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Author: skywalker   |   Latest post: Wed, 16 Aug 2017, 09:47 AM

 

Wall Street Breakfast: Is Crude In A Mood?

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Oil fell by around 4%, or $2 per barrel, in Wednesday's trade - its worst day in six weeks - but prices are bouncing back today. Crude futures +1% to $50.92. Comments by OPEC members, including oil ministers from Kuwait and Saudi Arabia, about extending a production cut are helping, but concerns about oversupply and increased shale production continue to weigh on prices.

Economy

Representative Jeb Hensarling has unveiled a GOP-crafted plan to replace Dodd-Frank and will hold a hearing to discuss the updated version of the Financial CHOICE Act on April 26. The 600-page bill is targeting a "pro-growth, pro-consumer" alternative that would end "too-big-to-fail" bailouts, bring significant reforms to the CFPB, and provide some regulatory relief for certain financial institutions.

"Even if monetary policy divergence remains substantial, there is good reason to think that spillovers to foreign economies will be manageable," Fed Vice Chairman Stanley Fischer told a conference in Washington. In March, the central bank raised its benchmark interest rate to a target range between 0.75%- 1%, continuing to step away from the historically low rates put in place in 2008.

Greece has achieved a 2016 primary surplus almost seven times higher than its bailout target of a primary surplus of 0.5% of GDP. Tensions remain as the IMF is still skeptical. It's not convinced Athens will be able to maintain that level of performance and estimates at least half of the primary surplus came from one-off measures rather than structural changes.

"The real political negotiations on Article 50" can only begin after the snap general election on June 8, according to the European Commission. The news comes after Theresa May secured parliament's backing for an early election. For now, Brussels negotiators and governments of the other 27 EU states are continuing to fine-tune their common position.

Two Venezuelan students and a National Guard sergeant died on Wednesday after being shot during protests against President Maduro. The deaths mean eight people have now been killed during demonstrations this month amid a devastating economic crisis. "If we were millions today, tomorrow we'll be more," said opposition leader Henrique Capriles, calling for another protest on Thursday.

"We're reviewing all the status of North Korea, both in terms of state sponsorship of terrorism as well as the other ways... but re-engage with us on a different footing than past talks have been held," Secretary of State Tillerson told reporters. It comes as North Korean state media warned Americans of a "super-mighty preemptive strike" and said don't "mess with us."

Stocks

Bill O'Reilly is out at the Fox News Channel (FOX, FOXA), ending his more than 20-year career at the network. The decision came after advertisers began to flee his show following allegations of sexual harassment. Who's taking over the primetime slot? Tucker Carlson will take the 8 p.m. hour, while The Five moves to 9 p.m.

Google is planning to introduce an ad-blocking feature in the mobile and desktop versions of its popular Chrome web browser, WSJ reports. The feature would filter out certain online ad types deemed to provide bad experiences for users as they move around the web. Google (GOOG, GOOGL) could announce the feature within weeks, but it's still ironing out specific details.

Extending their partnership, Sky (OTCQX:SKYAY) and HBO (NYSE:TWX) have agreed to a new $250M multi-year deal to develop and produce high-end drama programming. The announcement came as the U.K. broadcaster reported earnings that fell to just over £1B due to weaker advertising and higher costs.

More European earnings: Unilever (NYSE:UL) +1.5% premarket after announcing better than expected first-quarter sales. Not so sweet! Nestle (OTCPK:NSRGY) reported negative Q1 organic growth in China and warned pricing remains negative in Western Europe. ABB +2.4% premarket with orders under pressure, but seeing signs of stabilization.

Picking the Chicago suburb over the city itself, Caterpillar (NYSE:CAT) is moving its headquarters to Deerfield, IL. Its proximity to O'Hare International Airport and a commuter railroad would help Caterpillar executives stay more connected to the world. A spokeswoman also cited the suburb's proximity to a smaller airport that serves corporate jets.

