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Pence Wealth Management Financial Markets Report

US FINANCIAL MARKET

U.S. stocks fell modestly at the open on Tuesday as investors found few reasons to keep buying with the Dow and S&P 500 coming off a string of record highs

  • Betting on boring brings stock outperformance in 2014. The best sector in 2014 is utilities.
  • In 2013, the 50 highest-beta S&P 500 stocks rose an average of 51.4 %, compared with 21.3 % for the 50 lowest-beta stocks.

Allergan rejects Valeant and Ackman’s raised takeover offer

  • Allergan reiterated that the offer undervalues the company and is too risky for shareholders.

EBay’s PayPal head departing to lead Facebook’s messaging

  • PayPal President David Marcus is leaving to lead Facebook’s mobile messaging business, as the social network seeks to gain an advantage in a fast-growing and competitive business.
  • Messaging is a particularly competitive area as more people use the apps to communicate on the go.

Cisco challenged as Facebook favors software to move data

  • AT&T, Goldman Sachs, Facebook, and other companies are embracing software to run their networks.
  • Instead of buying expensive new routers and switches that move Internet traffic, they’re opting for networks that rely more on software and inexpensive hardware. The new technology is called software-defined networking, or SDN, and lets users add speed and features while cutting costs.

Time Warner said in talks to buy stake in Vice Media

  • The discussions value Vice Media at $2 billion to almost $3 billion.
  • Vice Media has a show on HBO, one of Time Warner’s cable-television channels.
  • A deal would give Time Warner’s TV network a property that has successfully developed content for new formats such as the web, as well as traditional TV.

AmEx hitches ride with Uber as networks vie for mobile

  • AmEx reached a deal that will allow customers of car-service firm Uber to book rides using rewards points.
  • The technology was integrated into Uber’s mobile phone app starting yesterday.
  • American Express card holders spent “hundreds of millions of dollars” last year on Uber rides.
  • AmEx, along with rivals Visa and MasterCard, is developing technologies and striking deals with merchants as more transactions shift from cash and plastic to mobile phones. U.S. mobile payments could more than quadruple to about $90 billion by 2017, according to a report last year from Forrester Research.

RadioShack’s loss widens as turnaround efforts fail to pay off

  • The company, which operated 4,250 stores in the United States, said on Tuesday it planned to close up to 200 stores in the current financial year.
  • Net sales fell 13 % to $736.7 million.

US ECONOMY & POLITICS

Job Openings in U.S. climb to highest level since September 2007

  • The number of positions waiting to be filled in the U.S. rose by 289,000 to 4.46 million in April, the highest since September 2007.
  • The Job Openings and Labor Turnover Survey, or JOLTS, adds context to monthly payrolls data by measuring dynamics such as resignations, help-wanted ads and the pace of hiring.
  • The hiring rate is at 3.4 %, compared with an average 2.8 % during the previous expansion. The gauge calculates the number of hires during the month divided by the number of employees who worked or received pay during that period.
  • Some 2.47 million people quit their jobs in April, up from 2.46 million the prior month. The quits rate, which shows the willingness of workers to leave their jobs, held at 1.8 % in April, down from a 2.1 % reading when the recession started almost six years ago.

EUROPE & WORLD

U.K. Economy regains pre-recession peak

  • GDP rose 0.9 % in the three months through May.
  • U.K. industrial production rose for a third month in April, driving the annual increase to 3 %, the most since 2011.

China Auto Sales climb 13% led by foreign carmakers

  • Retail deliveries of cars, multipurpose and sport utility vehicles climbed to 1.5 million units in May.
  • Chinese automakers accounted for 21.5 % of industry car sales last month, a decline of 5.1 percentage points from a year earlier.
  • China currently has enough roads and infrastructure to accommodate at most 300 million vehicles, while the number of driver licenses holders is expected to reach 1 billion in the next 10 to 15 years.

China Riches fuel Asia as world wealth tops $150 trillion

  • Private wealth in the Asia-Pacific region excluding Japan jumped 31 % to $37 trillion in 2013, supporting a 15 % advance to $152 trillion globally.
  • That outpaced the 8.7 % worldwide growth in 2012.
  • China leapfrogged Germany and Japan in the past five years to trail only the U.S. in a ranking of countries by private financial wealth. China’s $22 trillion is expected to increase more than 80 % to $40 trillion by 2018, while the U.S. may grow to $54 trillion from $46 trillion over the same period, Boston Consulting Group said.

TODAY in HISTORY

  • Alcoholics Anonymous was founded by “Bill W.” (1935)
  • Italy replaced its monarchy with a republic (1946)
  • Affirmed won the Belmont Stakes and the Triple Crown (1967)

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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