NYSE

Stocks Rise With Dow, S&P Pushing 6th Day of Gains as Investors Bet on US Tax Reform Chances

12:48 PM, Oct 20, 2017 — The major US stock indexes climbed on Friday after a Senate budget vote raised the possibility of US tax reform, a key Republican campaign pledge.

The Dow Jones Industrial Average and the Standard & Poor’s 500 extended their stretches of gains to a sixth consecutive day, while the Nasdaq Composite reversed losses from a day earlier. Lawmakers on Thursday passed the 2018 fiscal budget, which included instructions on passing tax reform measures by a simple majority in the Senate, cutting the chances it could be blocked by Democrats.

Financials gained more than 1% in the strongest advance among the sectors on the S&P 500, while information technology increased 0.7% after PayPal (PYPL) beat third-quarter estimates, sending the shares up 4.4%.

Also in earnings, Dover (DOV) gained 4.8% after the industrial equipment maker reported better-than-expected results for the third quarter while reiterating its earnings guidance for 2017.

While financials helped keep the Dow afloat, earnings from the blue chips that reported Friday weighed. General Electric (GE) fell 2.5% after third quarter earnings missed expectations and the conglomerate cut its outlook for the full year.

Procter & Gamble (PG) fell 3.2% after its fiscal first quarter results came in about in line with investors’ expectations, but sales performance among its segments was mixed.

Pharmaceutical firm Celgene (CELG) plunged 9.9% after the company said Thursday it will end trials on a drug aimed at treating Crohn’s disease.

In afternoon trading, the Dow rose 0.5% while the S&P 500 and the Nasdaq gained 0.4% each.

In Europe, the Stoxx 600 Index was up 0.3% and London’s FTSE 100 was little changed. In Asia, the Nikkei was less than 0.1% higher, the Hang Seng rose 1.2% and the Shanghai Composite Index added 0.3%.

Companies: General Electric Company

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Housing Market Updates

Hurricane Disruptions Weigh as September US Housing Starts Miss Expectations

1:03 PM, Oct 18, 2017 — US housing starts declined last month, missing analysts’ expectations as hurricanes impacted construction in the south, even as single-family permits offered an indication the weakness might not last long.

Privately owned starts were at a seasonally adjusted annual rate of 1.127 million, 4.7% below the revised August number of 1.183 million, the Commerce Department said on Wednesday. The consensus on Econoday was for 1.17 million.

“Today’s headline largely reflects delayed homebuilding in Texas and Florida as a result of Hurricanes Harvey and Irma,” TD Economics said in a note on their website. “Despite the drop in single-family starts, permits advanced strongly, indicating that the weakness in building is likely transitory.”

Privately-owned housing units authorized by building permits in September were 4.5% below August, but single-family authorizations were up 2.5% month-on-month, the data showed.

The August and September storms in the southern US have been showing their impact on the country’s economic data releases. Federal Reserve Chair Janet Yellen said earlier this week the effects are “quite noticeable in the short term,” although she said history shows longer-term effects will be modest.

TD Economics said rebuilding in the coming months will continue to be supported by a tightening labor market that has bolstered household incomes and lending conditions remain supportive.

The weaker-than-expected starts “imply lower private residential construction spending in the third quarter,” said Barclays. But the bank’s overall residential investment tracker was revised lower only slightly, leaving their third quarter gross domestic tracking estimate unchanged at 2.3%.

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Harley Davidson $HOG

Harley-Davidson Third-Quarter Profit Beats Wall Street Estimates as US Sales Slump Less Than Market

12:03 PM, Oct 17, 2017 — Harley-Davidson (HOG) posted profit for the fiscal third quarter that topped analysts’ forecast as the US motorcycle maker’s retail sales in its home market contracted by less than the market overall.

Net income in the quarter ended September 24 totaled $68.2 million, or $0.40 per share, compared with net income of $114.1 million, or $0.64 per share, in the corresponding period a year earlier, the Milwaukee-based company said on Tuesday. While earnings per share dropped from a year earlier, they were higher than the $0.39 average estimate from analysts polled by Capital IQ.

