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CMCSA | InterDigital announces multi year agreement with LG | InterDigital NASDAQ IDCC announces its patent licensing subsidiaries have signed a multi year license with LG Electronics OTC LGEAF The deal commits the companies to exploring joint projects related to R D of video and sensor tech for connected and autonomous vehicles The agreement covers LG s 3G 4G and 5G terminal unit products and establishes royalty cash payments to InterDigital InterDigital will drop outstanding litigation against LG InterDigital shares are up 3 4 Previously InterDigital updates its Q4 guidance Dec 4 Now read |
CMCSA | NBC s Today show ratings jump after Lauer firing | LOS ANGELES Reuters Ratings for NBC s Today show rose last week after the network announced it had fired longtime co host Matt Lauer following an allegation of inappropriate sexual behavior according to Nielsen data released on Tuesday The show on Comcast NASDAQ CMCSA Corp s NBC pulled in an average of 4 9 million viewers for the week well above its typical audience of 4 1 million and beat rival Good Morning America on Walt Disney Co s ABC network GMA attracted an audience of 4 4 million Today co anchors Savannah Guthrie and Hoda Kotb announced Lauer s firing during the Today broadcast on Wednesday Lauer was let go after a female colleague complained to NBC officials about a pattern of inappropriate sexual behavior that began while they were on assignment at the 2014 Sochi winter Olympics in Russia according to NBC statements on Wednesday On Thursday Guthrie read a statement from Lauer on the air in which he apologized for troubling flaws The Today show also reported on Thursday that at least two more women have gone to NBC with similar complaints against Lauer Lauer said in his statement that some of the accusations against him were untrue or mischaracterized without explaining further but said that there is enough truth in these stories to make me feel embarrassed and ashamed Reuters could not independently confirm the allegations and no further comment was available from Lauer s representatives |
CMCSA | UK delays provisional findings in Sky Fox review | The UK has delayed its release of provisional findings regarding Fox s FOX 0 4 FOXA 0 2 bid to buy out the rest of broadcaster Sky SKYAY 1 3 until next month But it expects that shouldn t change the overall timing of the review which pushed into spring 2018 when regulators decided to take a deeper look at implications of the 15B deal The Competition and Markets Authority had planned to make findings public the week of Dec 18 Meanwhile as Fox discusses selling assets to companies like Disney and Comcast NASDAQ CMCSA any stake in Sky would be included in such a sale Now read |
CMCSA | Comcast CMCSA Tops Q4 Earnings Revenue Estimates | Comcast Corp NASDAQ CMCSA is the largest cable MSO multi service operator in the U S and a leading media and entertainment company Comcast provides basic video digital video high speed broadband Internet and telephony services to individuals and business enterprises In addition the company provides filmed entertainment cable networks broadcast TV services and operates theme parks Comcast s decision to venture into the U S wireless space bodes well with its diversified business model It has completed the nationwide rollout of its wireless services under the Xfinity Mobile brand along with plans to include YouTube in its X1 video platform Further it has also has started the nationwide rollout of the DOCSIS 3 1 technology with its latest xFi Advanced Gateway Meanwhile Comcast is venturing into residential solar programs with a 40 month deal with Sunrun Comcast is working towards 5G network deployment Comcast continues to expand its theme park business With this Comcast aims to check customer churn and provide viewers with more streaming options On the other hand we are concerned about Comcast s operation in a saturated and competitive multi channel U S video market Like other cable operators the company continues to lose video subscribers due to cord cutting In the third quarter of 2017 Comcast lost 94 000 voice customers and 125 000 video customers We also view the high debt level consolidation related woes mounting programming costs as potential hazards Zacks Rank Comcast currently carries a Zacks Rank 3 Hold You can see The company has generated a positive average earnings surprise of 9 30 in the previous four quarters We have highlighted some of the key stats from this just revealed announcement below Earnings Comcast Beats Q4 2017 