The Bank of Japan shocked financial markets overnight by adopting negative interest rates for the first time ever, in a desperate attempt to kick start the world's number three economy. A rate of -0.1% will now apply to excess reserves parked at the central bank, which said it would extend the policy "as long as necessary." The decision saw global shares jump, the yen fall, and sovereign bonds rally. (SA)
Oregon regulators yesterday forced tight new state controls on struggling Portland health insurer Moda Health Plans, citing the company's ongoing financial losses and depleted capital reserves. The Oregon Division of Financial Regulation put the company into "supervision," meaning all business decisions will have to cleared by state officials. Moda suffered a miserable fourth quarter of continuing losses and a shrinking capital base. (OregonLive)
Amazon’s full-year sales topped the $100bn mark for the first time in company history last year. However, net profits of $596m reported after the bell yesterday missed Wall Street estimates, as operating expenses rose nearly 18 per cent from the year prior. Shares were down sharply after hours. (FT)
Finally, Fourth quarter GDP numbers are out this morning, and economic growth underwhelmed. The economy grew at a .7% annualized pace in the 4th Quarter, as a strong dollar sapped exports, manufacturing sputtered, and consumer spending cooled. (FT)
Oil is up $.55 at $33.77 a barrel.
Gold is flat at $1116 a Troy ounce.
US Stocks sold off yesterday after the Federal Reserve left interest rates unchanged saying the economy has slowed since December. The Fed also mentioned that a second interest rate hike in March was unlikely. Large losses from corporate heavyweights Apple and Boeing accounted for much of the drop in the Dow Industrials. With Apples declining stock price and Googles stock trading higher Apple is close to surrendering the title of world’s largest company to Google.
The US Stock market hasn’t been confident in the economy this year, and now, no longer is the Fed. Yesterday the Fed essentially issued a mea culpa admitting they shouldn’t have raised interest rates in December and that they probably won’t raise rates 4 times in 2016 as they had previously stated.
Facebook reported earnings yesterday after the bell that smashed wall st estimates. Facebook’s earnings were up 39% over the same period last year. The company said that 1.59 billion people globally visited their site at least once a month with 90% of those people using a mobile device to access the site. Mark Zukerberg and team seem to be doing a great job quieting the skeptics (including me) regarding their ability to monetize the business.
Ecommerce giant EBay reported earnings that were in-line with wall streets expectations of 39 cents/share. Revenue for the company was flat year over year, but the company gave guidance for 2016 that was much lower than expected sending the stock 10% lower. It seems that everyone is having a hard time competing with Amazon.
The Chinese central bank is taking steps to try to stop the flood of money leaving the country. The People’s Bank of China is curbing the ability of foreign companies to repatriate their earnings back to their own currency. They are also making it harder to bet against the Yuan and transfer money out of the country. These moves are going to make it difficult for the IMF to designate the Yuan as one of the worlds reserve currencies.
US Stocks traded sharply higher yesterday led higher by big earnings driven gains and oil prices trading higher. Today investors are digesting more earnings reports and looking towards 2pm when the Fed decision about interest rates is announced.
Yesterday after the bell Apple reported earnings that beat consensus estimates but missed on revenue estimates. IPhone sales grew at the slowest pace since the iPhone was introduced in 2007. The company forecast that revenue in the current quarter would decline at the steepest rate in 15 years signaling an end to the company’s hyper growth of the past. Shares of Apple are trading lower on this news.
Boeing reported earnings this morning that easily beat analysts’ expectations, but the company said that they will produce far fewer planes in 2016 than originally expected which sent the stock down 6%.
AT&T reported earnings that were softer than expected. The company added fewer wireless customers than a year ago. AT&T has been facing intense competition from carriers attracting customers in new ways. Last year AT&T bought DirecTV to offer national bundles of wireless and cable they say their rivals can’t match. Shares of AT&T are trading lower.
And it appears that the US consumer is shrugging off the stock market volatility as consumer confidence in January rose more than expected. Consumers don’t see the stock market weakness as having a negative impact on the economy.
