US Stocks Edge Lower as North Korea-US Rhetoric Escalates, Tech Stocks Sell-Off

1:15 PM, Sep 25, 2017 — US equity benchmarks were firmly in negative territory in recent trade on Monday as an escalation in rhetoric between North Korea and the US ratcheted up and the technology sector experienced a sell-off.

North Korea’s foreign minister, Ri Yong Ho, told reporters gathered outside a hotel in New York on Monday that US President Donald Trump had “declared war” on North Korea, according to a news report from Reuters. “The whole world should clearly remember it was the US who first declared war on our country,” Ri was quoted by Reuters news agency as saying on Monday. “Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country,” Reuters additionally quoted Ri as saying.

The reported comments come after US President Donald Trump issued a Tweet on Saturday saying that “If he [Ri Yong Ho] echoes thoughts of Little Rocket Man, they won’t be around much longer.” That Tweet came after Ri delivered a speech at the United Nations (UN) in which he criticized a speech made my Trump the previous week for having “reckless and violent words” and said that Trump “committed an irreversible mistake of making our rockets’ visit to the entire US mainland inevitable all the more”.

In economic news, the closely-watched Chicago Fed National Activity Index, a weighted average of 85 existing monthly indicators of national economic activity, slid to -0.31 in August from a revised reading of 0.03 in July, missing expectations for +0.11.

Separately, William Dudley, president of the Federal Reserve Bank of New York, indicated that inflation would likely rise and said that the US is on a trajectory of slightly above trend growth. “With a firmer import price trend and the fading of effects from a number of temporary, idiosyncratic factors, I expect inflation will rise and stabilize around the FOMC’s [Federal Open Market Committee’s] 2% objective over the medium term. In response, the Federal Reserve will likely continue to remove monetary policy accommodation gradually,” he said in a speech delivered in Syracuse, New York. Dudley’s comments come less than a week after the FOMC concluded its September rate-setting meeting at which it elected to hold its benchmark interest rate unchanged.

In equities, Facebook (FB), Apple (AAPL) and Alphabet (GOOG) were down by 3.8%, 0.7% and 1.5%, respectively, at the time of writing. Traders are also eyeing a raft of upcoming data due to be published later in the week. Durable goods and consumer spending figures will be released in the coming days.

The Dow Jones Industrial Average was 0.37% lower, the Standard & Poor’s 500 was down by 0.35% and the Nasdaq was 1.04% lower at the time of writing.

Companies: Apple Inc.
Price: 150.79 Price Change: -1.10 Percent Change: -0.72

 

NYSE

Stocks Edge Lower as US-North Korea Tensions Emerge

12:44 PM, Sep 22, 2017 — Stocks in the US made marginal moves further into the red on Friday as geopolitical tensions between the US and North Korea heightened a risk-off tone among investors.

A day after announcing additional sanctions on the reclusive Asian nation, President Donald Trump called North Korean leader Kim Jong Un a “madman” on Twitter. Kim offered his own insult of Trump, calling him “mentally deranged” and said the country might test a hydrogen bomb.

Markets that pushed lower a day earlier on the prospects of a third US interest-rate hike of 2017 were continuing to decline, with losses seen in seven of the 11 sectors on the Standard & Poor’s 500. Real estate fell the most, falling 0.6%, while energy rose 0.6%.

The move into havens sent gold higher, and miners benefitted, with Newmont (NEM) up 1% and Iamgold (IAG) rising 2%.

Telecommunications shares were up 0.7% as Reuters said Sprint (S) and T-Mobile US (TMUS) are close to a deal. Sprint jumped 4.6% while T-Mobile added 0.5%.

Also in company news, CarMax (KMX) jumped 7.7% after the company reported fiscal second quarter earnings and revenue that beat analysts’ expectations. Secoo (SECO) tumbled 20% in the first day of trading on the Nasdaq.

Ascendis Pharma (ASND) jumped 30% after Versartis (VSAR), which is developing a pediatric growth hormone similar to Ascendis’ TransCon, reported that its somavaratan missed its primary endpoint, removing itself as a threat to Ascendis’ candidate. Versartis plunged 86%.

