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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • U.S. stocks opened lower on Monday, as Russia’s military presence in Ukraine prompted investors to seek havens.
    • The rising threat of war between Ukraine and Russia sent investors scurrying for relative safety on Monday, pushing stocks down sharply – the Moscow market fell 11.5% – and lifting gold to a four-month high.
    • U.S. Secretary of State John Kerry is traveling to Kiev today after warning of possible sanctions against Russia. European Union foreign ministers will hold an emergency meeting today.
    • The geopolitical tension comes after the S&P 500 rose 4.3% in February.
    • U.S. equities are set to enter the sixth year of a bull market that started March 9, 2009. Three rounds of stimulus have helped push the S&P 500 up 175% from a 12-year low.
  • Light-vehicle sales in the U.S. may have risen 0.3% in February to almost 1.2 million. The annualized rate, adjusted for seasonal trends, probably reached 15.4 million, the average of 13 analyst estimates.
    • GM, Ford and Toyota — the three largest automakers by U.S. sales — each predict U.S. auto sales will top 16 million this year after growing by more than 1 million annually for the last four years. They totaled 15.6 million in 2013.
    • GM’s U.S. sales slipped 1% to 222,104, beating analysts’ estimates for a 7.7% decline. 
    • Ford’s U.S. light-vehicle deliveries fell 6.1% to 183,349, missing the average of nine analyst estimates for a 5.3% decline.
    • Toyota Motor sales slid 4.3%, a bigger decline than the 2.5% drop estimated by six analysts.
    • Chrysler deliveries rose 11% to 154,866 with its Jeep SUV brand increasing sales by 47%.
    • Nissan’s deliveries rose 16% last month to 115,360, beating analysts’ estimates that projected a 12% gain. 
  • Apple said technology letting drivers use iPhones with voice commands or steering-wheel buttons will be available in vehicles as early as this year. Ferrari, Mercedes-Benz, and Volvo will show customers the CarPlay system this week. In-vehicle technology is the top selling point for 39% of car buyers.
  • Goldman Sachs named Peter Oppenheimer, the CFO of Apple, as an independent director.
  • FedEx is raising shipping rates by an average 3.9%, effective March 31.
  • In the biggest management reshuffle at Microsoft since Satya Nadella took over as its chief executive, two top executives, Tony Bates and Tami Reller, will leave the company.
  • The SEC has launched a probe into how Wall Street banks, including Goldman Sachs and Citigroup, allocate and trade corporate bonds, the Wall Street Journal reported on Friday. The SEC is examining whether banks favor big investors, leaving smaller ones at a disadvantage. The regulator has made requests about several deals, including Verizon’s $49 billion bond offering last year.
  • Comcast is considering spinning off the 3 million subscribers it has offered to divest as part of its proposed $45.2 billion takeover of Time Warner Cable, into a publicly traded company, according to sources familiar with the matter.
  • John C. Martin, the chief executive officer of Gilead Sciences, has become a billionaire on the prospects of a powerful new hepatitis C drug that’s attracting scrutiny from payers and activists over its $1,000 per pill price tag. Gilead’s drug, Sovaldi, was approved in December, and is among the first of a new wave of hepatitis C treatments that can cure the liver disease faster and more reliably than previous drugs. Sovaldi is expected to produce $4.2 billion in revenue this year, rising to $8.1 billion in 2015, according to the average estimate of 13 analysts surveyed by Bloomberg.
  • Warren Buffett plans to make more large acquisitions for Berkshire Hathaway. Berkshire ended last year with $48.19 billion of cash and equivalents, giving Buffett the freedom to make big acquisitions and retain a $20 billion cushion. Full-year profit rose 31% to $19.48 billion. Despite that, the 2009-to-2013 period marked the first time since Buffett took over Berkshire that book value per share rose more slowly over five years than the Standard & Poor’s 500 including dividends on a pre-tax basis.
  • Boeing is considering a slower build rate and other options to keep production of its EA-18G electronic attack planes running into 2017, and give Congress time to add more orders. The St. Louis production line for Boeing’s F/A-18E/F Super Hornets and EA-18G Growlers is slated to shut down after 2016 unless the Pentagon’s No. 2 supplier wins additional U.S. or foreign orders for the planes soon. The plant will build F-15 fighters through at least 2018, based on current orders.

US ECONOMY & POLITICS

  • U.S. manufacturing activity accelerated in February. Markit’s U.S. Manufacturing Purchasing Managers Index (PMI) rose to 57.1 in February, above both the preliminary read of 56.7 and expectations for a read of 56.6. 
    • The new orders component rose to 59.6 from 53.9, he highest read for the subindex since April 2010. 
    • Output rose to 57.8 from 53.5, its highest since March 2011 and above the “flash” read of 57.2.
  • On a separate manufacturing activity report, the Institute for Supply Management (ISM) rose to 53.2 in February, up from January’s read of 51.3.
  • U.S. consumer spending rose more than expected in January. Consumer spending increased 0.4% after advancing by a revised 0.1% in December.

 EUROPE & WORLD

  • European stocks plunged the most in more than a month as investor concern increases that the escalating tension in Ukraine will hurt corporate earnings.
  • Manufacturers across Europe and Asia changed down a gear last month.
    • Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) came in at 53.2 last month, up from a flash reading of 53.0 but below January’s 54.0 – which was the highest since May 2011.
    • The HSBC/Markit PMI on China manufacturing fell to 48.5, a seven-month low and the third straight monthly decline in the index.
  • On a separate report, China’s official non-manufacturing (services sector) Purchasing Managers’ Index (PMI) rose to a three-month high of 55.0 in February.
  • Swiss pharma group Novartis will work more closely with rival Roche but rules out a merger, its chairman said in a newspaper interview on Sunday.

TODAY in HISTORY

  • Florida became the 27th state in the United States (1845)
  • The U.S. Senate passed legislation overriding a presidential veto for the first time (1845)

Sources: Reuters, Bloomberg.

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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