Bulls drive Dow Jones to the 24000 mark

Today’s Overview:

• Dax crashes
• Dow Jones breaks the 24000 mark
• CFIUS clears Bayer’s planned takeover of Monsanto
• Tesla opens biggest Lithium battery factory
• Juniper goes crashing after Nokia denies take-over

After a long week with no real changes the German DAX seems to be heading down in the first day of December. After opening at 13044, the German Index is down at the12854 point mark, losing 130 bp. The DAX is not the only Index suffering in the first day of December. The euro zone is sliding down Overall on the last day of the week as euro zone factories posted their busiest month in over 17 years in November. At mid-day only 3 stocks are above the 0% line, the biggest loser being Infineon carrying a loss of 228bp. Europe’s financial stocks wilted after a delayed vote on tax reform in the U.S. deflated a rally in the sector, driving regional benchmarks to start December with a dip. Euro zone stocks fell 0.6 percent while Britain’s FTSE, which has suffered from a strong sterling this week, slid 0.1 percent.  Financials were the biggest weight after the U.S. Senate delayed a vote on a tax reform bill that investors anticipate will be beneficial for banks.  Lloyds, Barclays, and BNP Paribas led the index down.  Oil and gas stocks stayed buoyant, with Shell, Total and BP leading sector gains as OPEC’s extension of supply cuts continued to boost crude prices. Healthcare stocks outperformed thanks to a Morgan Stanley upgrade boosting UCB by 3.3 percent while Novo Nordisk, flagged as one of the strategists’ favourites in the pharma space, gained 2.8 percent.  British pharma company Indivior also shot up 11.7 percent after its opioid addiction drug got approved by the U.S. Food and Drug Administration.

In the U.S. the stock market delivered a strong performance yesterday, with traders seeming to be more confident that the Trump Administration’s tax plan will be approved. At the close of trading, the Dow Jones Industrial Average was ahead 332 points; the broader S&P 500 Index was up 21 points; and the NASDAQ was higher by 50 points. Market breadth was supportive, with winners nicely ahead of losers on the NYSE. Most equity sectors participated in today’s advance. The energy and industrial issues showed leadership, while the telecom names and utility stocks underperformed. Technically, the stock market continues to move strongly higher, with the Dow Jones Industrial Average now past the 24,000 mark. While equity valuations are elevated, traders seem content with the nation’s economic progress.

On other big news Germany’s Bayer said that the Committee on Foreign Investment in the United States (CFIUS) had no national security concerns about the drugmaker’s planned takeover of U.S. seeds group Monsanto, giving its go-ahead. Bayer and Monsanto will continue to cooperate with other authorities to complete the transaction in early 2018, Bayer said in a statement on Friday.

Tesla Inc switched on the world’s biggest lithium ion battery on Friday in time to feed Australia’s shaky power grid for the first day of summer, meeting a promise by Elon Musk to build it in 100 days or give it free. “South Australia is now leading the world in dispatchable renewable energy,” state Premier Jay Weatherill said at the official launch at the Hornsdale wind farm, owned by private French firm Neoen.  Tesla won a bid in July to build the 129-megawatt hour battery for South Australia, which expanded in wind power far quicker than the rest of the country, but has suffered a string of blackouts over the past 18 months. In a politically charged debate, opponents of the state’s renewables push have argued that the battery is a “Hollywood solution” in a country that still relies on fossil fuels, mainly coal, for two-thirds of its electricity.  Supporters, however, say it will help stabilize the grid in a state that now gets more than 40 percent of its electricity from wind energy, but needs help when the wind dies down.

Shares of Juniper Networks Inc fell 8 percent in pre-market trade on Thursday after Finland’s Nokia denied reports that it was in talks to buy the U.S. network gear maker.  CNBC on Wednesday reported, citing sources, that Nokia was in talks to buy Juniper at an offer that would value the company at around $16 billion, higher than Juniper’s $11.26 billion market capitalization as of Wednesday’s close. That valuation would imply a price of about $42 per share, a level last seen by Juniper shareholders six years ago, Morningstar analyst Ilya Kundozerov wrote in a client note.  Within hours of the CNBC report, however, Nokia, which does not typically comment on market rumors, said it was not preparing an offer for Juniper. Bernstein analyst Pierre Ferragu said Nokia acquiring Juniper seemed a stretch citing an operational alliance limited to $300 million to $400 million in costs, near impossible product integration in routing and a risk of negative revenue combination.

 

Volkswagen up 12% MoM

Today’s Topic:

• Bulls take over the Markets
• Volkswagen up 12% MoM
• Uber grows its debt

Opening at the 13’156 point mark the German Index advanced to 13’200 point mark in the afternoon and follows the general trend on the Markets. Just before close only 4 stocks ( Infineon, SAP; Fresenius and Vonovia) are quoting negative ticks. The markets have profited from the tax reform advancements and couldn’t even be shaken by the nuclear missile test in North-Korea. Volkswagen takes the spot number one for the second time in a week with a 3% increase. The German carmaker went from 172,75 Euro to 175,75 Euro and is up 12% on a MoM comparison. Volkswagens Price jumped as a reaction to the 3,82 percent increase in Sales. “All brands have most recently developed strongly,” Mueller (Volkswagen CEO) said on Wednesday at a staff gathering in Wolfsburg. “And I trust that also the two remaining months will confirm the strong trend. And that we will be able to finish the year 2017 on a new record.”

