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U.S. STOCKS INCH HIGHER AFTER BOUT OF VOLATILITY

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U.S. STOCKS INCH HIGHER AFTER BOUT OF VOLATILITY

  • Concerns about higher interest rates have preoccupied investors in recent sessions.
  • The yield on the 10-year U.S. Treasury note pulled back to 1.713% from 1.732% late Tuesday.
  • The Federal Reserve and Bank of Japan both hold meetings next week.
  • Fed-fund futures suggest investors now see just a 15% chance of a rate rise in September.
  • The Japanese central bank will most likely to consider cutting interest rates further into negative territory.
  • In corporate news, shares of Bayer rose 3.3% after the German pharmaceuticals and chemicals giant said it would buy Monsanto for $57 billion.

US FINANCIAL MARKET

Bayer to Buy Monsanto in $66 Billion Deal

  • German company to pay $128 a share for U.S. seed maker in all-cash transaction.
  • The price represents a roughly 5% increase over Bayer’s original offer in May of $122 a share.
  • Bayer said it expected the deal to generate synergies of $1.5 billion after the third full year following the closing.
  • It also committed to a $2 billion breakup fee.

Apple Watch Series 2 Review: Still Not a ‘Need,’ Finally a ‘Want’

  • Most of the reviews have a common theme: that the Series 2 makes the Apple Watch a much more serious contender as a fitness tracker.
  • Both GPS and waterproofing bring it much closer to dedicated fitness devices, though the one-day battery-life is still cited as a drawback.

Boeing wins $700 million U.S. defense contract: Pentagon

  • Boeing been awarded a $700 million U.S. defense contract for Small Diameter Bomb Increment 1 weapons, the Pentagon said.

Twitter Arrives on Apple TV, Fire TV, Xbox One

  • Company shifts into video with new app as it seeks to revive user growth.
  • The app—which will contain only video, photos and tweets curated by the company—arrives on time for Twitter’s pivotal live-streaming debut of Thursday night football.
  • The streams will appear on one side of the screen with a curated feed of tweets next to them.

UPS plans peak season hiring of 95,000 for third year straight

  • The hiring numbers remain unchanged from the past two years as improvements to its network should help it handle rising ecommerce volumes.

Liberty Global to offer Netflix to all customers

  • The deal follows the launch of Netflix by Liberty Global’s UK subsidiary Virgin Media in 2013.
  • Liberty Global has 29 million customers in 30 countries.
  • Chief Executive Mike Fries said that subscribers in the UK with access to Netflix “pay more, churn less and are happier.”

Ford Motor says 2017 performance to drop from 2016 levels

  • Last week, Ford lowered its 2016 pretax profit forecast to $10.2 billion from at least $10.8 billion because of a charge in the third quarter for an expanded vehicle recall.
  • Ford said its automotive operating margin will be lower for full-year 2016 than the 6.8 percent achieved in 2015.
  • It also said adjusted earnings per share will be lower than the $1.93 earned in 2015.

Citigroup Predicts Higher Trading in Third Quarter

  • CFO said trading revenue will be up by mid-single digits compared with a year ago, driven by strength in rates and currencies.

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US ECONOMY & POLITICS

US Import Prices Post First Drop in Six Months

  • U.S. import prices fell for the first time in six months in August on declining petroleum and food costs.
  • Import prices slipped 0.2 percent and dropped 2.2 percent from a year ago. Import prices slipped 0.2 percent and dropped 2.2 percent from a year ago.
  • Export prices sank 0.8 percent after increasing 0.2 percent last time.
  • On the year, export prices declined 2.4 percent.
  • Agricultural export prices decreased 3.4 percent in August, the largest monthly drop since the index fell 4.2 percent in August 2013.

MBA Mortgage Applications Rose 4.2%

  • Mortgage applications activity was hopping in the September 9 week, with the seasonally adjusted composite index rising 4.2 percent from a week ago.
  • Purchase applications that led the way, jumping 9 percent higher on the week.
  • Refinancing applications increased too, though by a more modest 2 percent.
  • The average interest rate for 30-year fixed-rate mortgages on conforming loans ($417,000 or less) falling by one basis point from the prior week to 3.67 percent.

Soaring Student Debt Prompts Calls for Relief

  • A tripling of student debt over the past decade to more than $1.3 trillion has unleashed a torrent of Washington lobbying from outside the education sector, with various industries describing a “crisis” requiring federal intervention.
  • Real-estate agents, farmers, architects, startup lenders, lawyers, tech companies, benefits administrators—even podiatrists—have sent lobbyists to Capitol Hill over the past two years to push for legislation to forgive or at least reduce what workers and consumers owe on their student loans

U.S. Budget Deficit Expands in August

  • Monthly shortfall of $107 billion; deficit grows 25% from a year earlier.
  • Revenue grew 1% during that period.
  • Revenue from income taxes has climbed 4% this fiscal year, as more Americans have found jobs and their incomes increase.
  • But corporate-tax revenue has fallen 11% as corporate profits get squeezed due to a strong dollar, weak global economic growth and slow productivity gains.

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EUROPE & WORLD

BOJ to make negative rates centerpiece of future easing

  • The Nikkei reported earlier on Wednesday that the BOJ will put more emphasis on negative rates as a tool for future easing.
  • The BOJ is unlikely to abandon its current base money target, which is the amount of money it commits to print each year, or adopt an explicit cap on long-term rates.

ECB needs to be more flexible as it chases inflation

  • Governing Council member Klaas Knot said that the ECB is trying to overcome the biggest economic shock in 80 years, and even more stimulus could diminish returns and amplify negative side effects.

Singapore Airlines Won’t Extend Lease on First Airbus A380 Jet

  • The lease on the A380 expires in October next year and “we have decided not to extend it,” Singapore Airlines said.
  • Airbus in July announced it would slash production of the A380 to 12 planes a year in 2018 from 27 last year.
  • Singapore’s flag carrier declines to keep flying the earliest member of its fleet of 19.
  • The backlog of A380s to be delivered has eroded during years of no or few orders.

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TODAY in HISTORY

francis-scott-key

Francis Scott Key composed the lyrics to The Star Spangled Banner (1814)

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President McKinley died of gunshot wounds inflicted by an assassin. Vice President Theodore Roosevelt succeeded him  (1901)

seal_of_the_selective_service_system-svg

Congress passed the Selective Service Act, providing for the first peacetime draft in U.S. history (1940)

The Soviet space probe Luna 2 became the first man-made object to reach the Moon when it crashed onto the lunar surface (1959) 

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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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