Wednesday Morning Reads
- 40 Year Trend Break
- Powell Boosts Expectations of Rate Rises
- Reinstate Net Neutrality
- Bumper Year for China Tech IPOs
- Comcast’s Roberts Has Anti-Murdoch Card to Play in Bid for Sky
- End of Department Stores as We Know Them
- (Not So) Pretty Picture
- Trade on Support
- Top Morning Charts
- Head and Shoulders
- Bottom Scans I
- Bottom Scan II
- Bottom Scan III
- Overbought / Oversold
- Bull Flags
- Channel Up Scan
Unusual Option Action:
Following losses in yesterday's session, U.S. stock index futures are slightly higher this morning as investors try to shake off concerns prompted by Jerome Powell's testimony to Congress. The Fed Chair indicated three or more interest rates hikes during 2018 to prevent the U.S. economy from overheating. More clues to how the economy is performing will come today when the Commerce Department publishes its second fourth-quarter GDP estimate, which is expected to have expanded at a 2.5% annual rate.
U.S. Treasury Secretary Steven Mnuchin has "begun to have very high-level conversations" on rejoining the Trans-Pacific Partnership. "It's not a priority at the moment, but it is something the president will consider," he added. "He's willing to negotiate... Whether we do multilaterals or we consider going back into TPP, again that's something that's on the table."
The U.S. Commerce Department has imposed duties as high as 106% on aluminum foil from China after concluding that the country's producers are dumping the product in the U.S. and receiving unfair government subsidies. In response, China's Ministry of Commerce expressed "strong dissatisfaction" with the action and will take necessary measures to protect its legal rights and interests.
Posting its largest drop in more than six years, China's manufacturing PMI fell to 50.3 this month, down a point from January. It also marks the gauge's nearest brush with the 50-point mark that separates growth from contraction since August 2016. China's statistics bureau attributed the slowdown to the Lunar New Year, when output typically dips.
The Marshall Islands, a collection of more than 1,100 islands in the Pacific with roughly 70,000 people, is planning to launch a cryptocurrency to serve as an official legal tender. Members of parliament voted this week to proceed with the plan "targeted for the long-term needs of the country." The digital coin, to be known as the Sovereign, will probably be issued this year.
Eurozone inflation reduced speed for the third consecutive month in February, raising further questions over the ECB's ability to exit its easy monetary policy stance. Official figures from Eurostat showed consumer price increases slowed to 1.2% from 1.3% in January and 1.4% in December. The ECB wants to keep inflation below, but close to 2%.
This summer's driving season is likely to be the most expensive since 2014, according to the Oil Price Information Service, with drivers expected to pay an average of $2.79 a gallon for gas. That's nearly 11% higher than the current national average price of $2.518, according to AAA. Prices in some cities are also likely to top $3 per gallon.
The company that was once Asia's largest commodity trader has been brought to the brink of collapse. Noble Group (OTCPK:NOBGY) posted a full-year loss of $4.94B for 2017, with executives pressing ahead with a debt-for-equity rescue plan that's facing increased resistance. "Further additional non-cash valuation adjustments may be recorded going forward," the firm said in a statement.
Coming off a turnaround plan that more than doubled profit for two consecutive years, Weight Watchers (NYSE:WTW) wants to be the global destination for "health and wellness." "The world doesn't need another diet... Today, healthy is the new skinny," CEO Mindy Grossman said during a conference call. Shares jumped almost 8% in AH trading, adding to earlier gains that followed Q4 results.
Papa John's has severed ties with the NFL. Rather than serving as the league's official pizza, a status it's held since 2010, the company will focus on doing marketing with specific teams and players. Back in November, then-CEO John Schnatter blamed NFL leadership for hurting Papa John's (NASDAQ:PZZA) sales because it had not resolved the controversy over players kneeling during the National Anthem.