Worldwide retail motorcycle sales were down 6.9% in the quarter from a year earlier and Harley-Davidson US retail motorcycle sales were down 8.1% on the year, still better than the 9.2% drop in the US motorcycle industry’s overall 9.2% plunge.

“The continued weakness in the US motorcycle industry only heightens our resolve and the intensity we are bringing to the quest to build the next generation of Harley-Davidson riders,” Matt Levatich, chief executive of Harley-Davidson, said. “Launching one hundred new high-impact motorcycles is a critical part of our 10-year journey.”

Revenue was $962.1 million, down from $1.09 billion in the same period last year, but still exceeding the $958.7 million Street estimate, provided by Capital IQ.

For the full year, the company reiterated its expectation that it will ship 241,000-to-246,000 motorcycles to dealers worldwide, which is a 6%-to-8% decrease from the previous year. This quarter it sees motorcycle shipments of 46,700-to-51,700 units, compared with 42,414 motorcycles a year ago.

Companies: Harley-Davidson, Inc.
Price: 48.01 Price Change: +1.44 Percent Change: +3.09

BlackRock Beats Expectations in Quarterly Earnings But Big Banks Not Expected to Follow

3:06 PM, Oct 11, 2017 — BlackRock (BLK) reported better-than-expected results on Wednesday, but the positive trend may not be followed as the pace of earnings reports from top US financial firms picks up later this week.

The investment manager said third quarter adjusted net income, which excludes one-off items, rose to $5.92 per share in the quarter from $5.14 a year earlier. Analysts in a Capital IQ poll were expecting earnings of $5.57. Revenue of $3.23 billion also beat the Street’s forecasts, propelled by growth in base fees, performance fees and technology and risk management revenue.

“BlackRock benefits from strong financial markets while banks are leveraged to loans and rising interest rates which benefit those loan spreads,” said Tim Ghriskey, chief investment officer at Solaris Asset Management, a hedge fund. “BlackRock has a very diversified portfolio while banks have several segments.”

Citigroup (C) and JPMorgan Chase (JPM) are slated to report Thursday followed by Bank of America (BAC) and Wells Fargo (WFC) on Friday.

In a note dated Oct. 6, Goldman Sachs said a slowdown in earnings per share growth is expected to be “particularly pronounced in financials.” The sector is expected to see EPS fall by 3% in the third quarter, compared with a 21% increase in the first quarter and a 10% rise in the second quarter, Goldman said.

Zacks Research said the Federal Reserve interest rate hike in June had a full-quarter impact during the third quarter, which would have eased pressure on operating margins, and that loans continued to increase, which will help interest income.

But offsetting that is a seasonally weak period in capital markets with a slowdown in stock issues, weaker trading volumes and reduced merger acquisition activity which hurts fee income growth. And with the banks already cutting costs where they could in prior quarters, there will be less support from reduced expenses, according to Zacks.

Companies: Citigroup Inc.
Price: 75.08 Price Change: -0.11 Percent Change: -0.14

Oil Market

Oil Market Rebalancing May Require Extraordinary Measures: OPEC

10:51 AM, Oct 9, 2017 — Measures by oil producers to rebalance the market are making progress but other “extraordinary measures” may be necessary in the coming year, Mohammada Barkindo, secretary general of the Organisation of Petroleum Exporting Countries (OPEC) said on Sunday.

“There is a growing consensus that … a rebalancing process is under way. We are gradually but steadily achieving our common and noble objectives,” Barkindo said after meeting with Indian Oil Minister Dharmendra Pradhan in New Delhi, according to Reuters. “To sustain this into next year, some extraordinary measures may have to be taken in order to restore this stability on a sustainable basis going forward.”

OPEC members agreed last year to collectively lower daily output of oil by approximately 1.8 million barrels, starting January 1 2017, in a bid to support a price recovery for the commodity which had been pummeled by two years of consistent overproduction.

Barkindo said on Sunday that talks were underway to discuss prolonging the period in which the output restrictions are in place. Initially OPEC had agreed to limit production until March 2018 but Barkindo’s latest comments indicated that this extending this date could be up for discussion, according to Reuters.

