Archive for June, 2016

• CR Bard Raises Dividend
  Eddy Elfenbein, June 8th, 2016 at 7:49 pm

  For the 45th year in a row, CR Bard (BCR) raised their dividend. The quarterly dividend will increase from 24 to 26 cents per share. The dividend is payable on July 29 to shareholders of record at the close of business on July 18.

  The company also announced a new $500 million share repurchase authorization. This is on top of the current program which has $205 million left in it.

• Best Performers from the Low
  Eddy Elfenbein, June 8th, 2016 at 4:18 pm

• Morning News: June 8, 2016
  Eddy Elfenbein, June 8th, 2016 at 7:30 am

  Asia’s $60 Trillion Wealth Takes Europe Down a Peg

  ECB’s Hansson: Corporate Bonds Could Be More Effective in Boosting Inflation

  China Steel Exports Rise, Defying Japan, U.S. Call for Curbs

  PBOC’s Ma Says Credit Curbs Mean Short-Term Pain, Long-Term Gain

  Jeb Hensarling Plan Rekindles Debate as Republicans Aim to Dismantle Dodd-Frank

  Treasuries Climb as U.S. Sells $24 Billion of Three-Year Debt

  Bezos Says Amazon to Up India Investment to $5 Billion

  Micron Deal For Taiwan’s Inotera Delayed

  Lululemon Athletica Revenue Tops Views, Gives Downbeat Quarterly Prognosis

  Shell to Build Pennsylvania Plastics Plant in Bid for Market Share

  Suzuki Motor CEO to Step Down Over Fuel-Economy Scandal

  The Web’s Creator Looks to Reinvent It

  The CFA Exam’s Toughest Question: What’s the Payoff?

  Cullen Roche: The Downside of Academic Finance

  Jeff Carter: The Human Touch

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• Biogen Plunges
  Eddy Elfenbein, June 7th, 2016 at 12:19 pm

  Rough day for Biogen (BIIB):

  Biogen Inc. said an investigational therapy for multiple sclerosis missed its primary and secondary goals in a mid-stage study, but that the data suggested evidence of a clinical effect.

  Shares of the Cambridge, Mass., biopharmaceutical company fell 9.1% to $263.50 in recent premarket trading.

  Biogen Chief Medical Officer Alfred Sandrock said that owing to the complex nature of the data, the company continues to analyze the results “to inform the design of our next study.”

  The treatment—known as opicinumab—aims to repair the nervous systems of people with relapsing multiple sclerosis by employing a certain antibody in the effort to restore myelin sheaths that coat nerve fibers.

  Biogen generates the majority of its revenue from three multiple sclerosis drugs that are experiencing slowing growth. The company has focused its research and development efforts on new treatments for multiple sclerosis—with two other multiple sclerosis treatments in its pipeline—and other neurodegenerative conditions, including Alzheimer’s disease and Parkinson’s disease. The company plans to spin off its hemophilia drug business to narrow its focus to neurological disorders.

  In the latest trial, opicinumab missed the primary endpoint of improving walking ability, upper extremity function, cognition and other measures of physical disability. The treatment also missed the secondary endpoint for slowing the progression of disability.

  In a separate study of patients after a first episode of acute optic neuritis, opicinumab met its primary endpoint related to responses to light stimuli compared with a placebo, but it wasn’t effective on secondary goals of changing the thickness of retinal layers or visual function.

  Multiple sclerosis disrupts transmission of signals between the brain and spinal cord and other parts of the body and is marked by such symptoms as fatigue, muscle weakness, cognitive difficulties and, in some advanced cases, paralysis below the waist.

• Morning News: June 7, 2016
  Eddy Elfenbein, June 7th, 2016 at 7:32 am

  Why Britain Is Edging Toward ‘Brexit’

  Euro-Area Economy Grows Faster as Consumption Gathers Pace

  Why Trump, the ‘King of Debt,’ Hates Dodd-Frank

  Verizon to Bid $3 Billion for Yahoo’s Web Assets

  Valeant Cuts Forecast Under New CEO, Key Drug Sales

  The Alchemist Who Turned Toxic Assets Into Gold at Citigroup

  Shell Raises Savings Target From BG Group Deal

  Who Decides ‘Fair Value?” In Dell’s Case, a Judge

  Redstone Family Firm Moves to Block Paramount Pictures Sale

  Hertz Global Sets Date for Separation, Updates on Pricing

  Tribune Publishing Vote Tally Shows Big Support for Gannett Bid

  General Mills Releases Tiny Toast, Its First New Cereal In 15 Years

  Oil Hits 2016 High on Ebbing Supply, Softer Dollar

  Josh Brown: The Riskalyze Report: Advisors Dump “Low Vol”