The magic is coming to McDonald's (NYSE:MCD) again with a new Happy Meal promotion partnership with Disney (NYSE:DIS). Their previous relationship ended in 2006 after the fast-food chain slimmed down its menu for kids, but that 10-year cross-promotional deal was reportedly worth $1B to Disney. Executives from both companies declined to disclose the duration or value of the new deal.
Alibaba is setting up its first joint research center outside China to focus on AI, concentrating on a variety of applications including healthcare, smart homes and urban transportation. Alibaba (NYSE:BABA) declined to disclose how much it would invest in the Nanyang Technological University lab in Singapore, but said its funding would come from a $15B R&D program it announced last year.
Chinese video streaming service provider iQiyi, a unit of Baidu (NASDAQ:BIDU), has filed for an IPO that is set to raise more than $1.5B. The entertainment unit is one of few services that Baidu hasn't opted to fold or sell off as part of a wide-scale restructuring to focus on AI and autonomous driving. iQiyi plans to list its ADRs on the Nasdaq under the symbol "IQ."
In a deal that might boost its new Key program, which offers secure in-home delivery, Amazon (NASDAQ:AMZN) is buying smart doorbell maker Ring for $1B. "We look forward to being a part of the Amazon team as we work toward our vision for safer neighborhoods," said a spokesperson. Amazon partnered with lock manufacturers Kwikset and Yale for Key, and also recently acquired smart camera maker Blink.
The two biggest U.S. package-delivery giants are taking shots at each other's relationship with the National Rifle Association. The gun rights group uses UPS for shipments from the online NRA store "and not FedEx," the latter said in an email to Bloomberg, while UPS responded that FedEx (NYSE:FDX) is still maintaining its discounts for NRA members. Corporate NRA partnerships have been a hot topic since the high school massacre in Parkland, Florida.
Attorney General Jeff Sessions is cracking down on pharmaceutical companies that have contributed to the nation's opioid crisis. "We will use criminal penalties, we will use civil penalties," he declared in announcing the Prescription Interdiction and Litigation (PIL) Task Force. "The hardworking taxpayers of this country deserve to be compensated by any whose illegal activity contributed to these costs."
More bank fines... Deutsche Bank (NYSE:DB) has agreed to pay $240M to settle private U.S. antitrust litigation accusing it of conspiring with other institutions to manipulate Libor. It's the third bank to resolve claims by so-called "over-the-counter" investors. Citigroup (NYSE:C) reached a similar $130M settlement last July, while Barclays (NYSE:BCS) settled for $120M in November 2015.
A woman told police she had a child with casino mogul Steve Wynn after he raped her, while another said she was forced to resign from a Las Vegas job after she refused to have sex with him, the Associated Press reports. While the cases from the 1970s won't be investigated because the statute of limitations in Nevada is 20 years, a group of shareholders have filed suits against Wynn and the board of Wynn Resorts (NASDAQ:WYNN) for breaching their fiduciary duties.
Celgene (NASDAQ:CELG) -6.8% AH on an FDA drug rejection.
Etsy (NASDAQ:ETSY) +14.9% AH with a holiday sales boom.
Express Scripts (NASDAQ:ESRX) +3.9% AH boosted by tax benefits.
Hertz (NYSE:HTZ) -6.5% AH missing earnings estimates.
Macy's (NYSE:M) +3.5% amid "stellar" cost control.
Square (NYSE:SQ) -2% AH posting a wider quarterly loss.
TiVo (NASDAQ:TIVO) +12.2% AH examining options like going private.
In Asia, Japan -1.4%. Hong Kong -1.4%. China -1%. India -0.5%.
In Europe, at midday, London -0.3%. Paris -0.5%. Frankfurt -0.4%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude -0.1% to $62.93. Gold +0.2% to $1320.60. Bitcoin +0.2% to $10588.
Ten-year Treasury Yield -2 bps to 2.89%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 GDP Q4
9:45 Chicago PMI
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories