Client Login

WALL STREET GAINS AHEAD OF TRUMP’S STATE OF THE UNION ADDRESS

SECTION SELECTION

US FINANCIAL MARKET | US ECONOMY & POLITICS
 EUROPE & WORLD | TODAY IN HISTORY

DAILY MARKET REPORTS

  • Wall Street rose on Tuesday boosted by consumer discretionary and technology companies amid peak earnings, which have largely been positive so far, while investors wait for President Donald Trump’s State of the Union address.
  • The S&P 500 is eyeing its fifth straight session of gains after a recent dovish stance from the Federal Reserve and on hopes that a trade deal between the United States and China could be reached.
  • About 71% of S&P 500 companies have reported earnings have topped estimates. While estimates for fourth-quarter earnings growth are 15.4%, expectations for the first-quarter are much lower at 0.5%.
  • Estée Lauder jumped 11.6% as the cosmetics maker raised its annual forecast while luxury fashion group Ralph Lauren rose 9.7% after its quarterly revenue and profit beat estimates.
  • Alphabet wrapped up FAANG earnings by posting better-than-expected quarterly revenue and profit. However, worries about sharply higher spending sent its shares down 0.8%.

US FINANCIAL MARKET

Google Parent Shows Cost of Branching Out

  • Google’s parent company posted a big jump in quarterly revenue but also ever-rising costs outside its core online-advertising business, showing the drag from its efforts to diversify.
  • Revenue of $39.28 billion for the quarter and $136.82 billion for the full year represented a big jump from $32.3 billion and $110 billion, respectfully, a year earlier.
  • The company reported $31.07 billion in total fourth-quarter costs and expenses, up 26% from last year.
  • Capital expenditures rose 64% compared to last year, up to $7.08 billion.
  • So-called traffic acquisition cost, a measure of payments from Google to outsiders like wireless carriers to place ads, rose to $7.4 billion for the quarter, from $6.5 billion a year earlier.
  • Profit for the quarter was $8.95 billion compared with a $3 billion loss a year ago, beating estimates of $7.69 billion.

Estée Lauder raises full-year forecast on strength in skincare, China

  • Estée Lauder raised its annual profit forecast after posting better-than-expected quarterly results on Tuesday, driven by strong growth in China and higher demand for skincare brands such as La Mer, sending its shares up 10%.
  • Overall, net sales rose 7% to $4.01 billion, topping analysts’ average expectation of $3.92 billion.
  • Net income rose four fold to $573 million in the second quarter from a year earlier, when the company incurred a tax charge.
  • For 2019, the company now expects profit to be between $4.92 and $5 per share, from a prior forecast of $4.73 and $4.82.
  • Excluding items, it expects annual sales to grow between 8% and 9%, as opposed to the previously issued range of 7% to 8%.

Ralph Lauren’s Revenue, Same-Store Sales Rise

  • Ralph Lauren raised its full-year sales outlook and posted stronger revenue in its latest period, helped by growth in Asia and Europe.
  • Net revenue rose 5.1% to $1.73 billion, above expectations of $1.66 billion, as sales in North America grew by 2.5% to $908.7 million, and both Asia and Europe each rose nearly 10%.
  • Comparable-store sales rose 4% excluding currency fluctuations, ahead of a 2% increase expected.
  • The retailer reported a fiscal-third-quarter profit of $120 million, ahead of consensus and compared with a loss of $81.8 million a year earlier.

Gilead fourth-quarter profit misses Wall Street estimate, shares fall

  • Gilead Sciences reported a fourth-quarter profit that fell short of Wall Street estimates, sending shares lower, as sales of its flagship hepatitis C treatments continued to slide and it recorded one-time charges, and the company
  • Revenue for the quarter slipped to $5.8 billion from $5.9 billion, but still topped Wall Street’s forecast of $5.5 billion.
  • Fourth-quarter sales of Gilead’s HIV drugs rose to $4.1 billion from $3.4 billion, while sales of its hepatitis C drugs fell sharply to $738 million from $1.5 billion a year earlier.
  • The company’s quarterly net income was $3 million, or nil per share, due to a large impairment charge related to discontinuation of a multiple myeloma cell therapy program from Kite Pharma, compared with a net loss of $3.9 billion a year earlier.

