems rather than play politics The veteran oil executive also made a good impression on his first foreign trip to a Group of 20 summit in Bonn Germany last week Four senior diplomats who met him told Reuters they were relieved to find that he was pragmatic and open to dialogue Yet a key concern for U S diplomats is how effective his team can be in shaping foreign policy in the new administration Just two State Department positions of 116 key posts requiring executive branch nomination have been filled according to the nonpartisan Partnership for Public Service Tillerson s and that of U S ambassador to the United Nations For example Tillerson still has no deputy after Trump rejected his top choice Elliott Abrams People want to back him one veteran senior official said about the former Exxon Mobil boss But people are feeling that this building is being stripped said the official referring to a sense that with so many top positions vacant the State Department is not fully equipped to help make policy in the new administration There is also unease over possible deep staff cuts and the future of some departments Two people said employees in the Bureau of Management and Resources were told to apply for other positions within the State Department Hammond Tillerson s aide said no decision had been taken to close that division IN OR OUT OF THE LOOP On one recent matter of longstanding U S foreign policy Tillerson appeared to be sidelined On Feb 14 while Tillerson was at a dinner with Israeli Prime Minister Benjamin Netanyahu in a State Department dining room news headlines emerged suggesting the United States was backing away from supporting a two state solution for Israelis and Palestinians The two state solution is the bedrock of the international community s policy for a settlement between Israel and the Palestinians but Trump suggested last week he was open to abandoning it if both sides agree No one had been informed of any changes in policy and the Secretary was about to leave on his first major trip said one senior State Department official referring to Tillerson s visit to Bonn Tillerson s acting deputy Tom Shannon also did not take part in Trump s meeting with Netanyahu at the White House the following day when his boss was on his way to Europe according to one U S official It was unclear whether Tillerson had been left out of the loop deliberately or by accident said two officials A White House official told Reuters he did not know whether Tillerson was briefed in advance In response to broader concerns about communication between the State Department and the new administration he said both coordinated very well There are open lines of communications in both directions the official who declined to be named said The White House and the State Department coordinate closely across a full range of issues that concern both organizations To be sure on another important issue Tillerson had his say in persuading Trump to back Washington s stance on One China policy which acknowledges Beijing s position that Taiwan is part of it Trump has in the past appeared to question whether the United States would continue to respect that Hammond said Tillerson was on the phone with Trump several times a day This is the general style of the president to have quick check ins with people get people s advice on things he said Information for CEOs flows up and as a former CEO Tillerson understands that Tillerson has said little publicly since he started and his aides are quick to draw a contrast between him and predecessor John Kerry a former senator and presidential candidate who reveled in extensive foreign travel and deal making Tillerson is not John Kerry it is unfair to compare the two said Hammond He will quietly go about his job as a counselor and advisor to the president For Tillerson s State Department the concern is how to maintain a similar degree of communication with an administration grappling with a succession of crises nine officials involved in foreign policy and security issues said Over the past month the White House has faced legal setbacks over its immigration orders the resignation of Trump s national security adviser and an investigation into possible links between his campaign and Russian intelligence Monday s resignation of Michael Flynn who served as Trump s national security adviser for just 24 days in particular created a vacuum at the National Security Council which acts as a key partner for the State Department in formulating Washington s foreign policy |
