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U.S. STOCKS PAUSE AFTER RALLY

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US FINANCIAL MARKET
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DAILY MARKET REPORTS

  • Recent reports have shown consumer spending, home sales and business investment picking up, encouraging investors who have wondered whether an economy that has expanded for nine years could sustain its momentum.
  • Senate Republicans have also drawn closer to holding a vote on a tax bill.
  • The U.S. special counsel’s office charged former national security adviser Michael Flynn for lying to the FBI about his contacts with Russia’s ambassador to the United States.
  • VMWare gained 2.5 percent after the virtualization software maker reported upbeat results as more customers licensed its products to help ease their move to cloud.
  • Ulta Beauty fell more than 4 percent after the cosmetic retailer’s profit and sales forecast fell below estimates.

US FINANCIAL MARKET

VMware tops revenue, profit estimates; shares rise

  • Virtualization software maker VMware reported better-than-expected revenue and profit, as more customers licensed its products to help ease their move to the cloud.
  • Net income rose to $443 million from $319 million a year earlier.
  • Revenue rose 11 percent to $1.98 billion.

Ulta Beauty lower on merchandise margin pressure

  • Ulta Beauty tops profit estimates.
  • Comparable sales were up 10.3% during the quarter.
  • E-commerce sales were up 63% to $120M.
  • Despite the strong sales growth, gross margin fell 110 bps to 36.7% off a lower merchandise margin.

CVS Health Closes in on Deal to Buy Aetna

  • CVS is moving closer to a deal to buy Aetna for more than $66 billion in cash and stock. The deal, which could be announced by Monday, would create a health-care behemoth selling everything from drugs to insurance.
  • Deal would likely be valued at between $200 and $205 per Aetna share, sources say.

Macy’s ups seasonal hiring after strong start to holidays

  • Macy’s said on Friday said it had a strong start to the holiday shopping season and would hire an additional 7,000 temporary workers in anticipation of the demand continuing through Christmas.
  • The department store operator had said in September it would hire 80,000 temporary workers for the holidays – compared with last year’s 83,000 – of whom 18,000 would work in distribution centers to fulfill online orders.
  • More than 174 million Americans shopped in stores and online during the Thanksgiving–Cyber Monday holiday weekend, beating expectations of 164 million.

CME Group to launch bitcoin futures contract on Dec. 18

  • CME Group on Friday said it will launch its bitcoin futures contract on Dec. 18 to provide a regulated trading platform for the cryptocurrency futures market.
  • The bitcoin futures, available for trading on the CME Globex electronic trading platform, will be cash-settled, CME said.
  • Nasdaq also plans to launch a futures contract based on bitcoin in 2018, according to a Reuters report.

Amazon is in exploratory talks with generic-drug makers

  • Amazon has talked to makers of generic drugs, including Mylan and Sandoz, about a potential entry into the pharmacy space.
  • The conversations may be about Amazon taking a role in drug purchasing, competing against distributors like McKesson, AmerisourceBergen, and Cardinal Health.
  • But sources agree Amazon’s plans remain vague, and some are skeptical that the e-commerce giant will pull the trigger.

Campbell Is Testing Online Soup Delivery

  • Campbell is testing an online service that will deliver soups to customers’ homes, part of an effort by the 148-year-old food giant to shake off a sales slump and update its business model.
  • The Camden, New Jersey-based company will begin a pilot test of the program next month, shipping out containers of premium soups that consumers can heat up at home.
  • Campbell has made previous attempts to broaden its image. In July, the company announced a $700 million deal to buy Pacific Foods of Oregon, which makes organic soup and broth. It also invested $10 million in the meal-kit startup Chef’d earlier this year. Through that partnership, Campbell has started touting recipes that feature its products.

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US ECONOMY & POLITIC

Manufacturing Expands at Slower Rate in November, while construction spending surges

  • A gauge of U.S. manufacturing activity cooled for the second straight month in November, after hitting its highest level in 13 years earlier this fall.
  • ISM says its manufacturing index fell to 58.2 in November from 58.7 in October.
  • A reading above 50 indicates activity is expanding across the factory sector, while a number below 50 signals contraction.
  • Construction spending in October blazed forward by 1.4 percent, to $1.24 trillion, the swiftest advance in five months, outperforming economists’ expectations.

