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

 

 

 

Dow Jones opens with 100 point loss

If you have missed our Bitcoin Special Weekend Edition make sure to read up on it.

• DAX Review
• Wall Street Review
• Bechtle Earnings
• Macy’s Earnings
• Kohls Earnings

After record-breaking weeks, Equities have had a hard time in the European Markets. Some catalysts for the week development in the Eurozone were the strengthening EURUSD, fueling the European Markets and therefore increasing liquidity in U.S. Markets. German Earnings and the German auto- cartel have been weighting down investor-sentiment. The North-Korea conflict seems to be the most recent agitator for the sell-off on the German markets. For the current trading day the DAX has not been quoting any green digits with the Index going down since its opening without any resistance. 2 Hours before close the German DAX is down 0,91% from its previous close.

Following another record closing high by the Dow Jones Industrial Average to start the trading week on Monday and a late reversal on Tuesday amid growing tensions with North Korea, the stock market, on an extension of those heightened geopolitical concerns yesterday morning, started the middle session of the week, notably to the downside. Of course, the threats and counter threats involving North Korea was not the only influence on Wall Street, as a disappointing revenue release from entertainment mogul Walt Disney also rattled the street and helped to push the Dow down notably to start the day.  In all, the Dow fell back 80 points early, and the NASDAQ, under pressure from declines in several high-profile technology names, tumbled 60 points at the morning’s nadir. In fact, that composite remained the large-cap’s weak link throughout the morning. But it was mainly a story of growing geopolitical risk, as U.S.-North Korean relations continued to deteriorate. Leading the way lower was the consumer discretionary category, which takes in the aforementioned entertainment giant, which lost some 5% of its value in the morning. What did do well early yesterday were traditional safe havens, such as Treasuries and gold. Meanwhile, there was no bounce of note as the morning moved along, as all 10 of the principal equity groups were trading in the red as we approached the noon hour in New York, while losing stocks were sustaining a 2.3 to 1.0 ratio on the Big Board. Further underscoring the weak nature of the day’s action to that point, the CBOE Volatility Index (VIX), widely considered the fear gauge, was up some 7%, to near 12, a one-month high. Overall, we think the market’s response to the threats from North Korea seems rather muted, in part because the consensus seems to be that tensions will eventually subside. The market’s decline then moderated for a time as the afternoon got under way, with the Dow’s loss narrowing to about 40 points. However, that proved to be a brief respite, and stocks soon faltered again, but not dramatically so. In truth, the stock market is a bit frothy, with P/E’s up to around 20 for companies with earnings. That is high, albeit not dangerously so in this low inflationary environment. Still, if traders needed some excuse to sell, the news out of North Korea and the revenue miss at Disney were reason enough. So, stocks wilted, as the afternoon progressed, and as we moved inside two hours, the Dow was near the day’s low. This downturn would then persist up until the final half hour, or so, with few periods of sustained buying to interrupt the downtrend. However, as the session neared its close, some selective buying took hold, enabling the larger-cap composites to notably pare the day’s losses. However, the comeback did not fully encompass the smaller-cap indexes, where the Russell 2000 still ended matters off more than 13 points. As for the various equity sectors, there was only a breakeven performance by the health care group, while the other nine categories posted declines of generally half a percentage point, or less. In the Morning the Dow Jones is down 100 points shortly after open, dropping under the 22’000 point mark, with Goldman Sachs contributing the most losses. The S&P 500 declined 0.6 percent, with information technology and financials leading all sectors lower. The Nasdaq composite pulled back 0.75 percent, with Apple, Alphabet, Amazon and Netflix all trading lower. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, soared more than 24 percent to trade at 13.79.

Information technology company Bechtle AG said its second-quarter earnings after tax rose 11 percent to 25.39 million euros from 22.71 million euros last year. Earnings per share grew to 1.21 euro from 1.08 euro a year ago. Earnings before interest and taxes or EBIT in the second quarter reached 36.5 million euros, an increase of 13.2 percent from 32.3 million euros last year. Quarterly revenue increased 13.7 percent to 822.2 million euros from 723.4 million euros a year ago. Looking ahead, the company’s Executive Board continues to expect significant revenue and earnings growth for the year as a whole and confirms the forecast for 2017 published in March.

Macy’s is taking its victories where it can. On Thursday, the department store chain said comparable sales fell 2.8% in the second quarter, the 10th straight quarter of decline for the retailer. That said, the results were not as bad as investors had feared. Wall Street had predicted comparable sales would drop by 3.5%, according to Consensus Metrix. (Comparable sales exclude recently opened or closed stores.) And profit by one measure came in at 48 cents a share, better than the 45 cents analysts were projecting. Total net sales fell 5.4% to $5.55 billion, slightly above expectations. Despite the not-as-bad-as-expected results, Macy’s did not raise its full year forecast, which suggests the retailer views these improvements as fragile. Investors were sufficiently spooked: Macy’s shares were down 2% in premarket trading to $22.50, about half the level of their 52-week high.

