DAILY MARKET REPORTS
- Wall Street’s main indexes gave up opening gains on Wednesday as industrial companies continued to suffer from concerns over the impact of new tariffs on trade.
- Boeing fell nearly 2% with traders citing continuing fallout from reports on Tuesday that U.S. President Donald Trump is seeking to impose tariffs on up to $60 billion of Chinese imports.
- U.S. business prices rose 0.2% in February, a sign of modest inflation pressure.
- Americans cut spending at retailers in February for the third consecutive month despite receiving bigger paychecks.
- The yield on the benchmark 10-year U.S. Treasury note edged down to 2.846% Wednesday.
- Shares in Qualcomm fell about 3% after Broadcom formally withdrew its bid for Qualcomm but said it would pursue other targets.
- China’s factory output grew much faster than expected at the start of the year.
- Adidas was among the best performers after the German sporting goods company upgraded its long-term outlook and said it would launch a share-buyback program.
US FINANCIAL MARKET
Broadcom ends bid for Qualcomm after President Trump nixes deal
- Singapore-based Broadcom withdrew its $117 billion bid to acquire Qualcomm on Wednesday, two days after U.S. President Donald Trump blocked the attempt citing national security concerns.
- Being based in the United States as opposed to Singapore should make it easier for Broadcom to make acquisitions of U.S. companies without falling under the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS).
Ford recalls 1.38 million vehicles for loose steering wheel bolts
- Ford said it is recalling 1.38 million vehicles in North America for potentially loose steering wheel bolts that could detach, in a callback linked to two accidents and one injury.
- The automaker said the recall covers 2014 through 2018 model year Ford Fusion cars and 2014-2018 Lincoln MKZ vehicles built at plants in Michigan and Mexico.
Gun Maker Remington Plans to File for Bankruptcy Protection
- Crushed by a hefty debt load that has gotten harder to manage as gun sales have become increasingly volatile Remington is planning to file for bankruptcy protection as early as March 18.
- The company is expected to restructure its debt and pass into the hands of bondholders, including Franklin Resources and JPMorgan Chase’s asset-management division.
- These creditors plan to offload the asset to another buyer as soon as they can do so profitably.
- Remington’s new owners will have to contend with a fraught political and social environment that has resulted in retailers such as Walmart committing to raise the minimum age for buying a gun to 21 years and for others to cut ties with the NRA.
Google to Ban Ads for Cryptocurrencies
- Google is following Facebook ’s lead by banning ads for cryptocurrencies and other “speculative financial products” across its advertising platforms.
- Alphabet’s Google said the new policy will become effective in June across ads bought on its search and display-advertising network, as well as its YouTube unit.
- The policy also will restrict ads for nontraditional methods of wagering on the future movements of stock prices and foreign-exchange, such as binary options and financial spread-betting, Google said.
- In addition to its cryptocurrency ad-policy announcement, Google said it took down more than 3.2 billion ads that violated its wider policies in 2017, such as those that attempted to send people to sites loaded with malware or phishing scams.
Walmart expands home delivery in fight with Amazon
- Walmart will expand its grocery home delivery services to more than 100 metro areas this year from an existing six cities as the retailer steps up a fight against rival Amazon.com.
- Walmart said on Wednesday the service would be rolled out to more than 40% of U.S. households by the end of the year.
- Deliveries will cost $9.95 with a minimum $30 order and companies like Uber will provide transport. Other delivery companies will be added later this year.
- The move will complement Walmart’s rollout of curbside grocery pickup, which is currently available in 1,200 stores and will be added to a 1,000 more stores this year.
A New Black Mark for United as Dog Dies in Overhead Bin
- United Continental Holdings again angered some fliers on Tuesday after a passenger’s dog died in an overhead luggage bin.
- The incident on a Monday flight from Houston to New York is a new challenge for United executives trying to rebuild passenger confidence following a series of on-board altercations over the past year.
- The transport of animals on flights has attracted controversy in recent months as a number of airlines tightened rules on their carriage after a series of incidents involving passengers and flight crew.
- United last month tightened its requirements for passengers flying with emotional-support animals following a surge in numbers and onboard incidents such as urinations across the industry.
Trump Takes Qualcomm Off the Market
- President Donald Trump late Monday ordered Singapore-based Broadcom to call off its unsolicited attempt to acquire Qualcomm for $117 billion in cash and stock.
- The order cited “credible evidence” that Broadcom “might take action that threatens to impair the national security of the United States” if it came into control of Qualcomm.
- This came just a week after the Committee on Foreign Investment in the United States, or CFIUS, decided to look into the matter, citing Qualcomm’s role in developing 5G technology—in which the Trump Administration has taken a keen interest.