earnings estimate Our consensus earnings estimate called for an adjusted EPS earnings per share of 47 cents and the company reported adjusted EPS of 49 cents Investors should note that these figures take out stock option expenses Revenue Comcast reported total revenues of 21 915 million up 4 2 year over year outperforming our Zacks Consensus estimate of 21 804 million Key States to Note In the fourth quarter 2017 Comcast had 25 869 million up 4 7 year over year high speed Internet customers 11 552 million down 1 2 year over year voice customers 22 357 million down 0 7 year over year video customers and 1 131 million up 26 8 year over year security and automation customers The company added a net of 350 000 high speed Internet customers and 52 000 security and automation customers but lost 13 000 voice customers and 33 000 video customers in the reported quarter Comcast also gained 73 000 double play subscribers and 140 000 single play subscribers but lost 3 000 triple and quad product customers Comcast Corporation Price and EPS Surprise Check back later for our full write up on this Comcast earnings report later
The Hottest Tech Mega Trend of AllLast year it generated 8 billion in global revenues By 2020 it s predicted to blast through the roof to 47 billion Famed investor Mark Cuban says it will produce the world s first trillionaires but that should still leave plenty of money for regular investors who make the right trades early |
WFC | Golf Johnson to make PGA Tour return at Wells Fargo in May | Reuters Dustin Johnson will make his first start since withdrawing from last week s U S Masters when he competes in the Wells Fargo NYSE WFC Championship at Eagle Point Golf Club in North Carolina from May 4 7 the tournament s director said on Thursday We certainly are excited that Dustin will be joining us in Wilmington in a few weeks Wells Fargo Championship Executive Director Kym Hougham said in a statement More importantly we are glad that he is OK and will be returning to the PGA Tour World number one Johnson who walked off the first tee and withdrew from the Masters a day after slipping down a staircase and injuring his lower back had been favorite to win at Augusta National The 32 year old American who won last year s U S Open and took over as the world number one in February had arrived at the Masters having won each of his previous three events Johnson s best finish in the Wells Fargo Championship was a tie for 29th in 2010 In his two other starts he missed the cut There are currently six players among the top 20 in the world now in the Wells Fargo field as Johnson joins Australian Adam Scott Swede Alex Noren Spaniard Jon Rahm and the US pair of Patrick Reed and Phil Mickelson
Players have until April 28 to commit to the field |
WFC | Wells Fargo s banking agreement with Nevada extended | Reuters Wells Fargo Co N WFC said on Monday the State of Nevada had extended its banking agreement with the scandal hit lender until 2021 Several states including California Illinois and Ohio have severed ties with the bank following a sales scandal that cost former Chief Executive John Stumpf his job Wells Fargo s agreement with Nevada also comes with a two year renewal option The bank has been dealing with multiple lawsuits and regulatory inquiries since government investigations found in September that some of its employees had opened more than two million accounts without customers knowledge
Wells Fargo has been working to win back customer confidence following the scandal and paying a 185 million fine to the U S government It has fired more than 5 000 employees apologized to customers changed compensation plans and scrapped sales targets |
WFC | Wells Fargo chairman and CEO buy shares as bank aims to bounce back | Reuters Wells Fargo Co N WFC Chief Executive Tim Sloan and Chairman Stephen Sanger together bought nearly 100 000 shares of the company s stock as the bank tries to bounce back from a sales scandal that tarnished its once spotless image as an industry leader Sanger who led an internal inquiry after the third largest U S bank said it had opened as many as two million unauthorized customer accounts acquired 58 342 shares according to a regulatory filing on Monday Sloan who became CEO after the scandal led to the resignation of his predecessor John Stumpf bought 39 000 shares A Wells Fargo spokesman said the bank and Sloan had no immediate comment Sard Verbinnen a public relations firm which represents the Wells Fargo board of directors did not immediately respond to inquiries Wells Fargo shares were up 1 31 percent to 52 03