After limping into the post-Thanksgiving weekend session with a mixed-to-lower showing on Monday, the bulls had the momentum back yesterday. On point, Wall Street started the latest trading day with solid gains and then proceeded to press forward with nary a hiccup for the remainder of the session. True, there was a rapid pullback early yesterday afternoon on news that North Korea had fired a missile into the waters off the coast of Japan. That headline event sent the Dow Jones Industrial Average, once up by more than 190 points, back down to less than a 100-point advance. However, that selloff, was just a brief affair with the market regaining its footing shortly thereafter. Then, the same forces that had sent stocks soaring at the open were back in play for the balance of the day. In other news, the economy continues to show enviable strength, with data on new home sales showing a strong gain for October in a release on Monday and a survey on consumer confidence, issued by the Conference Board yesterday morning surging to its highest level in 17 years. That one-two punch suggests that the nation’s gross domestic product will advance by 3%, or more, in the current period.  The market’s comeback yesterday suggests that the shock effect of news out of North Korea is less than it had been in months past. Indeed, stocks rather quickly regained all of their gains from earlier in the day. In all, the three major composites, the Dow, the S&P 500, and the NASDAQ all had reached all-time highs in the morning. Then, the earlier nominated Jerome Powell–to be Federal Reserve Chair–turned out positive for the Street as he implied that his accession would result in few central bank changes. In sum, he suggested that he would keep the current slow tightening rate policy intact. Then, in the final hour, the bulls received more good news as the Senate took a step toward passing a bill aimed at reforming the U.S. tax code, as the Senate Budget Committee approved its tax plan, bringing the full Senate closer to a floor vote that may take place as early as tomorrow. With that news in hand, the Dow’s gain surged past 250 points. It would seem that a tax package will pass either late this year or in 2018. As the final bell sounded, the Dow was up 256 points; the S&P 500 was ahead 26 points; and the NASDAQ was better by 34 points.

In other news, Linde plc announced today that 92% of the ordinary shares of Linde AG entitled to voting rights were tendered by the end of the additional acceptance period of Linde plc’s exchange offer on November 24, 2017. The tender process has been completed and no further Linde AG shares can be tendered in the exchange offer. The business combination remains subject to the receipt of certain antitrust and other regulatory approvals and is expected to be completed in the second half of 2018.

Following the disclosure that over 57 million Uber driver and rider accounts were hacked, exposing sensitive, personal information, the National Limousine Association (NLA) is calling for Uber to halt its operations and on Congress to formally investigate the incident. While the scope of the breach is still not fully known, the NLA warns the public that this information most likely goes well beyond typical credit card exposure seen in many retail hacks. Insiders have confirmed with Reuters that Uber has increased its Debt to 1,46 billion USD.

Today’s Economic Calendar:

• MBA Mortgage Applications
• Janet Yellen Speech
• GDP
• Pending Home Sales Index
• EIA Petroleum Status

 

Airbus, Rolls Royce and Siemens to develop a hybrid plane

Today’s Topics:

• Dax Overview
• Airbus, Rolls Royce and Siemens to develop a hybrid plane
• SAP and Microsoft join forces
• U.S. markets overview

With a new week around the corner the German DAX still seems unsure about which direction it wants to take. After opening at the 13011 point mark the stock Index increased rampantly to the 13052 day-high and dropped well its below opening price to the 12970 point mark. Succeeding the volatile morning the DAX has been rising ,supported by the EURUSD, for the rest of the trading day hitting the 13066 point mark, effectively increasing by 50 bp. After massive losses of 12% the German TV Mammoth ProsiebenSat1. was able to gain 2,63% throughout the trading day and thus being the biggest winner today. Meanwhile Linde, the industrial gases group which said late on Friday it had received approval from 90 percent of its shareholders for its planned $80 billion tie-up with Praxair is up 2,04%.

Airbus, Rolls-Royce and Siemens have come together to develop a hybrid electric engine as the race intensifies to advance battery technology and electric motors to lower flying costs and move away from fossil fuels. Dubbed the E-Fan X programme, the three companies anticipate flying a demonstrator aircraft in 2020 after ground tests, provisionally on a BAe 146 aircraft. “We see hydro-electric propulsion as a compelling technology for the future of aviation,” Airbus Chief Technology Officer Paul Eremenko said in a joint statement. Airbus will be responsible for the control architecture of the hybrid-electric propulsion system and batteries, and its integration with flight controls. Rolls-Royce will be responsible for the turbo shaft engine and 2 megawatt generator, while Siemens will deliver the 2 MW electric motor.

Business software giants Microsoft Corp and SAP SE have agreed to expand the use of each other’s cloud-based products and services delivered via the internet, they said on Tuesday, as they laid out a common product road map for joint customers. In a joint statement, Microsoft said it would use SAP’s S/4 HANA database to help run its core internal financial planning functions – replacing older SAP software, while SAP said it would run more than a dozen of its critical internal financial systems on Microsoft’s Azure cloud service. The long-time partners said the latest integration of their products was designed to encourage more of their joint customers to run SAP software on Microsoft Azure cloud services. Mutual customers include Coca-Cola Co, Columbia Sportswear Co and Costco Wholesale Corp. SAP encourages its customers to run its products not only on Microsoft Azure but also on rival cloud platforms from Amazon, Google, IBM and SAP’s own in-house cloud services. The two companies agreed 18 months ago to work together to integrate Microsoft Office 365, the cloud-based version of Microsoft’s flagship productivity software, into SAP, while SAP agreed to run its HANA database software on Microsoft Azure.

Wall Street got off on the right foot yesterday morning after the Thanksgiving Day weekend, with the Dow Jones Industrial Average, the Standard and Poor’s 500 Index, and the NASDAQ all racing to new all-time highs in the first hour of trading. On point, the Dow jumped by some 80 points at its morning peak, while the NASDAQ was about 10 points to the good. Optimism about holiday sales in the wake of some positive early shopping indications and as a sense that at least some tax reform measure will pass by yearend dominated the early thinking. However, this initial burst of optimism was short-lived, and as we reached the noon hour in New York, the Dow had given back just about all of its early rise (it had actually turned negative briefly), while the S&P 500 Index and in particular the NASDAQ had gone into the red, as profit taking took hold. Then, after this late-morning selling burst, the market steadied somewhat, with the Dow turning positive once more. However, the comeback was not fully inclusive, as the S&P 500 and the NASDAQ remained in the minus column as we moved into the afternoon. The mid-session pullback evolved as the early rally in the retail stocks fizzled. The gains had took hold after signs pointed to a solid showing on Black Friday. The early upturn also reflected some optimism ahead of Cyber Monday’s results. Several chains, in fact, led by Dillard’s Inc., turned nicely higher. On the other hand, stocks of other retailers faltered on the day. Meantime, as noted, investors also were watching for developments surrounding the Republicans tax plan, with the Senate vote scheduled for this week. Also in the news was Dallas Federal Reserve President Robert Kaplan, who said on Sunday that he would support a December interest rate increase. Earlier, he had been on the fence regarding such a policy action. He also warned of possible financial imbalances going forward, noting that the stock market has gone for 12 straight months without even a 3% correction. Overall, stocks wilted as the afternoon proceeded, with the aggregate mood being influenced by this news ahead of further Washington dealings. Things would change little as the afternoon wound down, so that as we entered the homestretch, the indexes remained range bound, as before, with the Dow clinging onto a small gain, while the other indexes fell back modestly. All told, as the final bell sounded, the Dow was able to hold on to a 23-point advance, while losses of one and 11 points, respectively, were tallied by the S&P 500 Index and the NASDAQ. The small-cap Russell 2000 also softened, while nearly all of the ten leading equity groups closed lower. Elsewhere, we see that oil prices, which moved lower yesterday and took some oil issues with them, have now started trading with additional early losses. Also, interest rates now are up a bit, while U.S. equity futures are showing some early gains. In sum, the day is likely to be influenced by the latest news on taxes, the economy, and the Fed.

