Written by Gary
The US stock markets closed mixed (SPY +0.2%). The S&P 500 eked out a gain after positive comments regarding renegotiation of the North American Free Trade Agreement provided cause for optimism. DOW closes down 64 points.
Todays S&P 500 Chart
The Market in Perspective
Here are the headlines moving the markets. | |
U.S. factory activity slows further, tariff concerns growWASHINGTON (Reuters) – U.S. factory activity slowed for a second straight month in April, with manufacturers complaining about rising commodity prices in the wake of the Trump administration’s tariffs on steel and aluminum imports. | |
Cold snap for U.S. April auto sales instead of spring thawDETROIT (Reuters) – Most major automakers on Tuesday posted lower new U.S. vehicle sales for April as consumer demand continued to weaken and competition intensified following a lengthy boom for the industry. | |
S&P, Nasdaq advance on trade optimism, Dow dipsNEW YORK (Reuters) – The S&P 500 eked out a gain on Tuesday after comments from a Trump administration official on trade with China and the Mexican economy minister on the renegotiation of the North American Free Trade Agreement provided cause for optimism. | |
Fed likely to keep rates steady; investors bet on June hikeWASHINGTON (Reuters) – The U.S. Federal Reserve is set to hold interest rates steady this week but will likely further encourage expectations that it will lift borrowing costs in June on the back of rising inflation and low unemployment. | |
Investors look to Apple’s cash, services as iPhone sales seen stalling(Reuters) – Apple Inc’s multi-hundred billion cash stockpile and stalling growth in services such as iCloud present an opportunity and a concern that some investors hope will be addressed in the company’s quarterly earnings report on Tuesday. | |
U.S. extended tariffs exemption for EU due to good trade talks: RossWASHINGTON (Reuters) – The European Union’s exemption from U.S. steel and aluminum tariffs was extended because of promising trade talks with Washington, U.S. Commerce Secretary Wilbur Ross said on Tuesday, adding that he does not expect the practice to continue. | |
No more #Euroboom? No problem, say investorsLONDON (Reuters) – Signs of fading growth momentum across Europe have come as bad news to equity investors hoping for a repeat of 2017’s bumper returns, but many say they’re not ready to throw in the towel yet on companies that are still delivering strong earnings. | |
Incoming BASF boss rules out DowDuPont-style break-upFRANKFURT (Reuters) – The incoming boss of BASF has thrown his weight behind the chemical titan’s contentious strategy of keeping divergent businesses folded into one company, at a time when its major rivals such as DowDuPont are breaking themselves up. | |
U.S. agency to probe Nintendo systems after rival’s complaintWASHINGTON (Reuters) – The U.S. International Trade Commission said on Tuesday it will investigate certain gaming console systems from Nintendo Co Ltd after California-based Gamevice Inc filed a complaint alleging that their importation infringed on its patents. | |
Gold Hits 2018 Lows As Dollar Soars; Tech Pops, Dow DropsA Quiet Day with much of the world off on May Day holidays… Stagflation concerns dominate – construction spending and ISM Manufacturing tumbled as PMI/ISM Prices Paid soared to seven year highs – Simply put, hope is gone… A very mixed picture in equity-land today as Nasdaq ended higher (ahead of AAPL earnings), S&P unch (thanks to the machines) and The Dow suffered (as trade fears hit Boeing and MCD earnings didn’t help)… Futures show the divergence most clearly… | |
Earnings Season Common Thread: Heightened Awareness Of Cost- & Wage-Push InflationAuthored by Erik Mokaya via Avondale Asset Management, Each week we read dozens of transcripts from earnings calls and presentations as part of our investment process. Below is a weekly post which contains some of the most important quotes about the economy and industry trends from those transcripts. Click here to receive these posts weekly via email. The common thread in this week’s notes is a heightened awareness of both cost push and wage push inflation. Companies are citing that wages are rising (due to a tight labor market) and prices for raw materials like steel are rising. Both of these are being reflected in companies’ aims to increase prices of goods and services. In Europe, growth is moderating as inflation picks up. The Macro Outlook: Strong economic activity is causing bottlenecks in the supply chain “the U.S. rail system is experiencing high demand driven by strong economic activity. This increased overall demand is adding stress to the rail system…This increased overall demand is adding stress to the rail system…After rail, the next logistics bottleneck is trucking. The issue today is not in tractors and trailers, it’s finding qualified drivers and dealing with congested infrastructure.” -Halliburton’s (HAL) CEO Jeff Miller A tightening labor market is leading to wage inflation ” The labor market is tight. U.S. unemployment is at an all-time low and in some basins it’s just above 2%…there will likely be wage inflation and additional pricing will be necessary for cost recovery.” -Halliburton’s (HAL) CEO Jeff Miller Raw materials prices are also rising “Raw material … | |
Facebook Co-Founder Calls For Tech Firm ‘Data-Tax’ To Fund ‘Data-Dividend’ For All AmericansSome of Facebook’s harshest critics – since the company first came under pressure for purportedly not doing enough to stanch the flow of fake news on its platform and allowing Russian troll farms to post disingenuous advertisements – have been former employees and investors who have acknowledged that the company’s unchecked expansion has come at a cost: Tearing apart the social fabric. But in what is perhaps the highest-profile defection, Facebook co-founder Chris Hughes, who helped start the company along with Mark Zuckerberg, Dustin Moskowitz and Eduardo Saverin during their days living and working together at Harvard, is now calling on lawmakers to consider a data tax that could potentially cost Facebook and other tech giants like Google, Twitter and Snapchat billions in additional taxes. The purpose of the data tax, Hughes says, is to more evenly distribute the wealth produced by the sale or marketing of our sensitive user data, which is collected en masse by these websites.