Ex-Trump adviser Flynn charged with lying to FBI in Russia probe

  • The Office of the Special Counsel said Flynn was charged with making false statements about his contacts with Russia’s ambassador to the United States.
  • Flynn, a retired Army general who was fired from his White House post in February for misleading Vice President Mike Pence about his conversations with the Russian ambassador, is a central figure in the investigation led by Special Counsel Robert Mueller.
  • He is the second former senior aide to Trump to be charged in the probe.
  • Paul Manafort, who ran Trump’s presidential campaign for several months last year, was charged in October with conspiring to launder money, conspiracy against the United States and failing to register as a foreign agent of Ukraine’s former pro-Russian government.

Senate Republicans are confident they have the votes to pass tax bill

  • On Friday morning, Senate Majority Whip John Cornyn, R-Texas, called holdout Sens. Bob Corker, R-Tenn., and Jeff Flake, R-Ariz., the last two senators who need to get on board. The GOP can pass the legislation even if both senators oppose it over budget deficit concerns.
  • Senate Finance Committee Chairman Orrin Hatch, R-Utah, on Friday said he believes Republicans have the votes to pass the bill.

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EUROPE & WORLD

Markets ignore best European factory data in 17 years

  • A purchasing managers’ index showed that euro zone factories had their busiest month for more than 17 years in November and raised prices at the fastest rate in more than six years.
  • Forward-looking indicators suggested the momentum would continue to the end of 2017, capping what is expected to be the best year for euro zone economic growth in a decade.

Bank of France warns on bitcoin speculation

  • Bitcoin is a speculative asset and people who invest in it do so at their own risk, the Bank of France Governor Francois Villeroy de Galhau warned on Friday after recent volatile trading.
  • “We need to be clear: bitcoin is in no way a currency, or even a cryptocurrency,” Villeroy said in remarks made at a conference in Beijing, according to the Bank of France.
  • “It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility. The Bank of France reminds those investing in bitcoin that they do so entirely at their own risk,” he added.

Mitsubishi Cable head quits over data falsification scandal

  • The head of Mitsubishi Cable Industries has stepped down following the firm’s admission last week that it had manipulated inspection data of rubber sealing products.
  • The company is one of three Mitsubishi Materials units to have disclosed that data had been fabricated, the latest in a spate of falsification and compliance scandals at Japanese manufacturers this year.
  • The data fabrication at Mitsubishi Cable took place for two and half years with products potentially sent to hundreds of customers at home and abroad.

Saudi Prince bin Talal’s ‘friends’ have abandoned him

  • Investing celebrity Prince Alwaleed bin Talal has now been detained and reportedly tortured for more than three weeks.
  • The political and financial world has remained mostly silent or at least relatively calm about it.

Tencent Music, Spotify in Talks to Swap Stakes Ahead of Planned Listings

  • The music group of Chinese internet giant Tencent Holdings and Sweden’s Spotify are in talks to swap stakes of up to 10% in each other’s businesses ahead of their expected public listings next year, according to people familiar with the matter.
  • The deal would align the two services in future licensing negotiations with the major music labels—and offers potentially lucrative returns from their public listings, which are expected to value both in the billions of dollars, these people said.

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TODAY in HISTORY

  • The presidential election between John Q. Adams, Andrew Jackson, William Crawford, and Henry Clay was turned over to the House of Representatives due to the lack of an electoral-vote majority. (1824)
  • Sir Arthur Conan Doyle’s Sherlock Holmes appeared for the first time in print in the story “A Study in Scarlet.” (1887)
  • Twelve nations, including the United States, signed a treaty setting aside Antarctica as a scientific preserve free from military activity. (1959)
  • Exxon and Mobil agreed to merge, creating the world’s largest corporation. (1998)

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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