Archive for July, 2016

• Morning News: July 22, 2016
  Eddy Elfenbein, July 22nd, 2016 at 7:03 am

  U.K. Chancellor Ready to ‘Reset’ Fiscal Policy on Brexit

  Britain’s Economy Wilting Fast After Brexit Vote, May Prompt More Spending

  Pointing a Finger at the Fed in the Lehman Disaster

  Oil Prices Fall on Glut in Refined Products

  Fracklog in the Biggest U.S. Oil Field May All But Disappear

  Roger Ailes’ Unparalleled Impact On The Public Sphere

  Amazon Is Now Offering Discounted Student Loans as a Prime Perk

  FDA Raises Concerns Over Valeant’s Eye Drop

  Syngenta Says U.S. Talks Over ChemChina Bid ‘Constructive’

  Boeing Sees $2.1 Billion Cost on 787 Dreamliners, Air Tanker

  McDonald’s Stops Selling Big Mac in Venezuela Due to Bread Shortage

  Schlumberger Posts a Loss as Job Cuts Deepen

  Spotify Ramps Up Its Audio Ad Business as It Prepares for Its IPO

  Roger Nusbaum: Deploying Cash When the Market Is At All-Time Highs

  Cullen Roche: Revisiting My “Useless” 2016 Predictions

  Be sure to follow me on Twitter.

• Three More Earnings Beats
  Eddy Elfenbein, July 21st, 2016 at 9:00 am

  We had three more Buy List earnings beats this morning.

  Biogen (BIIB) reported earnings of $5.21 per share. They beat estimates by 54 cents per share. The company also announced a $5 billion buyback. Quarterly revenues rose 11.7% to $2.89 billion. Biogen’s CEO, George Scangos, said he’ll be stepping down.

  Biogen said they expect full-year earnings to range between $19.70 and $20 per share. Wall Street had been expecting $18.96 per share.

  Snap-on (SNA) reported Q2 earnings of $2.36 per share. Wall Street had been expecting $2.23 per share.
  
  Alliance Data Systems (ADS) earned $3.68 per share which was nine cents more than expectations. The company now expects Q3 earnings of $4.42 per share and full-year earnings of $16.85 per share.

• Morning News: July 21, 2016
  Eddy Elfenbein, July 21st, 2016 at 7:18 am

  Kuroda Says No Need and No Possibility for Helicopter Money

  Investors Think the Bank of Japan Will Pull the Trigger Next Week

  A Crude Oil Price Weakness In Q3 2016 Hastens A Multi-Quarter Rebalancing And Sharply Higher Oil Prices Into 2017

  US Treasury Chief Stresses Need for Greek Debt Relief

  Here’s How the World’s Biggest Beer Merger Won U.S. Antritrust Approval

  Komatsu Signals Mining Optimism With $2.9 Billion Joy Takeover

  HSBC Top Manager Arrested Over Foreign Exchange Fraud Claims

  Roger Ailes’s Exit Is Unlikely to Erode the Fox News Citadel

  Southwest Airlines’ Profit Misses Estimates as Fares Decline

  Dish Network Tops Profit Views, Loses Subscribers

  Pairing New Cancer Drugs With Older Ones Bolsters Roche Profit

  Daimler Posts Slight Growth in Profit

  AmEx Profit Rises on Gain Tied to Costco Portfolio Sale

  Josh Brown: Peter Boockvar: And Now, Everyone Is Bullish

  Howard Lindzon: The S&P is at All-Time Highs …Today is a Better day to Panic

  Be sure to follow me on Twitter.

• Signature Bank Earns $1.90 per Share
  Eddy Elfenbein, July 20th, 2016 at 10:18 am

  Shares of Signature Bank (SBNY) are down about 7% this morning. The bank reported Q2 earnings of $1.90 per share which was eight cents below expectations. Their net interest margin for Q2 was 3.18%.

  “There are many uncertainties in the current global environment – political, economic and regulatory, among others. However, the one constant is our conviction to depositor safety. In times of turmoil, volatility and market disruption, we rely on the strength and success of Signature Bank’s highly focused depositor-first model to sustain our growth. This deposit first-and-foremost strategy continues to allow us to not only weather storms, but also to seize opportunities arising from changing market conditions,” explained Joseph J. DePaolo, Signature Bank President and Chief Executive Officer.

  (…)

  Non-interest income for the 2016 second quarter was $13.1 million, up $3.4 million when compared with $9.8 million reported in the 2015 second quarter. The increase was due to a $4.4 million increase in net gains on sales of securities.

  Non-interest expense for the second quarter of 2016 was $92.3 million, an increase of $7.4 million, or 8.7 percent, versus $84.9 million reported in the 2015 second quarter. The increase was primarily a result of the addition of new private client banking teams, as well as an increase in costs in our risk management and compliance related activities.

• Morning News: July 20, 2016
  Eddy Elfenbein, July 20th, 2016 at 7:18 am

  U.S. Targets $1 Billion in Assets in Malaysian Embezzlement Case

  Justice Dept. Will Seek to Block Two Health Insurance Mergers

  Roger Ailes is Negotiating His Departure as Chairman of Fox News

  Pimco’s New Turnaround Man: Manny Roman

  For Berkshire Hathaway’s Latest Multibillion-Dollar Deal, Warren Buffett Goes Back to Insurance

  Unilever Buys Dollar Shave Club for $1 Billion

  United Profit Exceeds Analysts’ Estimates on Cost Reductions

  Discover Financial Loans Rise 4%

  BHP Says 2017 Iron Ore Output May Be Flat, Cuts Oil Spending

  Don’t Count Out Philip Morris

  EMC Shareholders Voted to Approve the Multi-Billion Dollar Merger With Dell

  Inside the High-Profile Downfall of a $8 Billion Hedge Fund

  Hyperloop One Files $250 Million Countersuit In Response To ‘Failed Takeover Attempt’

  Jeff Carter: Financial Statements and Valuation

  Roger Nusbaum: So Now Brexit Is Good For Markets?

