DAILY MARKET REPORTS
- The S&P 500 is on track to notch four fresh records in four trading sessions this week, rising more than 2%.
- The strong start to 2018 built upon last year’s remarkable gains, which were led by investor optimism over the global economy and a belief that central banks won’t hurt market and growth prospects by withdrawing stimulus too quickly.
- Nonfarm payrolls increased by 148,000 jobs last month, while economists had forecast a rise of 190,000.
- Monthly wage gains was a bright spot that pointed to labor market strength and could strengthen the chances of the Federal Reserve increasing interest rates in March.
- The odds of a March rate hike stood at 67.5 percent, according to CME Group.
Constellation Brands beats 3Q profit forecasts
- Constellation Brands reported fiscal third-quarter net income of $491.1 million.
- The results surpassed Wall Street expectations.
- The wine, liquor and beer company posted revenue of $1.98 billion in the period. Its adjusted revenue was $1.8 billion, missing Street forecasts. Five analysts surveyed by Zacks expected $1.86 billion.
- Beer sales, which account for more than half of the company’s total sales, rose 8 percent in the quarter.
- But wine and spirit sales fell 10.3 percent, hit by a 2.5 percent fall in depletion volumes.
- The drop in sales also reflect the divestiture of the company’s Canadian wine business in December 2016.
Uber Co-Founder Kalanick Plans to Sell 29% of His Shares in Company
- Travis Kalanick plans to sell 29% of his shares in Uber as part of a broader investment deal led by SoftBank Group.
- Mr. Kalanick, who was pushed out from his role as Uber’s chief executive last year but remains on the board, plans to sell the stake of about $1.4 billion in the tender offer for Uber shares by a SoftBank-led consortium, the people said.
- That tender offer, which concluded late last month, values Uber at $48 billion—a roughly 30% discount to its most recent valuation of about $68 billion but still a huge premium for early investors and employees like Mr. Kalanick.
Morgan Stanley to take $1.25 billion hit in the fourth quarter from the tax bill
- The net blow of the bill to the bank will include about a $1.4 billion net discrete tax provision, mainly due to the remeasurement of certain net deferred tax assets using the lowered corporate tax rate.
- Morgan Stanley’s arch rival Goldman Sachs had said on Dec. 29 it expects its fourth-quarter earnings to decrease by about $5 billion due to repatriation tax, the cost of moving money from foreign countries to the U.S., Goldman said in a filing.
SpaceX will launch ‘most powerful rocket in the world’ this month, and with a Tesla on board
- SpaceX will launch its biggest rocket, called the Falcon Heavy, this month, CEO Elon Musk said.
- SpaceX claims the Falcon Heavy is the “most powerful rocket in the world by a factor of two”.
- Musk said in an Instagram post Thursday that, at 2,500 tons of thrust, the rocket is equivalent to 18 Boeing 747 aircraft at full throttle.
Intel Wrestled with Chip Flaws for Months
- Several tech firms were notified of the vulnerabilities in June 2017.
- Apple became the latest tech giant to acknowledge it was affected by the vulnerabilities. The company said all iPhones, iPads and Mac computers were exposed, and that it already issued updates to fix the flaws.
- Intel, its archrival Advanced Micro Devices and chip designer ARM Holdings this week said some of their processors have security holes that could be exploited by hackers, a problem that affects a variety of chips in computers, smartphones and other devices but so far hasn’t been associated with any breaches.
- The flaws, which could allow hackers to pilfer sensitive information like passwords, affect most modern chips from an array of companies.
Apple Is Taking Longer to Ship Its Hot Products
- Longer lead times between announcement and product release have the potential to hurt Apple on multiple fronts. Delays give rivals time to react, something the company tried to prevent in the past by keeping lead times short, analysts and former Apple employees said.
US ECONOMY & POLITIC
- U.S. Employers Slowed Pace of Hiring in December
- Nonfarm payrolls rose a seasonally adjusted 148,000 in December.
- December marked the 87th straight month employers added to payrolls, a streak nearly twice as long as the second-best run.
- That brought employment gains for the year to 2.1 million.
- Meanwhile, the unemployment rate remained at 4.1%, matching the lowest level since December 2000.
- Weekly wages increased 2.8% from a year earlier, the second-best gain since early 2015.
- The share of Americans participating in the labor force held steady at 62.7% in December.
- A broad measure of unemployment and underemployment that includes Americans stuck in part-time jobs or too discouraged to look for work increased in December to 8.1% from 8.0% the prior month.
- U.S. Trade Gap Grew 3.2% in November
- The trade deficit widened 3.2% from a month earlier to $50.5 billion, the highest since January 2012.
- Imports of goods jumped to a record high of $204.0 billion in November.
- Exports of goods increased 2.3 percent to $200.2 billion in November, the highest on record.
- Part of the rise in the trade deficit in November reflected price increases. When adjusted for inflation, the trade deficit rose to $66.7 billion from $65.6 billion in October.
- While both imports and exports rose, the former increased by a greater margin, causing the deficit to expand. Imports climbed 2.5% while exports increased 2.3%.
Services sector growth slows more than expected in December
- The measure of economic movement in the service sector fell to 55.9, below the expected level of 57.6 forecast by a survey of Reuters economists.
- While the growth rate slipped, the December numbers represent the 96th consecutive month of economic growth in the service sector.
- A reading above 50 for the index indicates expansion in the service sector, and a reading below 50 signals contraction.
US factory orders rise for fourth straight month
- Factory goods orders jumped 1.3 percent amid rising demand for transportation and electrical equipment.
- October’s report was revised to show orders advancing 0.4 percent instead of the previously reported 0.1 percent dip.
- Orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans, fell 0.2 percent in November instead of slipping 0.1 percent as reported last month.
- Business spending soared last year as companies anticipated a massive cut in the corporate income tax rate.
EUROPE & WORLD
Brookfield Business Partners to buy Westinghouse for $4.6 billion
- A subsidiary of Canada’s Brookfield Asset Management plans to acquire Westinghouse Electric, the bankrupt nuclear services company owned by Toshiba, for $4.6 billion.
- Westinghouse is one the world’s leading suppliers of nuclear fuel, and it provides some form of service to 80 percent of the world’s 450 commercial reactors, according to court records.
- However, the company suffered after it agreed to build two plants in the U.S. Southeast on fixed-price contracts. The project went billions of dollars over budget, and Westinghouse filed for bankruptcy in March to escape the contracts.
Airbus in talks to sell at least 100 jets to China
- Airbus is in talks to sell 100 or more jetliners to China during a visit by French President Emmanuel Macron to Beijing next week.
- Macron plans to visit on January 8-10, accompanied by 50 company executives including planemaking officials from Airbus.
- The total number of aircraft has yet to be agreed and has historically depended on last-minute commercial negotiations that coincide with such diplomatic visits.
- In November, Boeing agreed to sell 300 planes worth $37 billion at list prices to China during a state visit by U.S. President Donald Trump.
TODAY in HISTORY
- A German newspaper reported German physicist Wilhelm Roentgen’s discovery of X-rays (1896)
- Henry Ford introduced the $5-a-day minimum wage (1914)
- Nellie Tayloe Ross became the first woman governor of a state (Wyoming) (1925)
- President Nixon ordered the development of the space shuttle (1972)
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.