The Federal Reserve starts a two day meeting this morning and is not expected to take any action on interest rates this meeting. However, there is hope central bankers will make some reassuring comments about market volatility and offer guidance on rate hikes. (Fox Business News)
Big bank AIG will return a minimum of $25 billion in capital to shareholders over the next two years, execute an IPO of its United Guaranty unit, and divest a number of other businesses. (CNBC)
Health giant Johnson & Johnson's sales fell 2.4% to $17.8 billion in the fourth quarter. Currency rates and slumping medical device sales continued to be a drag. Profits rose 18% to $3.2 billion. Excluding currency rates, revenue was up 1.8% renewed vitality in the Band-Aid segment. Medical device sales fell 8.7% for the year to $25.1 billion. (USA Today)
3M, maker of miracle products like Scotch tape and Post-it notes, reaffirmed its 2016 financial forecast of a 1% to 3% percent sales growth, excluding the impact of currency. The company cut about 1,500 jobs in the fourth quarter and took a pre-tax restructuring charge of $114 million. Profits fell to $1.04 billion, from $1.18 billion, a year ago. Sales fell 5.5% in the quarter. (Reuters)
Oil is flat at $30.27 a barrel.
Gold is up $7 at $1112 a Troy ounce. A three month high.
U.S. stocks logged their first positive week of 2016 last week. But the S&P 500 and Nasdaq are still in correction territory ahead of today's trading. (CNBC)
McDonald's fourth-quarter results are out reporting profits of $1.31 per share on revenues of $6.34 billion.
Global same-store rose 5%. In the US, they jumped 5.7% thanks to all-day breakfast. The company's shares have rallied 32% over the past year. (Business Insider)
Businesses were more likely to boost pay in the fourth quarter and confidence in U.S. growth continued, even as sales and profit growth flattened according to a survey by the National Association for Business Economics. 49% of firms reported raising wages in the quarter. Nearly half of businesses expect sales to rise. 19% of firms expect margins will drop in the current quarter, the highest since July 2014.
Ford is exiting all its operations in Japan and Indonesia this year, because the automaker sees "no reasonable path to profitability" in those countries. (Reuters)
The S&P 500 is down 8 and the NASDAQ is down 16. The MSCI international index is down 0.77%.
Oil is down $1.05 at $31.14 a barrel. Oil prices spiked 7% on Friday. That represented a dramatic rebound from last Wednesday, when crude crashed to as low as $26.19 a barrel, the weakest level since April 2003. That's a 21% jump in just two days. (CNN)
Gold is up $8 at $1104 a Troy ounce.
General Electric fourth-quarter profits were 52 cents per share, down from the 56 cents it reported last year. Sales rose 1% to $33.8 billion. GE reaffirmed its full-year profit forecast of 2% to 4% organic growth for the year. (Fox Business News)
Oil and gas exploration services company, Schlumberger says customers are abruptly cancelling projects. The world's largest oilfield services company plans to cut 10,000 jobs and a $10 billion stock buyback program to save cash. (Financial Times)
Like lemmings running over the cliff and into the sea retail investors pulled $5.2 billion from U.S. stock mutual funds in the latest week. That marks the third straight weeks of outflows. Remember the market timers Hall of Fame is an empty room in Paducah, Kentucky.
Join us this weekend for Financial Focus Radio when we will dissect this market downturn.
The S&P 500 is up 27 and the NASDAQ is up 74. The MSCI international index is up 2.46%.
Oil is up $1.56 at $31.09 a barrel. Crude oil is at 12-year lows and is cheaper than milk and a barrel. The price of one gallon of crude is equal to about half a gallon of milk, the lowest ratio since 2004. The cost of the oil inside a barrel is less than the cost of a barrel itself. (Fox Business News)
Gold is down $1 at $1098 a Troy ounce.
With the recent market turmoil January is on track to be the worst month for the S&P 500 since February 2009, the last month of financial crisis losses before the market began its rebound. Make a note …. That downturn ended …. so will this one. There is nothing a long-term investor with a well-diversified and balanced portfolio can and should do in response to this correction. (CNBC)
In the move to reduce holdings of assets perceived to be risky, the average cash balances of investors have climbed to 5.4%, the third-highest level since 2009. Remember no one can time the market. The only way to lock in certain losses is to sell your investments in a down cycle. (CNBC)
Mortgage application volume jumped 9% for the week over week, according to the Mortgage Bankers Association. Refinancing was the driver of total volume, surging 19%, but are 40% below a year ago. Applications to purchase a home fell 2% week-to-week, but are 17% higher than a year ago.
U.S. consumer prices fell in December as the cost of energy goods dropped and services rose. According to the Labor Department the Consumer Price Index slipped 0.1%. The CPI increased 0.7% for 2015. Last month, energy prices dropped 2.4% percent, with gasoline tumbling 3.9%. Food prices fell for a second straight month.
The S&P 500 is up 1 and the NASDAQ is up 10. The MSCI international index is down 0.21%.
Oil is down 32 cents at $28.03 a barrel.