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

Globally, the Hang Seng fell 0.8%, the Nikkei 225 slipped 0.3%, the Shanghai Composite lost 0.2% and the FTSE 100 rose 0.6%.

 

Fed Holds Key US Rate With Third 2017 Hike Projected; Longer-Term Expectations Lowered

Fed Holds Key US Rate With Third 2017 Hike Projected; Longer-Term Expectations Lowered

2:45 PM, Sep 20, 2017 — Another interest-rate increase is projected to come before the end of 2017, while longer-term views on the benchmark Fed funds rate were lowered by Federal Open Market Committee members, who opted to keep the target range unchanged on Wednesday.

According to a summary of economic projections, the median average for 2017 implies another 25 basis-point rate increase, unchanged from June’s outlook. For 2018 the so-called dot plots show a projected Fed funds rate of 2.1%, which would imply three further increases of 25 basis points each. That was also unchanged from June.

The dots showed an expected median of 2.7% in 2019, down from 2.9% projected earlier, and a longer-run rate of 2.8%, compared with June’s outlook for 3%.

The FOMC opted to keep the current range at 1% to 1.25%, saying that while recent hurricanes will likely offer a temporary boost to inflation, consumer price increases on a 12-month basis are expected to “remain somewhat below 2% in the near term,” according to the statement.

Hurricanes Harvey, Irma and Maria “have devastated many communities,” but are not likely to alter the course of the economy over the medium term, the FOMC said. In fact, the median expectation among members for 2017 gross domestic product growth was increased to 2.4% from June’s outlook of 2.2%. The projection for 2018 was held at 2.1% and 2019 was raised to 2% from 1.9% previously.

For core inflation, the FOMC members see a median of 1.5% for this year, down from 1.7% projected in June. And 2018 was lowered to 1.9% from 2% previously.

The FOMC said that normalizing the $4.5 trillion balance, as outlined in June, will begin next month, although specific details weren’t given in the statement.

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Northrop Grumman Set to Acquire Orbital ATK for $9.2 Billion in Cash and Debt

Northrop Grumman Set to Acquire Orbital ATK for $9.2 Billion in Cash and Debt

11:49 AM, Sep 18, 2017 — Northrop Grumman (NOC), a global security company, has agreed to acquire Orbital ATK (OA), a maker of satellites, missiles and rockets, for approximately $9.2 billion in cash and assumed debt as it seeks to expand its portfolio of products.

Under the terms of the deal, Northrop Grumman will pay shareholders of Dulles, Virginia-based Orbital ATK $134.50 per share in cash, or about $7.8 billion, and assume $1.4 billion in net debt, Northrop said on Monday on its website. It expects the deal to close in the first half of 2018 pending approval by regulators and Orbital shareholders.

The acquisition is expected to be accretive to earnings per share and free cash flow per share in the first full year after closing, and will help Northrop Grumman save $150 million by 2020 on a pre-tax basis. The company expects to post sales of between $29.5 billion to $30 billion in 2017 on a pro forma basis.

“The acquisition of Orbital ATK is an exciting strategic step as we continue to invest for profitable growth,” Wes Bush, chief executive officer of Northrop Grumman, said. “Through our combination, customers will benefit from expanded capabilities, accelerated innovation and greater competition in critical global security domains.”

Companies: Northrop Grumman Corporation
Price: 270.92 Price Change: +3.89 Percent Change: +1.46

Renault-Nissan Alliance Plan Aims to Double Cost Savings to $12 Billion

11:56 AM, Sep 15, 2017 — The car-makers’ alliance led by France’s Renault and Japan’s Nissan (7201.T) said on Friday it is planning to double its cost savings to 10 billion euros ($12 billion), launch 12 fully-electric models and operate a fleet of self-driving taxis by 2022.

The automotive alliance, which is the world’s largest, also has Mitsubishi Motors (7211.T) as a member and works with Germany’s Daimler (DAI.DE) and China’s Dongfeng.

To achieve the cost-saving target “on one side, Renault, Nissan and Mitsubishi Motors will accelerate collaboration on common platforms, power-trains and next-generation electric, autonomous and connected technologies,” Carlos Ghosn, chief executive of the Alliance, said detailing their six-year plan revealed on Friday.