Viacom Posts Slight Revenue Growth

  • Revenue at Viacom, the parent of Comedy Central and Nickelodeon, rose slightly in its latest quarter, reflecting its efforts to bolster other parts of its business beyond its cable networks.
  • Viacom’s fiscal first-quarter revenue rose 0.6% to $3.09 billion, but came in below the $3.12 billion expected, as performance from Viacom’s film and television studio helped offset a decrease in ad revenue for its cable TV business.
  • Excluding the impact of foreign exchange, revenue rose 4%.
  • Viacom reported profit fell 40% from a year earlier to $321 million, well below estimates on a per share basis.

Sales Fall at Archer Daniels Midland Despite Demand Outside of China

  • Archer Daniels Midland reported higher demand for key agricultural commodities outside of China at the end of last year, but the company still said overall sales dropped in the fourth quarter.
  • ADM said sales dropped 0.8% to $15.95 billion in the fourth quarter, falling short of the $16.81 billion analysts predicted.
  • The company said revenue in its origination business, which focuses on buying, storing and selling agricultural commodities, fell about 8% compared with the year earlier.
  • Profit fell to $315 million in the quarter, compared with $788 million a year earlier and just shy of estimates.

Janus Henderson profit misses estimates on higher net outflows

  • Fund manager Janus Henderson reported quarterly profit that missed Wall Street expectations, hit by customers withdrawing more funds against the backdrop of heightened market volatility.
  • In the quarter, Janus’ net outflows nearly tripled to $8.4 billion and the company’s assets under management fell 11.4% to $328.5 billion in the quarter.
  • Net income fell to $106.8 million in the quarter, from $471 million a year earlier when the company recorded a $340.7 million tax gain.

Lazard beats profit estimates on strength in deal advisory

  • Financial adviser Lazard topped analysts’ estimates for quarterly profit on Tuesday, as strong performance in its M&A advisory business helped make up for a drop in revenue in its asset management unit.
  • Lazard said total revenue was largely unchanged at $684.5 million.
  • The company’s asset management business saw outflows of $3.2 billion during the quarter, due to a spike in market volatility and that resulted in a 17% drop in revenue in the unit.
  • Adjusted net income fell to $118.9 million in the fourth quarter, from $148.1 million a year earlier.

Slack Files to Go Public with Direct Listing

  • Slack Technologies has filed paperwork for its direct listing on the stock market, setting it up to be the second major company to use the nontraditional method for an initial public offering.
  • The workplace-messaging company’s IPO could come as soon as this spring and, by the time it debuts, Slack could be valued well above $7 billion, the level at which it recently raised money.
  • Slack, which is based in San Francisco, runs an app used for group communication, especially in offices, and recently said it has more than 10 million daily active users in 150 countries.

Millions in cryptocurrencies frozen after Canadian founder’s death

  • About C$180 million ($137.21 million) in cryptocurrencies have been frozen in the user accounts of Canadian digital platform Quadriga after the founder, the only person with the password to gain access, died suddenly in December.
  • Gerald Cotten died aged 30 from complications with Crohn’s disease while volunteering at an orphanage in India, according to the Facebook page of Quadriga CX, which announced his death on Jan. 14.
  • Cotten’s main computer contained a “cold wallet” of cryptocurrencies, which is only accessible physically and not online, and his death left “in excess of C$180 million of coins in cold storage.”

Apple agrees to pay back-taxes to French authorities

  • U.S. technology giant Apple said it had reached a deal with France to pay an undeclared amount of back-dated tax, with French media putting the sum at around 500 million euros ($571 million).
  • Apple’s French division confirmed the tax payment agreement, but did not disclose how much it had agreed to pay.