XOM | Exclusive Algeria s Sonatrach in talks to begin offshore drilling source | By Lamine Chikhi ALGIERS Reuters Algeria s Sonatrach wants to start offshore oil drilling and has begun discussions with U S operators Exxon Mobil Corp N XOM and Anadarko N APC as well as Italy s Eni MI ENI a source at the state energy company told Reuters on Sunday The North African OPEC member nation has struggled to attract oil investment in recent years because of tough terms that have made foreign companies wary Sonatrach last year began a more flexible approach to bilateral talks with foreign partners Low oil prices have also pressured Sonatrach prompting it to focus on developing production at more mature fields in the southern Sahara and bringing online delayed gas projects Offshore drilling could offer another area for growth Seismic operations carried out by Sonatrach have shown an interesting potential in the areas including Bejaia and Oran said the source who asked not to be identified Bejaia is an eastern port and Oran is a port city in western Algeria Algeria needs the know how and expertise of major international firms to launch offshore drilling the source said Foreign partners including Anadarko Exxon Mobil and Eni were invited by Sonatrach to provide technical assistance given the experience they acquired in the Gulf of Mexico and deep water in Mozambique the Sonatrach source said The offshore is complementary to our operations in the south It will also contribute to boosting our output the source said The source did not give any information on the timing or scale of any offshore projects Such details including when the drilling will start are expected to be announced soon by Sonatrach s leadership the source said Algeria s earnings from oil and gas fell to 27 5 billion in 2016 from 35 7 billion in 2015 and more than 60 billion in 2014
Algeria s oil output was previously estimated at 1 1 million barrels per day bpd but it has cut production by 50 000 bpd under an agreement between OPEC and non OPEC producers aimed at raising crude prices |
XOM | Exclusive Iraq s Kurdistan negotiates new terms raises oil pre payments to 3 billion | By Dmitry Zhdannikov LONDON Reuters Iraq s Kurdistan has increased the loans guaranteed by future oil sales to 3 billion in new deals with trading houses and Russian state oil firm Rosneft aimed at strengthening its fiscal position as the semi autonomous region fights Islamic State Kurdistan s natural sources minister Ashti Hawrami told Reuters new debt talks concluded in recent weeks gave the region grace periods of between 3 and 5 years for repaying the debt The deals also increased total borrowing to around 3 billion He did not give the size of the debt before the latest round of talks but some of it dates from 2014 and 2015 Trading houses have been pre financing Kurdish oil exports for the past two years on a fairly short term basis after the government in Erbil decided to start independent oil exports via Turkey s Mediterranean terminals Now traders will loan money to Kurdistan for several years Rosneft became a lender last week Kurdistan says it needs to export oil independently as Baghdad has not paid Erbil its budget share just as the region needs money to fight Islamic State and host Syrian refugees Baghdad has said it would sue buyers of Kurdish oil arguing that the central government was the only legal exporter The new Baghdad government has softened its stance however as it cooperated with Erbil against Islamic State in Mosul This helps our economic independence although it is important to understand that this cannot be achieved just by oil revenues and higher oil prices We also need to press on with our economic reforms Hawrami said in an interview in London We have learnt a lot from the oil price shock the costs of fighting ISIS and the burden of some 1 8 million refugees coming to our territory Reform is a must we have a lot of debts to deal with He declined to name the trading houses but market sources have previously identified Vitol Petraco Glencore L GLEN and Trafigura as buyers of Kurdish barrels Last week Glencore confirmed it had concluded deals for Kurdish oil The other trading houses do not comment on their dealings with Kurdistan and Rosneft did not give any details on the size of the deal Hawrami said the deals would serve as a hedge against an oil price slide for several years Previous deals with trading houses have usually lasted 6 12 months It is also positive for the traders as they don t have to renegotiate their contracts every six months said Hawrami It strengthens our fiscal situation It means we can pay more regularly to the international oil companies working in Kurdistan and we can invest some money in expanding our oil infrastructure he said Kurdistan s finances suffered badly during the oil price slump of 2015 2016 and it has accumulated several months of arrears to producers such as Genel L GENL DNO OL DNO and Gulf Keystone L GKP due to tight revenues and supply glitches The stocks of these companies rose on the news This year we want to avoid repeating this I m confident we will do better We know the producers needs and plans We are prioritizing not to fall behind again Hawrami said GROUND BREAKING DEAL Hawrami said the arrival of Rosneft in addition to trading houses to the marketing of Kurdish barrels was good news for the region as it gave Erbil its first big end user and opened up new markets Rosneft has refineries in Germany and India We hope Rosneft s deal will become a ground breaker for other majors he said adding Rosneft was also looking at exploration blocks in Kurdistan He also said relations with Baghdad were improving We didn t hear any negative comments from them after the deal with Rosneft They know we are selling our oil And actually if we help each other rather than hindering progress we can both achieve better prices as buyers will not be able to seek unreasonable