Today’s Economic Calendar:

• International Trade in Goods
• Consumer Confidence
• Richmond Fed manufacturing Index
• State Street Investor Confidence Index

BMW to invest 200 million in battery cell site

Today’s Topics:

• DAX Overview
• BASF talks with DEA
• BMW to invest 200 million
• German business confidence at all-time high

This morning the DAX opened at the 13’000 mark and rallied up to the 13’150 point mark, noting a increase of 1,04%. This increase is fuelled by BASF and ThyssenKrupp  yielding  2,59% and 1,89% respectively. The BASF stock rose up in reaction to talks between the German chemicals group with DEA the energy group owned by Russian tycoon Mikhail Fridman. Bloomberg, citing people familiar with the matter, said that talks between Wintershall and DEA were at an advanced stage, adding the combined entity could be valued at more than 10 billion euros ($11.9 billion).

BMW will bundle its battery cell expertise in a new competence centre, the German luxury carmaker said on Friday, adding it would invest 200 million euros ($237 million) in the site over the next four years. “By producing battery-cell prototypes, we can analyse and fully understand the cell’s value-creation processes. With this build-to-print expertise, we can enable potential suppliers to produce cells to our specifications,” BMW board member Oliver Zipse said in a statement. “The knowledge we gain is very important to us, regardless of whether we produce the battery cells ourselves, or not.” The centre will open in early 2019, BMW said. ($1 = 0.8435 euros)

German business confidence rose unexpectedly in November to hit an all-time high, a survey showed Friday, adding to signs that Europe’s largest economy was heading for a strong fourth quarter. The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of some 7,000 firms, rose to 117.5 from an upwardly revised reading of 116.8 in October. This was higher than a Reuters consensus forecast for a value of 116.6. “Sentiment among German businesses is very strong,” Ifo chief Clemens Fuest said in a statement. “This was due to far more optimistic business expectations. The German economy is on track for a boom.”

Todays Economical Calendar:

• PMI Composite Flash

ProSiebenSat1 stock down 13%

Today the DAX fell to the 11900 point mark and is accounting for a loss of 1,60% one hour before close, standing at the 11930 point mark. At this time no stock is in the green range with the biggest loss coming from the German Media Behemoth ProsiebenSat1 with a booming 13% loss. Investors seem to be looking to invest in assets deemed safe such as Gold, which is up 0,6%.

ProsiebenSat1 warned that TV advertising revenues in German-language markets would decline in the third quarter and said it may look for external investors. The top German free-to-air broadcaster had already cut its TV advertising market outlook twice this year but said as recently as earlier this month it still expected a bounce-back in the second half of the year. Many major companies that rely on ad revenue have reported spending cuts by makers of fast-moving consumer goods such as Unilever, Nestle and Procter & Gamble – the world’s biggest advertisers – as they respond to weak global economic growth. Goldman Sachs downgraded ProSieben to “neutral” from “buy”. “We believe shares will remain under pressure until the first signs of market improvement (this is likely to affect other ad-exposed stocks as well),” it wrote. ProSieben shares were down 11.6 percent to 28.90 euros by 0820 GMT, at the bottom of the German blue-chip DAX and dragging the European media index down 2.5 percent.

Following a brief early tease to the upside, which saw the Dow Jones Industrial Average rise close to 50 points in minutes after yesterday’s market open, further reflections on the widespread damage caused by the hurricane that ravaged Houston and other parts of the southeastern portion of Texas over the weekend, the equity market quickly turned lower. As has been the case for much of this year, however, the pullback was relatively mild, with the Dow continuing to trade between 20 and 40 points lower, while the S&P 500 held just below the breakeven line. Breaking things down, the most of the morning saw more stocks decline than rise on the NYSE, although the differential was modest. One outlier was the NASDAQ, which gained nicely during this time. As for individual stocks, the Dow was pushed lower by a multi-point early decline in shares of Travelers. Energy prices also faltered on the damage brought on by the hurricane, with driller Schlumberger pulling back, and nearing a 52-week low in the process. As to other trading influences, with a heavy week of economic news before us, headlined by this Friday’s reports on employment and unemployment, along with key data on manufacturing, Wall Street was also consumed with the latest political news, where, this week, President Trump is expected to push his tax reform package, the timing of which could be in some jeopardy if costs to pay for the hurricane balloon in the months to come. Also, with pivotal data due on the economy, some focus will logically turn to the Federal Reserve, as it prepares to meet this month. Meanwhile, after this mid-morning Dow reversal, stocks steadied somewhat, so that as we neared the noon hour in New York, the blue-chip composite was nearing breakeven, while the NASDAQ’s gain was increasing. Then, as the afternoon got under way, stocks slipped anew, and within an hour, or so, the Dow and the S&P 500 were well into the red, while the NASDAQ’s gain, once 27 points, had eased to nine. Joining Schlumberger in the red, meantime, was food giant General Mills , with its setback bringing that quality issue to within a point of a new low. Stocks then stayed range-bound into the late afternoon, before some last minute buying almost wiped out the Dow’s deficit. Even so, at the conclusion of the session, that composite was off by only five points. A token gain, meantime, was tallied by the S&P 500 Index and a 17-point advance was inked by the NASDAQ. In the end, much of the day’s focus was on Hurricane Harvey, which was crippling the energy industry in Texas. As for the ultimate cost of the tragedy, above and beyond the human toll, it will be steep, with a partial offset from rebuilding. The potential of such rebuilding, in fact, did help one Dow stock to a hefty gain on the day, as The Home Depot jumped nearly $2.00 a share. Elsewhere, there was little excitement on this Monday in late August. Looking ahead to a new day now, we see that stocks were tumbling across Asia overnight, on jitters about North Korea that emerged late yesterday, while in Europe, the major bourses are now trading much lower, as well, on those same fears. In other markets, oil is little changed; gold, up sharply in recent weeks, is soaring again after North Korea launched another missile; and Treasury yields are down notably in a flight to safety. Finally, our futures are moving decidedly lower at this early hour, with the Dow suggesting an opening loss in excess of 100 points.

