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Pence Wealth Management Financial Markets Reports

US FINANCIAL MARKET

  • Wall Street rebounded at the open on Thursday from the previous session’s decline after data showed robust household spending and rising exports helped the U.S. economy to grow 3.2 % in the fourth quarter.
  • Facebook’s fourth-quarter revenue jumped 63 %, beating Wall Street targets, as the Internet company’s mobile ad sales continued to accelerate. Facebook said it now has 1.23 billion monthly users, with 945 million accessing the service on a smartphone or tablet.
    • The world’s largest social networking company said that revenue from mobile ads represented 53 % of its total advertising revenue in the last three months of the year, or $1.24 billion, versus the 49 % proportion that mobile ads represented in the third quarter.
    • Overall revenue in the fourth quarter rose to $2.585 billion, compared with $1.585 billion in the year-ago period and above the $2.33 billion expected by analysts polled by Thomson Reuters I/B/E/S.
    • Facebook reported net income of $523 million versus $64 million in the year-ago period.
  • Visa reported a better-than-expected 9 % rise in quarterly profit as more people used cards instead of cash to make payments. Net income rose 9 % to $1.41 billion from $1.29 billion a year earlier. Total operating revenue increased 11 % to $3.16 billion. Visa said total volume grew about 7 % to $1.84 trillion, helped by a strong holiday shopping in the United States.
  • Exxon Mobil posted lower-than-expected quarterly profit as it failed to offset declining production with fresh reserves. Exxon’s oil and natural gas production fell 1.8 %. Exxon Mobil posted net income of $8.35 billion compared with $9.95 billion in the year-ago period.
  • Diversified manufacturer 3M reported lower-than-expected quarterly sales, hurt by declines in its consumer business and slowing growth in Latin America. Revenue rose 2.5 % to $7.57 billion in the fourth quarter, below the analysts’ average estimate of $7.71 billion. 3M said net income rose to $1.1 billion from $991 million a year earlier.
  • ADT reported first quarter adjusted EPS of $0.43 Thursday morning, down from $0.44 last year. The consensus estimate was for EPS of $0.49. Shares fell sharply at the open. Customer growth didn’t meet expectations. Total revenue for the quarter came at $839 million, below estimates of $850.7 million.
  • Altria Group, the largest seller of tobacco in the U.S., said fourth-quarter profit rose 32 % as it boosted Marlboro cigarette prices. Net income increased to $1.1 billion from $836 million a year earlier.
  • United Parcel Service (UPS) said fourth-quarter profit dropped 8.5 % as a late surge in online Christmas shopping snarled operations and led to missed deliveries that boosted costs. Profit of $1.17 billion fell from adjusted earnings of $1.28 billion a year earlier. Sales rose 2.8 % to $14.98 billion, falling short of the $15.18 billion expected by analysts.
  • Qualcomm posted higher fiscal first-quarter revenue that slightly missed expectations as smartphone growth shifted to China but it bumped up its full-year earnings outlook on the strong start to 2014. Qualcomm also slightly raised its full-year forecast for earnings per share. Qualcomm had net income of $1.88 billion, down 2 %. The chipmaker reported first-quarter revenue of $6.62 billion, up 10 % from the year-ago period.
    • Average prices for cellphones in the September quarter, used to calculate licensing revenue for Qualcomm in the December quarter, were between $219 and $225, the company said.
  • Whirlpool posted a higher profit, citing especially strong sales gains in North and South America. The company, the world’s largest maker of home appliances, reported a fourth-quarter net profit of $181 million up from $122 million a year earlier. Sales at the maker of Whirlpool, Maytag and KitchenAid appliances rose 6.2 % to $5.1 billion.
  • Time Warner Cable, the second-largest cable company in the U.S., beat fourth-quarter profit estimates as higher fees made up for subscriber losses. Net income rose 5.3 % to $540 million from $513 million a year earlier. It lost 217,000 residential video subscribers in the period. Their average monthly bill climbed 2.2 % to $106.03 last quarter. The company said it forecast a gain of 1 million residential subscribers over the next three years. It also raised its quarterly dividend 15 % to 75 cents a share.
  • Northrop Grumman, the U.S. government’s fifth-largest contractor, said fourth-quarter profit beat analysts’ estimates as sales fell. Net income declined 10 % to $478 million compared with $533 million a year earlier. Sales declined 4.9 % to $6.16 billion in the quarter from a year earlier. Northrop is a key subcontractor on Lockheed’s F-35 jet fighter, booking $1.3 billion in 2012 for F-35 work, according to a regulatory filing.
  • ConocoPhillips, the largest U.S. independent oil and natural gas producer, forecast output will rise as much as 5 % this year, led by domestic production. Fourth-quarter adjusted profit exceeded the average of 17 analysts’ estimates compiled by Bloomberg.
  • Diageo, the world’s biggest distiller, said a slowdown in emerging markets including China and Nigeria weighed on first-half sales growth, sending the shares down the most since 2009. Revenue fell 6 %.
  • Biogen Idec said on Wednesday its new, high-profile oral multiple sclerosis drug Tecfidera had sales of $398 million in the fourth quarter, easily exceeding estimates for a third successive quarter and keeping it on track to top $1 billion in its first year on the market. The company forecast revenue growth of about 22 % to 25 % in 2014. Biogen said its fourth-quarter profit jumped 57 %, fueled by Tecfidera. The net profit rose to $457.3 million from $292.1 million a year earlier. Total revenue rose 39 % to $1.97 billion, edging past the average analyst estimate of $1.93 billion.
  • China’s Lenovo Group is buying Google’s Motorola handset division for $2.91 billion. Lenovo will receive more than 2,000 “patent assets” as part of the transaction.
    • A sale of Motorola would mark the end of Google’s short-lived foray into making mobile devices and a pullback from its largest-ever acquisition. Google bought the U.S. cellphone giant in 2012 for $12.5 billion but has struggled to revamp the money-losing business. With its acquisition of Motorola, Lenovo is emerging as the most viable contender to global smartphone leaders Apple and Samsung – albeit still a distant third-place player.
  • The U.S. government has raised the amount it is seeking in penalties from Bank of America to $2.1 billion after a jury found the bank was liable for fraud over defective mortgages sold by its Countrywide unit.
  • MasterCard suffered a blow on Thursday in a five-year fight against an EU ban on cross-border card fees, as an adviser to Europe’s top court backed regulators’ efforts to cut card costs.
  • Chipotle Mexican Grill, the best stock performer among U.S. restaurant chains last year, remains a favorite of options traders who bet its new outlets and food choices will attract health-conscious customers according to Bloomberg.
  • Pimco on Wednesday promoted another four of its top investment managers into more strategic roles, expanding the pool of potential successors to the fund management firm’s co-founder and star bond picker Bill Gross following the sudden resignation of Mohamed El-Erian.
    • Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah, currently managing directors at Pacific Investment Management Co, will become deputy chief investment officers, Pimco said in a statement.

