DAILY MARKET REPORTS
- U.S. stocks tumbled at the open Friday, as mounting anxiety over trade protectionism and inflation threatened to end the recent market rebound.
- President Donald Trump Thursday pledged to impose tariffs of 25% on imported steel and 10% on aluminum.
- The plan, which was met with threats of retaliation across Asia, Europe and North America, sparked declines in shares of companies like auto makers that use steel to manufacture products, while in Europe shares of steelmakers and industrial giants also fell.
- Europe promised to act firmly and China said it would defend its interests appropriately if Trump followed through with his pledge of imposing tariffs.
- Boeing’s 3.8% fall weighed the most on the index as worries about higher costs troubled investors.
- J.C. Penney shares plunged 9% after the department store chain missed same store sales estimates.
- Foot Locker shares were also down 12% after the footwear retailer posted disappointing quarterly results.
US FINANCIAL MARKET
J.C. Penney profit forecast, same-store sales disappoint, shares dive
- Sales at J.C. Penney’s established stores missed Wall Street targets in the fourth quarter and it forecast broadly lower-than-expected full-year profit, hurt by weak demand for its clothes and online competition.
- The retailer also cut 360 jobs as part of restructuring and cost-cutting efforts that are expected to save between $20 million and $25 million in costs annually.
- Comparable-store sales rose 2.6 percent in the fourth quarter ended Feb. 3, missing analysts’ average estimate of a 2.94 percent increase.
- Net sales rose 1.8 percent to $4.03 billion, missing the average expectation of $4.05 billion.
- Net profit fell to $254 million in the fourth quarter from $192 million, a year earlier.
Foot Locker reports 4Q loss
- Foot Locker reported a fiscal fourth-quarter loss of $49 million, after reporting a profit in the same period a year earlier.
- The results surpassed Wall Street expectations.
- The shoe store posted revenue of $2.21 billion in the period, missing Street forecasts.
Gunmaker American Outdoor Brands plummets 20% after quarterly sales plunge
- American Outdoor Brands shares tanked after the reported a large year-over-year sales decline and gave dismal guidance.
- The gunmaker said its sales fell 32.6 percent year over year in its fiscal third quarter.
- For the current quarter, American Outdoor said it expects revenue between $162 million and $166 million.
- Wall Street had previously projected $205.6 million in revenue, according to consensus estimates.
- The gunmaker also lowered its sales target for the year to a midpoint of $599 million from a December projection of $662.5 million. Analysts had predicted $655.6 million.
- Shares were halted prior to the announcement, and American Outdoor fell as much as 26 percent in after-hours trade.
Microchip Technology Agrees to Buy Microsemi
- Microchip Technology has agreed to buy Microsemi for $8.3 billion, a deal that would create a growing power in chips for everything from washing machines and cars to missiles.
- Microchip will pay $68.78 a share in cash for Microsemi, the companies said Thursday. Including debt, the deal has a value of just over $10 billion.
- It would form a company with about $6 billion of annual revenue and generate some $300 million of so-called synergies within three years.
- Microsemi makes chips for communications and for aerospace-and-defense applications. Microchip, meanwhile, specializes in semiconductors for the industrial, auto and home-appliance markets.
Expedia Picks AIG to Sell Travel Insurance on its Websites
- American International Group said it has been selected to sell travel insurance to customers of Expedia’s websites, part of AIG’s larger effort to earn more revenue from consumers.
- Expedia’s Brand Expedia Group said the pact would make AIG’s Travel Guard offerings available to people booking flights, hotels, cars, cruises and other travel on its sites.
- Expedia said it would expand the AIG offerings to its global websites following the U.S. launch.
- The Expedia pact follows AIG’s January agreement to acquire Validus Holdings for $5.56 billion.
Female-led investor group to buy Weinstein Co assets
- A former Obama administration official on Thursday reached a deal to purchase assets of The Weinstein Company and said she will use a majority-female board to rebuild the Hollywood studio tarnished by sexual misconduct allegations.
- Backed by investor Ron Burkle and led by businesswoman Maria Contreras-Sweet, the buyers would assume $225 million in Weinstein Co. debt and commit to invest about $275 million to launch a new company.
- The talks included a settlement fund worth up to $90 million for victims of alleged sexual assault and harassment by Harvey Weinstein.
- The buyers have agreed to purchase more than 90% of Weinstein Co. assets including its film library and television business.
US ECONOMY & POLITIC
Trump to impose steep tariffs on steel, aluminum; stokes trade war fears
- President Donald Trump announced on Thursday he would impose hefty tariffs on imported steel and aluminum to protect U.S. producers, risking retaliation from major trade partners like China, Europe and neighboring Canada.
