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Pence Wealth Management Financial Markets Reports

US FINANCIAL MARKET

  • U.S. stocks rose at the open on Tuesday, putting the S&P 500 on track to snap a two-session losing streak after the IMF raised its forecast for global growth and corporate earnings beat analysts’ estimates. The dollar strengthened and Treasuries fell with gold.
  • Dow Chemical rose 5.4 % at the open, the most since April, after Daniel Loeb’s hedge fund Third Point LLC took a stake.
  • Alcoa jumped 7.1 % for the biggest gain in the Standard & Poor’s 500 Index after JPMorgan Chase raised the stock to overweight.
  • Verizon Communications reported its quarterly revenue grew 3.4 %, slightly faster than analysts estimated.  The wireless business added 1.6 million subscribers in the quarter. It earned $5.07 billion. Revenue increased to $31.1 billion from $30.05 billion a year earlier.
  • Johnson & Johnson reported quarterly results that came in above Wall Street estimates on sharply higher sales of its prescription drugs and improving sales of its medical devices. Net income rose 37 % to $3.52 billion from $2.57 billion a year earlier. Revenue increased 4.5 % to $18.4 billion from $17.6 billion a year earlier.
    • The company forecast 2014 profit of $5.75 to $5.85 a share. The outlook was below the $5.86 average of 18 analysts’ estimates.
  • Delta Air Lines reported a higher-than-expected fourth-quarter profit, aided by lower fuel costs and higher fares. Net income totaled $8.5 billion including a noncash gain of $8 billion from a tax benefit. A year earlier it had a profit of $7 million. Excluding items such as the tax benefit, profit was $558 million. Revenue rose 6 % to $9.08 billion.
  • Baker Hughes posted a 16 % increase in quarterly profit, driven by higher drilling activity in the Middle East and Africa. Net income rose to $248 million from $214 million a year earlier. Revenue at the world’s third-largest oilfield services company rose 10 % to $5.86 billion.
  • Halliburton reported a 31 % rise in quarterly profit. Net income rose to $770 million from $589 million a year earlier. Revenue rose 5 % to $7.64 billion.
  • Travelers, the property-casualty insurer in the Dow Jones Industrial Average, said fourth-quarter profit more than tripled as claims costs from natural disasters fell a year after Superstorm Sandy. Net income rose to $988 million from $304 million a year earlier.
  • GECAS, the world’s largest aircraft leasing company, is close to placing an order for around 40 Boeing medium-haul jets. GECAS is owned by GE which makes the engines for the 737 family in a transatlantic joint-venture co-owned by France’s Safran.

US ECONOMY & POLITICS

  • Investors are the most upbeat about the global economy in almost five years, encouraged by the U.S.-led revival of industrialized nations, according to a Bloomberg Global Poll. Seventy-two % in the survey of Bloomberg subscribers said the U.S. economy is improving, up from 53 % a year ago.
    • Jeff Altman and John Paulson, two of last year’s best-performing hedge-fund managers, are predicting that stocks will continue their rally in 2014 even as the bull market approaches its sixth year.
    • Paulson, who runs the $20 billion Paulson & Co., said one reason to be optimistic about equities is that the economy is just in the middle of its current growth cycle.

EUROPE & WORLD

  • The International Monetary Fund (IMF) raised its global growth forecasts for the first time in nearly two years. The IMF predicted 3.7 % global economic growth this year, 0.1 percentage point higher than its October projections, and sees growth of 3.9 % in 2015.
    • U.S. GDP will expand 2.8 %, compared with 2.6 %; Japan will gain 1.7 % versus 1.2 %; and the U.K. will increase 2.4 % from 1.9 %, the report showed.
    • The IMF warned that some developing countries, especially those with large current account deficits or domestic weaknesses, could be hit hard by capital outflows this year as the Federal Reserve begins to scale back its pace of U.S. asset purchases.
    • In emerging markets, domestic demand has remained weaker as tighter financial conditions since mid-2013 as well as policy or political uncertainty and bottlenecks damp investment, the IMF said. Brazil is projected to grow 2.3 % this year, compared with 2.5 % in October, and Russia’s outlook was cut by 1 percentage point to 2 %.
  • The French carmaker Renault’s global sales rose 3.1 % to 2.63 million vehicles in 2013.
  • China’s Lenovo has resumed talks to buy IBM’s low-end server unit. The two companies failed to reach an agreement last year after differing on pricing. Media reports then put IBM’s hopes at between $4 billion to $6 billion for the unit, while Lenovo was said to be only willing to offer $2.5 billion.
  • Unilever, the maker of Magnum ice cream and TRESemme shampoo, said decelerating growth in emerging markets and stagnant demand in developed countries will continue after quarterly sales provided some respite for investors.
  • German investor confidence unexpectedly fell for the first time in six months, signaling caution over the outlook for the euro area’s economic recovery.
  • Deutsche Bank posted a surprise pre-tax loss of 1.15 billion euros for the fourth quarter due to heavy costs for litigation and restructuring, and warned that 2014 would be another year of further challenges and reform. Quarterly revenue for the group fell 16 % to 6.58 billion euros in the last quarter.
    • Deutsche Bank was fined $1.9 billion in December by the U.S. Federal Housing Finance Agency to settle claims that it defrauded two U.S. government-controlled companies in the sale of mortgage-backed securities before the 2008 financial crisis.
    • It was also fined 725 million euros by EU antitrust regulators for rigging interest rates.
  • China’s economy narrowly missed expectations for growth to hit 14-year lows in 2013. Full-year growth in 2013 was 7.7 %, steady from 2012 and just slightly above market expectations for a 7.6 % expansion, which would have been the slowest since 1999.
    • Capital formation accounted for 54 % of China’s economic growth last year, exceeding the 50 % share taken up by consumption. Net exports, on the other hand, detracted 4.4 % from overall growth.
    • Deutsche Bank expects China’s growth to accelerate to 8.6 % this year while RBS thinks it may climb to 8.2 %.

TODAY in HISTORY

  • King Louis XVI, king of France, was guillotined for treason (1793)
  • Vladimir Ilyich Lenin died in Moscow (1924)
  • USS Nautilus, the first nuclear-powered submarine was launched (1954)
  • The U.S. Census Bureau reported that Hispanics had surpassed Blacks as the largest minority group (2003)

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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