Back to Top


US ECONOMY & POLITICS

Federal Reserve Survey Shows Tighter Lending Standards, Weakening Credit Demand

  • A growing minority of banks reported tightening their standards for some loans in the fourth quarter and said they expected loan demand and performance to weaken, the Federal Reserve said Monday.
  • After a year in which banks continued to lend freely despite steadily rising interest rates, the Fed’s January survey of senior loan officers showed an increasing number of institutions bracing for a lending slowdown.
  • Banks can tighten their lending standards in a variety of ways, such as charging higher interest-rate premiums, reducing the size of credit lines or imposing greater requirements for collateral or loan covenants.

Trump to Call for Bipartisanship as He Threatens to Declare Emergency

  • President Trump in Tuesday’s State of the Union is expected to issue a plea for national unity at a moment of deep divisions, while Mr. Trump threatens to do an end-run around both chambers of Congress to pay for a wall on the southern U.S. border.
  • If Mr. Trump declares a national emergency on Tuesday, House Democrats are likely to bring to the floor a resolution of disapproval, a House Democratic leadership aide said on Monday.
  • In a January WSJ/NBC poll, 50% of respondents blamed him for the shutdown, compared with 37% who said Democrats were most responsible.
  • The president’s overall job performance rating remained steady, with 43% approving and 54% disapproving of the job he is doing.
  • An early draft of the address also contained a line in which Mr. Trump would urge Congress to “pass my proposal” for rebuilding the nation’s infrastructure, an administration official familiar with the drafting process said.

Trump Inaugural Committee Is Subpoenaed for Documents

  • President Trump’s inaugural committee on Monday received a subpoena for documents from the Manhattan U.S. attorney’s office, which last year opened a criminal investigation into how the fund raised and spent more than $100 million on 2017 inauguration festivities, according to people familiar with the matter.
  • The subpoena requests documents related to the committee’s donors and spending, including communications about payments made directly by donors to vendors—which would flout disclosure rules.
  • The investigation, which is being led by the public corruption unit of the Manhattan U.S. attorney’s office, grew out of the office’s probe into former Trump lawyer Michael Cohen’s business dealings, according to people familiar with the matter.

Trump to Begin Releasing Fiscal 2020 Budget Plan on March 11

  • The White House is expected to begin releasing the president’s fiscal year 2020 budget proposal on March 11, about a month later than usual due to the partial government shutdown.
  • The White House is technically required to submit a budget proposal to Congress by the first Monday in February, but the 35-day shutdown delayed the scheduled release.
  • The president’s proposal will provide a broad outline of his goals for government spending in the fiscal year starting Oct. 1, when previous spending caps will go back into effect unless Congress votes to raise them again.
  • Lawmakers voted last year to lift the caps and boost spending by $300 billion during fiscal 2018 and 2019.

World Bank Critic Is Nominee to Lead Lender

  • President Trump will nominate David Malpass, one of the World Bank’s sharpest critics within his administration, to be the next leader of the bank.
  • As the Treasury Department’s undersecretary for international affairs, Mr. Malpass has attracted attention for his criticism of the World Bank, especially over its lending to China.
  • He has argued the country has become wealthy enough that it no longer needs to borrow from the World Bank. Mr. Malpass has also been part of the U.S. team negotiating trade with China.
  • A senior administration official said that despite Mr. Malpass’s criticisms of the bank, he had been instrumental in pushing through a $13 billion funding increase for the bank that the U.S. supported in April.

Back to Top


EUROPE & WORLD

Chipmaker Infineon cuts revenue guidance blaming difficult markets

  • Chipmaker Infineon Technologies cut its forecast for full-year revenue growth on Tuesday to the bottom of its earlier range, blaming difficult markets, but expects a better second half as demand rebounds and inventories are worked off.
  • Infineon said revenues shrank by 4%, quarter-on-quarter, to 1.97 billion euros ($2.3 billion) in the first quarter of its business year, just above the mean forecast.
  • It said its book-to-bill ratio, an indicator of how healthy orders are, fell to 1.1 times from 1.5 in the prior quarter.
  • It reported a segment result, a proxy for total operating profit, of 359 million euros and a margin of 18.2%, compared with 400 million euros in the prior quarter and mean expectations of 344 million euros.
  • Infineon is now guiding for revenues to grow at the lower end of an earlier range of 9 to 13%.