discounts He also said the fact that Erbil was now selling some barrels for Baghdad from the northern Kirkuk field was evidence of improving relations In reality Baghdad has given us some share of oil to export So we have an arrangement that we both honor We have real cooperation and we hope to build on that he said INFRASTRUCTURE EXPANSION Kurdistan s existing pipelines can handle just over 650 000 barrels per day of exports and more investments are needed to bring that capacity to 1 million bpd including upgrading of pumping stations said Hawrami He said pipeline capacity should be expanded by the year end but production would not start rising until next year We have to be mindful about supply and demand You tell me what the oil price is going to be and I will tell you when we could reach 1 million bpd of output Investments have dried up in the last two years because of the oil price crash and attacks by ISIS he said Kurdistan is planning to offer some 20 blocks of land for exploration to investors The region took some blocks back from investors after discovering they did little exploration said Hawrami without naming the companies Some operators relinquished blocks as they were disappointed with what they found including U S oil giant Exxon Mobil N XOM which has given back three blocks out of six over the past year Hawrami said he did not see this as a set back Exxon has concluded that they will continue working on 3 blocks while on another three the potential reserves were simply not big enough for them Those blocks could suit other firms We are now looking to farm them out he said |
CSCO | Cisco Wins Temporary Victory Arista Products Faces ITC Ban | Cisco Systems Inc NASDAQ CSCO won a temporary victory in a long running patent infringement case at International Trade Commission ITC against its close rival Arista Networks NYSE ANET Notably Cisco filed the complaint 945 investigation with ITC in late 2014 alleging Arista of infringing six patents On May 5 2017 ITC issued a limited exclusion order and cease and desist order after it found that Arista s Ethernet switching products violated two patents 577 and 668 As per a recent 8K filing by Arista following disapproval by the United States Trade Representative of ITC s Final Determination in the case it is now barred from importing and selling the aforesaid Ethernet switching products in the U S However the victory may be short lived for Cisco According to the 8K filing the Patent Trial and Appeal Board PTAB has issued final written decisions invalidating all claims related to the above mentioned patents which Arista was found infringing by ITC Arista has filed emergency motions with the ITC seeking suspension of its orders pending completion of any appeals of the PTAB decisions Although Cisco has filed objections Arista s motion has received support from the Office of Unfair Importation Investigations OUII a neutral third party representing the interests of the public in ITC investigations Arista Networks Inc Revenue TTM
Cisco Arista Feud Turns Nasty Due to CompetitionWe note that Cisco has significantly underperformed Arista on a year to date basis While the networking giant gained 3 Arista returned 53 6
Cisco s underperformance reflects the impact of stiff competition it is facing from not only smaller players like Arista and Huawei but also from Facebook s NASDAQ FB Open Compute Project OCP Hence the lawsuits have significant importance for Cisco as it looks to regain market share particularly in the data center networking solutions market A ban on Arista products surely gives a competitive edge to Cisco The ban on import not only hurts Arista s gross margins domestic manufacturing costs higher but also increases lead times to customers due to redesigning of products Robust Portfolio Edge for AristaWe note that Arista has become a strong challenger to Cisco s dominant position within a short span of time owing to robust portfolio of switches and routers ably supported by the Extensible Operating System EOS EOS s fully programmable and highly modular architecture has been the key differentiator in our view Moreover Arista targets the high end data centers that require fast throughput at low cost Its high end applications are typically for the cloud data centers which have better growth prospects as compared with the enterprise data centers Meanwhile apart from intensifying competition ongoing transition to subscription based model will continue to hurt Cisco s top line growth at least in the near term The company recently provided an uninspiring long term outlook 3 5 years primarily due to these trends Zacks Rank Key PickCisco has a Zacks Rank 4 Sell while Arista carries a Zacks Rank 2 Buy However TESSCO Technologies NASDAQ TESS that sports a Zacks Rank 1 Strong Buy is a top ranked stock worth watching in the broader sector You can see Long term EPS growth for TESSCO is currently pegged at 10
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And this outperformance has not just been a recent phenomenon Over the years it has been remarkably consistent From 2000 Q1 2017 the composite yearly average gain for these strategies has beaten the market more than 11X over Maybe even more remarkable is the fact that we re willing to share their latest stocks with you without cost or obligation |
