Pence Wealth Management’s Financial Market Report

US FINANCIAL MARKET

• Apple is discussing ways to disburse some of its $137.1 billion in cash to shareholders. Apple has already committed to returning $45 billion over three years. While many investors agree Apple should return more money, some say CEO Tim Cook should focus on higher dividends, share buybacks or a special dividend.
• McDonald’s January global sales dropped 1.9% at restaurants open at least 13 months. For February, McDonald’s noted sales will be hurt by about 3 percentage points.
• Shares of LinkedIn jumped as much as 20% after the online professional-networking service reported better-than-expected fourth-quarter results. LinkedIn posted a 66% jump in fourth-quarter profit and said it added 15 million accounts to propel its total membership beyond 200 million. Visitors to LinkedIn’s website also viewed 67% more pages than the previous year.
• FAA will permit Boeing to conduct test flights of its 787 Dreamliners. “The primary purpose of the test flights will be to collect data about the battery and electrical system performance while the aircraft is airborne,” said a statement from U.S. Transportation.
• Boeing started the year ahead of its rival Airbus. Boeing sold 145 aircraft between January 1 and February 5 and took no cancellations. Airbus said it had taken 140 orders during the month but 19 orders got cancelled leaving 121 net orders. Boeing delivered 39 planes in January, while Airbus delivered 35 passenger jets to customers.
• BMW, the world’s largest premium carmaker, said group sales in January rose by 9.9% to 123,276 vehicles, a record for that month. Growth was lifted once again by its largest market, China, where sales of its BMW, Mini and Rolls-Royce brands gained 14.7% to 30,397 vehicles last month.
• Nissan suffered a 35% plunge in October-December profit as global sales languished, especially in China, where anti-Japanese sentiment flared over a territorial dispute.
• Fitch downgraded The McGraw-Hill and put it on watch for possible further downgrades due to the lawsuit filed by the Obama administration against its S&P subsidiary.
• The U.S. Postal Service lost $1.3 billion in the fourth quarter. The Postal Service lost $3.3 billion in the same period a year earlier. The Postal Service defaulted twice last year on required payments to the federal government and lost almost $16 billion during the fiscal year.

US ECONOMY & POLITICS

• The U.S. trade deficit shrank more than forecast in December, led by record exports of petroleum that gave the world’s largest economy a boost at the end of 2012. Exports rose 2.1% to $186.4 billion. Imports shrank 2.7% to $224.9 billion.
  • For all of 2012, exports climbed 4.4% to a record $2.2 trillion. Imports advanced 2.7% to $2.74 trillion. That pushed the trade gap last year down to $540.4 billion from $559.9 billion in 2011.
  • The data showed that exports of oil and other petroleum products rose to the highest level on record in January.  Oil imports plunged to 223 billion barrels, the fewest since February 1997.
  • It suggests the economy did much better in the fourth quarter than initially estimated. The gap shrank nearly 21% to $38.5 billion, lower than any estimate in a Bloomberg survey.
• Inventories at U.S. wholesalers unexpectedly fell 0.1% in December for the first time in six months as companies tried to keep pace with cooling sales. Analysts were expecting a 0.4% gain.
• The drop in stockpiles at distributors means inventories will probably subtract even more from fourth-quarter economic growth than currently estimated, partially offsetting a December plunge in the trade deficit that will help boost GDP.

EUROPE & WORLD

• The European Union will give “its support for a comprehensive trade agreement” with the United States.
• German exports are up 3.4% in 2012. Germany exported goods and services worth €1.097 trillion ($1.48 trillion) in 2012. German imports were up a more modest 0.7% last year at €909.2 billion. Exports to 27-member EU, which still account for more than half the total, were down 0.3% at €625.7 billion. Germany lost its crown as the world’s biggest exporter in 2009 to China. China exported about $1.99 trillion in 2012.
• China’s auto sales rose 46% in January to a monthly record on strong demand for SUVs. In January, sales of sport utility vehicles rose 90.5% to 240,700 while those of basic passenger vehicles rose 48.9% to just under 1.2 million.
• GM in China rose 26% in January to a monthly record of 310,765. Ford-brand vehicles rose 135% to 44,439 vehicles. Germany’s BMW rose 14.7%. Japanese automakers have suffered the most amid tensions between Beijing and Tokyo over ownership of a group of uninhabited islands.

TODAY in HISTORY

• College of William and Mary in Williamsburg, Va., received its charter, becoming the second institution of higher learning in the United States (1693) (Harvard was established 1636)
• The National Weather Service was established under the U.S. Army Signal Corps (1870)
• Chicago businessman William D. Boyce incorporated the Boy Scouts of America (1910)
• The first National Football League draft was held. Jay Berwanger was the first to be selected. He went to the Philadelphia Eagles (1936)

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.