US ECONOMY & POLITICS

  • GDP grew at a 3.2 % annual rate, the Commerce Department said on Thursday, in line with economists’ expectations.
    • October’s partial government shutdown was 0.3 percentage point drag.
    • Consumer spending (70 % of GDP) rose at a 3.3 % rate, the strongest since the fourth quarter of 2010.
    • The saving rate slowed to 4.3 % in the fourth quarter from 4.9 % in the prior period.
    • Businesses accumulated $127.2 billion worth of inventories, the most since the first quarter of 1998, adding 0.42 percentage point to GDP growth. Excluding inventories, the economy grew at a 2.8 % rate, up from the third-quarter’s 2.5 % rate.
    • The economy in the last quarter also got a boost from exports, thanks to firmer global growth. Exports rose at their fastest pace in three years. That, together with declining petroleum imports narrowed the trade deficit. Trade contributed 1.33 percentage points to GDP growth.
    • GDP growth for 2014 is forecast at 2.9 %, up from last year’s 1.9 %.
  • Initial claims for state unemployment benefits increased 19,000 to a seasonally adjusted 348,000. Economists polled by Reuters had forecast applications rising to 330,000. The four-week moving average for new claims edged up 750 to 333,000.
  • The Fed said it would buy $65 billion in bonds per month starting in February, down from $75 billion now. In what was Fed Chairman Ben Bernanke’s last policy-setting meeting, the central bank also maintained its longer-term plan to keep U.S. interest rates low for some time to come.
    • Overall improvement in the U.S. economy suggested the central bank would continue to cut the purchases, but some investors had speculated in recent days that the Fed might rethink its plan because of the emerging market problems.

 

EUROPE & WORLD

  • Record Cash Leaves Emerging Market ETFs on Lira Drop: Investors are pulling money from exchange-traded funds that track emerging markets at the fastest rate on record, as China’s slowing growth and cuts to central-bank stimulus sink currencies from Turkey to Brazil.
    • Emerging-market stocks head for the worst start to a year since 2008, after China’s manufacturing shrank and the U.S. Federal Reserve pressed on with stimulus cuts.
  • China’s Purchasing Managers’ Index (PMI) fell to 49.5 from 50.5 in December, HSBC Holdings and Markit Economics said in a statement today.
  • Brazil’s unemployment rate in December fell to a record low. The jobless rate fell to 4.3 % from 4.6 % in November.
  • H&M reported fourth-quarter profit that missed estimates as Europe’s second-biggest clothing retailer stepped up discounting amid a battle for business in a market weighed down by mild winter weather.

TODAY in HISTORY

  • King Charles I of England was beheaded (1649)
  • Adolf Hitler was named Chancellor of Germany (1933)
  • Gandhi was assassinated (1948)
  • British troops opened fire on civil rights marchers in Northern Ireland, sparking the “Bloody Sunday” massacre (1972)
  • The Iranian civilian government announced that the exiled Ayatollah Khomeini would be allowed to return (1979)

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. Securities offered though LPL financial Member FINRA / SIPC

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