DAILY MARKET REPORTS
- U.S. stocks rose on Tuesday, powered by stellar results from healthcare conglomerate Johnson & Johnson and gains in technology stocks, with the benchmark S&P 500 less than a percent away from its all-time high.
- In Tuesday’s action, health-care shares in the S&P 500 led the broader market higher, adding 0.8%.
- Shares of UnitedHealth fell despite raising profit guidance for the year on revenue growth across all its businesses.
- Johnson & Johnson also raised its full-year targets amid sales strength in its pharmaceutical division, sending shares 1.4% higher.
- Meanwhile, Bank of America said that its first-quarter profit rose as a healthy U.S. economy led to a strong performance in its massive consumer business. Shares of the firm however slipped 1.8% after the bank cited a weak interest rate environment.
- Investors have been watching closely as profits at S&P 500 companies are projected to projected to fall 3.9% from a year ago.
- Many analysts are monitoring the results for weaker profits as confirmation of concerns that global growth is set to falter in the coming months.
US FINANCIAL MARKET
Bank of America’s Profit Rises on Consumer Unit Growth
- Bank of America reported that revenue, net of interest expense, slipped to $23 billion from $23.1 billion a year ago, a number below analysts’ expectations of $23.3 billion.
- The bank saw 3% growth in consumer loans and 4% growth in loans to businesses in the first quarter, also reporting a 5% increase in deposits from a year earlier.
- Overall trading revenue declined 17%.
- Equities trading revenue fell 22% and fixed-income trading revenue slipped 8%.
- Quarterly profit at the second largest bank in the U.S. by assets was $7.31 billion, compared with $6.92 billion a year ago.
Johnson & Johnson Raises Full-Year Guidance
- Johnson & Johnson raised its full-year financial targets as it reported sales strength in its pharmaceutical division, though the company had a weaker showing in its other segments.
- Overall sales were flat from a year ago at $20.02 billion though it was still ahead of analyst expectations of $19.61 billion.
- Sales in its pharmaceuticals division in the U.S. rose 4.1% to $10.24 billion, but sales in its other divisions declined.
- Revenue from its consumer segment fell 2.4% to $3.32 billion.
- Sales in its medical devices business also fell 4.6%.
- J&J’s profit fell 14% from the year-ago quarter to $3.75 billion.
- J&J anticipates adjusted earnings this year to be between $8.53 to $8.63 per share, up from its prior forecast of $8.50 to $8.65 a share, and for operational sales to be between $82 billion and $82.8 billion, up from $81.6 billion to $82.4 billion.
UnitedHealth Boosts Profit Targets After Upbeat First Quarter
- UnitedHealth raised its profit guidance for the year as the company’s strong first-quarter performance was marked by revenue growth across all its businesses.
- Revenue grew 9% to $60.31 billion from a year earlier. Analysts were expecting sales of $59.71 billion.
- Revenue from its UnitedHealthcare segment rose 7% to $48.9 billion while its Optum segment grew by 13% to $26.4 billion.
- Profit in the quarter rose 22% to $3.47 billion from a year earlier, and came in ahead of consensus
- The company now projects earnings of $13.80 to $14.05 a share, and adjusted earnings of $14.50 to $14.75 a share, up from earnings of $13.70 to $14 a share, and adjusted earnings of $14.40 to $14.70 a share.
BlackRock profit beats estimates as assets rebound above $6 trillion
- BlackRock, the world’s largest asset manager, reported first-quarter profit that exceeded expectations and raked in $65 billion of new investor cash as global financial markets rebounded from a volatile fourth quarter.
- Total quarterly net inflows across all product types jumped 13.6% to $64.67 billion from a year earlier.
- Net income fell to $1.05 billion, from $1.09 billion a year earlier but beat on earnings per share.
- Total assets under management grew 3% to $6.52 trillion in the quarter through March 31 from a year earlier, amid a broad-based rebound in global equity markets.
Ad firm Omnicom’s profit beats on higher client spending
- U.S. advertising company Omnicom beat estimates for profit on Tuesday, as it benefited from higher client spending worldwide.
- Revenue fell 4.4% to $3.47 billion, slightly below analysts’ expectations of $3.5 billion.
- Net income fell to $263.2 million in the quarter, from $264.1 million a year earlier, less of a decline than expected.
AT&T Sells Hulu Stake, Valuing Video Service at $15 Billion
- AT&T sold its minority stake in Hulu back to the company in a deal that values the streaming video site at around $15 billion, a sharp jump from more than two years ago.
- On Monday, AT&T said it sold the 9.5% stake for $1.43 billion.
- Hulu is managed by Walt Disney, which owns a roughly 60% stake after acquiring shares held by 21st Century Fox along with other TV and film assets. Comcast holds a 30% share in the business.
- Disney and Comcast will have to negotiate how to divide the 9.5% stake that the venture acquired, a Hulu spokeswoman said.
China forms task force to review design changes to Boeing 737 MAX
- China’s aviation regulator said on Tuesday that it had set up a task force to review design changes to the Boeing 737 MAX that had been submitted by the planemaker after the fleet was grounded last month.
- CAAC said it would make sure that every 737 MAX undergoes the necessary design changes and every pilot receives the necessary training before the fleet returns to service.
