U.S. STOCKS SLIP AFTER RECENT RALLY
- Pound rises sharply against dollar.
- Many analysts have attributed this week’s gains in stocks and selloff in bonds to a warm reception from investors to Mr. Trump’s plans for tax cuts and infrastructure spending, potentially funded by higher deficits.
- While banks, pharmaceutical companies, defense and industrial stocks are likely to gain from Trump’s proposals to simplify regulation and boost spending, his stance on limiting immigration and free trade run counter to some of the technology industry’s most basic interests.
- Copper prices continued to surge, rising more than 5%.
- Walt Disney rose 2.9% after its executives promised earnings growth for the next two years.
US FINANCIAL MARKET
- More than $1 trillion was wiped off the value of bonds around the world this week as U.S. President-elect Donald Trump’s policies are seen boosting spending and quickening inflation.
- The capitalization of a global bond-market index slid by $450 billion Thursday, a fourth day of declines.
- Global stocks gained $1.3 trillion in the same period.
- Crude futures have wiped out gains made since the end of September when the OPEC said it would agree to cut oil production to shore up persistently low prices.
- OPEC reported on Friday an increase in its output to another record high, pointing to an even larger surplus on the market next year.
- It said it pumped 33.64 million barrels per day (bpd) last month, up 240,000 bpd from September.
- Shares rebound following after-hours drop as profit, revenue miss expectations.
- Disney posted revenue of $13.14 billion, a 3% decrease from last year’s fourth quarter and below Wall Street expectations of $13.52 billion.
- Net income rose to $1.77 billion from $1.61 billion a year earlier.
- Disney’s full-year revenue went up 6% to $55.6 billion.
- Operating income for the company’s cable networks segment, which includes ESPN, fell 13% to $1.45 billion.
- Disney said a 13% fall in ESPN ad revenue was driven in part by a decrease in fantasy-sports advertising and more money flowing to advertising during the Olympic Games.
- New ESPN deals with Hulu and AT&T/DirecTV could help the company attract elusive millennial customers who are opting out of traditional cable packages.
- ESPN had 92 million subscribers at the end of Disney’s 2015 fiscal year, ended Oct. 3, 2015, about 7 million fewer than in 2013.
- Shanghai Disney Resort had 4 million visitors in its first four months of operation.
- Before its June opening it expected 10 million people to visit. Analysts put the number at as many as 15 million.
- Disney’s movie division has posted record-setting returns this year, surpassing $6 billion at the global box office thanks to hits that include “Star Wars: The Force Awakens,” “Finding Dory” and “Zootopia.”
- Executives said they expected modest earnings per share growth in fiscal 2017 and “more robust growth” in fiscal 2018 and beyond, as ESPN attracts more online viewers, the new Shanghai theme park lures visitors and the movie studio releases more “Star Wars” installments and other films.
- Department-store operator cuts same-store-sales guidance for the fiscal year.
- The company’s same-store sales fell 0.8% in the quarter, down from 6.4% growth last year and well below the 2.2% increase analysts were expecting.
- Penney posted a loss of $67 million, compared with a loss of $115 million a year prior.
- Revenue fell 1.4% to $2.86 billion.
- World’s biggest assembler of Apple gadgets had brisk sales on iPhone 7 production.
- Sharp’s losses were a drag on what was otherwise a quarter of brisk sales because of production of the iPhone 7 for Apple.
- Net profit fell to NT34.6 billion New Taiwanese dollars ($1.09 billion).
- Revenue rose to NT$1.075 trillion from NT$1.066 trillion a year earlier.
- GE says 35% of the company’s new advanced turboprop engine will be made using 3-D printing, a technique that has allowed the company to eliminate more than 800 parts from the engine, cutting 5% of the engine’s weight.
- GE has 28 of the machines in use at the Auburn facility and eventually plans to have more than 50.
US ECONOMY & POLITICS
- The University of Michigan’s preliminary consumer sentiment index rose to 91.6 this month from October’s final reading of 87.2.
- Calendar quirks lowered monthly spending on government benefit programs.
- The federal government ran a $44.19 billion deficit in the first month of the new fiscal year, compared with $136.56 billion during the same month a year earlier.
- The one-month reading masks a broader trend of rising budget deficits.
- In fiscal year 2016, which ended Sept. 30, the budget shortfall reached $587.33 billion, about one-third bigger than in fiscal 2015.
- As a share of gross domestic product (GDP), a broad measure of economic output, the deficit rose to 3.2% in fiscal 2016 from 2.5% the prior year.
- The Congressional Budget Office expects the deficit to widen to $594 billion in fiscal 2017.
- Federal Reserve Vice Chairman Stanley Fischer said the central bank has almost reached its goals for maximum employment and price stability, strengthening the case for raising interest rates.
- The Fed has lifted its main interest rate just once since cutting it to near-zero in 2008, in December 2015.
- Analysts say some consumers fear Republicans will take away tax subsidies that offset premium costs.
- On Wednesday, about 100,000 people made plan selections on the federal exchange—the highest daily number since enrollment began Nov. 1. It ends Jan. 31.
- The Obama administration has said it hopes to have 13.8 million people select a plan by the end of open enrollment for 2017, an increase of 1.1 million compared with the end of the 2016 period.
EUROPE & WORLD
- China’s online-retail giant once again broke its sales record on the shopping day it helped create.
- Singles’ Day was a tongue-in-cheek holiday begun by some Chinese young people in the 1990s to commemorate the lonely hearts among them, with the evocative date 11-11.
- Over the past seven years, Alibaba has commercialized the day into the world’s biggest annual shopping festival through savvy marketing and steep discounts.
- Vendors sold some $14.3 billion worth of goods through Alibaba’s platforms on the day last year.
- Putin told a meeting with government officials on the economy that it would not be a disaster if the deficit were to hit 3.8-3.9 percent of GDP, but that Russia should aim for a level of 3.7 percent of GDP.
- Copper has become the favorite commodities trade, a sign that investors believe economic-growth prospects are improving from China to the U.S.
- Copper’s 14-day winning streak is the longest on record for at least 28 years.
- Stocks ended the day 4% down in Indonesia and closed 2.9% lower in the Philippines.
- Higher rates in the U.S. will naturally raise the bar for capital flows to emerging markets.
- Imposing tariffs on imports lies within the authority of U.S. presidents.
- Tens of thousands of parts that make up a vehicle often come from multiple producers in different countries and travel back and forth across borders several times.
- Ending the 1994 trade pact is relatively easy.
- The U.S. legally can pull out of Nafta six months after Mr. Trump as president notifies Mexico and Canada of his intention to do so.
TODAY in HISTORY
The Mayflower Compact was signed by Pilgrims aboard the Mayflower. It would provide the basis for all governments of the American colonies (1620)
Washington became the 42nd state (1889)
The Tomb of the Unknown Soldier was dedicated in Arlington National Cemetery (1921)
The Church of England voted to ordain women as priests (1992)
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