Kohl, who has a recorded success of undermining Macys, has released its and they look crispy. Kohl’s reported a narrower, 0.4 decline in same-store sales, compared to a drop of 1.8 percent during the same quarter last year. Analysts were expecting comparable sales to fall 1.5 percent, according to FactSet. Shares of Kohl’s were recently down 9 percent on the news, after initially jumping 4 percent in premarket hours. “The traffic momentum that we saw in the combined March/April period accelerated in the second quarter,” CEO Kevin Mansell said in a statement. “Though transactions for the quarter were lower than last year, July transactions increased. … We are also excited by the sequential sales trend improvement in all our lines.” Trying to drive shoppers back to its stores, Kohl’s has been testing new initiatives, like entering a partnership with Under Armour to sell the sports retailers merchandise. Management said on Tuesday that it’s also beginning to see benefits from initiatives in place with the goals of better managing inventory and cutting costs. “Under Armour in particular continued a very strong performance and beat the sales plan across almost all categories,” Mansell said on Thursday’s earnings conference call. “We’ve gained significant share in active apparel and footwear in the first half of the year and expect that to continue in the back half based on assortment improvements and our momentum.” The company’s net income rose to $208 million, or $1.24 per share, in the second quarter, from $140 million, or 77 cents per share, a year earlier. Net sales fell 1 percent, to $4.14 billion, notably declining for the sixth straight quarter. Analysts on average were expecting Kohl’s to report an adjusted profit of $1.19 per share and revenue of $4.13 billion, according to a survey by Thomson Reuters.

 

German DAX generates losses on weak German economic data

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After opening at 12’303 the German DAX was able to rally up and peaked at the 12’325 point mark 4 minutes after opening. The joy was off short time, as after reaching the 12’325 point mark, the German DAX started tumbling down on news of weak German economic Data. 2 hours before close the German DAX is down 0,46% from its previous close. The notable winners/losers are Deutsche Telekom (up 1,41%) and Fresenius Medical Care AG & Co KGaA (down 1,49%). After the German healthcare company released solid earning end of July, the emerging news of Fresenius acquiring NXStage seem to shake up investors.

In the States it continues to be mostly about earnings these days, as the dog days of August continue, with favorable reviews from the investment community, interspersed with a few notable setbacks among individual stocks, being the rule. That was the case again on Friday, as generally solid profit reports helped lift the Dow Jones Industrial Average further into record territory, with that index going well past 22,000 in a modest buying campaign. A few headline movers, such as Weight Watchers, benefiting from an earnings beat, paved the way for the early gain that carried the market solidly higher in the morning. As we moved into the early part of the afternoon, the Dow was ahead by 40 points, while the other large and small-cap indexes were up modestly, as well, with gaining stocks retaining a small lead on declining issues. All told, the session was a positive one to that point, even though there were a few headline makers on the downside, such as Fluor, which while posting better-than-forecast second-quarter earnings, still weighed in with lower orders and backlogs, and much-reduced guidance for the 12 months. The stock tumbled to a 52-week low, in response. The equity market remained range-bound over the final few hours of trading, as investors further digested the benign jobs report and the likelihood that the Fed will not be unduly influenced by it. Another generally constructive earnings day proved supportive, as well. So, all of the averages stayed on the plus side of the ledger, but the gains were far from formidable. As to stocks on the Dow, the financials did better, while most other issues on that composite moved little.  The lone negative on the day was a rise in bond yields on the better jobs data, with the 10-yesar Treasury note climbing to a yield of 2.27%. The market drifted until near the close, when there was a late spurt of additional buying, which helped cap off a week of generally higher prices. At the close, the Dow was ahead 67 points; the S&P 500 was better by five points; and the NASDAQ, on selective strength in technology, was in the black by 11 points. Meanwhile, there were more gaining groups than declining sectors, while on the Big Board, the earlier advantage held by advancing issues was retained into the close, with rising stocks holding about a four-to-three lead. Next week will be a lighter one for economic news, while earnings releases will start to slow down.

Sprint Corp.’s resumed talks about a potential merger with T-Mobile US Inc., being held at the same time as discussions with cable companies, shows the lengths billionaire Masayoshi Son is taking to build scale for a wireless carrier facing increasing competition in the U.S. The two wireless operators restarted discussions after Sprint’s exclusive negotiating period with Comcast Corp. and Charter Communications Inc. expired at the end of July, according to people familiar with the situation who asked not to be identified because the information is private. Sprint shares rose as much as 2.9 percent to $8.95 in early trading in New York Monday.

Todays Economic Calendar:

1. Gallup US Consumer Spending Measure
2. Labor Market Conditions Index
3. TD Ameritrade IMX
4. Consumer Credit