- The order effectively ends a four-month saga that saw Qualcomm, the world’s fourth-largest chip company by annual revenue, targeted by a smaller company with greater momentum.
Apple to Acquire Digital-Magazine-Subscription Service Texture
- Apple said it will acquire Next Issue Media and its digital-magazine-subscription service Texture, a product developed by top magazine companies that bundles together some 200 subscriptions into one monthly service.
- Terms of the deal weren’t disclosed. Next Issue Media and Texture are owned by Condé Nast, Meredith, Hearst, Rogers Communications and KKR.
- The acquisition comes as Apple looks to beef up its services business, which includes music streaming and mobile payments.
- Apple has set a goal of increasing total revenue from services to more than $40 billion by 2020.
- Texture offers a monthly, $10 subscription to magazines such as Vanity Fair, Good Housekeeping, Time, Sports Illustrated, and National Geographic.
GE’s Top Executives Miss Out on Cash Bonuses for the First Time
- General Electric didn’t pay a cash bonus last year to its top executives at corporate headquarters, which it said was the first time in the company’s 125-year history.
- The company said that its board withheld the 2017 bonuses and canceled some 2015 equity awards that executives would have partly received. It cited the conglomerate’s struggles last year, which forced GE to slash its dividend, cut thousands of jobs and overhaul its leadership.
- The only senior executive to receive a cash bonus for 2017 was David Joyce, the head of GE Aviation, which makes jet engines.
- Mr. Joyce received a cash bonus of $1.4 million and total compensation of $5.2 million in 2017, less than half of what he received the year before.
Apple Music hits 38 million paid subscribers
- Apple’s streaming music service now has 38 million paid subscribers, up from 36 million in February.
- Apple’s number compares to 71 million premium subscribers at the end of 2017 at industry leader Spotify.
- Amazon Music Unlimited has 16 million paying subscribers, and Pandora Media has 5.48 million total subscribers.
- Google does not release paid subscriber numbers for its service, Google Play Music.
Amazon recalls 260,000 portable power banks for fire hazard
- Amazon is recalling 260,000 AmazonBasics portable power banks that can “overheat and ignite,” according to a release by the Consumer Product Safety Commission.
- Amazon has received more than 50 reports of the power banks overheating in the U.S., causing chemical burns and property damage.
- Amazon is contacting everyone who purchased one of the affected devices.
US ECONOMY & POLITIC
U.S. Retail Sales Fall for Third Straight Month
- Americans cut spending at retailers for the third consecutive month despite receiving bigger paychecks, a sign the economy lost a bit of momentum early this year.
- Retail sales—reflecting how much Americans spent on goods ranging from groceries to construction supplies—fell 0.1% in February from a month earlier to $492 billion. Economists expected sales to rise 0.3%.
- Last month’s drop in sales largely reflected reduced spending on cars and gasoline. Excluding autos, sales rose 0.2%. Excluding cars and gasoline, sales climbed 0.3%.
- Despite declines in recent months, retail sales grew 4% over the past year.
U.S. Producer Prices Rose 0.2% in February
- The producer-price index (PPI) increased 0.2% in February from a month earlier.
- Prices rose a seasonally adjusted 2.7% in February from a year earlier, when excluding the more volatile food, energy and trade services categories, the largest annual gain since August 2014. Prices rose 0.4% in February from a month earlier.
- PPI data that excludes just food and energy increased too, rising 0.2% in February from a month earlier and 2.5% from the year before.
US business inventories continue to rise as sales post largest drop in over a year
- Business inventories rose 0.6% after advancing by the same margin in December.
- Motor vehicle inventories surged 1.7%.
- Retail inventories rose 0.7%.
- Manufacturing inventories climbed 0.3%.
White House Looks to Slash China’s Bilateral Trade Surplus by $100 Billion
- The U.S. is pressing China to reduce Beijing’s bilateral trade surplus by $100 billion, a White House spokeswoman said.
- Last week, President Donald Trump had tweeted that he wanted a $1 billion reduction.
- “It was a typo and he meant $100 billion,” the spokeswoman said.
Democrat in Pennsylvania Race Declares Victory
- Democrat Conor Lamb clung to a razor-thin lead in Pennsylvania’s special election for a U.S. House seat Wednesday morning, as absentee ballots were tallied. Republican Rick Saccone said he wouldn’t concede until election officials finished the count.
- By the time most precincts reported, Mr. Lamb’s margin was under 100 votes.