Gold is down $7 at $1100 a Troy ounce.
Stocks are dropping this morning, as oil prices sink another 3% and have traded below $28 per barrel, hitting lows not seen since September 2003. The S&P 500, and Nasdaq remain in correction territory after closing flat yesterday in a volatile session. The S&P 500 is just above the August 2015 correction low of 1,867. (CNBC & Reuters)
U.S. Treasury yields are lower this morning, with the 10-year yield falling below the 2% for the second time since last week, trading back to October 2015 lows. (Reuters)
IBM is forecasting weak earnings in 2016 after reporting an 8.5% fall in fourth-quarter revenue as a strong dollar weighed on results. The company receives more than half its revenue from markets outside the United States. The strong dollar carved off $7 billion from IBM's 2015 revenue and reduced its profit by $300 million in the fourth quarters. As of Tuesday's close, IBM's shares had fallen 18.5% in the past 12 months. (Reuters)
Goldman Sachs reported a fourth-quarter profit of $765 million. Revenue was $7.27 billion in the quarter. The results surpassed Wall Street expectations. Goldman shares have decreased 13% since the beginning of the year. (AP)
The S&P 500 is down 29 and the NASDAQ is down 74. The MSCI international index is down 2.66%.
Oil is down 81 cents at $27.65.
Gold is up $11 at $1100 a Troy ounce.
U.S. stocks are sharply higher this morning, after Chinese stocks gained 3.2% last night. Data shows the Chinese economy grew at 6.8%in Q4of 2015. For 2015, China's growth slowed to a 25-year low of 6.9%. The world's second-largest economy continues to shift away from its manufacturing roots. (CNBC)
Bank of America reported a 9.8% rise in profits for the fourth quarter of the year. The second largest U.S. bank reported profits of $3.01 billion, up from $2.74 billion, last year. Total revenue rose 4.3% to $19.53 billion. Global markets revenue rose 31%, accounting for 16% of total revenue. (Reuters)
UnitedHealth ended 2015 with a 19% drop in fourth-quarter profits. The company earned a profit of $1.22 billion for Q4, down from $1.51 billion in the previous year. The company had revenue of $43.6 billion. Earnings from the company's pharmacy benefits management unit jumped 50%. (AP)
Royal Dutch Shell is exiting a multi-billion-dollar Abu Dhabi gas field project, calling it uneconomic in the current downturn. Major write downs were not expected. (CNBC)
The S&P 500 is up 28 and the NASDAQ is up 69. The MSCI international index is up.
Oil is up 31 cents at $29.73. According to the International Energy Agency Chinese oil demand likely hit a record high in 2015.
Gold is down $6 at $1085 a Troy ounce.
Stocks are much lower this morning as oil is tanking, following yesterday’s rally on Wall Street. The S&P 500 and Nasdaq are in a correction territory, down more than 10% from last summer’s high. Asian stocks ended sharply lower overnight, erasing early gains. Chinese stocks lost 3.5%, moving into a bear market, down more than 20%. (CNBC)
Oregon’s largest employer Intel, sold more data center and mobile chips in the fourth quarter, as it makes steady progress diversifying away from a slowing PC market. The chipmaker made a $3.6 billion in profit, during the quarter. Revenue rose 1%, to $14.9 billion. (USA Today)
Wells Fargo, the world’s largest bank by market value, posted a quarterly profit of $5.71 billion unchanged from last year. Revenue climbed about 1% to $21.6 billion. (Bloomberg)
JPMorgan Chase fourth-quarter profits climbed 10% to $5.43 billion as expenses from litigation and employee compensation shrank. (Bloomberg)
Join us Saturday at 10 for Financial Focus radio as we share with you how to respond to the 2016 market sell off.
Almost $3.2 trillion of paper stock market value has been lost around the world since the start of 2016. U.S. stocks are off $1.77 trillion, while overseas stocks are down $1.4 trillion. But remember these are only paper losses until you actually push the sell button. If you have a long-term time horizon and own quality this is just a normal and expected correction. If you have been treating the financial markets as a casino and have bought junk, this will be very painful. (CNBC)
Banking giant JPMorgan Chase saw fourth-quarter profits rise 9%, helped by strong performance in its consumer banking division and lower legal expenses. The bank was impacted by the drop in oil prices, and the weakness in the commodity prices. The bank had to add to its credit reserves to cover loans to oil and gas companies and metal and mining companies. Total net revenue at the bank totaled $22.9 billion. (AP)
Best Buy saw holiday same-store sales fall 1.2%, due to softer than expected mobile phone sales. The electronics retailer saw other areas, like home theater and appliances, perform well. (CNBC)
The Web is becoming the go to place for all retail. WebMD is exploring a sale of all or part of its business. The online health-care information website operator is said to be in talks with Walgreens and UnitedHealth. (Financial Times)
U.S. stocks are higher this morning, putting the S&P 500 on track for a third day of gains, and the Nasdaq for a second straight positive day after breaking an eight-session losing streak. (CNBC)
A sharp drop-off in home loan activity over the holidays was clearly a blip. Mortgage application volume increased 21.3% last week. (Mortgage Bankers Association)
Is this showing the death throes of the PC? Personal computer shipments suffered their biggest yearly decline ever, dropping 10.4% in 2015. (International Data Corporation.)
