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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

  • Wall Street edges lower at the open. Traders are looking for fresh catalysts to keep the market’s momentum going amid mixed readings on the economy from data and corporate earnings.
    • The S&P rose for a third straight day on Tuesday, climbing above 1,900 for the first time ever though the gains stalled going into the close.
  • Boeing wins $3.8 billion 737 order. China’s Juneyao Airlines is buying 50 single-aisle 737 jets.
    • Narrow-body models such as the 737 and A320 are the workhorses of the global airline fleet, and are typically used on shorter routes. The 737 is the world’s most widely flown jetliner.
    • Boeing will deliver about 140 aircraft to China this year, after handing over a record 143 planes in 2013. Boeing secured orders for more than 230 new aircraft from China last year.
    • Boeing delivered a record 648 jets worldwide last year and expects to deliver 715-725 planes this year.
  • Microsoft slashes Xbox price, frees up Netflix and other popular apps. It will take $100 off the price of its Xbox One gaming console and let users view popular entertainment apps such as Netflix and ESPN without a $60-plus “Live” subscription, hoping to spur sales against rival devices like Sony’s PlayStation 4 and Amazon’s Fire TV.
    • Sales of the Xbox one console have lagged Sony’s PS4 since their holiday launches. Microsoft Corp said last month it has sold over 5 million Xbox One video game consoles. Sony’s PS4 which sold more than 7 million units.
  • Deere cut its full-year sales outlook even as it reported a better-than-expected quarterly profit.
    • Equipment sales dropped to $9.25 billion from $10.3 billion a year earlier. That trailed the $9.65 billion average of 12 analysts’ estimates. For the full fiscal year, equipment revenue will be down about 4 percent.
    • Deere maintained its forecast for full-year net income of about $3.3 billion.
    • Deere said that while the agricultural economy is “relatively healthy,” lower farm incomes are affecting sales of larger machinery in particular.
  • Macy’s announced a dividend increase of 25 percent and increased its stock buyback program by $1.5 billion to about $2.5 billion, but sales that were below expectations.
    • Revenue fell 1.7 percent to $6.28 billion. Net income rose 3.2 percent to $224 million.
  • Yahoo bought Blink, a mobile-messaging startup whose app lets users send messages that will self-destruct at a time set by the sender, for an undisclosed amount. 
  • Sears will hire an investment bank to help explore alternatives for its 51 percent stake in Sears Canada.
  • Telecommunications future in flux as AT&T mulls DirecTV. Comcast’s bid to buy Time Warner Cable for $45 billion, AT&T’s advanced talks to acquire DirecTV for as much as $50 billion, and Sprint and T-Mobile’s $30 billion merger talk could total more than $170 billion in equity and net debtand affect more than 80 million U.S. customers. 

US ECONOMY & POLITICS

  • U.S. producer prices posted their largest increase in 1-1/2 years in April as the cost of food and trade services surged, hinting at some inflation pressures at the factory gate.
    • Producer price index (PPI) for final demand increased 0.6 percent, the biggest gain since September 2012.
    • In the 12 months through April, producer prices advanced 2.1 percent
    • A drought in California is putting upward pressure on food prices and the high prices are already filtering through to the supermarket. Last month, food prices surged 2.7 percent, marking the biggest rise since February 2011. 
    • Food prices were pushed up by a surge in the cost of meats, which recorded their largest rise since October 2003.
    • Energy prices rose 0.1 percent last month. Services for final demand gained 0.6 percent after rising 0.7 percent in March.
    • Core producer prices excluding volatile food and energy costs increased 0.5 percent in April.
    • In the 12 months through April, core PPI for final demand rose 1.9 percent.

EUROPE & WORLD

  • Britain’s unemployment rate fell to a five-year low. The jobless rate dropped to 6.8 percent from 6.9 percent.
  • Chinese police charge British former head of GSK in China with bribery. The case is the biggest corruption scandal to hit a foreign company in China since the Rio Tinto affair in 2009.
  • Sony vows deeper restructuring, warns of another loss this year. Sony said it would spend 135 billion yen ($1.32 billion) on restructuring. Sony reported a 128.4 billion yen net loss for the 2013/14 financial year.

TODAY in HISTORY

  • The Lewis and Clark expedition set out from St. Louis (1804)
  • The Olympic Games were held in the United States for the first time, in St. Louis, Missouri (1904)
  • British rule in Palestine came to an end as The Jewish National Council proclaimed the State of Israel (1948)
  • The Warsaw Pact was signed by the Soviet Union and seven other Communist bloc countries. It finally dissolved in 1991 (1955)
  • Skylab, the United States’ first space station, was launched into orbit (1973)
  • Frank Sinatra died at the age of 82 (1998)

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. Sources: Reuters, Bloomberg.

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