Econochat · Economic Outlook · Equities · Eurozone · Global Economy · Insight · Interest Rates · Market News of the day · North America · Risk · Stock talk · Stocks

Daily from Wall Street, March 28

 

 

 

  • Dow on Track for Ninth Straight Session of Losses
  • Bond Buyers Back with a Vengeance

U.S. futures edged lower ahead of the opening bell Tuesday, putting the Dow Jones Industrial Average on track for its longest losing streak since 1978.

Chris Whittall of the Wall Street Journal reckons the Dow could rack up its longest losing run in almost 40 years today, if it closes in the red again.

Bonds climbed and S&P 500 futures edged lower as investors weighed whether a selloff stemming from U.S. policy uncertainty has further to run.

Fawad Razaqzada, market analyst at Forex.com, says to The Guardian: traders are still edgy.

Today, US index futures are currently pointing to a slightly weaker open, with European markets struggling to hold onto their earlier gains. So, there seems to be some stability in the markets at the time of this writing.

But the lack of any major news or other fundamental events, there’s little or no reason for the on-going ‘risk-off’ mood to turn decisively positive. Thus, equities could fall back later on today or this week, even if technically the markets look more stable. Put another way, safe haven assets like gold and Japanese yen may remain underpinned.

 

 Markets Now

US Opening Calls: 20527 -0.12% 2339 -0.10% 5372 -0.02%

In Asia, Japan +1.1%. Hong Kong +0.6%. China -0.4%. India +0.6%.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt +0.6%.

Crude +0.9% to $48.14. Gold -0.2% to $1253.50.

 

Economy/Politics

Undoing a slew of Obama-era policies, President Trump will sign an executive order today that will start the process of unwinding directives to combat climate change. Called the “Energy Independence” order, it will permit more carbon emissions from power plants, rescind a ban on coal leasing on federal lands, and reverse rules to curb methane emissions from oil and gas production.

The Dow extended its losing streak to eight sessions yesterday – the longest for the index since 2011 – but traders seem keen to move past the healthcare reform issue. In fact, future values are predicting a positive market open. “I don’t think this is the beginning of a full-blown correction, but it’s definitely a reversal in sentiment,” said Peter Cardillo, chief market economist at First Standard Financial.

There are more than a dozen speeches from members of the Fed this week so the narrative is coming thick and fast from the central bank. One highlight will be Janet Yellen’s speech in Washington today on workforce development challenges in low-income communities. Watch to see if the officials signal a plan for two additional rate increases this year, as proposed in their latest projections.

Despite corporate woes and political turmoil, South Korea’s GDP grew more than expected in Q4, expanding 0.5% from the previous quarter and 2.4% year-on-year. Meanwhile, North Korea has carried out another test of a rocket engine that U.S. officials believe could be part of its program to develop an ICBM. It’s the third such test in recent weeks.

South African President Jacob Zuma plans to fire Finance Minister Pravin Gordhan, unnerving investors who see him as an emblem of stability. The rand fell more than 3% on the news and bonds tumbled. While Gordhan has led efforts to keep spending in check and fend off a junk credit rating, Zuma wants to embark on a “radical economic transformation” that will tackle racial inequality and widespread poverty.

Stocks

“Oil has been placed in the Dakota Access Pipeline underneath Lake Oahe,” Energy Transfer (NYSE:ETE) said in a federal court filing, as it makes final preparations to start moving the oil. Once at full capacity, the $3.8B project will be able to ship 570K bpd of crude across four states to Patoka, Ill., where the fuel can be diverted to markets across the Midwest and Gulf Coast.

“The restrictive measures adopted by the Council in response to the crisis in Ukraine against certain Russian undertakings, including Rosneft (OTC:RNFTF), are valid,” Europe’s top court ruled today. The bloc slapped sanctions on Russia after it annexed Crimea in 2014 and stepped them up as Moscow went on to support a separatist rebellion in Ukraine’s industrial east.

