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Pence Wealth Management Financial Markets Reports

US FINANCIAL MARKET

  • Wall Street fell at the open on Wednesday as investors weighed the possibility of a wind-down of U.S. Federal Reserve stimulus in the wake of a provisional budget deal reached in Washington.
  • Costco reported a first-quarter profit and sales that fell short of analysts’ estimates, hurt by a rise in operating expenses. Operating expenses rose 5.5 % to $24.3 million. Selling, general and administrative expenses rose 7.2 %. Profit rose to $425 million from $416 million. Sales rose 5 % to $24.47 billion, but missed the average analyst estimate of $25.35 billion.
  • Mining equipment maker Joy Global forecast 2014 earnings below analysts’ estimates after reporting a quarterly profit that fell short of expectations as miners cut spending.
  • MasterCard, the second-biggest bank-card network, said its board of directors approved an 83 % dividend increase and a 10-for-1 stock split. Its board also authorized repurchasing as much as $3.5 billion of stock. Investors who own MasterCard stock on Jan. 9 will get the additional shares on Jan. 21.
  • Home Depot forecast 2014 earnings growth that trailed some analysts’ estimates while also saying it would meet a profitability goal earlier than expected. Home Depot also said it will reach an operating margin of 12 % for the year ending in January 2015, a year earlier than it expected. The company anticipates share repurchases of about $5 billion and capital spending of $1.5 billion.
  • Scripps Networks surged 6.7 % at the open after a report that Discovery Communications may make an offer for the owner of HGTV and the Food Network. Discovery operates cable television channels Animal Planet and TLC.
  • Disney may quickly enlarge its Shanghai resort after it opens in late 2015 in order to meet rising demand in the world’s most populous country, CFO Jay Rasulo said.
    • Attendance could ultimately top the company’s second-most popular property, Tokyo Disney Resort, which has 28 million annual visitors.
    • The resort is part of a larger focus by Disney on China, where entertainment spending by consumers has lagged the growth of the middle class, Rasulo said. The new park is within a three-hour drive of 330 million people, many of them young families, he said.
  • JPMorgan CEO Jamie Dimon said on Wednesday he was thankful congressional leaders had reached a budget deal and was “less worried” about the impact of an eventual scaling back of the Federal Reserve’s market-friendly stimulus measures.
  • Two more Swiss banks said they would work with U.S. officials in a crackdown on wealthy Americans evading taxes through hidden offshore accounts. Bank Coop and Migros Bank said on Tuesday they would participate in the U.S. scheme.
  • Cisco lost a European Union court bid to overturn EU approval of Microsoft’s 2011 takeover of Skype Technologies.
  • Polish airline LOT will get about 100 million zlotys($32.94 million) in compensation from U.S. plane maker Boeing for the faults that grounded its 787 Dreamliner jets.
  • BMW is considering building engines in North America for the first time and expanding vehicle production in the region to capitalize on growing demand. BMW may establish a motor factory in Mexico or the U.S.
    • The carmaker would join German premium-auto rival Mercedes-Benz in producing engines in the region. Mercedes will start using motors next year built at a Nissan Motor plant in Tennessee.
    • The BMW set up its only North American factory in Spartanburg, South Carolina, in 1994. The site, which produces all of BMW’s X3, X5 and X6 sport-utility vehicles is one of the U.S.’s main auto exporters.

US ECONOMY & POLITICS

  • The world economy will enjoy faster growth next year, as improvement in the U.S. and the euro area offsets slowdowns in China and Japan, said PIMCO’s Mohamed El-Erian. He said it’s virtually certain the Federal Reserve will begin moderating its asset purchases by the end of March, with a 50-50 chance of a move next week.
  • Congressional negotiators yesterday agreed to a budget deal that would ease automatic spending cuts by about $60 billion over two years and will reduce the deficit by $20 billion to $23 billion.
    • The bipartisan plan would set U.S. spending at about $1.01 trillion for this fiscal year, higher than the $967 billion required in a 2011 budget plan. The agreement sets spending for defense at $520.5 billion and for non-defense at $491.8 billion.
  • More than 250,000 Americans selected private health-insurance plans through Obamacare enrollment systems last month, better than twice as many as in October when the exchanges opened amid technology errors and outages.

EUROPE & WORLD

  • Uruguay, a nation of 3.3 million tucked between Argentina and Brazil, became the world’s first nation to legalize the cultivation, sale and use of marijuana in a move aimed at curbing the cost of combating drug trafficking.
    • Uruguay, led by 78-year-old former guerrilla Jose Mujica who has also legalized gay marriage during his presidency, is spearheading a movement in Latin America to combat drug trafficking by legalizing the use of the psychoactive substance.
    • In the U.S., Colorado and Washington last year became the first states to legalize the recreational use and sale of cannabis.

TODAY in HISTORY

  • Indiana became the 19th state (1816)
  • King Edward VIII abdicated the throne of Britain for the woman he loved, Mrs. Wallis Simpson (1936)
  • The United Nations International Children’s Emergency Fund (UNICEF) was established (1946)
  • Russian troops invaded Chechnya in an unsuccessful attempt to restore Moscow’s power in the region (1994)

SPECIAL REPORT (Cyber Monday and Black Friday)

  • According to IBM’s Digital Analytics Benchmark Cyber Monday report, mobile sales grew a healthy 55% on-year and accounted for about 17% of total online sales (second row on chart below).

Screen-Shot-2013-12-06-at-1.52.31-PM

  • IBM and Adobe have independently revealed that Apple’s iOS has won the battle with Android when it comes to Black Friday online shopping from mobile devices in the U.S., despite Google’s increased mobile OS market share in the region.
    • “On average, iOS users spent $127.92 per order on Black Friday compared to $105.20 per order for Android users,” the IBM report said.
    • iOS traffic reached 28.2 % of all online traffic, compared to 11.4 % for Android.
    • iOS sales reached 18.1 % of all online sales, compared to 3.5 % for Android.”
  • Adobe tracked 400 million visits to even more U.S. online stores – more than 2,000 – during Thanksgiving and Black Friday, reaching similar conclusions.
    • “iOS-based devices drove more than $543 million dollars in online sales with iPad taking a 77 % share.
    • Android-based devices were responsible for $148 million in online sales, a 4.9 % share of mobile driven online sales,” Adobe said.
    • Overall, iPads were responsible for online sales worth $417, with iPhone online sales amounting to $126 million. Comparatively, Android smartphones and tablets generated $106 million and $42 million, respectively, in online sales.
  • IBM reported that when it came to social influence, Facebook came out ahead of Pinterest (which interestingly much more visually focused).

 Screen-Shot-2013-12-06-at-1.55.06-PM

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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