EUROPE & WORLD
China’s Economy Grows Faster Than Expected on Strong Demand for Exports
- China’s economy expanded faster than expected in the first two months of 2018, helped by strong overseas demand for Chinese goods, though economists warned trade tensions with the U.S. threaten to derail that momentum in the months ahead.
- Industrial production, a rough proxy for economic growth, expanded by 7.2% in January and February from a year earlier, well above the 6.2% pace in December and forecasts for a 6.1% rise by economists.
- Fixed-asset investment, a closely watched indicator of construction activity, climbed 7.9% in the two-month period from a year earlier, quickening from a 7.2% increase in 2017 and beating forecasts for a 7% gain.
- Retail sales grew 9.7% from a year earlier, compared with a 9.4% rise in December and forecasts for 9.6% growth.
- Property investment, including in commercial and residential real estate, rose 9.9% in the first two months, compared with a 7% pace for the full 2017.
- Housing sales by value continued to grow at a double-digit pace, although the 15.7% rise was down from a 21.2% gain in December.
Adidas forecasts slower sales and profit growth for 2018
- Adidas forecast another year of sales and profit growth for 2018, albeit at a slower pace than in 2017, as the German sportswear firm reported fourth-quarter sales that undershot analyst forecasts and a net loss due to a one-off U.S. tax hit.
- Adidas said quarterly sales rose 12 percent to 5.06 billion euros, a currency-neutral rise of 19 percent, but missing average analyst forecasts for 5.13 billion.
- It reported operating profit more than tripled to 132 million euros, beating analyst forecasts for 61 million, but recorded a net loss of 41 million after a tax impact of 76 million due to changes in the U.S. tax code.
- Adidas said it plans to buy back up to 3 billion euros ($3.72 billion) worth of its shares by 2021, or almost 9% of its share capital.
UK expels 23 Russian diplomats after poisoning of ex-spy
- The measures include the expulsion of 23 Russian diplomats, the single biggest expulsion in over 30 years.
- May said the U.K. would also not send an official government representative to the World Cup soccer tournament in Russia this summer.
Drugmaker Hikma’s FY profit, revenue meet expectations; shares rise
- Hikma Pharmaceuticals reported full-year profit and revenue largely in line with expectations, aided by strong performance in the second half of the year.
- Revenue fell marginally to $1.94 billion, keeping with estimates.
- Hikma posted 2017 generics revenue of $615 million, surpassing its expectation of about $600 million.
- The Jordan-based drugmaker said EBITDA fell 5 percent to $468 million for the year but was largely in line with analysts’ estimate of $469.9 million.
All Toys “R” Us shops to shut in Britain
- Toys “R” Us stores will disappear from Britain’s shopping streets within six weeks, joint administrators for the retailer said on Wednesday, announcing plans to close the group’s remaining 75 shops.
- The administrators said in a statement they had not been able to find a buyer for all or part of the business, resulting in the loss of about 3,000 jobs.
- Seventy-five stores will be closed over the next six weeks, on top of the 25 outlets that have already closed or are about to shut under an earlier plan.
Mexico’s Cemex says under U.S. DOJ investigation
- Mexico’s Cemex said on Wednesday that it had received information requirements from the U.S. Department of Justice (DOJ) over its operations in Colombia and other jurisdictions.
- The investigation comes after the company said in December that the Securities Exchange Commission (SEC) had asked it for information to determine whether it violated the Foreign Corrupt Practices Act in the construction of a new plant in Colombia.
- The company said it would cooperate with both the DOJ and the SEC investigations.
Saudi Arabia Signals Commitment to Oil-Production Cuts
- Saudi Arabia said it would continue limiting its crude-oil output, signaling the world’s top oil exporter remained committed to production caps and underscoring a split with Iran’s call for gradually lifting output curbs.
- Saudi Arabia’s national oil company said its crude output would remain below 10 million barrels a day and its exports below 7 million barrels a day.
- Saudi Arabian Oil Co. has the capacity to pump as much as 12 million barrels a day.
- OPEC crude production continued to fall in February.
- Production dropped by 77,000 barrels a day compared with the month prior to average 32.19 million barrels a day.
Professor Stephen Hawking is dead at 76
- The renowned physicist and professor at the University of Cambridge made many discoveries in physics, mathematics and cosmology.
- Hawking suffered for decades from ALS, also known as Lou Gehrig’s disease.
- His early encounter with the disease during was depicted in the film “The Theory of Everything” in 2014.
TODAY in HISTORY
- The cotton gin was patented by Eli Whitney. (1794)
- The Republic of Czechoslovakia was dissolved, soon to be occupied by the Nazis. (1939)
- The FBI’s “Ten Most Wanted Fugitives” list made its debut. (1950)
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.
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.