The bank which reported earnings last week faces what is expected to be a contentious shareholder meeting on April 25 after proxy advisor Glass Lewis recommended votes against six Wells Fargo directors and Institutional Shareholder Services said votes against 12 of 15 directors were warranted nL1N1HF0UE |
WFC | New SPDR Fixed Income ETF Off To Solid Start | Disappointing macroeconomic data global market turbulence and threats to the stability of the U S economy have been making headlines since the beginning of the year leading to volatility across all asset classes Meanwhile treasury yields are also showing a downtrend Although the Federal Reserve Chair Janet Yellen stated earlier this month that the U S economy was making progress she remained silent on the timing of the impending interest rate hike This coupled with shockingly downbeat job data for the month of May has led to speculations that a June rate hike is in all possibility off the table read Because of these factors fixed income bond ETFs have lately gained a lot of popularity as investors continue to search for stable yield in an ultralow rate interest environment So it s not surprising that State Street Global Advisors has teamed up with Dorsey Wright Associates and has launched a fund of funds which allows investors an opportunity to take advantage of a proprietary signal driven momentum focused technical index methodology for fixed income exposure Below we have highlighted the newly launched fund SPDR Dorsey Wright Fixed Income Allocation ETF in greater detail DWFI in FocusThe fund tracks the Dorsey Wright Fixed Income Allocation Index which provides exposure to four SPDR ETFs with highest potential to outperform the other ETFs in the SPDR universe Each SPDR ETF is selected on the basis of relative strength and the four top ranked SPDR ETFs are included in the Index Relative strength is measured through the comparison of price momentum based on historical daily closing prices inclusive of dividends since inception The product holds 4 ETFs in its basket SPDR Barclays LON BARC International Treasury Bond ETF AX BWX SPDR Barclays Emerging Markets Local Bond ETF AX BND SPDR Wells Fargo NYSE WFC Preferred Stock ETF TO PSK and SPDR Nuveen Barclays Municipal Bond ETF TO TFI with approximately one fourth of the weight each read The fund has an expense ratio of 0 60 The fund invests in the above mentioned ETFs in slightly different weights than the index gaining 25 35 exposure to International Treasury 25 33 exposure to Emerging Markets 24 63 exposure to Hybrids and 24 56 exposure to Municipal Bonds Launched on June 1 2016 the fund has already amassed 5 1 million in its asset base as per The fund is up 1 6 in the last 5 days How Could it Fit in a Portfolio With the low yield environment likely to stay for some time now investors are looking for stable income with low risk DWFI provides investors a convenient and cost effective method to track changes in price volatility rates and yield spreads of certain fixed income ETFs through its relative strength methodology Meanwhile the fund of funds promises to be liquid and tax efficient However investors looking for a high growth vehicle may not be satisfied with this product Additionally changes in currency exchange rates may affect the value of the fund s investment adversely read CompetitionBeing a fund of funds with unique relative strength selection methodology the ETF does not have any direct competitor The fund provides investors a new way to play the fixed income market The product charges moderately high fees from investors annually due to its unique strategy The fund provides access to several niche spaces of the fixed income space international treasury emerging markets preferred stock and municipal bond However there are quite a few total bond market ETFs which could give some competition to DWFI Of these the popular fund Vanguard Total Bond Market ETF AX BND has a total asset base of 30 7 billion This fund tracks the Barclays U S Aggregate Float Adjusted Index and trades in heavy volume of 2 1 million shares per day and charges 6 bps in annual fees read Apart from these SOVB could also face competition from international high yield bond funds Schwab U S Aggregate Bond ETF with an asset base of 2 9 billion SPDR DoubleLine Total Return Tactical ETF JK TOTL with AUM of 2 5 billion and Fidelity Total Bond ETF with AUM of 138 8 million Thus DWFI is already off to a good start and has a good chance of making a name for itself if it manages to generate returns net of fees greater than the passively managed products in the bond ETF space The ETF s plan of diversifying its exposure and its emphasis on liquidity are noteworthy but its success is a huge factor of the returns it manages to generate Want the latest recommendations from Zacks Investment Research Today you can download 7 Best Stocks for the Next 30 Days |
