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U.S. STOCK RALLY FALTERS AFTER A STRONG START TO 2018

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US FINANCIAL MARKET
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 EUROPE & WORLD | TODAY IN HISTORY

DAILY MARKET REPORTS

  • U.S. stocks opened lower Wednesday after the S&P 500’s best start to a year since 1964, while Treasury yields continued to rise.
  • The S&P and the Nasdaq have closed at record highs on every single day in 2018, buoyed by optimism over global economic growth and expectations of a strong quarterly earnings.
  • Bonds extended recent declines, with the yield on the 10-year U.S. Treasury note rising to 2.590%.
  • Some analysts attributed Wednesday’s climb in bond yields to a Bloomberg report that Chinese officials have recommended slowing or halting purchases of U.S. Treasuries.

US FINANCIAL MARKET

Buffett’s Berkshire Hathaway Furthers Succession Plan

  • Berkshire said that it is expanding its 12-member board of directors by two and naming Gregory Abel and Ajit Jain to fill the spots.
  • Mr. Abel, chief executive of Berkshire Hathaway Energy Co., also has been named vice chairman of the company’s non-insurance business operations. Mr. Jain, Berkshire’s most important insurance executive, has been named vice chairman of insurance operatio

Nordstrom’s holiday sales up 2.5 percent, boosted by its Rack stores

  • Nordstrom said its net sales climbed 2.5 percent, while same-store sales rose 1.2 percent for the nine weeks ended Dec. 30, 2017, when compared with the same period a year ago.
  • Nordstrom said its e-commerce division also continued to grow through the holidays, though it didn’t break out revenue for that segment.

Nvidia rolling out patches for chip security flaw

  • Nvidia announces that some of its chipsets were affected by the Spectre security flaw.
  • Affected chipsets include GeForce, Grid, NVS, and Tesla.
  • The company is rolling out patches to fix the problem.

Kodak shares have more than tripled since company announced its new cryptocurrency ‘KodakCoin’

  • KodakCoin will roll out after an initial coin offering later this month.
  • Blockchain, the technology underpinning popular digital currencies like bitcoin, is going to be used to build KodakOne, the company’s new photo rights and royalties tracking product for digital photographers.
  • KodakCoin will be the currency used on that platform.

Tesla says solar roof production has started in Buffalo

  • Tesla said on Tuesday it began manufacturing its premium solar roof tiles at the company’s Buffalo, New York factory last month and has started surveying the homes of customers who made a deposit of $1,000 to reserve the product last year.
  • The solar roof, which generates electricity without the need for traditional rooftop panels, is a cornerstone of the electric vehicle maker’s strategy to sell a fossil-fuel-free lifestyle under the luxury Tesla brand.
  • Tesla unveiled the product in October 2016 as it sought to acquire solar installer SolarCity.
  • Tesla started taking orders for the solar roof tiles in May by asking homeowners to put down a $1,000 deposit via its web site.
  • The company has said its solar roofs would cost between 10 and 15 percent less than an ordinary new roof plus traditional solar panels.

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US ECONOMY & POLITIC

Fitch reiterates U.S. downgrade warning

  • Fitch reiterated its warning on Wednesday that the United States could lose its prized triple-A credit rating if the country’s debt ceiling is not raised in the coming months.
  • The U.S. Treasury Department will exhaust all of its borrowing options and run dry of cash to pay its bills by late March or early April if Congress does not raise its borrowing limit.
  • Fitch’s head of sovereign ratings James McCormack told Reuters that even if Washington then continued to make interest payments on its main government bonds, not meeting other domestic obligations “would not be compatible with ‘AAA’ status.”
  • During the debt ceiling showdown in August 2011, Standard & Poor’s stripped the United States of its highest rating. It has since then kept a slightly less sterling grade of AA+ on the world’s largest economy. Like Fitch, Moody’s Investors Service has maintained its top credit rating on the United States.

U.S. import prices rose 0.1% in Dec, vs 0.5% increase expected

  • U.S. import prices recorded their smallest increase in five months in December and underlying imported price pressures were muted amid declining costs for food and consumer goods.
  • The Labor Department said on Wednesday that import prices edged up 0.1 percent last month after an upwardly revised 0.8 percent rise in November.
  • Import prices excluding petroleum rose 1.3 percent in the 12 months through December.