  Be sure to follow me on Twitter.

• Microsoft Earns 69 Cents per Share
  Eddy Elfenbein, July 19th, 2016 at 8:34 pm

  A very good earnings report from Microsoft (MSFT). The software giant earned 69 cents per share which was 11 cents better than expectations.

  Microsoft Corp. remains a distant second to Amazon.com Inc. in cloud computing, but the software giant’s latest quarterly results suggest that it is effectively managing the transition from selling software licenses to selling on-demand computing services.

  In its fiscal fourth quarter, sales of the Redmond, Wash., company’s Azure cloud computing service more than doubled, offsetting a decline in the segment that includes its flagship Windows operating system and its struggling mobile-phone business.

  The strength of Microsoft’s cloud business surprised investors. The company beat expectations for both sales and profit, which spurred a 4% rise in Microsoft’s shares in after-hours trading.

  Microsoft has proved especially adept at selling its cloud services to existing customers, taking advantage of longstanding relationships with companies that have run its software in their own data centers.

  “They are effectively getting their customers to transition to the cloud,” Stifel Nicolaus & Co. analyst Brad Reback said.

  Microsoft’s transition to the cloud comes with an important cost: eroded margins. When the company relied on software licenses sold to companies every few years, it registered fat profits. But margins on cloud services, which are sold by subscription, are slimmer.

  For the quarter, gross margins slid 14% to $12.64 billion.

  The stock was up 4.2% in after hours trading.

• Morning News: July 19, 2016
  Eddy Elfenbein, July 19th, 2016 at 7:06 am

  Crude Oil: Is A Gasoline Glut Emerging?

  German ZEW Investor Sentiment Deteriorates in Brexit Aftermath

  EU to Fine Truck Makers Over Price-Fixing and Other Collusion

  SoftBank’s Quest for ARM Spanned Turkish Coast to No. 10 Downing Street

  D.C. Decision, Expected In Fall, Could Reverse CFPB’s Actions, Change Structure
  Yahoo Revenue Falls 15% and Profit Drops 64%

  Thanks to Pokémon Go, Nintendo’s Market Cap Just Doubled to $42 Billion

  Investor Challenges Baidu on Sale of Video Service to CEO

  UnitedHealth Profit Beats on Optum Unit Strength

  Wal-Mart Escalates Fight With Visa, Blocks Cards at Three Canadian Stores

  Monsanto and Bayer Move Closer to a Deal

  Novartis Says Profit Could Dip as It Boosts Investment in Heart Drug Entresto

  Netflix Disappoints Wall Street as Subscriber Growth Slows

  Josh Brown: Middle Out Compression

  Cullen Roche: There Are No “Bond Kings” in This Bond Market

  Be sure to follow me on Twitter.

• On Vacation
  Eddy Elfenbein, July 18th, 2016 at 3:47 pm

  I’m relaxing in Canada this week so posting will be light. We have a busy week for Buy List earnings, so I’ll provide updates for those.

• Morning News: July 18, 2016
  Eddy Elfenbein, July 18th, 2016 at 7:01 am

  The Coup Failed, But Erdogan’s Wrath Keeps Investors on Edge

  Ireland Hits Brexit Alarm in Biggest Foreign Crisis in 50 Years

  EU Said to Eye ‘Nuclear Option’ to Force May’s Hand on Exit

  My Venezuela Nightmare: A 30-Day Hunt for Food in a Starving Land

  Rate-Starved U.S. Banks Happily Gobble Mortgage Business

  Bank of America’s Profit Slides But Tops Estimates

  SoftBank to Buy ARM, a Mobile Chip Designer, for $32 Billion

  Alibaba Buying Yahoo Would Make The Most Sense For Everyone

  Artificial Intelligence Swarms Silicon Valley on Wings and Wheels

  3 Things That Can Go Wrong for Netflix on Monday Afternoon

  Even the Losers May Win as Exxon Outbids Partner for PNG Gas

  How Coca-Cola Can Make Soda A Growth Market Again

  With Pokémon Go, Nintendo Seeks to Salvage Lost Opportunity

  Rate-Starved U.S. Banks Happily Gobble Mortgage Business

  Jeff Carter: Scaling Your Portfolio

  Jeff Miller: What Might Derail the Stock Market Rally?

  Be sure to follow me on Twitter.

• Three Economic Reports Today
  Eddy Elfenbein, July 15th, 2016 at 12:45 pm

  We had a few important economic reports today. The government said that the CPI rose by 0.2% last month. That was below expectations of 0.3%. The core rate also rose by 0.2%.

  The government also reported that retail sales rose 0.6% last month. The rise for May was pared back to 0.2% from the original 0.5%. Excluding autos, retail sales were up 0.7% in June.

  Finally, the Fed said that industrial production rose by 0.6% in June. Expectations were for an increase of 0.4%.

  Now for some charts. Here’s the monthly change in seasonally adjusted core inflation:

  

  Here’s retail sales:

  

  Here’s industrial production. IP trended down since late 2014, but it may have turned a corner.