Archive for September, 2017

• Morning News: September 21, 2017
  Eddy Elfenbein, September 21st, 2017 at 7:05 am

  S&P Cuts China’s Credit Rating, Citing Risk From Debt Growth

  U.S. Fed Holds Fire On Rate Hike But ‘60% Expectation’ For December

  Yellen Brushes Aside Inflation ‘Mystery’ While Fed Eyes Rate Hike

  S.E.C. Says It Was a Victim of Computer Hacking Last Year

  Someone Made a Fake Equifax Site. Then Equifax Linked to It.

  HTC Messed Up Its Google Deal

  Facebook, After `Fail’ Over Ads Targeting Racists, Makes Changes

  Tesla is Reportedly Working on Its On Chip to Power Self-Driving Cars

  Baidu Fund Heats Up Driverless Race

  Pfizer and Johnson & Johnson’s Brewing Brawl Gets Real

  Albertsons Acquires Plated As The Meal Market Recalibrates

  Toshiba, Keen to Seal $18 Billion Chips Sale, Wrestles With Last-Minute Details

  Apple Can Patch Bugs, But Its Biggest Apple Watch Problem Can’t Be Fixed

  Roger Nusbaum: Planning Advice From True Experts

  Howard Lindzon: The Tyrannosaurus Rex and Jamie Dimon

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• The Fed’s Policy Statement
  Eddy Elfenbein, September 20th, 2017 at 2:07 pm

  Hot off the presses: While the FOMC decided against raising rates this time, they seem on course for a December rate hike. I think that would be a big mistake.

  Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have remained solid in recent months, and the unemployment rate has stayed low. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined this year and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

  Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Hurricanes Harvey, Irma, and Maria have devastated many communities, inflicting severe hardship. Storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term. Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Higher prices for gasoline and some other items in the aftermath of the hurricanes will likely boost inflation temporarily; apart from that effect, inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

  In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

  In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

  In October, the Committee will initiate the balance sheet normalization program described in the June 2017 Addendum to the Committee’s Policy Normalization Principles and Plans.

  Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Jerome H. Powell.

  Here are the latest projections (aka “the blue dots”).

  According to the projections, the Fed sees one more rate hike this year, three more next year, two more in 2019 and a final one in 2020.

• Morning News: September 20, 2017
  Eddy Elfenbein, September 20th, 2017 at 7:08 am

  Fed to Pack Up Crisis Tool, Debate Next Hike: Decision-Day Guide

  Bitcoin Price Hits $4,000 Even as Ray Dalio Calls it a ‘Bubble’

  Equifax May Be Happy to Spend $1 Per Customer for Their Trouble

  Toys ‘R’ Us Will Live Because Mattel and Hasbro Can’t Let It Die

  SoftBank CEO Says T-Mobile-Sprint Deal Will Lift Competition

  Amazon’s Next Act Takes Place in the Real World

  Toshiba Selects Bain Group as Buyer of its Prized Chip Business

  Chipotle: Melted Cheese Might Not Save Growth Woes

  Bed Bath & Beyond Craters 15% After Big Miss on Earnings Partly Blamed on Hurricane Harvey

  Proterra Counters Tesla’s ‘Beast’ Of A Semi With 1,100-Mile-Range Electric Bus

  Before Wisconsin, Foxconn Vowed Big Spending in Brazil. Few Jobs Have Come.

  Airbus Opens China A330 Plant Amid Market Push

  Ben Carlson: Social Proof in the Markets

  Michael Batnick: These Are The Goods

  Josh Brown: Okay, So My Favorite Band Got Discovered

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• Microsoft Raises Dividend by 7.6%
  Eddy Elfenbein, September 19th, 2017 at 5:34 pm

  Microsoft (MSFT) just announced a 7.6% increase to their quarterly dividend. The payout will rise from 39 to 42 cents per share. The dividend is payable December 14 to shareholders of record on November 16. The ex-dividend date will be November 15.

  Based on today’s close, MSFT yield 2.23% which is just one basis point below the 10-year Treasury.