The tax would then be used to establish a fund, which would then pay a data dividend to every American – essentially a tech funded appendage to the social security infrastructure.
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What To Watch For In Apple’s Earnings: With iPhone Sales Slumping, Buyback Better AmazeAs we discussed yesterday, Apple’s iPhone X sales woes have been extensively documented in recent weeks (most recently in “Doubts Grow At Apple” That A $1,000 Smartphone May Not Have Been A Winning Idea”) and with earnings by the world’s most valuable company scheduled for 30 minutes after the close today, many analysts and investors have asked just how Apple will avoid having its stock punished for what has been a disappointing quarter (and likely lackluster guidance) with some speculating that Tim Cook could unveil a shareholder payout as large as $400 billion in the coming years to offset operational fears. That, in a nutshell summarizes the cautious mindset of investors and Wall Street analysts (which GBH Insights analyst Dan Ives said has been in “full panic mode” about iPhone figures) ahead of today’s earnings. And it has reflected in Apple shares, which have fallen 7% in the past nine trading days as repeatedly ominous signals from iPhone suppliers cast a shadow over the world’s most-valuable publicly traded company, and which prompted Wall Street analysts to further slash their iPhone sales estimates. With that in mind, the biggest variables to keep an eye on at 4:30pm ET today will be the reported iPhone numbers, and the company’s revenue forecast, but even more importantly this quarter will be any disclosure by Tim Cook on how much of Apple’s massive and freshly repatriated cash hoard will be returned to shareholders, in addition to details on sales in China and growth in the company’s rapidly growing services division. Here, courtesy of Bloomber … | |
Slippery Way to Grab a Slice of the Next GoogleEveryone can be a venture capitalist. It is a seductive idea, conjuring up a rarefied world of Silicon Valley billionaires seeding the next Amazon or Airbnb. But “equity crowdfunding” opportunities have yet to prove their value to investors. | |
Companies Cry the Transportation BluesCompany after company is complaining that the tight labor market is making it harder and more expensive for them to get their products to customers, creating a potential drag on profits | |
SoftBank Chairman Makes Costly Flip-Flop in Sprint-T-Mobile DealA tie-up of Sprint and T-Mobile has long made strategic sense. SoftBank could have got better terms if the deal had been done earlier. | |
March 2018 Headline Construction Spending Three Month Rolling Average Growth Little ChangedWritten by Steven Hansen The headlines say construction was declined month-over-month and within expectations. Our view is that this does not consider inflation which puts this sector with little growth. | |
01May2018 Midday Update: Wall Street Slips After Tariff Delay, Dow Drops Nearly 300 Points, Boeing Falls 1.5%, US Factory Activity Slows, Construction Spending TumblesWritten by Gary US equities markets are down sharply (SPY -0.6%), as US factory activity slowed also weighed down by shortages of skilled workers. | |
Key Words: Justice Department won’t be ‘extorted’ by impeachment threat, Rosenstein saysDeputy Attorney General Rod Rosenstein on Tuesday didn’t sound fazed by the possibility that he may be impeached by Congress. | |
What happens when there’s a medical emergency onboard a flightThe family of a South Carolina woman is suing American Airlines after she died following a mid-flight medical emergency. | |
Wells Fargo CEO says critics who want him fired ‘don’t know what they’re talking about’The CEO of Wells Fargo, which has been dogged for 18 months by scandals, slapped with a fine, and constrained from growing, was asked whether it was time for fresh leadership. |
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