CMCSA | Meghan Markle departs Suits after engagement to Prince Harry | LOS ANGELES Reuters U S actress Meghan Markle has wrapped up her role on legal drama series Suits after seven seasons USA Network and Universal Cable Productions said in a statement on Tuesday a day after Markle and Britain s Prince Harry announced their engagement Markle 36 played Rachel Zane on the cable network drama rising up the ranks from paralegal to lawyer The character is engaged to be married to Mike Ross played by Patrick J Adams Markle has completed all her filming for the seventh season which will return in early 2018 the network said We want to send our most heartfelt congratulations to Meghan Markle and Prince Harry on their engagement USA Network and Universal Cable Productions both units of Comcast Corp NASDAQ CMCSA said in a joint statement Meghan has been a member of our family for seven years and it has been a joy to work with her We want to thank her for her undeniable passion and dedication to Suits and we wish her the very best the statement added Markle and Harry 33 announced on Monday they were getting married in May 2018 The couple met on a blind date in July 2016 and said their relationship had blossomed incredibly quickly |
CMCSA | NBC News fires Matt Lauer for inappropriate sexual behavoir | NBC News announces that it has fired co host Matt Lauer for inappropriate sexual misconduct Today hosts Savannah Guthrie and Hoda Kotb told viewers this morning that they had received the information only moments before the show began Shares of NBC parent Comcast NASDAQ CMCSA are down 0 3 in light premarket trading Now read |
CMCSA | Factbox Trump on Twitter Nov 29 Stock Market Matt Lauer | The following statements were posted to the verified Twitter accounts of U S President Donald Trump realDonaldTrump and POTUS The opinions expressed are his own Reuters has not edited the statements or confirmed their accuracy realDonaldTrump foxandfriends we are in record territory in all things having to do with our economy 0632 EST Great and we should boycott Fake News CNN Dealing with them is a total waste of time 0649 EST Looks like another great day for the Stock Market Consumer Confidence is at Record High I guess somebody likes me my policies 0703 EST Wow Matt Lauer was just fired from NBC for inappropriate sexual behavior in the workplace But when will the top executives at NBC Comcast NASDAQ CMCSA be fired for putting out so much Fake News Check out Andy Lack s past 0716 EST
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CMCSA | NBC News fires Today co host Matt Lauer for sexual misconduct | By Gina Cherelus and Jonathan Allen NEW YORK Reuters NBC News fired Matt Lauer the popular host of its Today morning show on Wednesday after a female colleague accused him of inappropriate sexual behavior the network said making him the latest rich and powerful man to be felled by such accusations His termination sent shockwaves through U S morning television where Lauer has been a fixture since becoming a Today anchor in 1997 and went on to become one of NBC s highest paid personalities earning 20 million a year The married 59 year old news star was the latest public figure to be embroiled in accusations of sexual misconduct that have recently struck down high profile men in entertainment politics and media Just hours later U S radio host Garrison Keillor said he had been fired by Minnesota Public Radio over an accusation of inappropriate behavior The complaint made by an unnamed female colleague on Monday night was a clear violation by Lauer of the company s standards NBC News chairman Andrew Lack said in a statement While it is the first complaint about his behavior in the over twenty years he s been at NBC News we were also presented with reason to believe this may not have been an isolated incident Lack said The network issued a second statement in response to a report in the Hollywood trade publication Variety that said several women had complained to the network about Lauer s behavior We can say unequivocally that prior to Monday night current NBC News management was never made aware of any complaints about Matt Lauer s conduct an NBC spokeswoman said Lauer s agent Ken Lindner did not respond to requests for