Gilead reaches a $11.9bn agreement with Kite Pharma

Topics

1. DAX Daily Review
2. Lufthansa rumours on AirBerlin
3. Uber assigns Khosrowshahi as new CEO
4. Gilead Sciences reaches an agreement with Kite Pharma
5. U.S. Market Daily Review

The DAX had a slow start into this week, opening at 12’105 quoting a loss of 0,5%. During the day the DAX was able to reverse the trend with a continuous upward movement. 2 hours before close the German Index is at 12160. Taking a microscope to segregate all the DAX Members no company reflects a massive loss or gain, with all stocks quoting in the [-1%; +1%] range.

Lufthansa’s proposal for the carve-up of Air Berlin would see it taking over the insolvent carrier’s Austria-based leisure airline Niki and other planes, a source familiar with the negotiations said on Thursday. Its proposal is in the low hundreds of millions of euros, the person said. In total, it wants to take on up to 90 planes, which would include the 38 crewed aircraft Lufthansa already leases from Air Berlin, the source said. The German flagship carrier on Wednesday said it had put forward a concept for an acquisition of parts of Air Berlin, but did not provide further details.

Uber Technologies on Sunday chose Dara Khosrowshahi, the chief executive of travel company Expedia Inc, as its chief executive, according to two sources with knowledge of the matter, handing him the challenge of leading the ride-services company out of a nearly year-long crisis. Khosrowshahi, 48, would take on the daunting task of mending Uber ‘s image, repairing frayed relations among investors, rebuilding employee morale and creating a profitable business after seven years of losses.

Gilead Sciences has reached an $11.9bn agreement to acquire Kite Pharma, adding a cutting edge anti-cancer technology to its portfolio.The Californian biotech group will pay $180 per share for Kite, it announced on Monday.Gilead’s agreement, first reported by the Wall Street Journal, represents nearly a 30 per cent premium on Kite’s closing price on Friday.Santa Monica-based Kite is a leader in cell therapy, a new form of treatment which involves re-engineering patients’ own white blood cells to attack cancer cells.Joh Milligan, Gilead chief executive, said: “The acquisition of Kite establishes Gilead as a leader in cellular therapy and provides a foundation from which to drive continued innovation for people with advanced cancers.We are greatly impressed with the Kite team and what they have accomplished, and share their belief that cell therapy will be the cornerstone of treating cancer. Our similar cultures and histories of driving rapid innovation in order to bring more effective and safer products to as many patients as possible make this an excellent strategic fit.”

In the U.S. on Friday The Dow quickly jumped to a morning-best gain of better than 115 points in an attempt to close out the up and down week on a high note. But this early strength would soon fade. Indeed, by late morning, the gains were shrinking, with the Dow’s initial advance reduced by more than 50%, while the volatile NASDAQ fell into the red after having initially climbed more than 35 points. As noted, hopes for tax reform were in the vanguard of this early strength, as the President is expected to begin campaigning for his package this week. Also helping market were constructive words on the state of the financial system from Federal Reserve Chair Janet Yellen. She was speaking at the bank’s annual symposium at Jackson Hole Wyoming.However, after her reassuring words on the financial outlook, the Fed Chair gave no clue about the Fed’s future monetary policy. Instead, she focused on the history of the monetary crisis that struck the global markets late last decade. As to interest-rate hikes, none is expected until at least December, and even then, the likelihood is that the Federal Reserve will pass on one more tightening at that time, preferring to wait until 2018. Of course, if we get tax reform and somewhat higher rates of gross domestic product growth and inflation, the central bank’s timetable for monetary tightening could move up somewhat. Meanwhile, after the morning’s quick start, as noted, stocks lost their edge, though most of the averages stayed in the plus column as we headed into the noon hour in New York. As to other influences on the day’s trading, in addition to taxes and the Fed, the government reported a sharp drop in new orders for durable goods in July. That report, issued an hour before trading commenced, showed that such orders had dropped 6.8% last month. However, excluding a steep decline in orders for transportation equipment, demand for durables actually ticked up 0.5%. This mixed showing had little impact on trading In all, with earnings in the rearview mirror for the second quarter and the economy likely failing to take center stage again until this Friday’s scheduled report on non-farm payrolls and the unemployment rate, the focus could well stay on the Fed and Washington for at least the coming few days. And that could keep things volatile. In the meantime, after that late-morning pause, stocks headed into the afternoon holding generally modest gains, with the Dow up about 45 points, but the NASDAQ a touch lower. The market then renewed its climb after lunch, so that by mid-afternoon, the Dow again was ahead by some 80 points. The stock market continued to firm up for a time as the afternoon wound down, but there was some last-minute selling that clipped some of the froth off of the averages, leaving the Dow ahead by 30 points and the S&P 500 up by four. The NASDAQ, reflecting weakness in the tech space, gave back six points. Still, gaining stocks continued to overwhelm declining issues on the Big Board, with moderate strength in energy and basic materials issues on a rise in oil prices ahead of the feared hurricane damage in Texas. So, it was a basically quiet end to a volatile week on the Street. Now, a new day and week dawn and for clues about trading going forward, we look out at the markets in Asia, where we saw generally mixed action overnight, while in Europe, the Continent’s bourses are tracking downward at this hour. In other markets, gold is up, crossing the $1,300 an ounce mark; Treasury yields, off in Friday dealings, are now nudging higher; and oil, following late-week gains, are heading lower on concerns about the devastation brought on by Hurricane Harvey. Finally, in a busy week for the economy, U.S. futures are trending a bit lower, on average, at this hour. Politics, the economy, and now the hurricane would seem to be the big items of note for the markets in the days ahead. Stay tuned

HP beats market expectations

The sentiment on the German Index is good today. The DAX is on its way up and has beaten the 12’200 point mark and us standing at a 0,70% gain two hours before close. U.S. Investors will be looking at Jackson Hole the location chosen for the annual FED meeting. Investors will focus their attention on the Yellen and on the Draghi talk scheduled for Friday.

