Thursday Morning Market Prepper
- Commodity Rally Gone
- China’s Economy Shaping Up
- Euro Zone Businesses Six-Year High
- Biggest-Ever U.S. Local Government Bankruptcy
- Fed Sticks to Gradual Rate-Hike
- Critics Smell a Lemon
- Apple Announce $1 Billion Fund
- Gold Sell-Off?
- Tesla More Than Doubles Revenue
- Tesla Plugs Older Model S
- Thumbs Up
- HSBC Posts Surprise Capital Boost
- Inside the Secret Room
- The New Profit Margin Phenomenon
- Futures up with eyes on House vote
- Healthcare bill gains traction
- Tesla says Model 3 production on track
- Facebook beats on revenues up near 50%
- WhatsApp back after global outage
- Phishing with Google Docs?
- Puerto Rico declares 'bankruptcy'
- Pyongyang rebukes China for 'betrayal'
- Apple talks $1B for U.S. manufacturing
— Option Millionaires (@OMillionaires) May 4, 2017
— Bloomberg Markets (@markets) May 4, 2017
Top Republicans are expressing optimism over today's healthcare vote in the U.S. House, while Democratic leaders blast the revised bill, noting it's not yet been analyzed by the Congressional Budget Office. The legislation comes after President Trump endorsed a plan adding $8B over five years to help fund high-risk pools and cover the cost of patients with pre-existing conditions.
The Fed kept interest rates on hold at its May meeting, but maintained expectations for further 2017 rate hikes. In a unanimous statement - the committee said it "views the slowing in growth during the first quarter as likely to be transitory" and believes the "fundamentals... remain solid." The dollar pushed higher following the news, putting pressure on gold and oil.
With its creditors at its heels and coffers depleted, Puerto Rico has sought what is essentially bankruptcy relief under PROMESA, a federal law enacted last summer. According to the island's oversight board, the territory is "unable to provide its citizens effective services," crushed by $74B in debt and $49B in pension liabilities.
Bank of Canada Governor Stephen Poloz will deliver a speech in Mexico City today at an event sponsored by a Mexican-Canadian business group, CanCham Mexico. His speech comes as the Trump administration hopes to start discussions on renegotiating NAFTA. Talks could begin as soon as this summer.
"China should no longer recklessly try to test the limitations of our patience," said the commentary released by North Korea's official news agency, warning it could trigger "grave consequences." KCNA added that China has regularly "infringed upon the strategic interests" in becoming closer to the U.S. and thus committed a "betrayal" in the process.
Protests in Caracas have claimed at least one more fatality, bringing the total number of people killed to more than 30 in several weeks of unrest. Venezuelans are taking to the streets as President Maduro begins the process of overhauling the country's constitution amid a political and economic crisis.
Marine Le Pen and Emmanuel Macron squared off last night in their final TV debate, laying bare their profoundly different visions for the country. The two clashed over security, the economy and their relationship with Europe. Campaigning will continue through Sunday, when voters hit the polls for the second round of France's presidential election.
Britain's economy picked up some steam in April after slowing in early 2017, as Markit/CIPS's Services PMI rose to a four-month high of 55.8, above all the forecasts. The news comes as Prince Philip, the 95-year-old husband of Queen Elizabeth II, step downs from royal duties. His retirement will start in the fall.
Tesla slipped 1.5% in extended trade after posting a wider-than-expected first quarter loss. However, revenues more than doubled from a year ago as record deliveries boosted sales. Tesla (NASDAQ:TSLA) also said its Model 3 remains on track to begin production in July as it spends heavily to meet the tight deadline for its mass-market sedan.
Despite posting a big earnings beat, Facebook (NASDAQ:FB) shares fell 1.5% from an all-time high, while Q1 revenue rose around 50% Y/Y to just over $8B. The company added 80M monthly users in the first three months of the year, as ad revenue soared, but investors appeared focused on its new earnings format. Facebook will no longer report adjusted figures.
Not only did the tech giant's stock take a hit last night, it appears WhatsApp (FB) was caught in the crossfire. The popular messaging service went down for a few hours, affecting users across the globe. "We have now fixed the issue and apologize for the inconvenience," WhatsApp said via email.