comment The news was announced by Today co anchors Savannah Guthrie and Hoda Kotb at the start of the talk show a staple of U S morning television for more than six decades that NBC says averages more than 4 million viewers We just learned this moments ago just this morning Guthrie said visibly shaken As I m sure you can imagine we are devastated Lack s statement did not say who made the accusation but promised that NBC News would cover Lauer s firing in as transparent a manner as we can The woman had met with New York Times reporters on Monday before meeting with NBC s human resources and legal departments that evening to share her allegation the Times reported saying that she said she was not ready then to publicly identify herself Her Washington based lawyer Ari Wilkenfeld said the meeting with NBC officials lasted several hours In fewer than 35 hours NBC investigated and removed Mr Lauer Wilkenfeld wrote in a statement Our impression at this point is that NBC acted quickly as all companies should when confronted with credible allegations of sexual misconduct in the workplace The complaint said the sexual misconduct occurred while Lauer and the female colleague were covering the 2014 Sochi winter Olympics in Russia and continued after the Games NBC News reporter Stephanie Gosk said on air An NBC representative did not respond to a request for more details Comcast Corp NASDAQ CMCSA the largest U S cable television company owns NBCUniversal Its shares rose 2 4 percent to 37 13 Today earned 509 million in advertising revenue last year more than any of its competitors New York based analysts Kantar Media said Lauer joined Today in 1994 and has interviewed presidents George Bush and Barack Obama and broadcast from seven Olympic Games He had been due to join his co hosts for the nationally televised lighting of the giant Christmas tree at New York City s Rockefeller Center on Wednesday night According to Fortune Magazine he signed a two year deal in 2016 that would pay him 20 million per year U S President Donald Trump responded with messages on Twitter calling for some of Lauer s colleagues to be fired too and adding to his recent attacks against U S news outlets for their reporting on his administration Wow Trump wrote about Lauer But when will the top executives at NBC Comcast be fired for putting out so much Fake News
During the 2016 presidential campaign then Republican candidate Trump was accused by 13 women who publicly said that in the past he had physically touched them inappropriately in some way the Washington Post reported Trump denied the accusations |
WFC | Senator Warren aide said to be in running for SEC job sources | By Sarah N Lynch and Svea Herbst Bayliss
WASHINGTON BOSTON Reuters Bharat R Ramamurti a legislative aide for Democratic Senator Elizabeth Warren is a contender for one of the vacancies on the U S Securities and Exchange Commission according to people familiar with the matter
Ramamurti is senior counsel to Warren on banking and economic policy and she is staunchly backing him for the SEC job one of the sources told Reuters
The sources spoke anonymously because deliberations on candidates for the SEC which is the primary regulator that polices and writes rules for Wall Street are not public
Ramamurti declined to comment
A source said a decision on the post was not imminent In prior instances with President Donald Trump s administration candidates in the running for positions were sometimes dropped after their names became public
Other names that are in the mix include Vermont Law School professor Jennifer Taub the AFL CIO s office of investment director Heather Slavkin Corzo and Andy Green a managing director at the Center for American Progress who previously worked for SEC Democratic Commissioner Kara Stein the sources told Reuters
Taub and Green declined to comment and Slavkin Corzo could not be immediately reached
A spokesperson for the White House declined to comment saying he could not discuss personnel matters
Trump must nominate three people to fill out the five member panel which currently is down to two commissioners Acting Chairman Michael Piwowar a Republican and Stein
The nomination of Wall Street deal making attorney Jay Clayton Trump s choice to lead the SEC was approved by the Senate Banking Committee earlier this month
Clayton an independent is still awaiting confirmation by the full Senate which is currently away for Easter recess
Trump has not yet formally nominated anyone else for the remaining SEC spots one Democrat and one Republican