In the U.S. the recent and strong rally in the stock market, which reflected revived hopes that the Administration would eventually get the tax reform changes it has sought since the new Administration took over in January, did not carry over to yesterday morning. Indeed, stocks started the session lower and continued in a negative vein through the conclusion of trading. On point, as we reached the noon hour in New York, the Dow Jones Industrial Average, a 192-point winner on Tuesday, had fallen back by about 45 points, with a morning-worst reading of some 90 points. The other averages were weaker, too, following outsized gains the day before. Behind the renewed, but moderate, selling yesterday were concerns emanating from the President’s speech at a campaign rally the night before, in which he said the government might be shut down if the U.S.-Mexico wall is not built and paid for. Also, his threats about a possible termination of the North American trade agreement, or NAFTA, unsettled investors. Currently, there are differences between the United States, Canada, and Mexico, on the pact. As to the equity market, the declines, in truth, were modest, with an even split between gaining and losing equity groups and just a slight advantage for individual issues gaining in price on the NYSE. Overall, the stock market seems more focused on the political comings and goings in Washington and around the globe than it is on the nation’s economy, which continues to move forward, if in unimposing fashion. So, stocks meandered into the early afternoon, with weakness notable on the consumer front, but strength in the energy area. The balance of the afternoon brought scant relief to the bulls, as the worries persisted, most notably those that pertained to the outlook for Administration-backed legislation, which is widely favored on the Street. With earnings season now largely over, the next Federal Reserve FOMC meeting still a month away, and the critical government employment some 10 days off, politics are now taking center stage. And that is not good given the deep divisions on Capitol Hill. So, stocks continued to move lower as we entered the home stretch yesterday. As the final bell sounded, the major averages were down near their session lows, with the Dow off 88 points; the S&P 500 down by eight points; and the NASDAQ lower by 19 points. Small losses also were tabulated by the small-cap composites. Still, reflecting the late weakness, gaining stocks still managed to hold a slim lead on declining issues on the Big Board. At the same time, the top 10 equity groups were evenly split between gainers and losers, with the former headed by the energy and basic materials stocks, which benefited from a small recovery in oil prices yesterday.

The U.S. Federal Trade Commission is allowing Amazon to move forward in the process of purchasing Whole Foods. The $13.7 billion acquisition, which was announced in June, combines the e-commerce behemoth with a major grocery chain. The FTC has since been investigating whether the tie-up would decrease competition, ultimately deciding it needn’t pursue the matter further. Whole Foods shareholders have also approved the purchase. It was a good deal for them because Amazon paid a 27 percent premium on the stock price.

U.S. teen apparel retailer Abercrombie & Fitch Co posted a much smaller than expected quarterly loss on Thursday, helped by robust demand for its Hollister brand, sending the company’s shares soaring nearly 20 percent. Hollister, the retailer’s California beach-themed brand of surfwear, reported a 5 percent rise in comparable sales in the second quarter ended July 29, beating analysts’ average estimate for a 2.9 percent increase, according to Consensus Metrix. Abercrombie said total sales at established stores fell 1 percent. That result, too, topped analysts’ expectations. The company’s upbeat results come as several teen apparel companies struggle in the face of intense competition from fast-fashion retailers such as H&M and Zara as well as online merchants such as Amazon.com Inc. Net loss attributable to Abercrombie widened to $15.5 million, or 23 cents per share in the second quarter, from $13.1 million, or 19 cents per share, a year earlier. Excluding one-time items, the company posted a loss of 16 cents per share. Analysts on average had expected a loss of 33 cents, according to Thomson Reuters I/B/E/S. The retailer’s net sales fell slightly to $779.3 million, also handily beating analyst expectations of $758.6 million. Abercrombie’s shares were up 18.8 percent at $11.42 in premarket trading.

HP Inc. published its third quarter financial results on Wednesday, beating market expectations and posting net revenue gains in both its PC and printing segments. The company reported non-GAAP diluted net earnings per share of 43 cents on net revenue of $13.1 billion. Wall Street was looking for earnings of 42 cents per share on revenue on $12.3 billion. A year prior, the company reported earnings of 48 cents per share on $11.89 billion in revenue. Personal Systems net revenue in Q3 came to $8.4 billion, up 12 percent year-over-year. Commercial net revenue increased 11 percent while Consumer net revenue increased 14 percent. Total units were up 7 percent, with Notebooks units up 12 percent and Desktops units down 3 percent. Meanwhile, HP’s Q3 printing net revenue was $4.7 billion, up 6 percent year-over-year. This marks the second quarter in a row HP has seen growth in both its PC and printing businesses. Q2 was the first time in seven years that revenue from both PC and printer sales increased over the same quarter. Notebooks were up 16%, Moorhead noted, attributing that to HP’s revitalized Spectre, ENVY and EliteBook lines.

Tiffany & Co. shares rose 1.6% in Thursday premarket trading after the luxury jewelry company reported earnings and sales that exceeded expectations. Tiffany had second-quarter net income of $115.0 million, or 92 cents per share, up from $105.7 million, or 84 cents per share, for the same period last year. The FactSet consensus was 86 cents. Revenue totaled $959.7 million, up from $931.6 million last year and ahead of the $930.0 million FactSet consensus. Same-store sales fell 2%. The company said growth in fashion and designer jewelry offset softness in other categories. Tiffany expects fiscal 2017 global sales to rise by a low-single-digit percentage year-over-year and earnings to increase by a high-single-digit percentage over last year’s $3.55. FactSet expects sales of$4.06 billion and earnings of $3.95. Tiffany shares are up 14.6% for the year so far while the S&P 500 index SPX, +0.06% is up 9.2% for the period.

BNP to lose 3,5 billion Euro Credit Plan

After a bad week the German DAX continues its downward movement. The downturn in the Eurozone is fueled by the terror attacks in Spain and the political instabilities in Washington. Two hours before close the German Index is down 0,84% at closely 12050. In the afternoon the DAX tried to outbreak and had a fast rise from the 12100 mark up to the 12140 point mark, but rapidly went crashing down after that.

