Wednesday Morning Market Prepper
- Futures are Higher after Apple Earnings
- Global Trade War?
- Dollar Rebound?
- Walmart Undercut Amazon
- Five Things For Today
- Has the Market Topped?
- UPS Blues
- Trapped Between Brexit and Donald Trump’s America
- Fed’s Message - Don’t Fret
- Trump Spoils Pharma
- Big Bet
- Futures up ahead of Fed, Apple +5%
- Dollar struggles on tough currency talk
- U.S. job adds jump to 246K in Jan.
- Apple suppliers on the move
- Macau revenue disappoints for January
- Cigarette volume falls at Altria
- Amazon plans first air cargo hub
- Trump picks Gorsuch for Supreme Court
- China factory activity still solid
US GASOLINE CONSUMPTION averaged 9.243 million b/d in Nov, up +1.44% compared with prior year, and equal to prev seasonal record set in 2006 pic.twitter.com/6L25V5tDmt
— John Kemp (@JKempEnergy) February 1, 2017
The Federal Reserve is expected to keep interest rates unchanged today in its first policy decision since President Trump took office, as the central bank awaits greater clarity on his economic policies. Trump has promised greater infrastructure spending, tax cuts, less regulations and a renegotiation of trade deals, but has offered few details or a timeline for their roll out. The FOMC decision will be released at 2 p.m. ET.
Top Japanese policymakers have hit back at President Trump's accusation of currency manipulation, stressing that Tokyo was abiding by a G20 agreement to refrain from competitive devaluations. "Japan's monetary policy is for the domestic purpose of beating deflation, and isn't done with forex in mind," said Masatsugu Asakawa, the nation's top foreign exchange official. The greenback is struggling on the news, recording its worst start to the year in three decades.
Activity levels across China's manufacturing sector continued to improve in January, continuing the stable performance seen in the second half of 2016. The official manufacturing PMI came in at 51.3, down a smidgen from 51.4 in December, but still above a 50 reading that indicates expansion. The rest of the economy also appears to be holding up well - the official non-manufacturing PMI edged up from 54.5 to 54.6.
Former UN Secretary-General Ban Ki-moon will not run for South Korea's presidency, a surprise announcement that removes a well-known figure from contention and further stirs the country's already tumultuous politics. A court is now deliberating about whether to accept Park Geun-hye's impeachment. If she's thrown out, presidential elections, originally set for December, would instead be held within two months.
India is a "bright spot" in the world economy, Finance Minister Arun Jaitley said as he unveiled his annual budget, adding that the impact on growth from the government's cash crackdown would wear off soon. Still, the finance ministry forecasts that growth could dip to as low as 6.5% in the current fiscal year to March, before picking up slightly in the coming fiscal year to between 6.75%-7.5%.
Britain's departure from the European Union will move a step closer this evening when U.K. lawmakers likely vote overwhelmingly in favor of Brexit. Attempts by the opposition to block Britain's exit are set to fail as Labour leader Jeremy Corbyn orders his MPs to vote in favor of triggering Article 50 - the two-year process by which Britain can leave the EU.
President Trump has nominated Neil Gorsuch, an appointee of President George W. Bush who serves on the tenth U.S. Circuit Court of Appeals in Colorado, to the U.S. Supreme Court. "Millions of voters said this was the single most important issue for them when they voted for me for president," he said. The conservative judge is youngest nominee to the nation's highest court in more than a quarter century, and could influence its direction for decades to come.
A top and bottom line beat for Apple! The tech giant sold over 78M iPhones in FQ1, becoming the world's top smartphone seller for the first time in half a decade. However, it cautioned that a strong U.S. dollar could weigh on revenues this coming period. Apple's (NASDAQ:AAPL) services business - which includes App Store sales, music and payments services - also continued to boom, with revenues in the segment jumping 18% from a year ago to $7.2B. AAPL +3% premarket.
Looking to accommodate its growing fleet of planes, Amazon (NASDAQ:AMZN) plans to invest $1.5B to build a large air cargo hub in northern Kentucky, signaling an expansion into transporting, sorting and delivering its own packages. The move, which is expected to create more than 2,000 jobs, will lessen its dependence on traditional carriers, including UPS and FedEx (NYSE:FDX), both of whose largest hubs are nearby.
Facebook is creating an app for television set-top boxes, including Apple TV (AAPL), giving it a home for video content - as well as a new vehicle for video advertising. Facebook (NASDAQ:FB) is also in discussions with media companies to license long-form, TV-quality programming, WSJ reports. A set-top box app would be a natural way to distribute that "premium" content and make it accessible on TV sets.
The new chairman of the FCC, Ajit Pai, has vowed to pare back outdated commission regulations, but declined to say if he will overturn the Obama administration's landmark net neutrality rules. One top priority is "to remove unnecessary or counterproductive regulations from the books," Pai told reporters after he chaired his first meeting. "We want to make sure that our regulations match the realities of the modern marketplace." FCC-related players: T, S, TMUS, VZ, TWX, DISH, SBGI, EVC, NXST, CBS, MEG, CTL, FTR, BT, ARRS
One year ago today, the World Health Organization declared the mosquito-borne virus known as Zika an international public health emergency. Zika is no longer classified as a crisis, but new infections are still present around the globe. "Overall, the global risk assessment has not changed," the WHO said in a January report, warning that vigilance worldwide must remain high. Related tickers: SNY, ABT, INO, AEMD, XON, CEMI, BCRX, TMO, OSUR, OTCQB:GOVX
The Acting Secretary of the Army has directed the Army Corps of Engineers to issue the final permit needed by Energy Transfer Partners (ETP, ETE, SXL) to finish the Dakota Access oil pipeline. A spokesperson for North Dakota Senator John Hoeven expects the permit to be granted "in days, not weeks," while Representative Kevin Cramer said the Army Corps has notified Congress of its plan to grant the easement.
