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Thursday, March 28, 2024

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  1. phil

    Worst idea ever!  ICE to take over Libor
    • Effective February 1, IntercontinentalExchange (ICE) will take over as the new administrator for the tainted interbank borrowing rate from the British Bankers' Association.
    • "IBA (ICE Benchmark Administration) has built a robust oversight and governance framework that includes an independent board with a majority of Independent Non-Executive Directors," says the company.
    • ICE names Andre Villeneuve as Chairman of IBA. He was previously Chairman of the City of Londons International Regulatory Strategy Group.
    • Press release

    That's like calling in Jeffrey Dahmer to clean up the Cub Scouts!  

    Oil bounced off $94.50, gasoline ripped up to $2.63 and THEN failed $2.62 – total joke.  

    Nat gas weak but holding $4.30 so far.

    Gold zoomed up to $1,250 but failing there.  

    Futures didn't like housing data (in-line) but came back now – I'm pretty sure they're aiming for a good close to the week. 

    • Stock futures cling to small gains, with the S&P and Dow each +0.1%, after housing starts topped estimates but building permits declined unexpectedly.
    • Dec. Industrial Production: +0.3% in line with expectations, +1.0% prior (revised).
    • Capacity utilization 79.2% vs. 79.1% consensus; 79.1% prior (revised).
    • European markets were higher following surprisingly strong U.K. retail sales data but have faded and barely remain positive.
    • UPS sharply cut Q4 EPS guidance, partly due to a shorter U.S. holiday season; Shell and Elizabeth Arden also issued warnings.
    • Earnings reports from Intel, AmEx, Capital One and SLM all fell short of Wall Street consensus, GE was in-line, and Morgan Stanley and Schlumberger posted beats.
    • Still ahead: consumer sentiment, job openings/labor turnover.
    • Ex-special items, Morgan earned $0.50 per share vs. estimates of $0.45.
    • Institutional Securities pre-tax loss of $1.1B compares to pre-tax income of $78M a year ago, but includes legal expenses of $1.2B this quarter. Excluding DVA, revenue of $3.7B rose from $3.6B a year ago. Advisory revenue of $451M about flat Y/Y. Equity underwriting revenue of $416M up form $238M a year ago, while fixed income underwriting revenue of $495M compares to $534M last year. Compensation expense of $1.6B is unchanged from last year.
    • FICC revenue of $694M falls 14.4% from $811M a year ago, a bit worse than expectations – maybe a combination of a greater focus on wealth management or losing share to others (Goldman), or both.
    • Wealth Management pre-tax income of $709M vs. $562M a year ago on revenue of $3.7B vs. $3.3B. Asset management fees of $2B up 7% Y/Y, transactional revenue of $1.1B up 11.6%.
    • Investment Management pre-tax income of $337M vs. $221M a year ago. Pre-tax margin of 40%.
    • CC at 10 ET
    • Press release
    • MS +1.9% premarket

    Strong markets boost BNY performance; interest margins a drag

    • Assets under custody of $27.6T up 5% Y/Y, thanks to higher market values combining with new business. AUM of $1.58T up 14%.
    • Investment services fees of $1.68B up 5% Y/Y. Investment management and performance fees of $904M up 6%. FX and other trading revenue of $146M up 5%.
    • Net interest revenue of $761M compares to $725M a year ago, with NIM of 1.09% down 7 basis points from last year.
    • Conference call is underway
    • Press releaseQ4 results
    • BK -1.4% premarket

    AMEX and Capital One part ways after earnings

    • We'll keep an eye on the credit card firms following last night's earnings reports from AMEX (AXP) and Capital One (COF).
    • Susquehanna is liking American Express – upgrading from Neutral to Positive and raising the price target to $107 from $90 – but cashes in its chips on its long CapOne call, downgrading to Neutral.
    • Jefferies boosts its PT on both – AMEX to $88 from $78, and CapOne to $88 from $80.
    • AXP +2.1%, COF -2.7% premarket
    • AMEX earnings coverage and CC transcript
    • CapOne earnings coverage and CC transcript
    • MasterCard (MA) and Visa (V) are both higher in early trading after American Express reports Q4 results.
    • The stocks may be getting a little push from the strong cardmember spending tally that American Express disclosed for the critical period.
    • Premarket: MA +0.4%, V +0.5%.

    Schlumberger earnings up on growth in Mideast and Asia, +1.2% premarket

    • Schlumberger (SLB) +1.2% premarket after reporting a better than expected 22% jump in Q4 earnings on strong revenue from drilling activity in the Middle East and Asia.
    • Revenue rose 7.4% to $11.91B, climbing 18% from the Middle East and Asia; international markets brought in about two-thirds of SLB's total 2013 revenue of $45.27B.
    • Says a temporary shutdown of operations in southern Iraq in November following a protest slightly hurt Q4 results.
    • In the U.S., SLB sees no change in fundamentals, with meaningful recovery in dry gas drilling activity "some way out in the future," CEO Paal Kibsgaard says; SLB has the lowest exposure to North America among the big four oilfield service providers, which include HAL,BHI and WFT.
    • Yesterday, SLB declared a 28% increase in its quarterly dividend to $0.40/share.