The major U.S. equity indexes are about to start the new week coming off their worst fortnight of trading in quite some time. The most recent five-day stretch saw a spike in volatility, and the major averages shed more of their value. There were a number of factors that came together to weigh on the market, most notably a negative reaction to President Trump’s commentary on the tragic event earlier this month in Charlottesville, Virginia and emerging worries that the fallout will be that the President and Congress will be unable to pass some of his business-friendly agenda, including tax reforms. That, along with worries about what the Federal Reserve’s possible decision to begin reducing its $4.2 trillion balance sheet by selling Treasury bonds and mortgage-backed securities will have on the U.S. economy, pressured the world equity markets. Adding the aforementioned factors up, the Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index are all down around 2% over the last fortnight of trading. Even more discouraging was the selling that we saw into Friday’s closing bell, and that came despite news that President Trump’s top aide Steve Bannon was removed from the White House staff, likely bringing with him his protectionist economic policies. The initial sense on Wall Street was that this would be good for the market (the averages rallied on Friday shortly after the news broke), as it would likely mean that President Trump’s top economic advisor and National Economic Council Director Gary Cohn will remain in his position, which would be good news for Corporate America, Big Business, and Wall Street. This situation, though, remains very fluid and may mean more twist and turns for the near-term performance of the world’s equity markets. Mr. Cohn’s commitment to the Administration bears watching, as many pundits believe that if he was to resign from the White House staff, it would lead to a notable correction in the equity market. Looking ahead to the week at hand, we still expect the world’s equity markets to be driven by the ongoing political news from Washington D.C. Overall, we think that any news or actions seen as possibly impeding the Administration’s ability to get some tax reforms passed will have on detrimental effect on the U.S. equity market. The market has risen significantly since last November’s Presidential Election on hopes that the new Administration will get some business-friendly policies passed, including the discussed tax reforms. That said, we do get a few reports on the U.S. economy, including data on existing home sales and durable goods orders. Investors also should be aware that the Federal Reserve’s annual Jackson Hole, Wyoming confab will take place later this week, which may bring more clues about how the central bank will proceed with regard to monetary policy over the remainder of this year.

This week notable earnings:

1. HP Inc.
2. American Eagle Outfitters
3. Abercombie and Fitch
4. Staples Inc
5. Tiffany & Co.
6. Delta Natural Gas Co Inc

Total SA agreed to buy the oil and gas unit of A.P. Moller-Maersk A/S, the French company’s biggest acquisition since 1999 and another sign of the accelerating pace of energy deals after a long downturn. Total will pay Maersk with $4.95 billion of its own shares and assume $2.5 billion of the Copenhagen-based company’s debt, according to a statement on Monday. The full transaction value of $7.45 billion is above what some analysts were expecting and Maersk shares jumped as much as 5.7 percent following the announcement. Total’s Chief Executive Officer Patrick Pouyanne is following through on a hint last month that he was ready and willing to make acquisitions to grow production, taking advantage of a plunge in company valuations, the cost of drilling and other equipment during the three-year industry downturn. The Maersk assets will boost the French giant’s business in the North Sea, adding to deals earlier this year that expanded its presence in Uganda and Brazil. “We had the feeling that on the North Sea, we had to go a step further to be more competitive,” Pouyanne said on a call with reporters. Maersk had been considering spinning off the oil and gas assets in an initial public offering, but “we offered them another option.” The deal ranks among the largest that a super-major has done since oil prices crashed in 2014. Royal Dutch Shell Plc agreed to buy BG Group Plc for $52 billion in 2015 and has been reaping the benefits since the transaction closed the following year. In January, Exxon Mobil Corp. agreed to pay $5.6 billion in shares, plus a series of contingent cash payments totaling as much as $1 billion, for drilling rights in the Permian shale region of Texas. Energy deals have picked up pace more broadly in recent months as the industry puts the worst of the slump behind it, although major oil companies have tended to be sellers. BP Plc has offloaded assets including a $1.7 billion stake in a Chinese petrochemical venture and Shell exited its Irish venture for $1.2 billion. “We like this deal,” Jason Kenney, an analyst at Banco Santander SA, said in a note. The transaction is “timely and opportune” with Brent crude, the international benchmark, trading at about $52 a barrel, he said.

Commerzbank announced it would end its credit plan partnership with BNP Paribas. 300’000 contracts with a total volume of 3,5 billion Euro will be handled solely by the German bank. During this process 150 employees will be transferred. The Credit Plan had initially been closed between Dresdner Bank and the French Bank and was taken over by Commerzbank with the acquisition of Dresdner Bank in August of 2008.

 

Alibaba has another blockbuster quarter

After a strong week, the DAX is slowing down today and losing some of its momentum, quoting a downward movement. The German Index started out strong but reverted back to the mean very quickly. 2 hours before close, the German DAX is down 0,20% from its previous close. A reason for this cool down in the German markets might be that German investors are on their tiptoe amid the AirBerlin and Lufthansa deal. Oil and Gold are down 0,39% and 0,22% respectively.

In the U.S. the bulls began trading yesterday with a new head of steam, as the leading averages all moved out to impressive early gains. On point, after we had passed the first half hour of market action, the Dow Jones Industrial Average had rung up a gain of some 70 points. Modest rallies also were under way on the S&P 500 and the NASDAQ. Also, yesterday, unlike Tuesday, the S&P Mid-Cap 400 and the small-cap Russell 2000 were comfortably in the black, as well. As to the Fed minutes, Wall Street was looking for clues about the Fed’s interest rate intentions. The report, meantime, suggested that there was now a split developing on the Fed regarding whether to tighten the monetary reins again this year, citing concerns about low inflation balanced out by improving GDP growth. Our sense continues to be that the Fed will raise rates just once more in 2017, and that such an adjustment might not come until late this year. Meantime, the market’s advance remained in place as the morning wound down, with the Dow’s advance holding in the 60-85 point range as noon arrived in New York. The NASDAQ, up haltingly early in the session, strengthened as the afternoon approached, with its advance surpassing 25 points. The stock market then stayed near the upper levels of its range for the next hour, or so, but ill winds politically, as other companies now have decided to abandon the President’s manufacturing council following last weekend’s violence in Charlottesville and the Administration’s changing response to it, fueled some selling as the 2:00 PM hour approached. In all, the Dow’s advance went from more than 85 points down to fewer than 30 points at one time. Still, the market had a generally strong tone to it, which suggested at the time that unless the minutes held some unwanted surprises, the day would end higher for stocks. The Fed minutes had little impact, with stocks initially rising then pulling back, with the Dow’s gain at one point nearly evaporating. Our thinking is that this Fed release will have little meaningful impact, with political headwinds probably more of an influence at this moment on market behavior. Traders, meantime, then backed off somewhat as we headed into the close, with the Dow ending the session ahead by a modest 26 points, while the NASDAQ, which waxed and waned late in the day, finally ending matters up by 12 points. Meantime, the Russell 2000, once ahead strongly, edged down a trifle at the conclusion of the day’s action.