With consumers choosing healthier options and a slew of sugar taxes, U.S. soda and energy drink sales decreased about 1.2% in 2016, falling for the 12th year in a row, according to trade publication Beverage Digest. However, total sales dollars increased 2% to $80.6B as soft drink makers pushed smaller packs at higher prices per ounce, while lowering emphasis on large discounts packs. Related stocks: KO, PEP, DPS, MNST, FIZZ

General Motors is ceasing its Venezuelan operations after its assets in the country were seized by public authorities. "In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities," General Motors Venezolana (NYSE:GM) said in a statement. The action will cause "irreparable damage" to the unit, its 2,678 workers, 79 dealers and suppliers.

Beware of secondhand airbags... Honda (NYSE:HMC) has confirmed that a driver of a 2002 Accord was seriously injured on March 3 after a Takata (OTCPK:TKTDY) airbag inflator ruptured during a crash. While that news is scary enough, Honda said the airbag wasn't the original installed in the vehicle and the inflator wasn't put in as part of Takata's massive recalls.

As part of a plea agreement over Dieselgate, the DOJ is expected to name a deputy attorney general under former President George W. Bush to serve as independent monitor of Volkswagen (OTCPK:VLKAY). Larry Thompson's selection, which will result in oversight for three years, is likely to be announced when the automaker is sentenced tomorrow in federal court.

Wells Fargo's largest investor, Warren Buffett, has likely already voted his shares to support the bank's recommendations at its contentious annual investor meeting next week, sources told Reuters, which include reinstating most of the board. It's the latest in a battle where proxy advisers are telling stakeholders to withdraw support for many Wells Fargo (NYSE:WFC) directors.

More than 1,200 hotels in the InterContinental Hotels Group (NYSE:IHG) fell victim to a three-month malware attack that targeted customer payment card data. Holiday Inn, Crown Plaza, Hotel indigo, Candlewood Suites and Staybridge Suites were all hit by the breach. The group knew about the attack since February, but thought only 12 hotels were affected at the time.

Martin Shkreli will be tried separately from his former business lawyer on securities fraud charges after a federal judge ruled a fair trial would be at "serious risk" if he was heard alongside co-defendant Evan Greebel. Prosecutors accuse the two of looting Retrophin (NASDAQ:RTRX) of millions of dollars to pay off investors whom the "pharma bro" allegedly had defrauded.

Facebook's new Building 8 "moon shot" unit is working on ways to read your thoughts, hiring 60 research scientists in the last year to establish the venture. "This is not about decoding your random thoughts," FB project chief Regina Dugan declared. "It is a silent speech system." Billionaire Elon Musk recently launched a competing project called Neuralink.

"Amazon Web Services launched an Australian region in 2012, we launched a Kindle store on amazon.com.au in 2013 and we now have almost 1000 employees in the country," Amazon (NASDAQ:AMZN) said in a statement. The retail giant is now looking for a warehouse to become a fulfillment center, the first of many in Australia, as it plans to open its online shopfront service Down Under.

Wednesday's Key Earnings

Abbott (NYSE:ABT) +0.4% propped up by St. Jude acquisition.
American Express (NYSE:AXP) +2.3% AH sailing past estimates.
BlackRock (NYSE:BLK) -1.7% despite record ETF inflows.
CSX Corp. (NYSE:CSX) +2.5% AH boosted by coal shipments.
eBay (NASDAQ:EBAY) -1.9% AH following light guidance.
Kinder Morgan (NYSE:KMI) -0.2% AH on mixed results.
Morgan Stanley (NYSE:MS) +2% posting a strong Q1.
Qualcomm (NASDAQ:QCOM) +2.8% AH topping expectations.
U.S. Bancorp (NYSE:USB) -0.2% as revenues met estimates.

Today's Markets

In Asia, Japan flat. Hong Kong +1%. China +0.1%. India +0.3%.
In Europe, at midday, London -0.2%. Paris +0.8%. Frankfurt +0.1%.
Futures at 6:20, Dow +0.2%. S&P +0.3%. Nasdaq +0.3%. Crude +1% to $50.92. Gold -0.3% to $1279.90.
Ten-year Treasury Yield +2 bps to 2.22%

Today's Economic Calendar

8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:45 Bloomberg Consumer Comfort Index
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

 

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