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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • U.S. stocks fell at the open, after the biggest drop for the Nasdaq 100 Index in two years, as technology shares fluctuated while financial and consumer companies slumped.
    • “The question today is will investors see this as an opportunity to buy the dip, or do they stay on the sidelines and wait to see earnings strength in the first quarter?” Edward Jones strategist said by phone.
    • Technology shares were hit as traders dumped the biggest winners of the bull market amid concern valuations have advanced too far. 
    • More than 1 million put options on an ETF tracking the Nasdaq index changed hands on April 4 as investors sought protection during a 2.7 percent drop in the gauge. 
    • Alcoa, the largest U.S. aluminum producer, unofficially kicks off the U.S. quarterly earnings season when it releases financial results after the close of trading tomorrow. JPMorgan and Wells Fargo are also among the S&P 500-listed companies reporting this week.
  • Pfizer Breast Cancer Drug Helps Revive Discarded Strategy. In findings reported yesterday, Pfizer’s drug, called palbociclib, stopped tumor growth for 20.2 months in advanced forms of hormone-related breast cancer, twice the time seen with an older therapy alone. The treatment, projected to add $3.1 billion in sales by 2020,
  • Airline quality report shows improvement on customer complaints. U.S. airlines received fewer complaints from passengers last year but did a worse job handling baggage. Among the 15 airlines included in the study, the rate of complaints filed against carriers fell to 1.13 per 100,000 passengers last year from 1.43 in 2012.
  • Retailers push into crowded mobile payment market. Big retailers are muscling in on the likes of Visa and MasterCard in a fiercely competitive and growing mobile payment market that promises to cut transaction costs and increase customer loyalty.
    • The global market for mobile payments is forecast to grow about threefold by 2017 to some $721 billion worth of transactions. The service is currently dominated by banks and card firms Visa and MasterCard.
    • Starbucks launched its mobile payment and rewards app in 2011. It already has 10 million users and the firm said this month it is looking for ways to expand the program beyond its own network.
    • An alternative path is also being explored in the US, where dozens of top retailers including Wal-Mart, Target and Best Buy have announced plans to set up a joint digital wallet service – the Merchant Customer Exchange, or MCX – though no launch date has been set.
  • Amazon launches Amazon Dash for delivery of groceries, household items. A black-and-white hand-held wand-shaped remote-control features a microphone, speaker as well as a bar-code reader and links directly to the user’s AmazonFresh account. The device is available only for users of the AmazonFresh which currently operates exclusively in Southern California, San Francisco and Seattle. Signing up for Amazon Dash is by invitation only.
  • Credit Suisse faces the threat of a new investigation into its role in helping wealthy Americans avoid paying taxes after New York state’s top financial regulator requested documents from the Swiss bank.

US ECONOMY & POLITICS

  • Capital Spending in U.S. Seen from Macy’s to Berkshire. The long-awaited pickup in U.S. business investment will take place this year.
    • The oldest capital stock in decades, more clarity on fiscal policy, improving growth prospects and companies awash in cash mean the stars have aligned to boost spending on commercial structures and equipment, according to economists.

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  • America’s Fiscal Health Affirmed as Treasuries Demand Rises. Investors submitted bids for $1.73 trillion of government notes and bonds at auctions held in the first quarter, or 3.07 times the $564 billion that was sold. The bid-to-cover ratio rebounded from last year’s 2.87, which was the lowest annual level in four years. The last time the ratio was higher on a quarterly basis was in 2012, when demand peaked at a record 3.12 times. 
  • Boeing and GE get U.S. license to export certain spare parts for commercial aircraft to Iran under a temporary sanctions relief deal that began in January.
    • GE said the Treasury had approved the company’s application to service 18 engines sold to Iran in the late 1970s. GE officials will meet with officials from Iran flag carrier Iranair and MTU in Istanbul next week to discuss Iran’s needs.
    • A Boeing spokesman said his company received the license this week and would now contact officials in Iran to determine which parts were needed.
    • The sales would be the first acknowledged dealings between U.S. aerospace companies and Iran since the 1979 U.S. hostage crisis led to U.S. sanctions.

EUROPE & WORLD

  • World Bank trims China, East Asia 2014 growth forecasts. It expects the developing East Asia and Pacific (EAP) region to grow 7.1 percent in 2014 and 2015, down from the 7.2 percent rate it had previously forecast for both years.
    • The World Bank trimmed its 2014 growth forecast for China to 7.6 percent, from 7.7 percent previously. It kept the 2015 growth forecast for China steady at 7.5 percent, down slightly from 7.7 percent actual growth in 2013.
    • It cut its forecast for Thailand’s economic growth to 3.0 percent in 2014 and 4.5 percent in 2015, from its previous forecasts of 4.5 percent and 5.0 percent, respectively.
  • India Starts World’s Biggest-Ever Election with Modi in Lead. About 815 million voters, roughly the populations of the U.S. and European Union combined, are eligible to cast ballots in nine rounds of voting over the next five weeks to pick 543 lawmakers.
    • Results will be known on May 16 in the nation of 1.2 billion people, where some two-thirds live on about $2 per day. The election will be the most expensive in Indian history, with the government, political parties and candidates spending 300 billion rupees ($5 billion). Voting began today in the northeastern states of Assam and Tripura.
  • New French finance minister promises ‘tough, brave’ decisions on deficit. Paris wants the European Commission to extend its deadline for cutting the public deficit, which stood at 4.3 percent of output in 2013.
  • Airbus keeps tight rein on cabin design as A350 launch nears. Airbus unveiled on Monday the first cabin for its new twin-engined airliner, the A350 XWB. Airbus delivered the first A380 two years late, hit by delays stemming from a surge in demand for customized interiors and problems installing electrical wiring harnesses.
  • Opel to launch small electric car by 2017.
  • Nigerian Economy Overtakes South Africa’s on Rebased GDP. On paper, the size of the economy expanded by more than three-quarters to an estimated 80 trillion naira ($488 billion) for 2013. That compares with the World Bank’s 2012 GDP figures of $262.6 billion for Nigeria and $384.3 billion for South Africa.
  • Malaysia Jet Team Hears Pings Consistent With Black Box.
  • World’s Most-Polluting Country Leads in Clean-Energy Investment. China is.

Invt by country

TODAY in HISTORY

  • Gen. Ulysses S. Grant defeated the Confederates at the battle of Shiloh (1862)
  • The World Health Organization (WHO), a UN agency, was founded (1948)

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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