Rail provider CSX reported a fourth quarter profit of 48 cents per share, above estimates. The rail operator said a weak global economy and other factors would hurt its 2016 results. (CNBC)
Yum Brands reported December same-store sales in China rose by 1%, driven by a 5% gain at KFC. That helped offset an 11% same-store sales drop at Pizza Hut. Yum is in the process of spinning off its China business. (CNBC)
U.S. oil prices are stronger for the first time in eight sessions, after dipping below $30 per barrel Tuesday for the first time in more than 12 years. Oil is up 85 cents at $31.29 a barrel. (Reuters)
European stocks and U.S. futures are sporting solid gains after the Shanghai Composite managed to squeeze out a 2/10% advance in a volatile session overnight. The Q4 earnings season is underway after Alcoa last night reported mixed results. Still to come this week are Intel, JPMorgan, Wells Fargo, and Citigroup, among others. (SA)
The China market may be short on cheerleaders these days, as global investors fret about a mainland economic slowdown, but Starbucks seems just as keen as ever to expand in the middle kingdom, announcing today that it would open 500 more stores in China this year. That’s in line with the Seattle-based coffee chain’s longstanding plan to buck the economic slowdown spooking global stock markets, and keep expanding rapidly on the mainland throughout the current decade. (ft)
American Airlines has become the latest US company to take a substantial write down on its investments in Venezuela as the country’s economic woes and currency crisis worsen. The airline said in a regulatory filing today that it will take a $592m one-off charge this quarter to write off the value of the Venezuelan currency it holds. Major US companies with exposure to Venezuela – including Procter & Gamble, PepsiCo and AT&T – have been collectively forced to take billions of dollars of write downs in recent years as Venezuela’s currency problems accelerate. (Filing)
US Stocks had the worst ever start to a year last week with the major US indexes losing over 6% last week. The selling has abated here in the US this morning with stocks higher in early trading. Last week global stock markets lost $2.3 Trillion in value. (CNBC)
The consolidation in the Drug business continues. The UK based Shire announced today that they would acquire the Illinois based Baxalta for $32 Billion in stock and cash. The deal will make Shire the leader globally in treating rare diseases. The deal marks a strong start to M&A in the healthcare business in 2016 after the sector saw its biggest deal making streak in history last year with global healthcare deals totaling $673 Billion, many of those deal tax inversions. (Yahoo Finance)
US drug makers demonstrated their pricing power with the start of the new year. Pfizer, Amgen, Allergan and many others have raised prices for dozens of drugs with many increases over 10%. One company Vanda pharmaceuticals increased one of their drugs 10% to $148,000/year. The price increases are significant especially in light of the recent political pressure to curb these price increases. This also illustrates why these companies continue to be good investments. (marketwatch.com)
And unless you’ve been under a rock you know Wednesday’s Powerball lottery is now $1.3 Billion which is the largest ever and expected to grow. Your chance at winning, 1 in 292 million. The for sure winner will be the tax man who will collect 39.6% of the winnings. Good luck out there! (marketwatch.com)
The Labor Department says the economy added 292,000 jobs in December. The private sector added 275,000 and government added 17,000. The unemployment rate is unchanged at 5%. 2015 job additions were the most on an annual rate since 1999.