- The Chinese regulator did not specify the changes submitted.
US ECONOMY & POLITICS
U.S. Industrial Production Declined in March
- Industrial production—a measure of output at factories, mines and utilities—fell a seasonally adjusted 0.1% in March from the prior month, the Federal Reserve said Tuesday.
- Economists had expected the index to rise 0.2%.
- From a year earlier, industrial production rose 2.8% in March.
- For the first quarter as a whole, manufacturing output declined at an annual rate of 1.1%, the first drop since output fell 1.6% in the third quarter of 2017.
- Capacity use, a measure of slack in the industrial economy, decreased 0.2 percentage point to 78.8% in March.
- Economists had expected capacity utilization of 79.2% in March.
Homebuilder sentiment inches higher, but affordability is still a problem
- Builder confidence rose 1 point to 63 in April in the monthly National Association of Home Builders/Wells Fargo Housing Market Index.
- Of the index’s three components, current sales conditions increased 1 point to 69.
- Buyer traffic rose 3 points to 47 but is still in negative territory.
- Sales expectations over the next six months fell 1 point to 71.
Mueller Report Expected to Be Released Thursday
- Attorney General William Barr expects to provide special counsel Robert Mueller’s report to Congress and the public on Thursday, a Justice Department official said, as members of both parties and the White House prepared themselves for an escalation of partisan combat.
- Mr. Barr has said he would color-code and explain his redactions, but the release of the document is unlikely to quiet Democrats’ demands for access to the full report.
- Washington has been waiting in suspense for the release of the report, which could determine the course and tenor of the rest of the Trump presidency and will likely reverberate into the 2020 campaign.
Trump Officials Stress Urgency In Fannie, Freddie Revamp
- Senior Trump administration officials are discussing how to jump-start an overhaul of mortgage finance, with the new federal overseer of Fannie Mae and Freddie Mac pledging to act with “a great sense of urgency” over the coming months.
- There are limits on what the administration can do with Fannie and Freddie absent legislation, which would be necessary to tear up the companies’ federal charters and put the firms on a level playing field with would-be competitors.
- But the FHFA has the authority to raise fees on lenders and adjust the size of loans the companies can buy, among other things.
EUROPE & WORLD
Canopy CEO Sees Revenue Topping $744 Million This Fiscal Year
- Canopy Growth expects to generate more than C$1 billion ($744 million) in revenue this fiscal year — 19% more than analysts’ estimates — according to Chief Executive Officer Bruce Linton.
- However, Linton doesn’t expect the world’s biggest pot company to be profitable in the reporting period that began on April 1, referring to earnings before interest, taxes, depreciation and amortization.
- Linton expects Canopy’s revenue to grow steadily over the course of calendar 2019 and spike in the final quarter of the year as more retail outlets open in Canada’s supply-constrained recreational cannabis market.
China’s Holdings of U.S. Treasuries Increase for a Third Month
- China’s holdings of Treasury securities rose for a third month as the Asian nation took on more U.S. government debt amid the trade war between the world’s two biggest economies.
- China’s holdings of notes, bills and bonds increased $4.2 billion to $1.13 trillion in February from the previous month, according to Treasury Department data released Monday in Washington.
- Japan remained the second-biggest holder, with $1.07 trillion, up $2.2 billion from January.
Iran’s oil exports hit new 2019 low so far in April: sources
- Iran’s oil exports have dropped in April to their lowest daily level this year, tanker data showed and industry sources said, suggesting buyers are curbing purchases before Washington clamps down further on Iranian shipments expected next month.
- Shipments are averaging below 1 million barrels per day (bpd) so far this month, according to Refinitiv Eikon data and two other companies that track such exports and declined to be identified.
- That’s lower than at least 1.1 million bpd as estimated for March.
- While exports could rise later in the month, the drop so far suggests Washington is making progress toward its goal of curtailing shipments to below 1 million bpd from May.
Zimbabwe nearly doubles bread price as economic woes mount
- The price of bread nearly doubled in Zimbabwe on Tuesday, another burden for citizens already struggling with a weakening currency and rising prices for basic goods.
- Bread now costs 3.50 RTGS dollars a loaf, up from 1.80 on Monday, according to prices displayed by most shops visited by Reuters in the capital, Harare.
- Zimbabwe ditched its own currency for the U.S. dollar and other currencies in 2009, after hyperinflation reached 500 billion% the previous year.
- In February, faced with acute shortages of U.S. dollars, Zimbabwe introduced a new currency, called the Real Time Gross Settlement dollar. The RTGS has been losing value ever since, forcing companies to increase prices .
- Year-on-year inflation raced to 66.8% in March, up from 59.39 the previous month, according to statistics agency Zimstats.
Foxconn chairman to withdraw from daily operations, considers presidential run
- Foxconn’s Chairman Terry Gou said on Tuesday he is considering contesting Taiwan’s 2020 presidential election and the company said he would withdraw from the daily operations of the world’s largest contract manufacturer.
TODAY in HISTORY
- Lenin returned to Russia after 10 years in exile in Switzerland. (1917)
- China sent President Nixon two giant pandas as a gift. (1972)
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