Warren a progressive Democrat has been critical of the Trump administration s plans to roll back the 2010 Dodd Frank Wall Street reform law
She voted against Clayton s nomination saying his employment as a lawyer at Sullivan Cromwell representing large banks creates too many conflicts of interest and may prevent him from being a tough regulator
As her counsel on the banking committee Ramamurti has played a prominent role in shaping Warren s policy agenda He helped steer her investigative efforts into the Wells Fargo NYSE WFC fake accounts scandal and worked on bipartisan efforts to broker a deal on housing reforms for mortgage lenders Fannie Mae and Freddie Mac |
WFC | Wells Fargo Q1 EPS 1 0 vs estimate of 0 97 | Investing com NYSE Wells Fargo Thursday reported first quarter earnings that edged past estimates The U S bank said its Q1diluted EPS was 1 00 against a consensus estimate of 0 97 and 0 99 a year earlier Revenues came in slightly below forecast at 22 bn Wells Fargo shares were off 1 19 at 52 49 in pre market trade |
WFC | The Next Big Financial Collapse Can Happen At Any Time | Every day that life goes by and there s no disruption I consider that a bonus
We are currently sitting on the edge on another housing and commercial real estate market disaster The financial system was never fixed or reformed The banking sins which led up to the big housing bubble crash were merely erased with taxpayer funds and printed money The laws passed were not designed to protect us from them but to better protect their ability to hide the continuation of the fraudulent banking activities that serve to transfer wealth from the general public to the elitists
The Fed and U S Government have successfully succeeded in reflating the housing bubble Housing prices have been fueled by low to no down payment Government sponsored mortgages and by the Fed s near zero interest rate policy Go ahead raise rates Janet let s see how quickly you explode the current housing bubble your people have blown
The financial media heralded the announcement of Wells Fargo Company s NYSE WFC 3 down payment mortgage program like it was a new way to split to the atom Lost in the hoopla was the fact that Wells Fargo s program is just now catching up to the times Fannie and Freddie have been sponsoring 3 down payment mortgages since early 2015 The Government agencies also signficantly reduced the required monthly insurance payment on low down payment mortgages Same with the FHA which has been doing 3 5 down mortgages since 2008 Th Government has become the new version of Angelo Mozilo s Countrywide Mortgage company
It s nothing more than a reconfiguration of the exact same types of mortgages and the associated derivatives that took down the financial system in 2008 The use your house as an ATM programs have been reinstated Need to pay for your wife s full body plastic surgery makeover Do a cash out refi and pay for that plus redo your kitchen and finish out your basesment Leverage that home equity to the max
After our conversation with John Embry about the silver market the discussion wandered into the housing and mortgage market on an ad lib basis Below is the Shadow of Truth s bonus footage with John Embry about the forthcoming systemic debt collapse led by mortgage and auto leverage
Below you find the video |
WFC | Top ETF Stories Of May | The month of May was moderate for the broader U S market with the S P 500 and Nasdaq Composite adding 0 8 and 2 7 respectively However the Dow Jones Industrial Average lost about 0 6 While an oil price recovery and some solid U S economic readings favored risk on sentiments earnings recession and seasonal weakness in the market played foul
Let s delve a little deeper into the top ETF stories of May and see how the markets may behave ahead if the present scenario remains intact Fed Rate Hike Bet
Startling many investors minutes from the Fed April meeting pointed to interest rate hike possibilities in June As soon as the Fed turned hawkish in mid May asset classes started to re price themselves with Powershares DB US Dollar Index Bullish Fund starting to regain its lost ground in Q1 read
Meanwhile most of the U S economic reading came in stronger fanning the possibility of a Fed move in a month or two The yield on the 10 year U S Treasury jumped 9 bps to 1 85 as of May 27 2016 since the Fed indicated a sooner than expected rate hike on May 18 Gold Snaps Wining Trend
As the Fed hike speculation strengthened the greenback non interest bearing assets like gold started to falter Notably gold was off to a spectacular start this year on higher safe haven demand SPDR Gold Shares NYSE GLD bore the brunt of this trading read