Layoff announcements suggest a solid labor market. There were 23,622 announced job cuts in December 2015, down from November and a year ago. There has been an uptick in announced layoffs in the energy sector, with 1,682 announced job cuts in December and a total of nearly 100,000 in 2015. By comparison, there were just 14,000 announced layoffs in the energy sector in all of 2014.(LPL Research)
Constellation Brands the third-largest beer company by volume in the U.S., saw profits jump 22% in the latest quarter. In the quarter, Constellation’s net beer sales rose 8%, while sales in the wine and spirits segment climbed 3%. Shares are up 39% in the past 12 months. (Wall Street Journal)
Walgreens beat profit expectations in the latest quarter, but the nation's largest drugstore chain started 2016 cautiously by narrowing its earnings forecast range for the New Year. Walgreens had a quarterly profit of $1.11 billion on sales of $29.03 billion. The company's shares grew about 12% in 2015. (AP)
New orders for factory goods fell in November and inventories declined for a fifth straight month. Another signal that economic growth slowed in Q4. New orders for manufactured goods slipped 0.2% after climbing in October. (CNBC)
The ISM non-manufacturing index says the sector expanded in December. It was about even with the previous month. (Fox)
Economists have slashed Q4 GDP estimates to as to a 0.5% annual pace. The economy grew at a 2.0% rate in the third quarter. Manufacturing, which accounts for 12% of the US economy, has suffered the most and is likely to remain under pressure, at least through early 2016. (CNBC)
Macy's cutting its outlook and more than 3,000 jobs after a poor holiday season. Macy's expects to reduce expenses by about $400 million annually. Two Oregon locations are on the list of 40 stores Macy's will close by the end of 2016. Those are Roseburg and North Bend. (Portland Business Journal)
Oil is down $1.09 at $32.88 a barrel. This decline puts U.S. oil prices are at 12-year (2004) lows. Oil is at near-record production and there are massive stockpiles. (Reuters)
U.S. stocks and those around the world are lower this morning, after North Korea claimed to have successfully tested a H-bomb, knocking markets already concerned about China's economy. (Fox)
Mortgage application volume fell dramatically over the past two weeks, even when adjusted for the holidays. This was likely due to a rush in home loans before the Fed rate hike. All that demand being pulled forward made for a steep 27% drop-off. We will see if this is a trend or a blip. (CNBC)
Car sales are on track for their best-selling month of the year and their best December ever as companies reported their sales. New-car revenue is expected to reach a record $58 billion for December, up 15.4% from a year earlier. (Robert E. Frey)
Private companies created far more jobs than expected in December, a bright sign for the economy. According to ADP private payrolls surged by 257,000, with gains evenly distributed among small, medium and large businesses.
Oil is down $1.18 at $34.79 a barrel. Brent crude, the price of foreign oil, fell to their lowest levels in more than 11 years this morning, as tensions between the Saudis and Iran are seen as stomping out any chance of major producers cooperating to cut output.
We are ready to call this the biggest misleading financial headline of 2016. “U.S. Stocks Post Worst Annual Losses Since 2008”. We all remember in 2008 the S&P 500 was down nearly 40%. In 2015 the S&P 500 was down 0.7% and if you add in the dividends returned a positive of a little over 1%. Be careful of the headlines. The world did not end like the Wall Street Journal headline would lead you to believe.
The U.S. economy's manufacturing sector contracted in December, according to the Institute for Supply Management. The employment component fell but new factory orders rose. Construction spending posted its first decline in nearly 1-1/2 years. (CNBC)
As President Obama moves to limit gun ownership, Smith & Wesson is raising its quarterly revenue and earnings guidance, saying gun sales have been stronger than expected and predicting a continuation of that trend. The stock is up 147% in the last 12 months. Competitor Sturm, Ruger stock is up almost 72% in the same time period. (WSJ)
Amazon says more than 23 million items were ordered worldwide from sellers on Amazon on Cyber Monday, a more than 40% increase from the prior year. But even in the digital world there are returns. In the first week of January, UPS anticipates it will backhaul more than 5 million packages back to U.S. retailers — that would be 500,000 more than last year. (CNBC)
U.S. and European stocks are dropping today, after Chinese equities plunged 7%. Spurring the sell-off, factory activity in China contracted for the 10th straight month in December. The S&P 500 snapped a three-year winning streak in 2015. The Nasdaq posted its fourth straight positive year. (CNBC)
More bad news for American Express. They and Bank of America were booted after 12 years by Fidelity as credit card partners, in favor of U.S. Bancorp and Visa. (Reuters)
One commodity could get a boost in pricing. Dairy farmers in Texas and New Mexico say consumers should expect a milk shortage, after a freak blizzard killed more than 30,000 dairy cows last week. (Christian Science Monitor)
EMC will cut an unspecified number of jobs as the data storage company plans to trim expenses by $850 million. The move comes as EMC prepares to be taken private by computer maker Dell. (CNBC)
The Force is strong. Walt Disney's newest Star Wars episode topped ticket sales again this week. The movie is on pace to break the all-time domestic box office record held by "Avatar" this week. (Variety)