stocks

Stocks Dip in US as Oil Retreats, French Election Jitters Weigh

12:45 PM, Apr 21, 2017 — The main US markets were trading mostly lower on Friday afternoon as concerns about the outcome of the weekend’s presidential election in France weighed and oil prices dropped.

Sunday’s election is widely seen as too close to call, with four candidates leading. The result could have an impact on France’s future role with the European Union, less than a year after the UK’s vote to leave the bloc.

On the Standard & Poor’s 500, eight of the 11 sectors weakened, with a 1.1% drop in telecommunication services leading as Verizon (VZ) fell 1.7%. The firm is slashing prices and offering more data to stem an unprecedented wave of customer losses. But General Electric (GE) fell the most on the Dow Jones Industrial Average, retreating 2.1% after reporting earnings that beat Wall Street estimates, although revenue dipped year-on-year.

The S&P’s energy sector fell 0.5% as West Texas Intermediate lost 2.3% to trade below $50 a barrel while Brent shed 2.1% to $51.88. Schlumberger (SLB) shed 2.9% as the oilfield services giant reported quarterly adjusted earnings that meet Street expectations, but revenue was below the outlook. Halliburton (HAL), which releases results Monday, fell 1.3% and Baker Hughes (BHI), which releases results Tuesday, shed 2.5%.

Mattel (MAT) dropped 11% after the toymaker reported financial results for the first quarter, with a wider-than-expected loss and revenue that fell short of analysts’ expectations. Honeywell (HON) increased 2.5% after reporting better-than-expected earnings and revenue and as it raised the lower end of its 2017 earnings guidance range in line with Street estimates.

In afternoon trading, the S&P 500 fell 0.2% while the Dow and the Nasdaq lost 0.1%.

Globally, the Nikkei 225 advanced 1%, the Shanghai Composite was little changed, the Hang Seng dipped 0.1% and the FTSE 100 also edged down 0.1%.

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BMW

Positive Valuation Effects Underpin Jump in BMW’s First Quarter Pre-Tax Profit

11:34 AM, Apr 20, 2017 — German luxury car-maker BMW (BMW.DE) posted a sharp increase in its first quarter pre-tax profit on Thursday as it said that its stake in mapping service ‘HERE’ had risen in value.

Profit before tax rose 27% to 3.01 billion euros ($3.33 billion) from 2.37 billion euros in the same quarter a year earlier, the company said in a trading statement released ahead of its full financial results due on May 4.

The jump was due to a 183 million euro increase in the value of its stake in HERE after the company received new investment. Intel said in January that it had agreed to purchase a 15% stake in HERE for an undisclosed sum. Volkswagen’s Audi and Daimler, the maker of Mercedes cars, also hold stakes in the mapping company.

BMW said it had also benefited from a financial gain of 122 million euros from valuation effects while its Chinese joint venture, BMW Brilliance Automotive, contributed more to profit.

Revenue totaled 23.45 billion euros compared with 20.85 billion euros in the same quarter a year earlier, the company said. The average estimate for first-quarter revenue in a Financial Times survey is 21.88 billion, based on two analysts’ forecasts.

BMW reiterated its goal for a “slight increase” in group profit before tax and an earnings before tax (EBIT) margin in the automotive segment within the range of 8%-to-10% for 2017. In the first quarter, the EBIT margin in the automotive business was 9% compared with 9.4% in the first quarter of 2016.

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UK shopping

UK Retail Sales Post Deepest Annual Drop in Six Years in First Quarter

7:00 AM, Apr 11, 2017 — UK retail sales had their biggest drop in six years in the first quarter as a pick-up in inflation after a drop in the value of the pound prompted consumers to spend more cautiously.

Comparable sales, which exclude changes in floor space, fell 0.7% last quarter from a year earlier, the biggest drop since the first quarter of 2011, the British Retail Consortium (BRC), said by e-mail on Tuesday.

In March alone comparable sales declined by 1% from a year earlier, the sharpest decline since August 2015, after a 0.4% annual drop in February, the BRC said. The March figures have been distorted by the timing of Easter, which falls in April this year while last year it fell in March, according to the BCR. Economists had forecast a 0.5% drop in March comparable sales from a year earlier, according to a poll on investing.com.

Total sales rose 0.1% last quarter from a year earlier and in March they fell an annual 0.2%, the first drop in those figures since August. Food sales on a comparable basis fell an annual 0.2% in the first quarter, while non-food sales were down 1.1% in the same period from a year earlier, the data showed.