The alliance seeks to sell 14 million units in 2022 up from about 10 million sold in 2016, the company said. Combined revenues are estimated at $240 billion by that year. The companies also plan to produce 12 new zero-emission, purely electric vehicles by 2022, using new common electric vehicle platforms and components.

Over the same period, the car-makers plan to introduce 40 vehicles with varying levels of autonomy ranging to fully self-driving capabilities. The alliance is also targeting running ride-hailing services with self-driving vehicles by that year.

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AstraZeneca

AstraZeneca Reports Positive Results From Trials on Lung Cancer Drugs Imfinzi and Tagrisso

12:54 PM, Sep 11, 2017 — AstraZeneca (AZN), a UK drugmaker, reported positive results from two late stage trials with lung cancer drugs Imfinzi and Tagrisso, reviving hopes for its product pipeline after a setback at the Mystic trial in July.

The stage three trial named Pacific showed that Imfinzi, an immunotherapy drug, had an 11-month longer survival rate without worsening of the disease compared with placebo in patients with stage-three non-small cell lung cancer, which hasn’t spread elsewhere in the body, AstraZeneca said on Monday on its website.

The trial is continuing to evaluate overall survival rates, the company said.

The other trial, codenamed Flaura, showed that AstraZeneca’s Tagrisso reduced the risk of progression or death by more than half in patients with non-small cell lung cancer who have certain genetic mutations and with and without cancer spreading to their brain.

Patients receiving the treatment had a survival without worsening of the disease of 18.9 months compared with 10.2 months for the current standard of care.

The results come after the drugmaker suffered a setback in its research for lung cancer treatments in July, when a phase three trial of Imfinzi plus tremelimumab combination didn’t meet a primary objective of progression-free survival compared to chemotherapy in previously untreated patients with metastatic first-line non-small cell lung cancer.

That study is continuing to assess two additional objectives — overall survival for Imfinzi monotherapy and overall survival rate for Imfinzi in combination with tremelimumab. The results for both are expected during the first half of 2018.

Companies: Astrazeneca PLC
Price: 32.83 Price Change: +0.58 Percent Change: +1.81

Equities Mixed

Equities Mixed in US As Hurricane Irma Heads for Florida

12:52 PM, Sep 8, 2017 — The benchmark averages in the US were fluctuating between gains and losses on the last trading session of the week as Hurricane Irma barrelled toward Florida, while consumer shares retreated after grocer Kroger’s (KR) profit fell.

The severe storm is about 400 miles from Miami, according to the National Hurricane Center’s latest update, with maximum sustained winds of 150 miles per hour. Irma is moving on Florida just two weeks after Hurricane Harvey slammed in eastern Texas, causing massive flooding and damage that’s still being assessed.

Insurance-related stocks were stronger on Friday after coming under steady selling pressure during the week in a 1.6% slide. That’s steeper than the loss of about 0.3% on the Standard & Poor’s 500 index. The financials group rose 0.9% but was still down 2.3% in the week.

Consumer staples shed 0.8% after Kroger said fiscal second quarter earnings topped analysts’ estimates, but were weaker year-on-year. It also affirmed full-year guidance, but said the figures don’t include any impact from hurricanes Harvey or Irma. Wal-Mart Stores (WMT) shed 1.2% and Target (TGT) lost 3%.

Equifax (EFX) dropped 12% in the steepest slide on the S&P 500 after saying a cybersecurity incident has potentially impacted about 143 million US consumers. Zumiez (ZUMZ) surged 22% after beating estimates with its quarterly results.

In afternoon trading, the Dow was up 0.2%, the Nasdaq Composite slipped 0.3% and the S&P 500 was little changed.

Globally, the Nikkei 225 fell 0.6%, the FTSE 100 lost 0.3%, the Hang Seng was up 0.5% and the Shanghai Composite was little changed.

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Wall Street Street Sign

Brady’s Earnings Top Wall Street Estimates as Identification Products Drive Revenue

2:11 PM, Sep 7, 2017 — Brady (BRC), a Milwaukee-based identification and security products maker, posted net income and revenue that were higher than Wall Street analysts’ estimates as the identification products segment reported stronger organic sales.