    Capstone Turbine +6.3% on Permian Basin orders

    • Capstone Turbine (CPST) +6.3% premarket after receiving orders for two Capstone C1000s and an order for 25 Capstone C65 microturbines to be used for oil and gas production in the Permian Basin.
    • CPST says the order for the two Capstone C1000 microturbines, to be used by an independent oil and gas producer in the area, marks its first multiple megawatt project in the Permian Basin after previously installing C30s and C65s at project sites in the region.

    UPS lowers guidance after logistical challenges crop up

    • UPS (UPSlowers FY13 guidance to a range of $4.57-$4.75 vs. consensus of $4.65-$4.85.
    • Results in the U.S. were hit by the logistical challenges of a compressed peak season coupled with the surge of late online shopping.
    • The company sees EPS growth of 10% to 15% for 2014.
    • UPS -3.1% premarket.

    Analysis: Tesla Motors starting to solve 'production constrained' riddle

    • Wedbush Securities walks away from the Detroit Auto Show and investor meetings with Tesla Motors (TSLAfull of love for the EV automaker.
    • Increased battery production from Panasonic during the second half of the year and the potential for a second Model S production line this year sets up with for the company to solve what Elon Musk called its "production constrained" riddle.
    • Progressively lower battery costs should help support margins, notes Wedbush.
    • Shares of TSLA are up 0.3% premarket to extend on their double-digit rally this week.

    More on GE Q4: Net profit rises 5%

    • GE (GE +1.4%) net profit $4.2B vs $4B last year.
    • General Electric Company (GE): Q4 EPS of $0.53 in-line.
    • Revenue of $40.38B (+3.1% Y/Y) beats by $160M.
    • GAAP earnings from continuing operations +20% to $5B.
    • Industrial segment profit +12%, with six of seven segments growing earnings; organic revenue +5%.
    • U.S. orders +8%, growth market orders +13%, Europe orders +3%.
    • Margins up 100 bps vs. 4Q12.
    • Cuts $1.6B in industrial structural costs in 2013, ahead of plan
    • GE Capital Q4 earnings +38%.
    • At the year end, GE had $89B in cash.
    • The company's 2014 framework remains unchanged.
    • PreviousPR

    Someone matching my target on JCP:  J.C. Penney -1.6% pre-market, Craig-Hallum sees $0/share

    • Shares of J.C. Penney (JCP) continue to slide, -1.6% pre-market. Hurting their cause is an initiation at Sell by Craig-Hallum, which believes the equity is worth a big fat goose egg.
    • The firm thinks the retailer will never recover and expects it to burn through half its market cap in cash this year given the secular headwinds its department stores face.

    Surgeon General report finds more smoking risks

    • A new report from the U.S. Surgeon General links cigarettes to even more types of illness including liver cancer, diabetes, and rheumatoid arthritis.
    • Standing out in the findings was the determination that secondhand smoke increased the risk of a stroke by 20% to 30%.
    • Smoking-related deaths in the U.S. are pegged at 480K per year, up from a prior estimate of 443K.
    • Related stocks: MORAIPMLO.

    EA soars on strong NPD figures; Take-Two up moderately

    • Electronic Arts' (EA +11%) Battlefield 4Madden NFL 25, and FIFA 14 respectively claimed spots #2, #4, and #9 on NPD's December bestseller list for U.S. physical retail game sales. Those rankings are hardly changed from November (#2, #4, and #10), and are meeting with the approval of investors and analysts.
    • "EA Scores December Hat Trick," reads the title of a bullish Cowen report. The firm thinks NPD's numbers suggest EA has a shot at beating consensus estimates and guidance forecasts when it reports on Jan. 28. Longbow, which had been prepared to cut its EA estimates in response to NPD's numbers, is hiking them instead.
    • On the other hand, NPD thinks Activision's (ATVI -0.1%) U.S. physical retail sales fell 40% Y/Y in December, thanks in part to tough Call of Duty comps. Call of Duty: Ghosts was the bestselling title for the second straight month, but Skylanders: Swap Force fell to #10 from #7. Shares +0.9%.
    • Take-Two's (TTWO +2%) Grand Theft Auto V, which debuted in September to record sales, fell to #7 from #5. NBA 2K14 rose a spot to #5.
    • Altogether, NPD thinks U.S. physical retail game sales, still pressured by a shift to digital channels and mobile gaming, fell 17% Y/Y. That's a little better than November's 24% drop.
    • Previous: EA, Activision, Take-Two underperform after GameStop warns

    Apple iPhone goes on sales at China Mobile

    • Apple (AAPL) has finally launched the iPhone on China Mobile's (CHL) massive network, but despite the carrier's 763M subscribers, skepticism exists about how much the companies will benefit.
    • "You need to consider the cannibalization of (iPhone) sales from China Unicom (CHU), China Telecom (CHA) and the grey market," says Gartner analyst CK Lu. "So even though there's an addition from China Mobile, it will also impact sales from other channels as well."
    • As for China Mobile, there are concerns about subsidies it might have to pay. "I don't see a price war coming where Apple is engaged in the war, but I do think you're going to see a subsidy war coming," says Michael Clendenin of Shanghai-based RedTech Advisors.

    Three breakfast reads



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