  

• Morning News: September 19, 2017
  Eddy Elfenbein, September 19th, 2017 at 7:04 am

  Mexico Readies Bill to Regulate Fast-Growing Fintech Industry

  The World’s Biggest Wealth Fund Hits $1 Trillion

  The IMF Needs to Stop Torturing Greece

  Bond Investors Rationalize the Unrealistic

  Jamie Dimon, Here’s Why You’re Wrong About Bitcoin

  Equfax Suffered Another Data Breach in March

  Toys ‘R’ Us Files for Bankruptcy but Keeps Stores Open

  Adidas Overtakes Jordan on List of Top U.S. Sport Footwear

  Roku Just Doubled Its IPO Forecast to $252 Million

  Fixing the `Brain Damage’ Caused by the IPO Process

  Ocado Reports Strong Growth, But Short Term Costs Hurt Shares

  Activist Lifts Clariant Stake, Aiming to Scuttle Huntsman Deal

  Howard Lindzon: All is Fair in Love and War…and Markets

  Roger Nusbaum: James Altucher Is Right, Retirees Shouldn’t Own a Home

  Jeff Carter: mHub Pitch Competition

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• Disappointing Economic News
  Eddy Elfenbein, September 18th, 2017 at 10:50 am

  The Federal Reserve gets together again tomorrow. I doubt we’ll see any moves on the interest rates front, but we may get some hints of things to come. The futures market appears to be leaning towards a December rate hike. I don’t think that’s a good idea.

  We’re not near a recession, but the economy is hardly sprinting either. On Friday, we got some disappointing economic news. The Fed said that industrial production fell 0.9% in August. Hurricane Harvey was responsible for an estimated 0.75% of that. Also, retail sales dropped 0.4% last month. Excluding gasoline, retail sales were down 0.2% in August.

  The Atlanta Fed’s GDP model now sees Q3 coming in at 2.2%. The New York Fed’s model is down to 1.3%. Harvey bears some of the blame, but not all.

• Ingredion Raises Dividend by 20%
  Eddy Elfenbein, September 18th, 2017 at 10:01 am

  Good news for Ingredion (INGR) investors. On Friday, the company announced a 20% increase to its dividend. The quarterly payout will rise from 50 to 60 cents per share. Based on Friday’s closing price, the new dividend yields 1.92%.

  “We are proud of our record of delivering consistent shareholder value. From dividends and share repurchases to capital investments and acquisitions, we are committed to a balanced deployment of cash consistent with our strategic blueprint,” said Ilene Gordon, chairman, president and CEO.

  The new dividend is payable on October 25 to stockholders of record at the close of business on October 2.

  

  On Monday, Ingredion said that James Zallie will become their new CEO on January 1. He’ll replace Ilene Gordon who will stay on as chairman until July 2018.

• Fed hike around the corner?
  Eddy Elfenbein, September 18th, 2017 at 9:37 am

• Morning News: September 18, 2017
  Eddy Elfenbein, September 18th, 2017 at 6:54 am

  Superpower India to Replace China as Growth Engine

  China Expresses Concern Over EU Push to Curb Foreign Takeovers

  Yellen Legacy Burnished by Job Market Hunch, Crisis Policy Exit

  Cuomo Proposes Stricter Regulations for Credit Reporting Agencies

  Wall Street’s Trillion-Dollar Monopoly Has Repo Traders on Edge

  Northrop Grumman Nears Deal to Purchase Orbital ATK

  Walgreens Said to Tweak Rite Aid Deal to Clinch U.S. Approval

  Slack Gets Slice of SoftBank’s $100 Billion Tech Bounty

  Facebook Navigates an Internet Fractured by Governmental Controls

  Hiscox Sees $150 Million Net Claims from Hurricane Harvey

  Rolling Stone, Once a Counterculture Bible, Will Be Put Up For Sale

  UBS: ‘Headwinds Could Persist’ for Wells Fargo After the Fake Account Scandal Killed Its Stock Last Year

  Jeff Miller: Will a More Aggressive Fed Spark the Long-Awaited Correction?

  Ben Carlson: How Millennials Can Prepare For the Next Financial Crisis

  Michael Batnick: These Are The Goods

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• GE is Dow’s biggest laggard
  Eddy Elfenbein, September 15th, 2017 at 4:13 pm