Wednesday Morning Reads
- 3% surge
- The Logical Next Step for Europe’s Integration
- About to Get Another Jolt
- Push for Global Status
- To Catch Bad Actors
- Right Or Wrong?
- Bitcoin Is Greatest Scam Ever
- The Fed Is In A Pickle
- Who Benefits From Rising Interest Rates?
- Comcast formalizes offer for Sky
- Earnings turnaround for Credit Suisse
- Finland ends trial of basic income
- Mnuchin headed to China for trade talks
- Oil on watch after Iran dismisses Trump
- Yahoo successor settles hack for $35M
- Big payday for Google's Sundar Pichai
- Tim Cook heads to the Oval Office
Tweet of the morning:
Twitter’s first quarter revenue:
Q1 2018: $665 million
Q1 2017: $548 million
Q1 2016: $595 million
Q1 2015: $436 million
Q1 2014: $250 million
Q1 2013: $114 million
Q1 2012: $54 million
Q1 2011: $18 million
— Jon Erlichman (@JonErlichman) April 25, 2018
Open Interest Changes:
Unusual Option Action:
Mobile ads and videos are expected to yield an impressive Q1 for Facebook (NASDAQ:FB) today as the tech giant presents its first quarterly results since the Cambridge Analytica scandal. Investors will be watching for any updates to the company's data protection plan, as well as engagement, a pledge to clamp down on "clickbait" and its daily active users (which fell last quarter for the first time in North America). Ahead of the report, Facebook also announced it would appoint Kevin Martin, a former FCC chair, as its interim head of U.S. policy.
Crude prices whipsawed yesterday after President Trump called the Iran nuclear deal "insane," while France's Emmanuel Macron discussed a new agreement which would block the country's nuclear activity until 2025. Prices are on watch again today, with Iranian President Hassan Rouhani dismissing Trump as a "tradesman" and warning of "severe consequences" if the U.S. were to pull out of the accord.
Saudi Arabia's Council of Economic and Development Affairs has approved of the Privatization Program, which is one of 12 key elements in the kingdom's Vision 2030. It plans to generate about $200B through privatization in the coming years and increase the private sector's contribution to GDP from 40% to 65% by 2030.
Turkey's central bank is widely expected to lift its key interest rate today as policymakers balance rapid inflation and a plunge in the lira against President Erdogan's preference for strong economic growth. Turkey's currency fell to a record low against the dollar and euro earlier this month, while the country's prime minister said the central bank was responsible for past policy decisions and would take necessary measures.
With eight months still left in its two-year trial of universal basic income, Finland said it will scrub the project and explore alternatives for reforming its social security system. The highly publicized experiment saw 2,000 randomly chosen participants - aged 25 to 58 - receive a flat monthly payment of €560, with no requirement to seek or accept employment.
Treasury Secretary Steven Mnuchin is headed to China in "a few days" to resolve the ongoing trade dispute between the world's two largest economies. "They trade with us [but] we can't trade with them," President Trump declared. Both countries have proposed tariffs on the other, after the Trump administration's "Section 301" investigation into China's business practices.
U.S. stock index futures are stumbling again this morning as the benchmark 10-year Treasury yield rose above 3% for the first time in four years, sparking concerns over higher borrowing costs for companies already facing rising commodity prices. "It's kind of one of those things where we all expected it, we talked about it, then it happens and the market is surprised by it,” said JJ Kinahan, chief market strategist at TD Ameritrade.
Comcast has formalized its offer for British broadcaster Sky (OTCQX:SKYAY), along with commitments to maintain its annual budget and editorial board independence, in a deal valued at about $31B. Comcast (NASDAQ:CMCSA) said the "superior" cash bid was a 16% premium to the existing offer from Twenty-First Century Fox (NASDAQ:FOX), which has also been trying to buy the 61% of Sky that it doesn't already own.
As it works to save its struggling $3.9B acquisition of Tribune Media (NYSE:TRCO), Sinclair Broadcast Group (NASDAQ:SBGI) has reached deals to sell nearly two dozen TV stations in order to gain government approval. The stations are being sold to various parties, including Standard Media and Meredith (NYSE:MDP), and are expected to close simultaneous with the Tribune transaction near the end of Q2.
