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Pence Wealth Management Financial Markets Reports

US FINANCIAL MARKET

  • Stocks were little changed at the open Thursday as the market digested mixed data that showed a rise in weekly jobless claims and stronger-than-expected retail sales for November.
    • Stocks posted their largest drop in a month yesterday as traders locked in recent gains after a provisional budget deal out of Washington removed one of the near-term reasons for the Fed to keep up its current pace of economic stimulus.
  • Facebook will join its S&P 500 stock index after the close of trading on December 20, cementing the social media network’s rise into one of the biggest, most powerful U.S. companies. Facebook will also replace Williams Cos in the S&P 100 index of large U.S. companies.
  • PepsiCo is set to replace Coca-Cola as the beverage supplier to restaurant chain Buffalo Wild Wings, the New York Times reported. Buffalo Wild Wings operates more than 950 sports bars and grills in the United States and Canada.
  • Hotel operator Hilton Worldwide raised $2.34 billion in its IPO on Wednesday, returning to the public markets some six years after Blackstone Group took it private in one of the largest deals of the leveraged buyout boom. Hilton, whose brands include such high-end names as Conrad and Waldorf Astoria, priced its shares at $20, within the expected range, and gave it an equity value of $19.7 billion.
  • Chevron plans to spend $39.8 billion on projects and exploration in 2014. Chevron’s latest capital and exploratory budget compares with $42 billion in expected investments this year, far more than the $36.7 billion the company originally budgeted. Larger rival Exxon Mobil’s 2013 budget was $38 billion.
  • Microsoft has sold more than 2 million Xbox One video game consoles since its November 22 launch, catching up with rival Sony’s PlayStation 4 released a week earlier. Sony last week said it took 15 days for PS4 sales to cross 2.1 million.
  • Boeing ousted Airbus as Air Canada’s primary supplier of narrow-body jets, winning an order of 61 planes, valued at $6.5 billion for the 737 Max model as they vie for supremacy in the biggest segment of the aircraft market.
    • The order was a blow to Airbus, which made the 86 A320-family planes in Air Canada’s fleet and is offering the re-engined neo that competes with the Max.
  • American Airlines agreed to buy 60 aircraft from Brazilian planemaker Embraer, the world’s largest producer of regional jets, in a deal worth $2.5 billion at list prices.
  • American also ordered 30 Canadian Bombardier CRJ900 jets, the planemaker with an additional 40 planes. The firm order contract was valued at about $1.42 billion and might increase to about $3.38 billion if the 40 options are converted into firm orders.
  • Airlines lobby group IATA (the International Air Transport Association) has raised its forecast for airline profits this year by 10 % and predicted passenger numbers topping 3 billion for the first time. The IATA said that it expected total airline profits to reach $12.9 billion this year. Profit per passenger is expected to leap to $4.13 in 2013 from $2.49 in 2012, then reach an average $5.94 in 2014, said IATA.
  • Samsung lost its bid to ban sales of Apple’s older iPhone and iPad in South Korea after a court dismissed a lawsuit claiming the U.S. firm had infringed on three of Samsung’s mobile patents.
  • Natural gas futures jumped to a seven-month high in New York on speculation that a government report will show a larger-than-normal decrease in stockpiles of the heating fuel as cold weather stokes demand. Natural gas for January delivery rose 6.2 cents, or 1.4 %, to $4.399 per million British thermal units (Btu) at 9:33 a.m. About 49 % of U.S. households use gas for heating, according to the EIA.

US ECONOMY & POLITICS

  • Stanley Fischer, who led the Bank of Israel for eight years until he stepped down in June, has been asked to be the Federal Reserve’s next vice chair once Janet Yellen takes over as chief of the U.S. central bank. At MIT, he once taught current Fed Chairman Ben Bernanke and Mario Draghi, the ECB president. Fischer was born in Zambia and has Israeli and U.S. dual citizenship.
  • Retail sales in the U.S. rose more than forecast in November as Americans bought cars and took advantage of discounts going into the holiday-shopping season. Purchases climbed 0.7 %.
    • So-called core sales, which strip out automobiles, food services, gasoline and building materials and correspond most closely with the consumer spending component of GDP, rose 0.5 % after gaining 0.7 % in October.
  • Import prices dropped 0.6 % last month. The decline was led by a 3.1 % fall in fuel expenses that was the biggest since June 2012. Costs dropped 1.5 % over the past 12 months.
  • Initial claims for state unemployment benefits surged 68,000 to a seasonally adjusted 368,000 last week. That was the largest weekly increase since November 2012 and surpassed economists’ expectations for a rise to only 320,000.
  • Inventories at U.S. businesses rose 0.7% in October, well above expectations, the Commerce Department said Thursday. Economists had been forecasting inventories to rise 0.3%. Business sales rose 0.5%. The inventory-to-sales ratio, an indication of demand, held steady at 1.29 in October from the prior month.
  • The Fed will probably start reducing its $85 billion of monthly bond purchases at its Dec. 17-18 meeting, according to 34 % of economists surveyed Dec. 6 by Bloomberg, up from 17 % in a Nov. 8 poll.

EUROPE & WORLD

  • France is fully involved in the next phase of PSA Peugeot Citroen’s development, French Finance Minister Pierre Moscovici said.
  • British film and computer games rental chain Blockbuster is to close down completely after administrators said they had failed to secure a buyer for the firm.
  • Japanese PM Shinzo Abe’s cabinet approved a $53 billion extra budget for the current fiscal year to fund stimulus steps announced last week aimed at offsetting the blow from a planned increase in the national sales tax.
  • President Vladimir Putin conceded for the first time that Russia’s economic problems were home-grown and vowed not to abandon the spending promises he made on returning to the Kremlin last year. The government was relying on oil prices of over $100 per barrel to balance its books, consumer spending is all that is keeping the economy ticking over.
  • Korea Aerospace Industries has signed a contract with Iraq to export 24 T-50 light fighter jets valued at $1.1 billion. T-50 cost less than $100 million which is 2.5 times less than the Lockheed Martin/Boeing F-22 Raptor.
  • India’s consumer-price inflation exceeded 11 %, adding pressure on central bank Governor Raghuram Rajan to raise interest rates again next week even as industrial output slid more than expected.
  • Amount of dirty money leaving developing world jumped 14 % in 2011. Developing countries lost nearly $1 trillion to fraud, corruption and shady business transactions in 2011, vastly outpacing the foreign aid they received and the pace of dirty money leaving emerging nations is accelerating, according to Global Financial Integrity.

TODAY in HISTORY

  • Pennsylvania became the second state to ratify the U.S. Constitution (1787)
  • Joseph Rainey took his seat as the first African American in the U.S. House of Representatives (1870)
  • The Mona Lisa was recovered in Florence after having been stolen two years earlier (August 1911) from the Louvre (1913)
  • Kenya gained its independence from Britain (1963)

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. 

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