U.S. wholesale inventories rebound strongly in November

  • U.S. wholesale inventories rose slightly more than initially estimated in November, suggesting that inventory investment will probably contribute to economic growth in the fourth quarter.
  • The Commerce Department announced that wholesale inventories rebounded 0.8 percent after dropping 0.4 percent in October. The department reported last month that wholesale inventories jumped 0.7 percent in November.
  • Auto inventories increased 0.7 percent in November, reversing October’s 0.7 percent drop. There were also increases in inventories of petroleum, machinery and electrical goods.
  • Sales at wholesalers shot up 1.5 percent in November after increasing 0.8 percent in October. Sales of motor vehicles rose 1.2 percent in November after jumping 3.4 percent the prior month.

Mortgage applications shoot up 8.3% to start the year

  • Total application volume rose 8.3 percent during the first week of the year from the previous week, as mortgage rates held below year-ago levels
  • Refinance applications led the charge, rising 11 percent from the previous week.
  • Mortgage applications to purchase a home rose 5 percent for the week but were 1 percent lower than the same week one year ago.
  • The average contract interest rate for 30-year fixed-rate mortgages was basically unchanged during the week, increasing just 1 basis point to 4.23 percent, with points decreasing to 0.35 from 0.37 for 80 percent loan-to-value ratio loans.

Judge blocks Trump move to end DACA program for immigrants

  • A U.S. judge blocked President Donald Trump’s administration on Tuesday from ending a program that shielded from deportation children brought to the United States illegally by their parents.
  • Trump decided in September to rescind the Deferred Action for Childhood Arrivals program, or DACA. U.S. District Judge William Alsup ruled in San Francisco on Tuesday the program must remain in place while litigation over Trump’s decision unfolds.
  • In a statement, White House press secretary Sarah Huckabee Sanders called the decision “outrageous,” especially after Trump’s immigration meeting with bipartisan lawmakers on Tuesday.

 

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EUROPE & WORLD

 

U.S. yields at 10-month high on report China may slow U.S. bond purchases

  • Benchmark 10-year notes last fell 10/32 in price to yield 2.5825 percent, from 2.546 percent late on Tuesday. It earlier rose to 2.597 percent, the highest since March 15.
  • The Chinese officials, who were not named, said the market for U.S. government bonds is becoming less attractive relative to other assets.
  • They also cited trade tensions with the United States as a reason to slow Treasury purchases, the report said.
  • China is the largest foreign holder of U.S. government debt, with $1.19 trillion in Treasuries as of October 2017.
  • China also holds the world’s largest foreign-exchange reserves, at $3.1 trillion, and regularly assesses its strategy for investing them but it isn’t clear whether the officials’ recommendations have been adopted

China Quietly Orders Closing of Bitcoin Mining Operations

  • Chinese authorities ordered the closing of operations that create a large share of the world’s supply of bitcoin, tightening a clampdown that has already shuttered exchanges for the trading of cryptocurrencies in China.
  • Miners use powerful computer systems to solve complex math problems to generate and verify units of cryptocurrencies.
  • The miners have thrived in sparsely populated areas of China where electricity is plentiful and inexpensive and temperatures are cooler.
  • A loss of a large-scale mining operation would disrupt the creation and verification of cryptocurrency units.

Apple Sets Date for China Data Handover

  • Apple said it will turn over its cloud operations in China to a state-owned local partner Feb. 28, complying with Chinese law mandating that customer data collected on the mainland be stored here.
  • With the handover, photos, documents and messages uploaded by Apple users throughout China will be stored at a data center in the southwest province of Guizhou operated by the local partner, Guizhou-Cloud Big Data Industry.
  • Customers who log on to the Chinese iCloud service are notified of the change, and informed that they can either keep using iCloud or deactivate it on Feb. 28.

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TODAY in HISTORY

  • Thomas Paine’s Common Sense, was published. (1776)
  • The first underground passenger railway, the Metropolitan, opened in London. (1863)
  • The League of Nations came into existence. (1920)

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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