- Trump said the duties, 25 percent on steel imports and 10 percent on aluminum, would be formally announced next week, although White House officials later said some details still needed to be ironed out.
- Shares of U.S. domestic steel and aluminum makers rallied, but shares of companies ranging from auto makers to airplane makers fell on the potential impact of the higher costs.
U.S. Consumer Sentiment at Second-Highest Level Since 2004
- The University of Michigan said Friday its consumer-sentiment index was 99.7 in February, up from 95.7 in January. It was the second-highest monthly reading since January 2004, below only October’s 100.7 reading.
Airlines cancel more than 2,000 flights as nor’easter snarls travel
- Airlines had canceled more than 2,000 flights Friday as a powerful nor’easter brought rain, snow and severe wind to much of the Mid-Atlantic and Northeast. Most carriers were waiving change fees for fliers there.
EUROPE & WORLD
Japan’s Jobless Rate at Quarter-Century Low
- Japan’s jobless rate fell to a low of almost 25 years in January, while a ratio of job openings remained at a 44-year high, the latest signs that the labor market is tightening as the world’s third-largest economy continues its growth streak.
- The jobless rate fell to 2.4% in January, the lowest level since April 1993.
- Another indicator showed there were 159 jobs available for every 100 job seekers, maintaining a 44-year high.
China’s second largest e-commerce site, JD.com, falls on weak quarterly results
- Despite posting better-than-expected revenue for the quarter, net income was down 17.7% at 449 million versus a mean analyst estimate of 666 million according to Thomson Reuters consensus estimates.
- JD.com’s total net loss in the fourth quarter was 909.2 million yuan, up from a loss of 1,783 million yuan a year earlier.
- Revenue for the quarter was 110.2 billion yuan ($17.38 billion), above analysts’ mean estimate of 108.5 billion.
- JD.com also said this month that it has raised $2.5 billion for its logistics arm to bolster its position in online retail.
Honda February China vehicle sales fall 5.9 percent year-on-year
- Honda’s sales in China fell 5.9 percent in February from a year earlier to 77,065 vehicles, after climbing 10.9 percent in January.
- Sales volume during the first two months of 2018 totaled 203,239 vehicles, up 3.9 percent from the same period a year ago.
- Last year Honda’s sales rose 15.5 percent from a year earlier to 1.44 million vehicles, compared to the 3 percent growth in overall auto sales the market saw in 2017.
- The China Association of Automobile Manufacturers (CAAM) estimates China’s overall vehicles sales to grow a relatively lackluster 3 percent this year, the same as in 2017.
Toyota Announces New Company Devoted to Self-Driving Cars
- Toyota said it would spend nearly $3 billion to build software for autonomous cars, the latest sign that Japan’s biggest car maker is pushing to get the cars into the hands of consumers.
- Toyota, Denso and Aisin Seiki will create a new Tokyo-based company, called Toyota Research Institute-Advanced Development, and they said they would invest ¥300 billion ($2.8 billion) in it.
- Toyota is nearing a self-imposed deadline of 2020 for selling cars that can pilot themselves on freeways, with city-street capability a few years later.
GM plants to cut 5,000 South Korean jobs
- General Motors’ South Korean unit plans to slash 5,000 jobs, or about 30 percent of its workforce, but keep production steady if Seoul agrees to its $2.8 billion proposal for the loss-making operation
- The U.S. automaker announced last month that it would shut down a factory in Gunsan, southwest of Seoul, and that it was mulling the fate of its three other plants in South Korea.
- The Detroit automaker, which owns 77 percent of GM Korea, is negotiating with the South Korean government over the restructuring proposal, as state-run Korea Development Bank (KDB) owns a 17 percent stake.
Electrolux puts $250 million U.S. investment on hold over Trump tariff hike
- Sweden’s Electrolux, Europe’s largest home appliance maker, said it would delay a planned $250 million investment, after U.S. President Donald Trump announced tariffs on imported aluminum and steel.
- Electrolux buys all the steel it uses in its U.S. products domestically.
- Electrolux had said in January it would invest $250 million to expand and modernize its plant in Springfield, Tennessee.
TODAY in HISTORY
- Texas declared its independence from Mexico. (1836)
- Rutherford B. Hayes was declared president by a S. electoral commission since the original result was too close to call. He was the only president elected this way. (1877)
- Puerto Rico became a U.S. territory and Puerto Ricans gained American citizenship. (1917)
- King Kong, starring Fay Wray, premiered in New York City. (1933)
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.