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Pence Wealth Management Financial Markets Reports

US FINANCIAL MARKET

  • U.S. stocks edged up at the open on Tuesday after a three-session decline on the S&P 500, but an unexpected drop in durable goods orders in December and disappointing iPhone sales at tech giant Apple kept investors on edge ahead of a two-day Federal Reserve meeting.
  • Shares of Apple opened down 8 % on Tuesday, a day after the world’s most valuable technology company’s weak revenue forecast for the current quarter renewed fears about Chinese smartphone demand and a tepid global market.
    • The record 51 million iPhones sold by Apple in the quarter fell short of the 55 million expected by Wall Street. The company also said revenue will be $42 billion to $44 billion in the current quarter, compared with analysts’ estimates of $46.1 billion. Shares fell in extended trading. Apple sold 26 million iPads, slightly more than analysts’ estimates of 25 million.
    • Profit was $13.1 billion, little changed from $13.1 billion a year earlier. Sales rose 5.7 % to $57.6 billion. Both results beat the average of estimates compiled by Bloomberg.
    • Apple maintained its gross profit margin of 37.9 % for the quarter.
  • While sales in Greater China rose 29 % to $8.84 billion, Apple said revenue in the Americas region fell 1 % to $20.1 billion. Cook attributed the drop in part to new upgrade policies by carriers that led customers to wait longer to upgrade their devices. Apple also didn’t have the right mix of iPhones for sale between the 5s and 5c models, and the high-end 5s was more popular than expected, he said.

January 28 January 28January 28

  • Samsung sold a record 86 million smartphones in the fourth quarter and widened its lead over Apple. Samsung took 29.6 % of the global smartphone market in the fourth quarter.
  • Apple sold 51 million iPhones in the year-end quarter with 17.6 % market share.
  • Huawei sold 16.6 million smartphones and Lenovo sold 13.6 million, each taking 5.7 % and 4.7 % of the market.
  • For the entire 2013, global smartphone shipments grew 41 % to reach a record 990 million. Samsung sold 319.8 million units to take 32.2 %, up from 30.4 % in 2012. Apple sold 153.5 million iPhones with a 15.5 % market share.
  • Corning reported higher fourth quarter earnings as production and restructuring costs declined from a year ago. Revenue declined to $1.96 billion from $2.15 billion. Core net sales were $2.00 billion, down from $2.04 billion a year ago. On average, analysts expected to revenue of $1.93 billion.
    • Corning said sales volume for Gorilla Glass, the shatter-resisting material used to cover the iPhone, was weaker than the company had expected. Samsung remains Corning’s bigger customer compared to Apple. Corning sales from Samsung was $141.93 million compared to $4.93 million from Apple in the quarter.
  • Foxconn Technology Group, the maker of Apple’s iPhone, is in talks with U.S. states including Arizona and Colorado to build advanced manufacturing facilities as part of plans to set up factories closer to its clients.
    • Foxconn, the world’s largest custom manufacturer of electronics, may expand in its largest market as clients including Apple seek to have their products made in the U.S. Its Foxconn Interconnect Technology unit has announced an expansion in Pennsylvania, which will create about 500 jobs. Foxconn will also invest $10 million in a venture with Carnegie Mellon University for research in robotics and manufacturing.
  • DuPont posted a quarterly profit that doubled and beat market estimates, helped by higher margins at its businesses that sell seeds and make materials for solar panels. The company also announced a new $5 billion share buyback program, $2 billion of which it expects to buy back in 2014. Net sales rose 6 % to $7.75 billion. DuPont said that it expects full-year operating earnings to rise 8-15 %. The company expects 2014 sales to inch up 4 % to about $37 billion.
  • Comcast, the largest U.S. cable company and the owner of NBCUniversal, reported a 26 % increase in fourth-quarter profit after adding TV subscribers for the first time in more than six years. Net income rose to $1.91 billion. Fourth-quarter sales gained 6.2 % to $16.9 billion.
    • In addition to 43,000 television subscribers, Comcast added about 379,000 Internet customers and 227,000 phone-service users.
    • Comcast also increased its dividend by 15 % to 90 cents a year and authorized an additional $7.5 billion in share repurchases, with $3 billion planned for this year.
  • Charter has agreed in principle to sell Time Warner Cable’s New York, North Caroline and New England assets to Comcast, if it succeeds in buying Time Warner Cable, according to a Bloomberg report on Monday. Charter has offered $132.50 per share for Time Warner Cable, which rejected the bid as “grossly inadequate.”
  • Pfizer reported better than expected fourth-quarter results, helped by higher sales of drugs for cancer, nerve pain and arthritis, and the company forecast 2014 earnings in line with Wall Street estimates. It earned $2.57 billion in the fourth quarter. That compared with $6.32 billion in the year-earlier quarter, when the company recorded a gain from selling its nutritional products business to Swiss food group Nestle.
    • Global company sales fell 2 % to $13.56 billion, hurt by competition from cheaper generic forms of its medicines. But they topped Wall Street forecasts of $13.35 billion.
  • Ford Motor posted a higher-than-expected quarterly profit as a strong performance in the No. 2 U.S. automaker’s core North American market offset losses in Europe and South America. The company also affirmed the 2014 profit outlook.
    • Ford’s net income rose to $3 billion compared with almost $1.6 billion a year earlier. The results included a $2.1 billion gain from the addition of deferred tax assets to the balance sheet, as well as charges of $311 million for last year’s pension buyouts and layoffs in Europe.
    • Revenue rose 4 % to $37.6 billion, above analysts’ estimates of $35.17 billion.
  • The vice chairman of the Bitcoin Foundation, a trade group promoting the adoption of the digital currency, has been charged by U.S. prosecutors with conspiring to commit money laundering by helping to funnel cash to illicit online drugs bazaar Silk Road.