50 Oil Finally a Reality
May saw the long awaited recovery in oil prices The liquid commodity which has been on a strong footing lately rising from its 12 year lows in February staged a sharp rally in recent times Easing concerns over supply glut on lower shale output a significant fall in U S crude inventory geo political crisis in some oil producing nations like Nigeria and Venezuela and the wildfire in Canada s oil rich area made this rally possible
United States Oil Fund NYSE USO and United States Brent Oil Fund are the two beneficiaries of this rally read
Regional Bank ETFs Burst with Enthusiasm
With the hint of a Fed hike bank ETFs soared Higher interest rate favors banks profitability as their net interest margin the spread between their borrowing rates and lending rates rises
Notably before the latest Fed hike bet the yield spread between the 10 year U S Treasury and three month U S Treasury was 1 48 on May 17 2016 On the other hand the spread for same maturity bonds was 1 53 on May 27 2016 This rise in spread should bode well for regional bank ETFs
Also economic revival goes well with the regional bank ETFs which thrive mainly on interest income If this was not enough an oil price recovery did a lot for the recent surge in bank ETFs U S banks have significant exposure to the long beleaguered energy sector where chances of a credit default are higher But a 50 oil reduced banks worries to some extent
SPDR S P Regional Banking ETF and SPDR S P Bank ETF are examples of two bank ETFs that showered gains on investors lately read
Lure for Income Stays Strong
Quite expectedly demand relatively safe and high yielding products were in demand in the month A subtle rise in Treasury yields and the likely flare ups in volatility must have made investors cautious as they flocked to regular income producing securities Among the bunch preferred ETFs like Preferred Portfolio Powershares and SPDR Wells Fargo NYSE WFC Preferred Stock deserve a special mention
Investors also favored quality dividend ETFs like SPDR S P Dividend and iShares Core Dividend Growth |
CMCSA | DAX Slides Other European Markets Follow on German Political Turmoil | Investing com European markets opened lower on Monday as German political turmoil dampened market sentiment and as investors eyed an upcoming speech by European Central Bank President Mario Draghi
The EURO STOXX 50 fell 0 18 France s CAC 40 slipped 0 15 while Germany s DAX 30 was down 0 30 by 03 35 a m ET 07 35 GMT
Investors remained cautious after German Chancellor Angela Merkel said she failed to form a government coalition sparking concerns that a new election may be in order
The Free Democrats Party FDP unexpectedly left the negociation table Sunday leaving Merkel s conservative camp and the Green party with no coalition agreement If no government is formed German President Frank Walter Steinmeier can call a new election
Financial stocks were mostly lower as French lenders BNP Paribas PA BNPP and Societe Generale PA SOGN eased 0 08 and 0 23 while Germany s Commerzbank DE CBKG and Deutsche Bank DE DBKGn lost 0 16 and 0 95
Among peripheral lenders Italy s Intesa Sanpaolo MI ISP dipped 0 08 while Spanish banks Banco Santander MC SAN and BBVA MC BBVA slipped 0 02 and 0 21 respectively
Elsewhere RWE AG DE RWEG surged 3 57 amid reports the German utility is planning to cut its 16 8 billion stake in retail business Innogy which could potentially involve a deal with Italy s Enel MI ENEI
Last week the company said there was no need to sell the 76 8 stake
Prosiebensat 1 Media AG DE PSMGn added to gains with shares up 1 32 after Chief Executive Thomas Ebeling said he will be leaving the German broadcaster in February 2018
In London FTSE 100 slid 0 35 weighed by J Sainsbury PLC LON SBRY whose shares were down 1 89 The stock was closely followed by 3I Group LON III down 1 73
Mining stocks added to losses on the commodity heavy index as Rio Tinto LON RIO dropped 0 77 and BHP Billiton LON BLT lost 0 99 while rival company Glencore LON GLEN retreated 0 89
Financial stocks were also mostly lower as Lloyds Banking LON LLOY fell 0 20 and HSBC Holdings LON HSBA declined 0 63 while the Royal Bank of Scotland LON RBS dropped 0 77 Barclays LON BARC overperformed with shares up 0 32
EasyJet PLC LON EZJ was ome of the top performers on the index with shares up 1 09 The airliner made headlines last week when it posted another decline in profits and announced a 5 million pay off for departing Chief Executive Carolyn McCall