Walmart has poured billions into its e-commerce and tech to integrate its digital business with its stores, and the strategy is paying off handsomely. The retailer said comparable sales at its 4,000 U.S. stores, a $300 billion a year business, rose 1.8% on the year in the three months to June, well above Wall Street expectations for 1.3% according to Consensus Metrix. That gave Walmart U.S. its 12th straight quarter of growth. More crucially for the world’s largest retailer, shopper visits also increased, rising 1.3% and showing that Walmart’s massive investments in features like grocery curbside pickup, in-store order retrieval, its own mobile payment app and the expansion of its online assortment are spurring shoppers to come into stores. In an effort to be able to compete with Amazon, Walmart made some big investments in its e-commerce division. But investments, along with more aggressive pricing generally, cost money. The company disappointed Wall Street with a profit forecast of 90 cents to 98 cents per share for the current quarter, compared with the 98 cents analysts expected. Wal-Mart Stores shares, which had been on a tear of late, slipped 1.5% in pre-market trading. “Sales growth is coming from across the business – including stores, e-commerce and a combination of both,” CEO Doug McMillon said in a statement. The chain also got a boost from its massive grocery business, which generates 56% of its revenue. Food saw its best quarter in five years, aided in large part by an overhaul of the fresh food business that aimed at better competing with the likes of Whole Foods Market, which is being acquired by Amazon. Other bright spots for the company included the performance of Sam’s Club, which chronically underperforms its rival Costco Wholesale. Comparable sales, a metric that strips out the impact of newly-opened or closed stores, rose 1.2%, but shopper traffic was up 2%. Further afield, nine of Wal-Mart Stores’ eleven markets saw comparable sales increases, including a first rise in sales in three years at its Asda unit in the U.K. Still, the investments took a toll: Walmart earned $1.08 per share, slightly above $1.07 expected by analysts and roughly on par with a year-ago levels. Total sales were $123.36 billion, a hair above the $123.15 billion markets were expecting. Short after opening Wal-Mart is down 2,20%

Ireland’s finance minister said the European Commission’s demand that Dublin collect up to €13bn in back taxes from Apple was unjustified, in an interview with Germany’s Frankfurter Allgemeine newspaper. The European Commission ordered Apple to repay taxes to Ireland after ruling last year that the US technology company paid so little tax on its Ireland-based operations that it amounted to state aid.

Cisco reported FY4Q17 earnings on 8/16, after the close. Revenue and EPS came in as expected. Looking at revenue by products, there are puts and takes but nothing major to note. Gross margin for the quarter came in at 63.7%, or 20 bps lower than expectation, while non-GAAP operating margins came in 40 bps ahead of expectations at 31.5%. However, guidance is a tad weak. FY1Q18 revenue and EPS are about in-line, but non-GAAP gross margin was guided to 63-64% vs. 64.1% consensus, and non-GAAP operating margin was guided to 29.5%-30.5% vs. 31.3% consensus. Overall, the quarter is uninspiring, which is reflected in the stock trading down 2.5% in the aftermarket on high volumes.

Alibaba had another blockbuster quarter of business as its profits almost doubled. The Chinese e-commerce giant reported net profit of 14 billion RMB ($2.1 billion) for its recent quarter that finished June 30 — that’s up 96 percent year-on-year. Total revenue grew 56 percent to reach 50.2 billion CNY ($7.4 billion), easily exceeding estimates, with the firm reporting 466 million active buyers over the previous 12-month period. Alibaba’s core commerce business brought in the majority of revenue — 43 billion ($6.4 billion) — but its 58 percent annual growth was topped by its smaller business units. That’s a sign of the future, according to CEO Daniel Zhang. “Alibaba had a strong start to fiscal 2018, reflecting the strength and diversity of our businesses and the value we bring to customers on our platforms. Our technology is driving significant growth across our business and strengthening our position beyond core commerce,” Zhang said. Of those units, its aggressive cloud computing business, which TechCrunch profiled earlier this year, was one of the more impressive. It grew 96 percent to reach 2.4 billion RMB ($359 million) in revenue while losses narrowed to 103 million RMB, or $15 million. The company noted that its cloud computing customer base passed one million for the first time. Alibaba’s digital media and entertainment business, which includes video service Youku Tudou, saw revenue jump 30 percent to four billion RMB ($602 million). The company has spent the past year expanding its business outside of China, which this quarter again shows accounts for the lion’s share of revenue, and the results are beginning to bear fruit. Alibaba said its international e-commerce services reached “meaningful scale” with 2.6 billion RMB ($389 million) in revenue. It credited Lazada, its business in Southeast Asia which it recently invested a further $1 billion in this year, and AliExpress for increasing revenue by 136 percent from last year.

 The Earnings Outlook for tomorrow are Deere with an Actual EPS of 1,95, Foot Locker with an EPS of 0,902.

Todays Economic Calendar:

I) Jobless Claims

II) Industrial Production

III) Leading Indicators

IV) Fed Balance

V) Money Supply

 

 

 

Ryanair files anti-trust complaint

1. DAX Review
2. U.S. Review
3. Ryanair files anti-trust compliant
4. Amazon 16 billion bond release
5. Gigaset Earnings
6. Economic Calendar

In case you missed out Elliott Wave Technical Analysis Report, make sure to catch up on it.

The DAX is recovering from its recent losses. 3 hours before close the German Index is up by 0,83% reaching the 12278 point mark. With this actual form it does seem that the DAX will be breaking its August high. There are no major international signals, as the Brent and Gold seem have to stabilized at 50 USD and 1270 USD respectively.