“First impressions of March’s sales figures are underwhelming,” Helen Dickinson chief executive at the BRC said. “The pressure on prices continues to build, albeit slowly, and will inevitably put a tighter squeeze on disposable income.”

Inflation has picked up in the UK in recent months as global energy prices have climbed and the pound has depreciated since British voters backed a withdrawal from the European Union, Britain’s largest trading partner. UK consumer prices climbed 2.3% from a year earlier in March, at the same rate as in February, which was the fastest price growth since 2013, the Office for National Statistics said on Tuesday. This matched economists’ expectations in an investing.com poll.

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Unilever Confirms Plan to Sell Spreads Business, Raises Cost-Saving Targets

6:48 AM, Apr 6, 2017 — Anglo-Dutch consumer goods company Unilever (UL) said on Thursday that it plans to offload its edible spreads business and review its structure after the US food giant Kraft Heinz abandoned its takeover bid in February.

The company said that it had “the future of the spreads business now lies outside the group,” following a review of its businesses, adding that it plans to sell or separate the unit that makes the Flora and Stork margarine brands.

Unilever is also reviewing its dual corporate structure which currently has headquarters in London and Rotterdam, with a view to simplifying its legal structure and increasing its flexibility for strategic decisions, and it is setting up an integrated foods and refreshment unit, which will be located in the Netherlands.

The company said that the improvements it is making will allow it to increase its underlying operating margin, excluding restructuring, from 16.4% in 2016 to 20% by 2020. It now sees total cumulative savings over the next three years at 6 billion euros ($6.40 billion) rather than the 4 billion euros that it targeted earlier. It expects to incur total restructuring costs for the cost-cutting programs of about 3.5 billion euros for the 2017-2019 period.

As part of a program to return value to shareholders, Unilever said that it would buy back 5 billion euros of shares this year and it said that it intends to raise the dividend by 12% for the coming year.

Companies: Unilever PLC
Price: 49.66 Price Change: +0.55 Percent Change: +1.12

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Syngenta

ChemChina’s $43 Billion Acquisition of Syngenta Gets Green Light From Regulators

11:20 AM, Apr 5, 2017 — European Union regulators have approved the $43 billion planned takeover of Swiss pesticide supplier Syngenta by ChemChina, a state owned chemicals company, with conditions.

The nod from the European Commission, which also oversees competition policy, hinges on the sale of significant parts of ChemChina’s European pesticide and plant growth regulator business, the regulator said in a statement on Wednesday.

It also follows an in-depth review of the proposed merger as the commission had concerns that the deal could have reduced competition in European markets for pesticides and plant growth regulators. Syngenta is the largest pesticide supplier worldwide and ChemChina sells pesticides in Europe through Adama, its Israel-based unit. Adama, the largest company worldwide selling generic pesticides, is a close competitor of Syngenta in a number of existing pesticides, the commission said.

To secure the approval ChemChina made a commitment to sell Adama’s fungicide business for cereals, fruits and oilseed rape, which target fungal infection, several of its herbicides, which target weed and insecticides as well as its seed treatment products for cereals and sugar beet, the commission said.

It also pledged to sell 29 generic pesticides under development and a significant part of Adama’s plant growth regulator business for cereals. Syngenta will sell its businesses for fungicides for vegetables and herbicides for cereals, vegetables and sunflower.

The commission said the pledges had addressed its concerns as “the divestment package will ensure that effective competition is preserved in pesticide and plant growth regulator markets after the takeover.”

“It is important for European farmers and ultimately consumers that there will be effective competition in pesticide markets, also after ChemChina’s acquisition of Syngenta,” Margrethe Vestager, the EU commissioner in charge of competition policy, said. “ChemChina has offered significant remedies, which fully address our competition concerns.”

The US Federal Trade Commission also approved the merger on Tuesday on condition that ChemChina divests three products, where Syngenta and Adama overlap in the US market of pesticides, according to a statement on its website.

The European Commission last month approved another mega-merger in the chemicals industry. It gave the green light to the planned $130 billion merger between Dow Chemical (DOW) and DuPont (DD), which is likely to create the world’s largest chemical company. In another proposed deal in the chemicals sector, German pharmaceutical and agricultural chemicals giant Bayer (BAYN.DE) and US seeds company Monsanto (MON) are also seeking regulatory clearance for their $66 billion planned merger, according to news reports.

Companies: Syngenta AG
Price: 90.00 Price Change: +0.69 Percent Change: +0.77

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Stocks Gain as Oil Rises Back Above $50, GDP Data Increases

12:52 PM, Mar 30, 2017 — The US markets rose on Thursday afternoon, with the energy sector advancing as benchmark oil prices went back above $50 a barrel while economic growth data also gave a boost.

