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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • U.S. stocks rose at the open, with the Standard & Poor’s 500 Index climbing above its record closing level, amid confidence in the strength of the economy as investors watched developments in Ukraine.
  • American Eagle Outfitters lost 6.1 % to $13.35 at the open. The teen-apparel retailer seeking a new CEO said it would break even in the current quarter.
  • Wall Street analysts are racing to keep up with Facebook’s stock rally.
    • Shares of the world’s biggest social network have jumped 32 % so far this year, compared with a 1.6 % gain for the Standard & Poor’s 500 Index.
    • The surge has left the 49 analysts who cover Facebook in a bind — while 38 of them recommend the company with the equivalent of a buy rating. 21 of the total now have share-price targets below where Facebook is trading.
    • Facebook stands out because of how analysts almost unanimously agree their clients should buy the stock. The company gets a 4.6 out of 5 in recommendation consensus, which is how strongly analysts agree on whether a stock should be bought or sold.
  • Union Pacific sees severe weather hurting its quarterly profit. Terminal dwell was upm13 % on bad weather.
  • Canadian Pacific Railway Limited announces share repurchase program. CP believes that the purchase of its shares from time to time is an appropriate and advantageous use of the Corporation’s funds.
  • Target has been sued by Swatch, which accused Target of illegally selling watches that copy its own. Swatch, which is known for its plastic namesake watches, accused Target of infringing its designs for “zebra” and “multi-color” watches.
  • SoftBank President Masayoshi Son will start a “massive price war” if U.S. regulators allow his Sprint to purchase T-Mobile.
    • AT&T and Verizon collect most of the U.S. mobile industry’s cash flow and don’t face “real competition,” Son said in an interview with PBS’s Charlie Rose.
    • Son said he was willing to postpone profit to gain market share and would use price cuts to draw users.
    • The U.S. has slower Internet services than Japan and South Korea, and ranked 15th out of 16 countries surveyed by speed, Son said during the interview.
    • The U.S. has about 200 million mobile broadband users, the highest number of all countries, according to Chetan Sharma. Last year, average mobile data use almost doubled to 1.2 gigabytes from 690 megabytes, he said.
  • Several U.S. institutional investors are closely monitoring the developments at Pimco in the wake of Mohamed El-Erian’s abrupt resignation as CEO and ensuing acrimony between him and co-founder Bill Gross.
    • Overall, customers withdrew $41.1 billion from Pimco’s flagship Total Return Fund last year reducing assets to $236 billion and marking the 10th straight month of outflows.

US ECONOMY & POLITICS

  • U.S. wholesale inventories rose more than expected in January. Companies built up stocks of autos and machinery, though sales posted their largest decline in nearly five years.
    • Wholesale inventories rose 0.6 % to $521.2 billion after a revised 0.4 % gain in December. Economists expected a 0.4 % increase.
    • Inventories are a key component of GDP. Excluding autos, wholesale inventories rose 0.4 % in January. This component goes into the calculation of GDP.
  • The White House forecast more robust economic growth in 2014 than last year and a further pickup in the economy for 2015.
    • Under a White House projection, the U.S. economy is expected to expand by 3.1 % this year. Growth would pick up to 3.4 % in 2015, the White House said.
    • “Blue Chip” forecasters such as Bank of America, Goldman Sachs, Swiss Re, Loomis, Sayles & Company, and J.P. Morgan Chase expect 2.9 % growth this year, while the non-partisan Congressional Budget Office predicts a 2.7 % growth.
  • U.S. small business optimism declined in February, according to the National Federation of Independent Business. The organization’s monthly small business optimism index fell to 91.4 last month, compared to 94.1 in January.

EUROPE & WORLD

  • Chinese PC maker Lenovo was up to IBM to resolve a wildcat strike at a China-based factory, as a deal to buy IBM’s server business had yet to be finalized. More than 1,000 workers went on strike last week to protest over the terms of their potential transfer to Lenovo. More than 7,500 IBM employees in more than 60 countries were expected to transfer to Lenovo once the deal is completed.
  • The probe into the disappearance of Flight 370 took another twist as Malaysian authorities and Interpol said the two people who boarded the plane with stolen passports were Iranian and probably not linked to terror groups.
  • Audi delivered more cars than BMW through the first two months of 2014 to nab the global lead in luxury sales. Audi sold 242,400 vehicles through February, 383 more than the BMW brand.
  • The U.K. didn’t get its first 4G network until last year, but Prime Minister David Cameron is already talking about 5G. He took to the stage at the CeBIT conference in Hannover, Germany, to announce plans to develop a 5G mobile-data network that can download a movie in less than a second.
    • As part of his government’s 45 million pound ($75 million) investment for research into 5G and the so-called Internet of Things, British and German universities will team up on the initiative.
    • The South Korean government said in January that it would spend 1.6 trillion won ($1.5 billion) to deploy 5G service. The government promised a movie download would take one second. South Korea’s Samsung predicted that its 5G technology would be ready by 2020.

TODAY in HISTORY

  • The Confederate States of America adopted its constitution (1861)
  • A torrential rainstorm hit the East Coast. The rain turned to snow the next day and it became the Blizzard of 1888, the most famous snowstorm in American history. It caused more than 400 deaths (1888)
  • William Howard Taft became the first U.S. president to be buried in the National Cemetery in Arlington, Virginia (1930)
  • President Roosevelt signs the Lend-Lease Bill (1941)
  • Mikhail Gorbachev became head of the Soviet Union following the death of Konstantin Chernenko. At 54, he was the youngest member of the ruling Politburo (1985)
  • Janet Reno won unanimous Senate confirmation to be the first female U.S. Attorney General (1993)
  • Japan is hit by an enormous earthquake that triggers a deadly 23-foot tsunami in the country’s north, about 230 miles northeast of Tokyo. Cooling systems in one of the reactors at the Fukushima Daiichi Nuclear Power Station fail shortly after the earthquake, causing a nuclear crisis (2011)

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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