Rosneft’s quarterly net profit hit by weak oil prices

  • Russian oil producer Rosneft said its net profit fell by almost a quarter to 109 billion roubles ($1.66 billion) in the fourth quarter, hit by weak oil prices.
  • Rosneft also said that its fourth-quarter revenue fell 5.3% quarter on quarter to 2.2 trillion roubles.
  • Fourth-quarter total hydrocarbon production stood at 5.94 million bpd, up 1.9% from the third quarter, it said.
  • Earnings before interest, tax, depreciation and amortization (EBITDA) fell 24.1% to 488 billion roubles, hit by increased spending by the end of the year along with higher export taxes and lower oil prices.

Saudi Stocks Soar Ahead of Reclassification

  • More than $1 billion of foreign investment in Saudi stocks last month boosted its benchmark index to among the top performers globally, as investors shrugged off concerns sparked by the killing of a dissident journalist to profit from the kingdom’s coming reclassification as an emerging market.
  • Index compilers FTSE Russell and MSCI are set to include Saudi Arabia’s stock market in their emerging-market baskets, a move that will result in billions of dollars in investments from international fund managers who track such benchmarks.
  • Foreign investors were net buyers of 4.36 billion Saudi riyals ($1.16 billion) on the Saudi market, known as the Tadawul, in January, according to exchange data.

Merkel sets out condition for Huawei’s participation in 5G network

  • German Chancellor Angela Merkel said on Tuesday Germany needs guarantees that China’s Huawei Technologies will not hand over data to the Chinese state before the telecoms equipment supplier can participate in building its 5G network.
  • Merkel, on a visit to Japan, said that due to security concerns, it was important to speak to the Chinese government so “the company doesn’t just simply hand the data to the state”.
  • She told students in a discussion at Keio University that security was important if firms wanted to work in Germany and it must be made clear that the Chinese state cannot access all the data in Chinese products.

Back to Top


TODAY in HISTORY

  • Mexico adopted its present constitution. (1917)
  • FDR proposed increasing the number of Supreme Court justices—”packing” the court. (1937)

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, the Wall Street Journal.

Content posted by third parties on this site is screened in order to protect clients’ privacy and comply with regulatory requirements. Content containing sensitive personal information, inappropriate language, information about specific investments, misleading information, information about other companies or websites, or information related to litigation will be removed. Content posted by third-parties on this site remains the responsibility of the party posting the content and is not adopted or endorsed by Pence Wealth Management or LPL Financial. Any opinions or statements posted by third parties are their own and may not be representative of the experience of others and are not indicative of future performance or success. Third party content on this site does not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness. 

Comments are closed.

All Financial Consultants at Pence Wealth Management are Registered Representatives with, and securities and Advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA & SIPC. Financial Planning offered through Pence Wealth Management, a Registered Investment Advisor and separate entity from LPL Financial. The LPL Financial representative associated with this website may only discuss and/or transact securities business with residents of the following states: Alaska (AK), Alabama (AL), Arkansas (AR), Arizona (AZ), California (CA), Colorado (CO), Connecticut (CT), Delaware (DE), Florida (FL), Georgia (GA), Hawaii (HI), Idaho (ID), Illinois (IL), Kansas (KS), Kentucky (KY), Louisiana (LA), Massachusetts (MA), Michigan (MI), Minnesota (MN), Mississippi (MS), Missouri (MO), Montana (MT), Nebraska (NE), Nevada (NV),

New Hampshire (NH), New Jersey (NJ), New Mexico (NM), New York (NY), North Carolina (NC), North Dakota (ND), Ohio (OH), Oklahoma (OK), Oregon (OR), Pennsylvania (PA), Rhode Island (RI), South Carolina (SC), South Dakota (SD), Texas (TX), Utah (UT), Virginia (VA), Washington (WA), Wyoming (WY), Washington (DC)

Laila Marshall-Pence CA Insurance Lic# 0545421

BC_badge_black_small