The US economy expanded at a faster pace than previously projected in the final quarter of 2016, rising 2.1%. That’s above the bureau’s earlier estimate for annualized growth of 1.9% but remained slower than the level registered in the third quarter, when GDP increased by 3.5%.

Financials increased 1% on the Standard & Poor’s 500, the biggest gain among the sectors. On the Dow Jones Industrial Average, Wal-Mart Stores (WMT) and Goldman Sachs (GS) rose the most, adding 1.1% each to lead nearly two-thirds of the blue chips higher.

West Texas Intermediate, the benchmark US oil type, rose 1.8% to $50.38 a barrel, pushing the sector up 0.6% on the S&P 500. Brent, the international standard, increased 0.7% to $52.77. ConocoPhillips (COP) jumped 7.6% after Cenovus Energy (CVE) said late Wednesday it was buying some of ConocoPhillips’ assets in Canada. Cenovus dropped 12%.

Also in company news, Lululemon Athletica (LULU) plunged 23% after setting its guidance below Wall Street expectations. Freeport-McMoran (FCX) gained 5.2% after Reuters said the company’s Indonesian unit is close to a deal that will allow it to temporarily resume copper concentrate exports from its Grasberg mine in Papua.

In afternoon trading, the Dow, Nasdaq and the S&P 500 were all up about 0.1% each.

Globally, the Shanghai Composite fell 1%, the Nikkei 225 lost 0.8%, the Hang Seng retreated 0.4% and the FTSE 100 was down 0.1%.

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oil refinery USA flag

Oil Prices Extend Gains After Smaller-than-Expected Build in US Stockpiles

10:52 AM, Mar 29, 2017 — Oil prices were trading higher on Wednesday afternoon after government data showed that US inventories of crude oil rose by less than expected last week, marking the 11th week in 12 in which inventories have expanded.

West Texas Intermediate (WTI) crude oil, the main US benchmark, was trading 1.4% higher at $49.05 per barrel recently, while Brent crude, the international gauge, was up by 1.3% at $52.11 per barrel. WTI and Brent closed 1.3% and 1.1% higher, respectively, on Tuesday.

US inventories of oil rose by 0.9 million barrels to 534 million barrels in the week ended March 24, according to the Energy Information Administration’s (EIA) weekly oil report, published on Wednesday. This compared to 5 million barrel weekly gain registered the previous week and a 1.9 million barrel weekly increase which had been projected by the American Petroleum Institute (API) on Tuesday.

Total motor gasoline inventories decreased by 3.7 million barrels, having fallen by 2.8 million barrels a week earlier. Distillate fuel inventories fell by 2.5 million barrels, exceeding the 1.9 million barrels drop seen in the prior week, and propane/propylene inventories fell by 1.5 million barrels, far surpassing the 0.1 million barrels contraction seen the week before. Commercial petroleum inventories decreased by 3.9 million barrels, compared to a 1.3 million barrel drop registered a week earlier.

Also feeding into oil pricing sentiment on Wednesday was a higher greenback. As a dollar denominated commodity, a higher buck tends to make oil less affordable to international buyers. The Dollar Index, which tracks the value of the US currency against a basket of foreign currencies, was 0.37% higher at the time of writing.

Price: 7.64 Price Change: +0.15 Percent Change: +2.00

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Canadian dollar down

Canadian Dollar Drops On Falling Oil Prices

8:01 AM, Mar 27, 2017 — The Canadian dollar drifted lower against its major counterparts in the European session on Monday, as oil prices fell on indications of increased drilling activity in the US and as the OPEC put off a decision to extend historic production cuts to balance oil market.

Crude for May delivery declined USD0.38 to USD47.59 per barrel.

Data from Baker Hughes showed that the oil rig count rose by 21 to 652 in the week ended March 17, which was its highest level since September 2015. Signs of growing shale output undermines the attempts by the OPEC to eliminate the supply glut.

The meeting of OPEC and non-OPEC oil producing nations over the weekend agreed to review the oil market conditions and meet again in April regarding an extension of the output deal. This was an abrupt change from earlier draft of the statement which reported a “high level of conformity and recommends six-month extension.”

Further weighing on the currency on the currency was risk aversion, as President Donald Trump’s failure on healthcare reform triggered concerns about the prospects for his plans to use fiscal stimulus to boost growth.

The loonie showed mixed performance in the Asian session. While the loonie rose against the aussie and the greenback, it held steady against the euro. Against the yen, it declined.

