Pence Wealth Management’s Financial Market Report

US FINANCIAL MARKET

• American Tower’s fourth-quarter net income fell 34%. Revenue rose 18%.
  • Domestic rental and management revenue rose 8% to $499.9 million, while international rental and management revenue jumped 36% to $239.8 million.
  • For the full year, American Tower earned $637.3 million, or $1.60 per share, up from $396.5 million, or 99 cents per share, in 2011. Revenue rose to $2.88 billion from $2.44 billion.
  • The company projected 2013 net income of $765 million to $840 million, below average analysts’ predictions of $848.9 million.
• AT&T plans European expansion with technology licensing. More than 30 companies worldwide have asked to license AT&T’s Digital Life product, which lets customers watch over their homes for leaks and break-ins from a mobile device. AT&T is becoming more of a technology company as it develops new lines of business such as wireless home-monitoring systems and mobile-wallet applications to supplement slowing growth in wireless service revenue. 
• Macy’s reported a fourth-quarter profit that beat Wall Street expectations.
• Americans are feeling more comfortable spending money on their homes as the housing market slowly recovers.
• Home Depot fiscal fourth-quarter net income surged 32%, beating expectations. The company also said that it would buy back $17 billion of its common stock and boosted its quarterly dividend by 34%. For fiscal 2013, it expects revenue $76.21 billion, slightly below analysts’ expectations.
• Steve Madden’s net income rose 39% in the fourth quarter. Revenue increased 13%. The company expects fiscal 2013 revenue to climb 6% to 8%.
• HP is selling its webOS software to LG Electronics. The deal rids HP of the centerpiece of its ill-fated, $1.8 billion purchase of Palm three years ago.
• Nestle has agreed to buy U.S. medical foods company Pamlab which was founded in 1987 and employs over 300 staff, makes medical foods for patients with conditions including diabetic peripheral neuropathy, dementia, depression and high-risk pregnancy.
• JPMorgan plans to cut 3,000 to 4,000 jobs in its consumer bank in 2013. JPMorgan Chase had 5,614 branches in 2012. The bank has been building more branches even as competitors such as Bank of America Corp have scaled back. 
• Goldman Sachs will begin its annual job cutting process as early as this week. The bank usually culls out the weakest 5% of its employees around now. But the cuts will likely be deeper in some businesses, particularly equities trading, where volumes and earnings are weak. 

US ECONOMY & POLITICS

• Bernanke strongly defended the U.S. central bank’s bond-buying stimulus before Congress, saying its benefits clearly exceed possible costs.
• The Conference Board consumer confidence index accelerated to 69.6 from a downwardly revised 58.4 in January, handily topping economists’ expectations for 61. It was the highest level since November.
• The Conference Board expectations index climbed to 73.8 from 59.9, while the present situation index gained to 63.3 from 56.2.
• The Standard & Poor’s/Case-Shiller 20-city home price index rose 6.8% in December, closing out 2012 with the biggest yearly gain in more than 6 years. In December, the 20 city home price index rose 0.88%. Prices rose across all 20 cities, although gains were sharpest in cities hardest hit by the housing bust, including Las Vegas (+2.1%), Los Angeles (+1.7%), San Francisco (+1.6%), and Phoenix (+1.5%).
• The FHFA house price index — which measures the prices of homes with mortgages guaranteed by Fannie Mae or Freddie Mac — rose 0.6% in December. Consistent with the S&P/Case-Shiller data, gains were sharpest in the Pacific region (+1.2%). The FHFA index rose 5.8% over the past 12 months.
• Sales of new U.S. single-family homes surged to their highest level in 4-1/2 years in January. The Commerce Department said that sales jumped 15.6% to a seasonally adjusted annual rate of 437,000 units, the highest level since July 2008. The percentage gain was the largest since April 1993. 

EUROPE & WORLD

• Italy’s post-election political paralysis is spooking financial markets. World stock markets and southern European government bonds sank on Tuesday on fears that political gridlock in Italy would leave its economic reforms in tatters and reignite the euro zone’s broader debt crisis.
• But former Premier Silvio Berlusconi insists a government can be formed.
• U.K. government bonds climbed for a second day after Moody’s Investors Service cut Britain’s top rank, as investors downplayed the significance of the downgrade.
• South Africa’s GDP rose an annualized 2.1% from 1.2% in the third quarter.

TODAY in HISTORY

• Napoleon Bonaparte escaped from exile on the island of Elba (1815)
• Grand Canyon National Park was established (1919)
• RADAR (Radio Detection and Ranging) was first demonstrated by Robert Watson-Watt (1935)
• Minnesota was the 36th (of 41 total) state to ratify the 22nd Amendment to the U.S. Constitution. (At the time, ratification required 36 states out of 48. Today, ratification would require 38 states out of 50.) The amendment limited a U.S. president to two terms in office (1951).

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

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.