Big payday for Google CEO Sundar Pichai. An award of 353,939 restricted shares he received before a promotion in 2014 will vest today. Currently worth about $380M, making it one the largest single payouts to a public company executive in recent years. Alphabet's (GOOG, GOOGL) stock has surged 90%since the grant date, compared with a 39% advance of the S&P 500.
The company formerly known as Yahoo, Altaba (NASDAQ:AABA), has been fined $35M by the SEC for its response to a 2014 cybersecurity breach on hundreds of millions of user accounts that wasn't disclosed until 2016. While federal law doesn't require firms to inform shareholders of every hack attempt, companies can't mislead investors about the scope of an attack and must tell them about events that are material to investment decisions.
After attending a state dinner on Tuesday, Apple (NASDAQ:AAPL) CEO Tim Cook is staying in Washington for a closed-door meeting today in the Oval Office. There was no agenda posted, but Cook has been a fan of Trump's tax law which is helping the company to repatriate some of its overseas cash, with plans to contribute $350B to the U.S. economy over the next five years.
Driven by its wealth management business, Credit Suisse (NYSE:CS) has delivered its best quarterly results since CEO Tidjane Thiam launched his restructuring plan for the bank two years ago. Following 6.6B Swiss francs ($6.7B) of losses in 2015 and 2016, and a big tax writedown that wiped out gains last year, Credit Suisse posted 694M francs in first-quarter net income. CS +5.1% premarket.
Striking a last-minute wage deal with its labor union on Monday, General Motors (NYSE:GM) and South Korea are now considering raising the size of their investment in the U.S. automaker's local unit from a previously proposed $2.8B. According to Reuters, a preliminary deal on the financial assistance - reportedly worth $4.4B - is likely to be signed on Friday.
The new title "reflects our strategic transformation as a leader in the nutrition industry," said Herbalife (NYSE:HLF) CEO Rich Goudis, changing the company's name to "Herbalife Nutrition." A two for one stock split is also in play, effective May 7. Herbalife Nutrition will begin trading under its new name today, but retain ticker symbol "HLF."
Shire climbed over 4% in after-hours trading on reports that it's reached a breakthrough in talks with Takeda Pharmaceutical (OTCPK:TKPYY). The latter was said to have sweetened its fifth buyout offer to $62B, with a preliminary merger deal set to be announced today. Shire (NASDAQ:SHPG) is also expected to extend a regulatory deadline, allowing Takeda to carry out more due diligence and firm up its bid.
3M (NYSE:MMM) -6.8% lowering its guidance range.
Amgen (NASDAQ:AMGN) -0.6% AH following weak forecasts.
Biogen (NASDAQ:BIIB) +1.1% beating earnings estimates.
Caterpillar (NYSE:CAT) -6.2% hinting to a growth slowdown.
Coca-Cola (NYSE:KO) -2.1% amid lower pricing.
Corning (NYSE:GLW) -2.8% swinging to a loss.
Eli Lilly (NYSE:LLY) -0.1% after a regulatory setback.
Freeport-McMoRan (NYSE:FCX) -14.5% flagging problems abroad.
Lockheed Martin (NYSE:LMT) -6.1% on a weak cash flow outlook.
Texas Instruments (NYSE:TXN) +5.6% AH topping expectations.
United Technologies (NYSE:UTX) -1.1% despite raising guidance.
Verizon (NYSE:VZ) +2.1% as unlimited plans held customers.
Wynn Resorts (NASDAQ:WYNN) -1.7% AH on a legal settlement charge.
In Asia, Japan -0.3%. Hong Kong -1%. China -0.4%. India -0.3%.
In Europe, at midday, London -0.6%. Paris -0.7%. Frankfurt -1.5%.
Futures at 6:20, Dow -0.2%. S&P -0.3%. Nasdaq -0.4%. Crude +0.2% to $67.81. Gold -0.5% to $1325.90. Bitcoin -4.9% to $9182.
Ten-year Treasury Yield +4 bps to 3.02%
Today's Economic Calendar
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
11:30 Results of $17B, 2-Year FRN Auction
1:00 PM Results of $35B, 5-Year Note Auction