ONEOK is acquiring the remaining public stake in ONEOK Partners (NYSE:OKS) for $9.3B in stock. Under the agreement, each outstanding common unit of ONEOK Partners that ONEOK (NYSE:OKE) does not already own will be converted into 0.985 shares of ONEOK stock, representing a 22.4% premium to the ONEOK Partners closing price on Jan. 27. The transaction is expected to close in Q2. OKE +1.7%; OKS +2% premarket.
Toshiba plans to stop building nuclear power plants, after incurring billions of dollars in losses trying to complete long-delayed projects in the U.S. The decision would deal a fatal blow to Toshiba's (OTCPK:TOSYY) ambitions to become a major player in the nuclear construction business. It bet on Westinghouse's AP1000 reactor design, which it hoped would anchor a new generation of plants that were supposed to be easier to build and to deliver on time.
A new round of crash tests highlight areas where Tesla's (NASDAQ:TSLA) Model S and BMW's (OTCPK:BAMXF) i3 failed to score as high as other electric vehicles rated by the Insurance Institute for Highway Safety. The vehicles didn't fail any tests, but did fall short of meeting all the criteria needed to be rated a "Top Safety Pick." Tesla made some production changes, however, and the updated model will be tested at some point by IIHS.
According to court documents filed late Tuesday, Volkswagen (OTCPK:VLKAY) has agreed to pay at least $1.26B to settle claims from nearly 80,000 U.S. diesel car owners. The costs could rise to $4B if it needs to buy back all the vehicles. Separately, German auto supplier Robert Bosch (OTC:BSWQY) will pay $327.5M to compensate owners in connection with VW, Audi and Porsche emissions claims.
The last holdout... Disney (NYSE:DIS) has agreed to pay $100M to resolve claims it colluded with other animation studios to not hire one another's workers in California, where allegations of no-poaching pacts have plagued tech companies for the better part of a decade. Comcast's DreamWorks Animation (NASDAQ:DWA) previously agreed to a $50M settlement, while two Sony Pictures (NYSE:SNE) units and Blue Sky Studios reached deals totaling $19M.
The NFL has rejected a Super Bowl advertisement from GNC Holdings (NYSE:GNC) despite this year's big game broadcaster initially approving it. Ingredients in some of its products - DHEA, Synephrine and Octopamine - are included in the NFL's banned substances list. GNC was planning on using the advertisement to promote its new business model and strategies, as shares have fallen close to 70% over the last year.
Continuing to trim its exposure to financial services, General Electric (NYSE:GE) has agreed to sell its 43% stake in South Korean credit card firm Hyundai Card to Hyundai Commercial, Affinity Equity Partners, GIC and AlpInvest. The transaction, which is expected to close this month, represents aggregate GE ending net investment of approximately $1.3B as of the end of the fourth quarter 2016.
Warren Buffett said he bought $12B of stock for Berkshire Hathaway (BRK.A, BRK.B) since the election, and the total may be even higher due to stock purchases by his deputies Todd Combs and Ted Weschler. The speed with which Berkshire is buying stocks is unusual. It has spent in fewer than three months roughly half what it spent on equities in the three years ending Sept. 30, 2016.
Recording a major milestone, BlackRock's (NYSE:BLK) exchange-traded fund unit, iShares, has topped $1T in U.S. assets for the first time. "We're seeing our clients expand the use of iShares ETFs to replace individual securities, to execute more efficiently than swaps, futures or individual bonds, and to construct efficient portfolios," said Martin Small, the U.S. head of iShares. In 2009, BlackRock bought the iShares business from Barclays (NYSE:BCS), which had helped popularize the funds.
Aetna (NYSE:AET) +1.6% beating quarterly profit estimates.
Apple (AAPL) +3% AH with a revival in iPhone sales.
AMD (NYSE:AMD) +4.9% AH after topping expectations.
Anadarko Petroleum (NYSE:APC) flat AH on mixed results.
Electronic Arts (NASDAQ:EA) -1.1% AH amid mixed guidance.
Eli Lilly (NYSE:LLY) +3.1% boosted by new drugs.
Exxon Mobil (NYSE:XOM) -2.1% as profits halved in 2016.
MasterCard (NYSE:MA) -2.7% hurt by rebates, stronger dollar.
Pfizer (NYSE:PFE) +1.3% hiking its view for 2017.
Sprint (NYSE:S) +1.3% on successful cost trimming.
U.S. Steel (NYSE:X) volatile AH following 2017 guidance.
UPS (NYSE:UPS) -6.8% issuing a cautious outlook.
Under Armour (NYSE:UAA) -25.7% after a flat-footed performance.
Valero (NYSE:VLO) -3.6% hit by ethanol fuel blending costs.
In Asia, Japan +0.5%. Hong Kong -0.2%. China closed. India +1.8%.
In Europe, at midday, London +0.6%. Paris +1.1%. Frankfurt +0.9%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.5%. Crude -0.5% to $53.08. Gold +0.1% to $1212.80.
Ten-year Treasury Yield +2 bps to 2.47%Today's Economic Calendar
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Gallup U.S. Job Creation Index
8:30 Treasury Refunding Quarterly Announcement
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcemen