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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • Wall Street edged lower at the open following six-day S&P rally as strong results from Boeing failed to inspire investors to keep pushing equities higher following six straight days of gains.
    • According to Thomson Reuters data, profits are seen rising 1.6 % this quarter, down from the 6.5 percent growth rate estimated at the start of the year.
  • Boeing posts higher adjusted profit raises 2014 forecast. Sales increased 8.3 percent to $20.5 billion, topping the $20.2 billion average estimate.
    • Boeing handed over 161 commercial jets in the period, including 18 Dreamliners. Last year’s tally was 137, with only one 787 in that total.
    • The company repurchased 19.4 million shares for $2.5 billion during the period after authorizing a $10 billion buyback plan, the largest in its history, in December.
  • Northrop lifts 2014 forecast as profit surges. Net income surged 18 % to $579 million in the quarter compared with $489 million a year earlier. Sales fell 4.2 percent to $5.85 billion in the quarter from a year earlier.
  • AT&T ups revenue growth forecast on new pricing model. AT&T raised its forecast for full-year revenue growth to reflect its acquisition of LEAP wireless in March.
    • AT&T added 625,000 postpaid net wireless subscribers in the quarter. AT&T earned $3.65 billion in the first quarter, compared with $3.70 billion in the year-ago quarter. Revenue rose to $32.48 billion compared with Wall Street’s view of $32.47 billion.
  • Procter & Gamble quarterly profit rises on home care sales. Net income climbed 1.7 percent to $2.61 billion from $2.57 billion a year earlier. Sales were unchanged at $20.6 billion, disappointing investors looking for stronger growth. P&G left its fiscal 2014 forecasts unchanged.
  • Norfolk Southern profit falls 18 % on lower coal shipments. Net income fell to $368 million in the first quarter from $450 million a year earlier. Revenue dropped 1.8 percent to $2.69 billion. Revenue from coal shipments fell 15%.
  • Gilead profit triples, hepatitis C drug sales beat by $1 billion. Sovaldi, the company’s $1,000-a-pill medicine to treat hepatitis C, had sales of $2.27 billion in the first quarter. That beat an average of analyst estimates by more than $1 billion.
  • Biogen profit increases on multiple sclerosis drug sales. Net income increased 12 percent to $480 million from $426.8 million a year earlier. Total revenue is expected to increase 26 to 28 % this year, the company said, compared with a previous outlook of 22 to 25 %.
  • Amgen, the world’s largest biotechnology company by revenue, disappointed analysts with lower-than-estimated sales of its top drug. Revenue increased 6.6 percent to $4.52 billion compared with a year earlier, missing the $4.75 billion average. Net income fell to $1.07 billion from $1.43 billion a year earlier.
  • Cost controls boost Dow Chemical margins, profit tops estimates. Revenue rose 0.5 % to $14.46 billion, missing the average analyst estimate of $14.72 billion. Net income rose to $964 million from $550 million a year earlier.
  • Delta profit beats estimates as travel surge trumps storm. Profit of $281 million exceeded an average estimate from 17 analysts. Sales rose 4.9 percent to $8.92 billion.
  • Valeant CEO ‘disappointed’ in Allergan poison pill. Allergan on Tuesday night said that its board of directors had adopted a one-year stockholder rights plan to give it more time to consider takeover proposals.
  • HBO strikes deal with Amazon to stream shows. The companies said this was the first time HBO, the premium cable channel owned by Time Warner, had licensed its programming to an online subscription streaming service. Netflix customers have not been able to watch HBO shows on that service.
  • Dish Network is targeting a summer debut for its Internet-TV service in the U.S., according to people familiar with the matter. Following its agreement with Disney, Dish approached NBCUniversal for a similar deal.
  • Yum Brands’ China restaurant sales improve. Yum’s restaurant sales in China included an increase of 11 % at KFC and a rise of 8 percent at Pizza Hut Casual Dining. Yum reported first-quarter net income of $399 million for the first quarter, compared with $337 million a year earlier.

US ECONOMY & POLITICS

  • New home sales dive to eight-month low in March. Sales dropped 14.5 % to a seasonally adjusted annual rate of 384,000 units. Economists had forecast new home sales at a 450,000-unit pace last month.
    • The median price of a new home last month rose 12.6 % to $290,000 from March last year.
  • U.S. factory activity expands in April, pace stalls. Markit’s “flash” U.S. Manufacturing Purchasing Managers Index (PMI) dipped to 55.4 in April from 55.5 in March. Economists had expected a reading of 56.0.
    • The output subindex jumped to 58.2, the highest since March 2011, from 57.5 last month.
    • The new orders subindex rose to 58.9 from 58.1 last month.
  • U.S. mortgage applications fell last week. The MBA’s seasonally adjusted index of refinancing applications fell 3.7 %. Fixed 30-year mortgage rates averaged 4.49 % in the week.

EUROPE & WORLD

  • Chinese factories stalling as euro zone business picks up. The HSBC/Markit flash Purchasing Managers’ Index (PMI) for April rose to 48.3 from March’s final reading of 48.0, but was still below the 50 line separating expansion from contraction.
  • Germany’s private sector expands faster in April. Markit’s preliminary composite Purchasing Managers’ Index (PMI) rose to 56.3 in April from March’s final 54.3. Markit’s PMI for the services sector rose to 55.0 in April from March’s 53.0, easily beating the average forecast of 53.4.

TODAY in HISTORY

  • Playwright William Shakespeare died in Stratford-on-Avon, England (1616)
  • Coca-Cola announced that it was changing its formula and introduced New Coke (1985)

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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