Thursday Morning Market Prepper
- Productivity Cooled
- Worse than you think
- Wolf Lessons
- Morning Movers
- Tesla Changes Its Name
- Into the ‘Right Now’
- Making Investing Great Again
- Facebook Revenue Jump
- You Never See the Best Employment Data
- Stock Picking Back?
- Futures dip ahead of data, earnings
- Merck matches profit expectations
- Macy's jumps on talk of real estate deal
- Philip Morris gains after revenue topper
- Ralph Lauren CEO resigns
- Facebook cruises through estimates
- Mexico rumors and NAFTA preparations
- European earnings roundup: DB and more
- Reckitt confirms merger talks with MJN
that shift in market rate expectations.... pic.twitter.com/asmOfAG59A
— Divyang Shah (@DShahTR) February 2, 2017
— David Gura (@davidgura) February 2, 2017
That is unusual. https://t.co/UJa4PQsdmP
— Sean Brodrick (@SeanBrodrick) February 2, 2017
Six more weeks without a rate hike? The Fed kept interest rates on hold at its January policy meeting, its first since Donald Trump assumed the presidency, but said "measures of consumer and business sentiment have improved of late." The FOMC's next policy meeting will take place on March 14-15. Meanwhile, the market is now trapped in another rate decision session, this time at the Bank of England, which will release its policy statement, minutes and inflation report. Well, it's Groundhog Day... again.
Theresa May is getting ready to publish a detailed Brexit plan in a white paper after winning a huge majority for the government's Article 50 bill in the Commons. The report will flesh out the Prime Minister's big Brexit speech at Lancaster House last month - including controlling migration and quitting the single market - and contain ministers' negotiating strategy for leaving the EU.
"It's time to bring a clear-eyed focus on foreign affairs, to take a fresh look at the world around us, and to seek new solutions grounded in very ancient truths," President Trump declared at the swearing-in ceremony of Rex Tillerson. The former Exxon Mobil (NYSE:XOM) CEO was confirmed as Secretary of State by a 56-to-43 Senate vote after early GOP reservations fizzled and a handful of Democrats joined the Republican majority.
"It is absolutely false that the president of the U.S. threatened to send troops to Mexico," said Eduardo Sanchez, spokesman for Mexico's presidential office. It followed reports stating Trump threatened to do so to stop "bad hombres down there." Meanwhile, Mexico's government has begun a formal 90-day consultation process with the nation's business community that's needed before the start of talks to revise NAFTA.
Calling Iran a "destabilizing influence" in the Middle East, National Security Adviser Mike Flynn has officially put Iran "on notice" and warned of new U.S. sanctions following the country's weekend ballistic missile test. The pronouncement marks a pivot away from the Obama administration’s policy of diplomatic engagement, which led to a 2015 multinational nuclear deal that has been denounced repeatedly by President Trump. Could a black swan be surfacing in the oil markets?
Saudi Aramco will have the right to book the kingdom's oil reserves through the IPO it plans for next year. "The reserves under the ground are by constitution owned by the state but the state will give Aramco through the concession the exclusive right to monetize those reserves," Energy Minister Khalid Al-Falih told reporters. Aramco's (Private:ARMCO) crude oil and condensate reserves were 261.1B barrels, according to its 2015 annual report.
"I'm not going to comment on these reports," said Australian Prime Minister Malcolm Turnbull in response to a Washington Post article describing a heated exchange between him and President Trump. The latter reportedly ended a weekend phone call after accusing Canberra of seeking to export the "next Boston Bombers" to the U.S. under a bilateral refugee agreement with the Obama administration. A late night tweet from Trump said he would "study this dumb deal!"
Facebook shares popped 2.3% in extended trading after the company reported earnings above analysts' expectations. Its ad business zoomed higher, as retailers poured money into snagging customers during the holiday shopping season, but at the same time, Oculus is on the hook for $500M after losing a key lawsuit. In 2016, Facebook (NASDAQ:FB) added nearly 270M users, bringing its monthly user base to 1.86B.
European earnings roundup: Deutsche Bank (NYSE:DB) -4% premarket suffering from a second full-year net loss after getting hit by legal costs. Recording falling profits, AstraZeneca (NYSE:AZN) slipped 3% before the bell as the company awaited key drug data. Shell (RDS.A, RDS.B) shares are down slightly after earnings slipped to the lowest level in more than a decade. It's a bitter pill to swallow for Novo Nordisk (NYSE:NVO), as the stock slid 6% upon lowering its outlook for 2017. Nokia (NYSE:NOK) +3% premarket after beating estimates and seeing improvement in its networks market, while Vodafone (NASDAQ:VOD) fell 1% on cautious guidance.
Sony cut its full-year profit forecast for a second time after posting quarterly earnings that missed estimates on a major writedown. Net income will be ¥26B ($23M) in the 12 months ending March, down from an already-reduced outlook for ¥60B, the company said in a statement. Sony's (NYSE:SNE) struggle to make hit movies in Hollywood led to Monday's surprise ¥112B ($1B) charge against its film business.
