US FINANCIAL MARKET
- U.S. stocks opened slightly lower on Thursday as traders fretted that strong labor market and economic growth data could make the Federal Reserve push forward a timetable to wind down its asset purchases program.
- Several major U.S. retailers posted disappointing sales for November after cautious shoppers pinched their pennies at the start of a shorter holiday season.
- Costco said sales at stores open at least a year rose 2 %, below the 3.3 % increase analysts were looking for.
- Same-store sales at L Brands, owner of the Victoria’s Secret lingerie chain, also came in below expectations. Its drop of 5.5 % was far deeper than the 1.1 % decline analysts were projecting.
- Disney announced a dividend of 86 cents per share, an increase of about 15% over its prior dividend.
- Walgreen said that its sales for the first quarter of the fiscal year rose 6% to $18.35 billion, from $17.32 billion in the same quarter a year earlier. Same-store sales were up 5.5% for the quarter. November sales totaled $6.07 billion, up 4.1% from $5.83 billion a year earlier.
- Kroger, the biggest U.S. supermarket operator, posted a lower third-quarter profit that matched Wall Street’s view, as it continued to appeal to loyal shoppers with competitive prices. Net income was $299 million down from $317 million a year earlier.
- Deere’s board of directors approved an increase to the company’s share buyback program. It also declared a quarterly dividend.
- Apple’s stock rose Thursday morning following reports of an agreement with China Mobile that gives the tech firm’s iPhones access to the world’s largest mobile phone carrier customer base. The release of iPhones onto China Mobile’s network, which boasts over 700 million subscribers, is expected to start later this month, according to the WSJ.
- Lockheed Martin’s F-35 fighter jet is making good progress as it nears initial combat use by the U.S. Marine Corps in July 2015, but the company must still finalize the software needed to deliver weapons and fuse data from its many sensors, the Pentagon’s F-35 program chief told Reuters. The Air Force has said it plans to start using its conventional takeoff F-35 jets from mid-2016. The Navy will follow suit in late 2018.
- Nearly 50 years after launching its affordable sports car, Ford Motor is unveiling a global redesign of the Mustang to try to burnish the U.S. automaker’s image and spur sales of its more expensive models. 2015 Mustang will be the first Mustang sold in Europe and Asia.
- Shopping mall giant Westfield Group said that it would buy the remaining 50 % interest in New York’s World Trade Center for $800 million, which will make the company the sole owner of the shopping mall.
- JPMorgan Chase is warning some 465,000 holders of prepaid cash cards issued by the bank that their personal information may have been accessed by hackers who attacked its network in July.
- The Pimco Total Return Fund run by bond guru Bill Gross saw its seventh consecutive month of outflows in November, according to Morningstar data. Investors pulled a net $3.7 billion from the mutual fund last month, bringing its total assets under management to $244 billion. Year-to-date, investors have withdrawn a net $36.9 billion from the fund.
US ECONOMY & POLITICS
- The U.S. economy grew faster than initially estimated in the third quarter, led by the biggest increase in inventories since early 1998. Consumer spending slowed. GDP grew at a 3.6 % annual rate instead of the 2.8 % pace reported earlier, the Commerce Department said.
- Businesses accumulated $116.5 billion worth of inventories, the largest increase since the first quarter of 1998. That compared to prior estimates of only $86 billion. In the second quarter, they rose at a $56.6 billion pace. Inventories accounted for a massive 1.68 percentage points of GDP growth. The big question is whether they are voluntary or involuntary increase.
- Stripping out inventories, the economy grew at a 1.9 % rate rather than the 2.0 % pace estimated last month.
- A gauge of domestic demand rose at just a 1.8 % rate.
- Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised down to a 1.4 % rate, the lowest since the fourth quarter of 2009.
- Americans’ purchasing power rose at a slower pace. Disposable income adjusted for inflation increased at a 2.9 % annualized rate after a 4.1 % advance in the second quarter.
- Wages and salaries increased by $77.2 billion, up from the previously reported gain of $54.6 billion. They rose about $46 billion in the third quarter.
- Gross domestic income, which reflects all the money earned by consumers, businesses and government agencies, increased at a 1.4 % annualized rate in the third quarter after a 3.2 % gain in the previous three months.
- Still, housing and autos remain bright spots for the economy. Residential construction increased at a 13 % annualized rate and added 0.38 percentage point to growth.
- Auto sales remain on pace for their best year since 2007.
- Jobless claims decreased 23,000 to 298,000 in the week ended Nov. 30. Economists’ estimates in the Bloomberg survey ranged from 307,000 to 335,000.
- Headline factory orders were roughly in line with expectations, while the underlying detail on core capital goods orders and shipments was slightly better. Headline factory orders declined 0.9% in October (vs. consensus -1.0%). Relative to the data contained in the October durable goods report, core capital goods orders were revised up slightly in both October and September.
- The Federal Reserve could bolster its commitment to ultra-low interest rates by ruling out a rate hike until inflation heads closer to its 2-% goal, according to research published Wednesday by the Cleveland Fed.
EUROPE & WORLD
- The ECB left its benchmark interest rate at a record–low 0.25 % at a meeting in Frankfurt.
- The ECB forecasts inflation at 1.1 % in 2014, 0.2 percentage point lower than the previous prediction. It sees inflation at 1.3 % in 2015, the first time it has made a forecast for that year.
- Britain’s government announced the biggest upgrade to official growth projections in more than a decade on Thursday. Government said that the economy was on track to grow by 1.4 % this year – more than double the 0.6 % penciled in at the time of the March budget. Growth in 2014 was expected to be 2.4 %, up from the previous estimate of 1.8 %.
- Britain will impose capital gains tax on foreign investors selling homes that are not their primary residence from 2015. Property prices in London have jumped by about 10 % in the last 12 months. About 70 % of newly built properties across central London are bought by foreign investors.
- Japanese Prime Minister Shinzo Abe’s cabinet approved a $182 billion package on Thursday to pull the economy out of deflation, but doubts remain about the impact.
- Russian consumer prices rose 6.5 % from a year earlier after a 6.3 % increase in October, more than economists forecast in November.
- General Motors will drop the Chevrolet brand in Europe by the end of 2015 after it failed to build a significant market share, and focus instead on its Opel and Vauxhall marques in a drive to return to profit on the continent.
- Ford and its local partners in China sold a total 99,157 vehicles on a wholesale basis in November, up 47 % from a year earlier, the company said on Thursday. In the first 11 months of the year, sales totaled 840,975 vehicles, up 51 % from the same period last year.
- Daimler said global sales of its Mercedes-Benz auto brand rose to their highest-ever level in November, growing by 10.9 % to 133,441 cars thanks to demand for its new E-Class model and a boost of sales in China and North America.
TODAY in HISTORY
- The first scholastic fraternity in America, Phi Beta Kappa, was organized at the College of William and Mary in Williamsburg, VA (1776)
- Composer Wolfgang Amadeus Mozart died in Vienna, Austria, at age 35 (1791)
- President Polk triggered the Gold Rush of 1848 by confirming that gold had been discovered in California (1848)
- The 21st Amendment to the Constitution, repealing prohibition, was ratified (1933)
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.