Following a strong equity market rally on Monday, as simmering tensions eased a little with North Korea, and fears of an imminent armed conflict with that nation lessened to a degree, Wall Street calmed down a bit yesterday morning, too. Indeed, after a small early extension to the rally in the first few minutes of yesterday’s session, stocks faltered somewhat within the first hour of trading, and an early 35-point gain in the Dow Jones Industrial Average quickly faded, with that blue-chip composite falling into the red during the second hour of trading. The other averages went into the red, as well. Meantime, a big individual story, one day after the shift away from North Korea, was at giant home improvement retailer The Home Depot, which issued quarterly results yesterday. And while the top and bottom-line results were better than expected, the gains, and the raised full-year forecast did not satisfy the Street, as that stock tumbled, losing nearly 4% of its value early on. The loss in HD turned the Dow negative, costing that index some 40 points. However, after that initial turn down by the Dow, that index returned to the black shortly thereafter. Also in the retail category weak earnings hurt Coach stock in early dealings. Still, the resilience of the bulls was evident yesterday, with that late-morning attempted comeback in the Dow. Meanwhile, in other market moving news, the Commerce Department reported that retail sales had posted an increase of 0.6% in July. That was above the 0.4% rise forecast. Also, June’s result was pared back from a rise of 0.4% to one of 0.3%. Excluding motor vehicle sales, core retail spending was ahead of 0.5%. Here, too, the gain was above consensus. Contributing to the pickup were sales of furniture and home furnishings, and building materials. Sales over the Internet soared, meantime, advancing by 1.3%. The market remained in somewhat of a mixed pattern as the noon hour arrived in New York, with the Dow near the breakeven line, and with the S&P 500 and the NASDAQ each off incrementally. The small-cap Russell 2000 and the S&P Mid-Cap 400 also were in the red, but in a more meaningful way. As has been the case recently, it was the retail group suffering once again, with steep losses in some high-profile names, such as Under Armour. Also, more stocks were lower than higher on the Big Board at that time, by a count of two-to-one while among the core groups, energy, basic materials, and consumer stocks were leading things lower. The weak tone persisted through the middle of the afternoon, and while the Dow held near the breakeven line, and the large-cap S&P 500 and the NASDAQ were just down incrementally, the smaller indexes and the advance-decline ratio were notably off. It was, to that point, a somewhat sobering day, even as the economy continued to show relative strength and the news out of North Korea was somewhat reassuring, for now. The equity market then would firm up slightly as the session wound down, but the overall weaker tone would persist into the close. When all the numbers were in, the Dow, with some last-minute selling, would end the session ahead by just five points; the S&P 500 would conclude matters just about where it began them; and the NASDAQ would end the day off seven points. Losing stocks easily led gains, though, and the small- and mid-cap categories showed noted weakness.

Germany on Wednesday rejected a claim by budget airline Ryanair of a conspiracy behind efforts to keep bankrupt rival Air Berlin afloat until a new owner is found. The Irish airline lodged a complaint with European Union competition authorities after Air Berlin filed for bankruptcy protection and then got a 150 million euro ($177 million) loan from the German government. Ryanair said late Tuesday there’s “an obvious conspiracy” between the German government, Lufthansa and Air Berlin. The loan will help Air Berlin to keep flights running for the next three months, while it is negotiating a possible deal with Lufthansa and another unnamed carrier, reported by German media to be easyJet. A spokeswoman for Germany’s Economy Ministry said it was “absurd” to claim that the rescue package had been staged. Beate Baron told reporters in Berlin that the government expects the loan to Germany’s second-largest airline to be repaid. Air Berlin filed for bankruptcy protection Tuesday after its main shareholder, Abu Dhabi-based Etihad, said it would make no more financing available following years of unsuccessful turnaround attempts. The airline, which carries some 80,000 people a day mostly on short-haul destinations, made a loss of about 782 million euros last year.

Amazon.com Inc. on Tuesday completed a $16 billion bond deal to fund its planned $13.7 billion acquisition of Whole Foods Market Inc. The issue came a day after ratings agency Moody’s Investors Service assigned the deal a Baa1 rating and revised Amazon’s credit outlook to positive from stable. S&P Global Ratings assigned the credit a higher rating of AA-minus last week. Amazon raised $16 billion in a seven-part offering that included a 40-year tranche, underwritten by Bank of America Merrill Lynch, Goldman Sachs and J.P. Morgan Chase. As expected, the bonds priced at the tight end of guidance, but the new concessions were still attractive, according to research firm CreditSights, which had upgraded its recommendation on Amazon’s bonds to outperform from underperform based on the initial price talk. Initial price talk on the 10-year tranche was 110 basis points above comparable Treasurys, which later tightened to Treasurys plus 90 basis points. CreditSights analysts led by Jordan Chalfin said at the price, the notes were still a bargain.

Gigaset reported a drop in first-half sales and EBITDA but reiterated its outlook for higher sales over the full year, thanks to growth in new market segments like smartphones. In the first half, smartphone revenues rose to EUR 3.7 million from EUR 1.1 million a year earlier, following the launch of two devices. Over the first six months of 2017, total revenues fell 3.6 percent to EUR 128.3 million due to a continued contraction in Gigaset’s main market, cordless home phones. Sales in the consumer segment fell to EUR 98.1 million from EUR 110.7 million a year ago, while the business market grew 25.7 percent to EUR 25.4 million, driven by strength in its home market Germany.  EBITDA fell to EUR 5.7 million from EUR 10.6 million in the first half of 2016, hurt by increased spending on marketing and R&D, including the ramp-up of mobile sales. Excluding the extra EUR 4.6 million in costs, EBITDA would have been largely stable for the full year, Gigaset said. Free cash flow was a negative EUR 24.1 million versus an outflow of EUR 13.1 million a year earlier.  Despite the lower H1 results, Gigaset maintained its outlook for higher revenues over the full year, with a low double-digit million euro increase thanks to the expanding smartphone business. Core EBITDA is expected to reach EUR 15-25 million over the year, while cash flow should be just a mid single-digit million euro outflow.

Today Economic Calendar:

1. MBA Mortgage Applications
2. Housing Starts
3. Atlanta FED Business Inflation Expectations
4. EIA Petroleum Status Report
5. FOMC Minutes