Samsung Electronics may build a U.S. plant to manufacture home appliances, Reuters reports, the latest global firm to consider a response to the import criticism of President Trump. Specifics such as the amount the electronics giant might invest and where the new base might be located have yet to be decided, but Samsung (OTC:SSNLF) continues to "evaluate new investment needs."
In its broadest deployment so far, IBM's Watson will be assisting H&R Block's (NYSE:HRB) 70,000 tax professionals this filing season at 10,000 branch offices across the country, where 11M people file taxes. The AI partnership will be presented during a 60-second Super Bowl television ad. It keeps with IBM's strategy for Watson - touching consumers, but through its corporate clients.
Big tech giants like Alphabet (GOOG, GOOGL), Apple (NASDAQ:AAPL), Facebook (FB), UBER, Stripe (Private:STRIP), along with a consumer packaged goods company and others industries are working together on a letter opposing President Trump's travel ban. An excerpt of the draft: "Our ability to grow our companies and create jobs depends on the contributions of immigrants from all backgrounds... In a global economy, it is critical that we continue to attract the best and brightest from around the world."
It looks like the network isn't big enough for the both of them. Tamron Hall is leaving NBC News (NASDAQ:CMCSA) as it makes way for Megyn Kelly at the 9 a.m. hour. "Tamron was offered a multi-year, multi-million dollar deal to stay at the 'Today' show and she turned it down," a source told Page Six. "People inside NBC were shocked. They expected her to stay."
Another New York AG lawsuit... Eric Schneiderman is accusing Charter Communications (NASDAQ:CHTR) of deliberately misleading its internet subscribers and failing to deliver the speeds it promised. The lawsuit alleges that Time Warner Cable (NYSE:TWX), which Charter purchased last year, knowingly promised speeds in advertisements that it knew it couldn't deliver, leaving New York consumers with buffering delays.
A South Korean court has decided to end Hanjin Shipping's (OTC:HNJSF) court receivership process and expects to declare bankruptcy on Feb. 17 after a two-week period for appeals. It made the decision as the firm's liquidation value would be worth more than its value as a going concern. Hanjin, which had been the world's seventh-largest container shipper, applied for court receivership in late August.
After selling $2.5B of Australian assets last month, Rio Tinto (NYSE:RIO) has received approaches for its remaining coal operations in the country, Bloomberg reports. Its controlling stakes in the Hail Creek and Kestrel mines, which are located in Queensland state’s Bowen Basin and mainly produce coking coal used in steelmaking, could fetch as much $1.5B.
A winning formula? Reckitt Benckiser (OTCPK:RBGLY) has confirmed $16.7B merger talks with baby food maker Mead Johnson (NYSE:MJN) to build its faster-growing consumer health business and bolster its presence in Asia. Reckitt would pay $90 a share, a 29.5% premium to Wednesday's closing share price, but it's still too early to say if there will be a deal. MJN soared almost 24% AH on the news.
It's now possible to buy and sell pot on the Toronto Stock Exchange, or make that "WEED." Canopy Growth (OTCPK:TWMJF), Canada's first marijuana unicorn, has switched to the new four-letter stock ticker. The value of marijuana stocks in Canada has swelled as shareholders bet on the legalization of recreational use and the growing acceptance of the country's burgeoning medical marijuana industry.
Alphabet's self-driving car unit is far more comprehensive and mature than its rivals, according to new statistics released by regulators. The data shows that Waymo (GOOG, GOOGL) logged 30 times more miles of testing in autonomous vehicles than all of its competitors combined last year in California. Its cars were also the most accurate, with human intervention needed for safety reasons only 0.2 times per thousand miles.
For the first time under the FAA's commercial drone rules, the agency has granted permission to operate a drone at an airport. Seven flights were conducted by 3D Robotics on Jan. 10 at Hartsfield-Jackson Atlanta International, the busiest airport in the world. The permit required three spotters to be watching the drone during its flight and to coordinate closely with air traffic control. Related stocks: AMBA, AMZN, AVAV, DJI, OTCQX:DRNE, HON, INVN, IXYS, GPRO, TRMB
Amazon plans to schedule more than 200 flight departures and landings per day at a $1.5B cargo hub it's building near Cincinnati, in a sign of the online retailer's soaring shipping ambitions. Amazon (NASDAQ:AMZN) only has disclosed leasing 40 Boeing (NYSE:BA) 767 planes to date, 16 of which are in service, but it has also been building operations at smaller airports across the country.
Altria (NYSE:MO) +0.3% squeezing out a profit.
Anthem (NYSE:ANTM) +4.3% after topping expectations.
Dominion Resources (NYSE:D) -5.8% with a soft outlook for 2017.
Facebook (FB) +2.3% AH buoyed by mobile advertising.
Metlife (NYSE:MET) -1.1% AH stung by its U.S. retail unit.
In Asia, Japan -1.2%. Hong Kong -0.6%. China closed. India +0.3%.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt -0.2%.
Futures at 6:20, Dow -0.3%. S&P -0.3%. Nasdaq -0.3%. Crude +0.5% to $54.16. Gold +.3% to $1224.40.
Ten-year Treasury Yield -1 bps to 2.46%
Today's Economic Calendar
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Productivity and Costs
8:30 Gallup Good Jobs Rate
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
4:30 Money Supply
4:30 Fed Balance Sheet