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HEALTH-CARE SELLOFF PRESSURES STOCKS

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HEALTH-CARE SELLOFF PRESSURES STOCKS

  • The S&P 500 retreated Wednesday as a slide in health-care stocks dragged indexes lower.
  • Italian lenders continued to drive market focus after Sunday’s referendum.
  • In government bond markets, the yield on the 10-year Treasury note fell to 2.365% from 2.394% in the previous session.
  • In currencies, the euro inched up 0.2% against the dollar to $1.0742.
  • Pfizer fell 2.2% after Britain’s competition watchdog fined the drugmaker $107 million for its role in ramping up the cost of an epilepsy drug by as much as 2,600 percent.
  • Celgene lost 4% following its announcement that it would not further test a combination of its breast cancer drug Abraxane with chemotherapy.
  • Western Digital rose 5% after the data storage maker raised its second-quarter profit and revenue forecasts.
  • Dave & Buster’s soared 13.5% following upbeat quarterly results and a raised full-year revenue forecast.
  • Wendy’s rose 4% after activist investor Nelson Peltz raised his stake in the burger chain to 23.45%.

US FINANCIAL MARKET

Oil eases on doubts OPEC output cut will end global glut

  • Oil prices slipped on Wednesday ahead of a U.S. petroleum inventory report and on doubts production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years.
  • OPEC and non-OPEC oil producers meet this weekend in Vienna to agree details of the output cut, which targets an overall reduction of around 1.5 million barrels per day (bpd).
  • Oil production has been outpacing consumption by 1 to 2 million bpd since late 2014.

Poll: U.S. bull market seen extending into 2017 but Trump a wild card

  • The benchmark index will end 2017 at 2,350 and finish 2016 at 2,210, according to the median forecast of around 40 strategists.
  • The S&P 500 is up 8% year-to-date, having gained over 2 percent in the weeks since the election.

Trump Says He’ll ‘Bring down Drug Prices’; Biotech Stocks Fall

  • “I’m going to bring down drug prices. I don’t like what’s happened with drug prices,” Trump said.

Pfizer Fined $107 Million for Overcharging U.K. for Epilepsy Drug

  • U.S. drug giant says it will appeal.
  • The U.K.’s top antitrust regulator slapped Pfizer with a record $107 million fine, alleging it overcharged the national health-care system for an epilepsy treatment.
  • The CMA said the £84.2 million Pfizer fine was the highest it had ever imposed.

Dave & Buster’s Raises Outlook, Results Beat Expectations

  • Sales at established stores rose 5.9%, compared with an increase of 8.8% a year earlier. Analysts expected growth of 2.3%
  • Revenue increased 19% to $228.7 million.
  • Food and beverage sales grew 13% and amusement and other revenue improved by 24%.
  • The company reported a profit of $10.8 million, up from $4.6 million a year earlier.

Western Digital Updates Expectations for Second Fiscal Quarter

  • The company expects its second quarter revenue to be approximately $4.75 billion compared to its earlier forecast of $4.7 billion.
  • Non-GAAP gross margin is expected to be approximately 36%, versus the earlier forecast of approximately 35%.

Starbucks sets five-year growth targets, to open 12,000 more stores

  • The company said it would add 12,000 stores globally by 2021 and target comparable sales growth in mid-single digits and profit growth of 15-20 percent a year.
  • Starbucks’s revenue has been growing at an average rate of 12.76 percent over the past five years.

Apple’s Top Assembler Foxconn Confirms Plans for U.S. Investment

  • “While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant U.S. officials,” it said in a statement.

MasterCard to buy back shares worth $4 billion

  • The new share repurchase program will be effective at the completion of the company’s previously announced $4 billion share repurchase program, under which it has about $1.3 billion remaining.

Dimon Says New Sapphire Card Cuts Profit by Up to $300 Million in Quarter

  • JPMorgan Chase & Co.’s new Sapphire Reserve credit card will reduce the bank’s profit by $200 million to $300 million in the fourth quarter.
  • “The card has been doing great” and was embraced by consumers before the bank did any marketing, Dimon said.
  • JPMorgan introduced the card in August with a 100,000-point sign-up bonus for customers who spend $4,000 in the first three months.
  • The points are worth $1,500 in travel booked through Chase’s website.
  • The cards, which carry a $450 annual fee, were in such demand shortly after the launch that the bank temporarily ran out of the metal it uses to make them.

Strong Dollar Has Companies Counting the Cost—and Opportunities

  • Most economists are predicting the Fed will raise key interest rates in mid-December, and consensus forecasts call for two more increases next year.
  • Rate increases tend to boost a currency, making investment denominated in it generally more attractive because of the prospect of higher interest.
  • Another support for the greenback: Republicans plan tax incentives designed to encourage U.S. companies to bring foreign profits back home.
  • If companies reinvest a significant share of those dollars, the U.S. economy could strengthen, too, potentially adding to the upward pressure on interest rates.

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US ECONOMY & POLITICS

Job Openings Were Little Changed Last Month

  • Job openings were little changed at 5.5 million.
  • Over the month, hires and separations were little changed at 5.1 million and 4.9 million, respectively.

U.S. mortgage rates rise to highest levels in over two years

  • 30-year fixed-rate conforming mortgages averaged 4.27 percent, the highest level since October 2014.
  • Interest rates on 15-year fixed-rate mortgages averaged 3.53 percent, their highest since September 2014.

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EUROPE & WORLD

Australia’s Economy Shrinks Most in Eight Years; Currency Slumps

  • GDP fell 0.5% from previous quarter.
  • Decline was driven by slump in construction and government spending.
  • The economy grew 1.8% from a year earlier, compared with a forecast 2.2% gain.

Shell Signs Preliminary Iran Oil Deal despite Uncertainty over Trump

  • Royal Dutch Shell said it had signed a memorandum of understanding with Iran’s state oil company to explore future ventures, signaling that giant energy companies won’t be deterred by President-elect Trump’s pledge to undo the Iran nuclear deal.
  • Shell is the largest company to wade back into Iran since the U.S. and other world powers lifted sanctions in January.
  • Total SA of France last month signed a $4.8 billion deal to develop a large gas field in Iran and is negotiating for an oil deal now.

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TODAY in HISTORY

Delaware became the first state to ratify the U.S. Constitution (1787)

The U.S. declared war on Austria-Hungary in World War I (1917)

The Japanese attacked Pearl Harbor (1941)

America’s final moon mission, Apollo 17, blasted off from Cape Canaveral (1972)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.

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