The U.K.’s biggest retailer will pay £214M over its 2014 accounting scandal as shareholders line up to oppose its $4.7B takeover of food wholesaler Booker (OTCPK:BOKGY). Tesco (OTCPK:TSCDY) has provisionally agreed to pay £129M under a deferred prosecution agreement with the Serious Fraud Office and £85M to compensate investors.

Replacing ousted chief Brad Grey, Jim Gianopulos, the longtime head of Twentieth Century Fox (FOX, FOXA), has been officially tapped to turn around Viacom’s (VIA, VIAB) troubled Paramount Pictures. The move fills one of two gaps atop major Hollywood studios. Sony Pictures (NYSE:SNE) is still on the hunt for a replacement for outgoing chief Michael Lynton.

Comcast is planning to rebrand and expand a streaming video option for broadband subscribers who do not want to pay for a traditional cable package. The service, dubbed Xfinity Instant TV, will be priced as low as $15 a month to roughly $40 a month, sources told Reuters. Comcast (NASDAQ:CMCSA) will include major broadcast networks as well as add-on options.

Credit Suisse will finalize capital raising plans “as soon as possible,” according to CEO Tidjane Thiam, who didn’t give specific details on the timing or the type of fundraising. But reports suggest Credit Suisse (NYSE:CS) is considering $3B-$5B as it continues to restructure globally and recover from a recent $2B charge for selling toxic mortgage securities.

Just six months after a profit warning, Ericsson (NASDAQ:ERIC) has revealed that restructuring charges will be twice the original forecast, amounting to SEK6B-SEK8B ($680M-$910M) in 2017. The telecoms equipment maker will also write down SEK3B-SEK4B ($342M-$456M) of assets in Q1, while taking provisions of an estimated SEK7B-SEK9B.

Jack Dorsey will do “whatever it takes” to make sure Twitter (NYSE:TWTR) and Square (NYSE:SQ) do well, amid calls for the tech founder to focus on one over the other. “I’m going to make sure both succeed,” he told CNBC, adding that there are “potential synergies” between the two firms and that Square was looking for further acquisitions, particularly in the machine-learning space.

The No. 1 U.S. airline has become the latest to seek a foothold in China by securing a tie-up with one of the country’s big three state-run carriers. American Air (NASDAQ:AAL) is making a $200M equity investment in China Southern Airlines, equivalent to a 2.68% stake. The two will also begin a code-sharing agreement under which they can sell tickets on some of the other’s flights.

A spokeperson with Uber said the company’s self-driving cars are being put back on the road in Tempe, Arizona and Pittsburgh, Pennsylvania. It’s a quick reversal from yesterday’s news that the test program was being suspended. According to local police, the high-impact crash in Arizona was due to human error of the other vehicle and not UBER‘s driverless technology.

Ford will announce investments in three of its Michigan manufacturing facilities this morning, including the Michigan Assembly Plant, Flat Rock Assembly Plant and Romeo Engine Plant, sources told The Detroit News. It’s unclear how many jobs will be created or the total dollar amount, however, one of the sources characterized the investments as “significant.” F +1.1% premarket.

Besides guiding SpaceX (Private:SPACE), Tesla (NASDAQ:TSLA) and several more companies, Elon Musk is launching a new startup called Neuralink. “Difficult to dedicate the time, but existential risk is too high not to,” he wrote in a tweet. It’s expected to specialize in electrodes connected to the brain, which may ultimately lead to the uploading and downloading of thoughts.

Fired from Pimco four decades after he co-founded the investment firm, Bill Gross has finally settled his lawsuit against the company. The asset management giant is reported to have agreed to pay $81M to the legendary investor, who has pledged to give the money to charity. For its part, Pimco (OTCQX:AZSEY) said Gross’s increasingly erratic behavior was behind the firing.

More drama at Valeant? Former CEO Michael Pearson is suing the firm over unpaid stock awards and consultation fees. Based on VRX‘s stock price of $10.81 at the close of trading on Monday, the 3M shares have a market value of about $32.43M. Valeant fell to a 7-year low earlier this month after activist Bill Ackman sold the last of his stake in the struggling drugmaker.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s