Phishing with Google Docs? Apparently spreadsheets make good bait. A computer attack that mimicked Google's (GOOG, GOOGL) cloud-based document software spread across U.S. news organizations and other institutions on Wednesday. Not only did the malicious link look remarkably realistic, but the email that delivered it appeared to come from someone users already know and replicated Google's login system.
Apple is starting a $1B fund to promote advanced manufacturing jobs in the United States, a sector already high on its list of priorities. "By doing that, we can be the ripple in the pond... those manufacturing jobs create more jobs around them because you have a service industry that builds up around them," Apple's (NASDAQ:AAPL) Tim Cook told Jim Cramer.
European earnings roundup: HSBC +2.7% premarket buoyed by higher interest rates, a weaker dollar and a jump in trading income. Another profit and beer volume rise boosted AB Inbev (NYSE:BUD) shares up 4% despite a headache in the U.S. and Brazil. Shell (RDS.A, RDS.B) +2.3% premarket after doubling its profits with an oil price rebound, while Statoil (NYSE:STO) handily beat estimates.
The NCAU has received a $400M payment from Credit Suisse (NYSE:CS) in connection with toxic residential MBSs that led to the failure of three credit unions during the financial crisis. That settles the 19th of 20 lawsuits the agency has filed in the last six years. Its legal recoveries related to failed corporate credit unions have already reached $5.1B.
Aetna will not sell Obamacare individual insurance plans in Virginia next year, citing "growing uncertainty" in the market and $200M in expected losses on the business this year. Aetna (NYSE:AET) already has sharply curbed its 2017 participation in the marketplace to cover just four states and left open the question of whether it will sell individual health plans anywhere next year.
Over at the Waymo/Uber courtroom, Waymo parent Alphabet (GOOG, GOOGL) has presented documents showing that UBER worked to buy a startup from engineer Anthony Levandowski while he was still working on self-driving technology at Alphabet. High stakes? Alphabet hopes the documents will help persuade a federal judge to temporarily block parts of Uber's driverless-car program.
While it resumed selling diesel cars in the U.S. last month, Volkswagen (OTCPK:VLKAY) just disclosed positive data for April. Diesels accounted for nearly 12% of sales, a sign consumer demand for such cars had not been dampened by its emissions scandal. There's still a ways to go... before the crisis, diesels accounted for about 25% of VW brand sales across America.
A ticket to watch an NFL game can be expensive, but the price tag to stream a match-up can be more outrageous: Verizon (NYSE:VZ) will reportedly pay $21M to stream just one NFL game this fall. The week-three match-up in London, between the Baltimore Ravens and Jacksonville Jaguars, will be distributed across Verizon's AOL platform, go90 and Complex.
American Airlines is further shrinking the space for passengers on its newest Boeing (NYSE:BA) 737 jetliners, allowing it to cram in more travelers. Space between most rows will be trimmed to 30 inches, an inch less than on its existing 737-800s, and at least three rows will have only 29 inches. It moves American (NASDAQ:AAL) closer to deep discounters such as Spirit (NYSE:SPR) and Frontier Airlines (Pending:FRNT).
AIG (NYSE:AIG) +1.4% AH boosting its buyback.
Facebook (FB) -1.5% AH changing its earnings style.
Fitbit (NYSE:FIT) +9% AH turning a corner?
Groupon (NASDAQ:GRPN) -13.3% as revenues shrunk.
Kraft Heinz (NASDAQ:KHC) -1.6% AH with declining U.S. sales.
Southern Co. (NYSE:SO) unmoved after strong earnings.
Sprint (NYSE:S) -14.3% missing profit estimates.
Square (NYSE:SQ) +5% AH raising its outlook.
Tesla (TSLA) -1.4% AH following a Q1 loss.
Time Warner (NYSE:TWX) flat despite topping expectations.
In Asia, Japan closed. Hong Kong -0.1%. China -0.3%. India +0.8%.
In Europe, at midday, London +0.4%. Paris +1%. Frankfurt +0.8%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude -0.9% to $47.37. Gold +1.1% to $1235.
Ten-year Treasury Yield +3 bps to 2.34%
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
8:30 International Trade
9:45 Bloomberg Consumer Comfort Index
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
4:30 Money Supply
4:30 Fed Balance Sheet