  Howard Lindzon: The Stock Market and Trains: Nothing But Opportunity

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• Yellen Says Rates Need to Rise
  Eddy Elfenbein, June 6th, 2016 at 12:53 pm

  Janet Yellen’s remarks for today indicate that she sees rates going up, but she’s less clear on when:

  Federal Reserve Chair Janet Yellen said positive forces supporting U.S. job growth and higher inflation will still probably outweigh negative developments, calling additional gradual interest-rate increases appropriate without specifying their precise timing.

  “I continue to think that the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run,” Yellen said, according to the text of a speech she is scheduled to deliver Monday in Philadelphia.

  Yellen was less specific than in her previous remarks in describing when she thought the Fed should raise rates again. On May 27 at Harvard University, she said an increase would likely be appropriate in “coming months,” a phrase omitted from Monday’s speech text. Since then, the Labor Department on Friday reported U.S. employers in May added the fewest number of new jobs in almost six years, causing expectations for a rate increase to plunge.

  The May employment numbers were “disappointing,” she said, while also pointing to one of the few encouraging elements of the report — the increase in average hourly earnings.

• June Rate Hike Odds Plunge
  Eddy Elfenbein, June 6th, 2016 at 11:55 am

  Friday’s jobs report has shaken Wall Street’s expectations. The Fed meets again next week and the futures market thinks there’s less than a 1-in-25 shot they’ll raise rates. That might even be understating it. Expectations for a July hike are now down to 35%.

  Cyclical stocks are doing well today which is a continuation of the trend since late January. When the economy does better, Wall Street shifts from defensive areas like consumer staples and healthcare to more economically dependent areas like industrials and energy. These cycles tend to last a few years.

  

  The S&P 500 just broke above 2,110. If we hold here by the end of the day, it will be our highest close since July. It’s interesting how 2,100 held like a brick wall for so long, and it took a lousy jobs report for us to break through.

• Morning News: June 6, 2016
  Eddy Elfenbein, June 6th, 2016 at 7:10 am

  Why Inflation Targets Are Getting Harder to Hit – ECB

  Luxembourg to Invest $227 Million in Asteroid Mining

  German Industry Orders Fall More Than Expected in April

  The Land Below Zero: Where Negative Interest Rates Are Normal

  Saudi Diversification Plan May Accelerate With Bet On Uber

  U.S. to Press China to Curb Industrial Output

  Central Bankers Told They Should Be Sprinting Toward Blockchain

  Fed’s Rosengren Flags Jobs Report, Yet Says Fed Rate Hikes Coming

  Gogo Falls as American Holds Right to Pull Service on Jets

  Why the Economic Payoff From Technology is So Elusive

  Devon Energy to Get Nearly $1 Billion From Asset Sales

  Facebook Co-Founder Saverin Takes a Shine to Singapore Underdog

  Watchdog That Shepherded Panama Papers Now Constrained by Finances

  Roger Nusbaum: Hopefully the Short Run Doesn’t Kill You

  Jeff Miller: Is Small Employment Growth Big News for Stocks?

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• The Market Rotates
  Eddy Elfenbein, June 3rd, 2016 at 12:38 pm

  With today’s lousy employment report, the market suddenly realizes that the Fed probably won’t raise rates later this month, and perhaps not in July as well.

  Students of “The Elfenbein Theory to Explain the Entire Stock Market” know exactly what to expect. High dividend areas like Utilities are doing well, while banks and financials are doing poorly.

  Check this out:

  

• May Jobs Report +38,000
  Eddy Elfenbein, June 3rd, 2016 at 8:32 am

  The government just released the May jobs report. The economy created only 38,000 net new jobs last month. The unemployment rate fell to 4.7%.

  Revisions for March and April subtracted 59,000. Average hourly earnings rose by 0.2%.

  I think this takes a June rate hike off the table.

  The unemployment rate is lower now than it was in every single month from November 1973 to October 1997.

  Here’s payroll employment along with the stock market.