Net income in the quarter ended July 31, was $25.2 million, or $0.48 per share, compared with $25.1 million, or $0.49 per share, in the same quarter a year earlier, the company said in a statement on Thursday. This topped the $0.46 average estimate of analysts in a Capital IQ poll.

A difference in the corporate tax rate, which was 29.7% for the 2017 quarter and 21.5% for the year-earlier quarter, had a significant impact on net income, the company said. At the operating level, earnings before income taxes increased to $35.9 million, compared with $32 million a year earlier.

Revenue rose to $289.2 million from $282.1 million a year earlier, with a 3% increase in organic sales, led by identification products, which had 4.4% organic sales growth. Organic sales of workplace safety contracted 0.6%.

In the 2018 fiscal year, the company expects earnings per share of $1.85 to $1.95 from $1.84 reported for the 2017 fiscal year. Analysts are predicting earnings of $1.90 per share.

Companies: Brady Corporation
Price: 35.18 Price Change: +2.03 Percent Change: +6.12

LA Times Owner tronc Acquires New York Daily News

LA Times Owner tronc Acquires New York Daily News

11:25 AM, Sep 5, 2017 — tronc (TRNC), a US publisher, which owns the Chicago Tribune and the Los Angeles Times, said that it acquired all of the outstanding interests of Mortimer Zuckerman’s Daily News, LP., the owner of the New York Daily News and NYDailyNews.com, to expand its publishing portfolio to 10 major US markets.

Financial terms of the transaction weren’t disclosed. Under the terms of the transaction, tronc assumed operational and pension liabilities of the New York Daily News, the media company said on its website late on Monday. The company will meet the obligations from New York Daily News cash flow.

Founded in 1919, the New York Daily News has 11 Pulitzer prizes under its belt, most recently winning the public service journalism prize in 2017. The NYDailyNews.com boasts more than 80 million unique monthly visitors. The New Your Daily News was founded by tronc’s predecessor company, The Tribune Company, tronc said.

The deal includes 100% ownership of the New York Daily News’ printing facility in Jersey City, New Jersey. As part of the transaction, tronc will acquire a 49.9% interest in a joint venture with Zuckerman-related entities that will own the 25-acre parcel of land on which the printing facility is located, overlooking the Manhattan skyline, tronc said.

Companies: tronc, Inc.
Price: 14.98 Price Change: +0.32 Percent Change: +2.18

 

Second-Quarter US Growth Revised Above Expectations on Improved Consumer Spending

9:40 AM, Aug 30, 2017 — The US economy grew more than earlier thought in the second quarter amid increases in consumer spending, according to the second estimate from the Department of Commerce .

Real gross domestic product growth was 3% in the three months ended June, faster than the advance estimate of 2.6% made last month and compared with the first-quarter pace of 1.2%, data from the department’s Bureau of Economic Affairs showed on Tuesday. Analysts polled by Econoday had projected second quarter growth of 2.8%.

“The revision to consumer spending was the highlight of this report, indicating that the consumer, helped along by strong job and income growth, has definitely woken up after the first quarter lull,” Michael Dolega, director and senior economist with TD Economics, said in a note.

Personal consumption expenditures, a measure of consumer spending on goods and services, rose 3.3% in the second quarter from 1.2% in the first three months of 2017, the BEA said. In the advance estimate, PCE was up 2.6%.

The report should “embolden Fed hawks to suggest additional rate rises,” Dolega said. “Still, the weak inflation figures remain a constraint at this point.”

Morgan Stanley lowered its third-quarter GDP tracking estimate to 2.5% from 2.7% after the better-than-expected revision, with the results implying “a bit less sequential growth,” according to a statement.

And the third quarter will likely face headwinds from Hurricane Harvey’s assault on the US Gulf Coast, according to TD Economics, which said the storm could slow GDP growth by between 0.1 and 0.4 percentage points.

“Both consumer spending and business investment are likely to sustain weaker performance as a result, but most of the drag is likely to come from net exports — with refined product exports hard hit given the outages of Gulf Coast refineries and ports shuttered,” Dolega said in the note.

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