US ECONOMY & POLITICS

  • The Conference Board’s US consumer confidence index advanced to 80.7 from a revised 77.5 in December. More Americans than at any time since August 2008 said jobs were currently plentiful and the share of those viewing business conditions as good was the highest in more than six years.
    • The gain in the Conference Board’s measure follows reports that consumers were spending at the end of last year. Retail sales rose 0.2 % as cold weather drove Internet sales and demand for discounted winter clothing after a 0.4 % advance in November, Commerce Department figures showed Jan. 14.
  • The S&P/Case Shiller single-family home prices gained 0.9 % in November, slightly more than expected. The 20-city composite index rose 13.7 % year-on-year, the largest rise since February 2006.
  • Durable goods orders dropped 4.3 % by weak demand for transportation equipment, primary metals, computers and electronic products and capital goods. Economists polled by Reuters had expected orders to rise 1.8 %.

EUROPE & WORLD

  • Ikea Group, the world’s biggest furniture retailer, said household consumption is recovering in several markets including the U.S. and Europe. A total of 1.3 billion visits were made to Ikea’s website in the year through August, up from 1.1 billion a year earlier. The number of store visits fell to 684 million from 690 million.
  • The U.K. economy expanded 0.7 % in the fourth quarter, ending the best year since 2007 amid growth in every industry except construction.
  • Shares in Sony shed 3.3 % to a two-month low of 1,654 yen after Moody’s Investors Service cut its debt rating on the Japanese consumer electronics company to junk status, citing challenges in its television and PC businesses. Moody’s cut its rating on Sony by one notch to Ba1 from Baa3.
  • Royal Philips, the world’s largest lighting company, said progress toward 2016 goals for profitability will be “modest” this year after a slowdown in healthcare orders and increasing costs tied to currencies. The Dutch company will step up spending on restructuring and investment.
  • Siemens, Europe’s largest engineering company, reported fiscal first-quarter earnings that beat analyst estimates as profitability at the infrastructure unit more than doubled.
    • Its CEO said the company wouldn’t meet a goal for 2014 profit representing 12 % of sales. To match the profitability of ABB and General Electric, he is trying to reduce charges for mismanaged projects.
    • The company also said today it will end its listing on the New York Stock Exchange to cut costs and reduce the complexity of its financial reporting. “It’s a mixed set of results — orders beat, but revenue missed,” said Simon Toennessen, a London-based Credit Suisse analyst.
  • India’s central bank unexpectedly raised its key interest rate. It boosted the repurchase rate to 8 % from 7.75 %, the Reserve Bank of India said today.

TODAY in HISTORY

  • King Henry VIII of England died and his nine-year-old son, Edward VI, assumed the throne (1547)
  • Congress passed legislation creating the U.S. Coast Guard (1915)
  • U.S. shuttle Challenger exploded 72 seconds after liftoff, killing all seven crew members aboard, including school teacher Christa McAuliffe (1986)
  • The creation of Element 114 is announced by scientist (1999)

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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