CSCO | The Internet Of Things Showdown Cisco Vs Sierra Wireless | As technology advances we are becoming more and more interested in the idea of home automation We feel that it would be great to have the lights turn on at a certain time or even have the blinds automatically go up in the morning This is called the internet of things and we are only on the tip of the iceberg
Every year it seems as though there is some new way to automate our lives While I am not going to get into the advantages and disadvantages of automation in this post I am going to talk about 2 big players in this space
Both Cisco and Sierra Wireless are in a position to benefit greatly from the internet of things But one is a better long term play than the other Which one is it Continue reading for the analysis of these two companies
Overview Of Cisco
Cisco Systems NASDAQ CSCO is a tech stalwart They were around when the tech bubble burst at the turn of the century The stock took a beating even then took a long time to recover But the company is much healthier now and is looking toward the future
The business of Cisco is manufacturing routers switches and other software for internet connectivity Since you need these devices to automate your home Cisco sees a new income stream on the horizon
As a result in 2016 they purchased Jasper Technologies which will help Cisco with processing and analytics of the internet of things
They have also partnered with the major automakers to provide high speed data transfer networking technology inside the vehicle
Recently Cisco reported earnings per share of 0 60 which beat estimates by 0 02 Revenues came in at just shy of 12 billion which beat estimates by 40 million but was a 0 5 decline compared to last year
The good news is that Cisco knew this revenue drop was coming but is expected to hit upcoming revenue numbers
As you can see Cisco is in a good place to take advantage of the internet of things
Next up is Sierra Wireless
Overview Of Sierra Wireless
Sierra Wireless Inc NASDAQ SWIR is closely related to the business of Cisco They manufacture 2G 3G and 4G modules and gateways for internet connectivity
And as with Cisco Sierra is being proactive in the internet of things space by purchasing smaller firms to cement their position as a top player in the field
Over the past few years Sierra has purchased
AnyData
In Motion
Wireless Maingate
Accel
MobiquiThings
GlobalTop Technology
By making these acquisistions Sierra Wireless is positioning itself as a pure play internet of things player who is able to not only allow for network connections but also analyze process and gather data
In its latest earnings report revenue came in at 161 million which beat estimates by 6 million and was an increase of 13 compared to the prior year Earnings per share were 0 24 which beat estimates by 0 08
For full year 2017 the outlook is good Revenue is expected to be up 10 and earnings per share up 53
So just like Cisco Sierra Wireless is on top of its game when it comes to positioning itself for the internet of things
The Internet Of Things Showdown
So with two companies poised to profit on the internet of things which is the better stock to own
Before I get into that we need to understand the market size for the internet of things Cisco estimates it is a 19 billion dollar per year market and Sierra sees over 50 billion connected devices
Forbes thinks that by 2020 the internet of things market will hit 267 billion by 2020
So there is money to made here But are these estimates too rosy I like to try to look at things from a neutral position before making an investment decision I agree there is a growing market for the internet of things
I would love to have my blinds drop based on when the sun is hitting my face when watching television And the autonomous car is a reality It might not be the norm in a few years from now but it is going to happen
But with that said I think some aspects of this new technology is more of a fad I don t see the need to have everything in your house be a smart device
And I haven t even touched on the issue with privacy concerns I refuse to have a voice assistant in my house because it is always listening and recording Sure I m not doing anything illegal but who knows how that data is being used
So there is a market for the internet of things Which stock is better positioned
Sierra Wireless is setting itself up as a main player in this field with the acquisitions it has been making As long as the market explodes for this technology Sierra is going to profit The only issue is their pricey stock
With Cisco they too are positioning themselves well to be a leader in this field But what I really like about them and why I think they are the better buy is because of diversification
If the internet of things doesn t live up to the hype or the market crashes Cisco will be OK They survived a major market meltdown in the past and they are diversified in many areas of the technology sector should this new industry not live up to the hype
This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article |
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