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Pence Wealth Management Financial Markets Reports

US FINANCIAL MARKET

  • U.S. stocks are down shortly after the open on Thursday in the wake of upbeat labor market data and as Macy’s lifted the bar further for retailers after a stellar holiday season.
  • Macy’s reported strong holiday sales and gave a preliminary forecast for 2014 that suggests it will continue to outpace its rivals. Macy’s said comparable sales rose 3.6 % in November and December.
    • Macy’s also announced plans to cut about 2,500 jobs, or 1.4 % of its U.S. workforce, but said it expects to add positions for its growing online business.
  • T-Mobile reported a fourth-quarter boost in customer growth and offered to pay customers to switch from rival services.
  • Dish Network officially pulled its bid of $2.2 billion to buy bankrupt wireless spectrum provider LightSquared.
  • Apple and Samsung have agreed to attend a mediation session to be held on or before February 19, as they prepare to clash in court in March over smartphone patents. Apple CEO Tim Cook and Samsung CEO Oh-Hyun Kwon will attend the session with in-house lawyers only.
  • Samsung will release its Galaxy S5 smartphone by April and is studying using eye scanner technology for the first time as it readies the high-end handset to compete with Apple’s iPhones.
  • IBM will invest more than $1 billion to establish a new business unit for Watson, as the tech giant hopes to get more revenue from the supercomputer system that beat humans on the television quiz show “Jeopardy”.
  • Novartis is in talks with Merck to trade its animal-health and human vaccines businesses for Merck’s over-the-counter health-products unit. The swap would fit strategies at both companies. The two drugmakers may each trade about $5 billion in assets to do so.
  • Alcoa has agreed to pay $384 million to settle charges by the U.S. Securities and Exchange Commission and the U.S. Department of Justice that its subsidiaries bribed foreign government officials. The SEC said Alcoa’s subsidiaries had “repeatedly” bribed officials in Bahrain to retain the right to supply a government-operated aluminum plant.
  • California man stole DuPont secrets and gave it to a Chinese state-owned company for $28 million in contracts, a U.S. prosecutor told jurors.
  • BlackRock agreed to end its analyst survey program worldwide. The agreement stems from an investigation by New York Attorney General into the early release of Wall Street analyst sentiment, which can move markets. The Analyst Survey Program asked many of the world’s most prominent analysts at dozens of brokerage firms a series of questions related to the companies they were covering.
  • Stockpiles of corn in the U.S., the world’s top grower, are rising at the fastest pace in 19 years as a record crop overwhelms increased demand for the grain used to make livestock feed and ethanol. Inventories probably totaled 10.764 billion bushels (273.4 million metric tons), 34 % more than a year earlier, according to a Bloomberg survey.

US ECONOMY & POLITICS

  • The U.S. government’s budget deficit narrows sharply in the first three months of fiscal 2014 to $182 billion, including a $44 billion surplus in December.
  • Initial claims for state unemployment benefits declined 15,000 to a seasonally adjusted 330,000, the Labor Department said on Thursday. Economists had expected first-time applications to fall to 335,000. The four-week moving average for new claims fell 9,750 to 349,000.
    • The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 50,000 to 2.87 million in the week ended December 28.
    • A total of 4.19 million people were receiving benefits under all programs in the week ended December 21.
    • With benefits for more than a million long-term unemployed Americans having expired on December 28, that figure should decline sharply in the weeks ahead.
    • The number of planned layoffs at U.S. firms plunged by 32 % in December to the lowest monthly total in more than 13 years. Employers announced 30,623 layoffs last month, down from 45,314 in November. The last time employers announced fewer job cuts was June of 2000, when 17,241 planned layoffs were recorded. For all of 2013, employers announced 509,051 cuts, down 3 %.
  • Janet Yellen was “hopeful” that U.S. economic growth will accelerate in 2014 to 3 % or more and persistently low inflation will move up toward the central bank’s target of about 2 %.
  • Minutes of the Fed’s December 17-18 policy meeting, released on Wednesday, showed many members of the policy-setting Federal Open Market Committee (FOMC) wanted to proceed with caution in trimming the asset purchases.

EUROPE & WORLD

  • Euro zone economic sentiment rose more than expected in December and inflation expectations picked up.
  • Mario Draghi strengthened the European Central Bank’s pledge to keep interest rates low for as long as necessary and warned that it’s too soon to say the euro region is out of danger.
  • China’s annual consumer inflation slowed more sharply than expected to a seven-month low of 2.5 % in December, easing market fears of monetary policy tightening although the central bank is tapping the brakes on bank liquidity. Food prices rose 4.1 % in December from a year earlier, slowing from November’s 5.9 % rise.
  • Vehicle sales in China rose 13.9 % last year. The recovery was partly aided by a rebound in sales of Japanese cars.
  • China will spend over $100 billion on more than 6,600 km (4,100 miles) of new railway lines this year.
  • India will soon invite foreign businesses to help expand its once-mighty but now outdated railways. Existing passenger and freight network operations will not be open to foreign investors under the initiative.
  • Only 1,750 km (1,087 miles) of new lines were added by India from 2006 to 2011, compared with 14,000 km (8,699 miles) by China.

SPECIAL REPORT (The Home Affordable Refinance Program [HARP])

  • The Home Affordable Refinance Program [HARP] stands out among the alphabet soup of initiatives rolled out to stem a wave of foreclosures: It is one that is finally living up to its ambitions.
  • Nearly 3 million homeowners, including at least 900,000 who owe more than their homes are worth, have been able to refinance their loans under the crisis-era program designed to reach borrowers with little or no equity in their homes. The majority of those loans were refinanced in 2012 and 2013, after the government revamped the program following a disappointing start.

Refi Madness

TODAY in HISTORY

  • Connecticut became the 5th state in the United States (1788)
  • Mississippi became the second state to secede from the Union (1861)
  • The Russian Revolution of 1905 was sparked by troops firing on petitioners to Czar Nicholas in St. Petersburg (1905)
  • Surveyor 7, the last of America’s unmanned lunar probes, landed on the Moon (1968)

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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