“OPEC has the best poker face in town but it has bluffed us countless times before this so we’ll see if this are sincere,” Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma, told MT Newswires over the phone on Monday.

Oil production is a large component of the overall economy in some nations and to maintain economic growth or just stability they have to sell more particularly if prices are down. This has prompted past production negotiations to fail if not all crude producers agreed and stuck to specific output levels. OPEC next meets in Vienna on November 30.

The US benchmark, West Texas Intermediate crude oil, was 0.2% at $49.39 per barrel in recent trade while Brent crude, the international gauge, was up 0.1% at $55.66 per barrel.

Price: 10.00 Price Change: +0.03 Percent Change: +0.30

 

Treasury Targets Reducing Capital Market Regulations With Mnuchin Citing Growth Chances

2:24 PM, Oct 6, 2017 — The US Treasury outlined its proposals to streamline and reform the capital market regulatory framework, following on a key element of President Donald Trump’s election campaign last year.

Treasury’s evaluation of current capital market regulations found that there are significant reforms that can be undertaken to promote growth and vibrant financial markets while maintaining strong investor protections, according to a report released on Friday.

In February, Trump issued an executive that called on the Treasury to identify laws and regulations that are inconsistent with a set of designated core principles of financial regulation.

“We examined the capital markets system to identify regulations that are standing in the way of economic growth and capital formation,” said Treasury Secretary Steven Mnuchin in Friday’s release. “By streamlining the regulatory system, we can make the US capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.”

Last month, Federal Reserve members raised their outlook for growth this year to 2.4% from June’s projection of 2.2%. For 2018, the officials see 2.1% expansion.

The Treasury report said the US has seen a 50% reduction in the number of publicly traded companies over the past 20 years. The department is proposing streamlining disclosure requirements to reduce costs for companies and tailoring the disclosure and other requirements for companies going public based on their size.

They also found the federal financial regulatory framework could be improved by evaluating the regulatory overlaps and opportunities for harmonization of Securities and Exchange Commission and the Commodity Futures Trading Commission CFTC regulation.

Other recommendations include incorporating more robust economic analysis and public input into the rulemaking process to increase transparency and reviewing the roles, responsibilities and capabilities of self-regulatory organizations. Also, Treasury is looking to advance US interests and promoting a level playing field in the international financial regulatory structure.

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Oil Pipelines

TransCanada Cancels Two Pipeline Projects Amid Regulatory Scrutiny

12:23 PM, Oct 5, 2017 — Pipeline operator TransCanada (TRP) will take C$1 billion ($790 million) charge in the fourth quarter after terminating plans for two pipelines in eastern Canada.

The Canadian company said in a release it will end the planned Energy East and Eastern Mainline projects after a careful review of what it termed changed circumstances. Further details weren’t given.

“In light of the project’s inability to reach a regulatory decision, no recoveries of costs from third parties are expected,” the company said.

TransCanada said it stopped capitalizing the project in August. In September, the National Energy Board, Canada’s industry regulator, said it suspended its review of the projects for 30 days at the company’s request. Earlier, the board said it received 820 submissions as part of public comment period into the pipelines and would consider factors including greenhouse gas emissions and potential accidents and spills.

The company added they will focus on their $24 billion near-term capital program which is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an 8% to 10% range through 2020.

Energy East was a proposed 4,500 kilometers (2,800 miles) of pipeline that would transport 1.1 million barrels of oil a day from Alberta and Saskatchewan to the refineries of eastern Canada

The Eastern Mainline project was to be 279 kilometers of new natural gas pipeline facilities that would have been integrated into the Canadian Mainline system upon completion. The project was also to have added nine compression units at five existing sites.

Companies: TransCanada Corporation
Price: 48.78 Price Change: -0.07 Percent Change: -0.13

walmart

Wal-Mart Acquires Same-Day Delivery Service Parcel to Take on Amazon

11:26 AM, Oct 3, 2017 — Wal-Mart (WMT), the world’s largest retailer, said on Tuesday that it acquired Parcel, a technology-based, same-day delivery startup based in New York in a move seen as an attempt to take on e-commerce giant Amazon.com (AMZN).