The loonie slipped to 1.4504 against euro, a level unseen since November 2016. The loonie is likely to find support around the 1.46 mark.

Survey data from Ifo institute showed that German business sentiment improved in March.

The business confidence index rose to 112.3 in March from 111.1 in February. Economists had forecast the indicator to fall to 110.8.

The loonie eased to 1.0190 against the aussie and 1.3350 against the greenback, from its early near 2-week high of 1.0155 and a 4-day high of 1.3321, respectively. On the downside, the loonie may locate support around 1.03 against the aussie and 1.345 against the greenback.

The loonie remained lower against the yen with the pair trading at 82.66, after falling to more than a 4-month low of 82.56 early in the session. The next possible support for the loonie-yen pair is seen around the 81.00 level.

The summary of opinions from the monetary policy meeting showed that Bank of Japan board members viewed that the bank should not rush to action and it should pursue monetary easing under the current framework with patience.

To achieve the price stability target, it is important to bring the economy onto a self-sustaining growth path, members said at the meeting held on March 15 and 16.

Looking ahead, Federal Reserve Bank of Chicago President Charles Evans and European Central Bank Chief Economist Peter Praet are expected to speak about the current economic conditions and monetary policy at the Global Interdependence Center in Madrid at 1:15 pm ET.

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shell oil company

Royal Dutch Shell Divests Gabon Onshore Oil Interests for $590 Million

7:20 AM, Mar 24, 2017 — Oil and gas production major Royal Dutch Shell (RDS.A, RDS.B) has sold its Gabon onshore interests to a portfolio company of asset management company The Carlyle Group (CG) for $587 million in the latest transaction in its multi-billion dollar divestment program.

The deal, which Shell is undertaking through its affiliates, sees it divesting all of its onshore oil and gas operations and related infrastructure in Gabon to Assala Energy Holdings, a portfolio company owned by Carlyle International Energy Partners and Carlyle Sub-Sahara Africa Partners, which are both funds managed by The Carlyle Group.

It follows recent divestments by Shell in the UK, Gulf of Mexico and Canada, which form part of the company’s previously stated $30 billion divestment program that aims to simplify Shell’s upstream portfolio following its acquisition of BG in February 2016.

As a result of the sale, 430 local Shell employees will become part of Assala Energy at completion. Shell also said that the purchaser would assume debt of $285 million as part of the transaction, which is expected to close in the middle of the year, and would make additional payments of up to a maximum of $150 million.

The company said that the transaction would result in an impairment charge of $53 million post tax which would be taken in the first quarter of 2017. Shell onshore in Gabon produced approximately 41,000 barrels of oil equivalent per day in 2016 and Shell Trading (STASCO) will continue to have lifting rights from the assets for the coming five years, the company said.

“The decision to divest was not taken lightly, but it is consistent with Shell’s strategy to concentrate our Upstream footprint where we can be most competitive,” Andy Brown, Shell’s Upstream Director, said. “Shell will continue to pursue opportunities in Sub Saharan Africa.”

Price: 52.26 Price Change: Percent Change: +0.00

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canadian tax

2017 CANADIAN BUDGET PREVIEW: Could Feds Provide Tax Breaks to Seniors?

Back in 2015, the Liberals pledged to enhance the Old Age Security and Guaranteed Income Supplement with a new Seniors Price Index. OAS and GIS payments already rise with inflation, but the Liberals noted that, according to a Statistics Canada study, the price of most things seniors buy tends to rise faster, so a new index would help them keep up with the cost of living.

Meanwhile, in its alternative budget, the Canadian Centre for Policy Alternatives suggested indexing OAS to the average industrial wage and salary instead of the CPI to ensure the flat retirement benefit keeps up with earned incomes. The centre also recommended increasing the incomes of the lowest income single seniors by $1,000 by boosting the GIS top-up. Changes to the Canada Pension Plan were already announced by the Feds this summer, but the centre wants to go further, increasing the CPP income replacement rate to 50% of earnings (it’s currently at 25%, scheduled to rise to 33.3% by 2023).

One other possible change to the budget involves extending the retirement age to 67 from 65. The previous Conservative brought in this change when it was in power, and intended to phase it in gradually. But when the Liberals gained power, they promptly reversed the retirement age back to 65. But with more Canadians living and working longer, the change to age 67 might make sense, and the Liberals may be considering an about-face on this controversial issue.

MT Newswires will be providing extensive coverage of Budget 2017, with Ottawa correspondent Doug Watt providing stories from the lockup and filing those stories as soon as the budget embargo is lifted at around 4 pm ET on Mar. 22.