“We plan to leverage Parcel for last mile delivery to customers in New York City — including same-day delivery — for both general merchandise as well as fresh and frozen groceries from Walmart and Jet,” according to a statement from Wal-Mart.

Wal-Mart didn’t disclose the price but said it was smaller than what it spent on previous acquisitions this year. The deal closed on Sept. 29. Parcel will continue to serve its current clients in the city, Wal-Mart said.

In August, Amazon stepped up the expansion of its food delivery business with the takeover of Whole Foods. The company said it was slashing prices at Whole Foods. Though its Prime service, Amazon offers same-day and one-day delivery on some items and two-hour delivery in certain areas with Prime Now.

The news of the acquisition comes as a report by Thasos Group, a research firm that tracks location data from mobile phones, showed Walmart’s regular shoppers accounted for 24% of Whole Foods’ new customers in the week of following the acquisition by Amazon. That was the largest percentage.

Companies: Wal-Mart Stores, Inc.
Price: 79.45 Price Change: +1.00 Percent Change: +1.27

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ArcelorMittal Plans to Invest $1 Billion to Expand Mexico Facilities Amid Rising Demand

12:29 PM, Sep 29, 2017 — ArcelorMittal (MT), the world’s largest steelmaker, said it plans to invest $1 billion in Mexico over three years to expand its business in the Latin American country.

The funds will go toward developing steel production capabilities, sustaining the competitiveness of its mining operations and modernizing existing facilities, the company said late Thursday. The announcement follows the designation of special economic zones in southern Mexico, the country’s most economically disadvantaged region. The investment will support the creation of about 800 new jobs and play an important role in bolstering economic activity in the region, ArcelorMittal said.

The program investment will help ArcelorMittal Mexico meet the anticipated increase in demand from domestic customers, and to help use ArcelorMittal Mexico’s productive capacity of 5.3 million tonnes.

The main investment will be the construction of a new hot strip mill over three years, which will enable ArcelorMittal Mexico to produce about 2.5 million tonnes of flat-rolled steel for domestic non-auto industry customers. Further investments will be made to upgrade facilities at Lazaro Cardenas and at the group’s Mexican mining operations.

“In order to make investment decisions of the scale we have announced today we need both a favorable investment environment and confidence in long-term domestic growth prospects,” said Lakshmi Mittal, chief executive of ArcelorMittal.

The special economic zones will create “a positive regulatory investment framework aimed at facilitating economic and infrastructure development in the south of the country,” Mittal said. “Our investment program is aligned with the Mexican government’s objectives and will enable us to benefit from the anticipated increased demand for higher-added value steel products from domestic Mexican customers.”

Companies: ArcelorMittal
Price: 25.69 Price Change: +0.21 Percent Change: +0.82

Ford Motor Company

Ford Motor Partners With Ride-Hailing App Lyft to Test Self-Driving Vehicles

11:15 AM, Sep 27, 2017 — Automaker Ford Motor (F) is teaming up with ride-hailing company Lyft, in which its rival General Motors has a stake, to test self-driving vehicles, it said on Wednesday.

Ford, which is developing self-driving technology through self-driving vehicles and its virtual driver system Argo AI, is also building out the infrastructure and systems necessary for to make it easy for people to use its service, Sherif Marakby, Ford’s vice president for autonomous vehicles and electrification, wrote in a blog post on Medium on Wednesday. Ford has previously said it will invest $1 billion in Argo AI over the next five years.

As Ford builds its technology platform, it initially plans to offer human-driven vehicles on Lyft’s fleet, with the help of the ride-hailing service’s application. Later, it aims to make self-driving vehicles available through Lyft’s network, but only after their safety has been demonstrated.

“We don’t, however, plan to put customers in them until we are certain our technology delivers a positive, reassuring experience where we can gain meaningful feedback,” Marakby said. “When ready, we’ll have self-driving cars operating alongside Lyft’s current community of drivers to help accommodate times of significant consumer demand to ensure that transportation remains timely and affordable.”

Companies: Ford Motor Company
Price: 11.89 Price Change: -0.04 Percent Change: -0.30

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