Sky Plc LON SKYB continued to climb for a second consecutive session following reports late last week that Comcast NASDAQ CMCSA and Verizon have joined the pursuit for 21st Century Fox which owns a 39 stake in the British company
In the U S equity markets pointed to a lower open The Dow Jones Industrial Average futures pointed to a 0 17 loss S P 500 futures signaled a 0 18 fall while the Nasdaq 100 futures indicated a 0 19 slide |
CMCSA | TiVo wins set top box patent case against Comcast | Reuters The U S International Trade Commission has ruled in favor of Rovi Corp which is now known as TiVo NASDAQ TIVO Corp and prohibited Comcast Corp NASDAQ CMCSA from importing and selling certain types of Rovi s Xfinity X1 set top boxes
The final ruling in favor of Rovi that makes set top boxes said the import ban applies to certain X1 set top boxes that violated two patents but not the product s legacy versions
The ban applies unless it is overturned by the U S President Donald Trump s administration during the Presidential review period
It is too hypothetical to determine whether Comcast s two alternative designs infringe the patents the commission said on Tuesday
Today s Commission Opinion reinforces the need for Comcast to take the necessary licenses to our IP Rovi said in an e mailed statement
Comcast in an e mailed statement said it disagreed with the trade commission s decision and will appeal |
WFC | Wells Fargo board releases findings of probe into scandal | Investors have moved on from the account opening scandal at Wells Fargo NYSE WFC but there are still some loose ends to tie up like this morning s naturally fairly scathing report Senior managers at the bank failed to pay attention to warnings of spreading sales abuses for over a decade says the 110 page effort instead treating thousand of whistleblowers as rogues Harshest criticism is mounted against now former consumer banking head Carrie Tolstedt Full report is hereShares 0 5 premarket |
WFC | Best banker in America blamed for Wells Fargo sales scandal | By Carmel Crimmins and Karen Freifeld Reuters An investigation by Wells Fargo Co s N WFC board laid blame for the company s unauthorized accounts scandal on a high pressure sales culture and a retail executive obsessed with stamping out negative views about her division The report carried out by board Chairman Stephen Sanger and three other independent directors and released to media on Monday said former retail division head Carrie Tolstedt ignored the systemic nature of abusive sales practices and accused her of impeding the board s efforts to address an issue that festered for years Lawyers for Tolstedt rejected the report s findings on Monday She had declined to be interviewed for the investigation We strongly disagree with the report and its attempt to lay blame with Ms Tolstedt A full and fair examination of the facts will produce a different conclusion Enu Mainigi Williams Connolly LLP attorneys for Tolstedt said in a statement Sanger a board member since 2003 faces pressure to root out the problems amid calls by advisory group Institutional Shareholder Services for investors to oust him and other directors in place when the scandal broke Glass Lewis meanwhile has recommended votes against six board members at the bank s April 25 annual meeting In an interview with Reuters Sanger said the bank was not scapegoating anyone I m not surprised that some of the people involved see it differently but we stand by the findings of this investigation he said Sanger said the report showed the board had taken the appropriate action with the information it was given and had revamped compensation leadership and its own structure to make sure such abuses did not reappear I m very disappointed in the ISS and Glass Lewis recommendations they do not take into account sufficiently the actions that the board has taken since the issue broke he said We will trust investors to make their own decisions about how they will vote With the U S Department of Justice looking into the sales practices experts said Wells Fargo s board was under pressure to ensure the buck stopped with someone else There s a tremendous amount of pressure from regulators to throw someone under the bus said Duke Law School professor James Cox who specializes in corporate and securities law If they don t then Wells Fargo is going to be even more in the crosshairs The Department of Justice declined to comment on its probe Wells Fargo said Tolstedt had been fired for cause and it would cancel approximately 47 million worth of stock options held by her The bank said it would also claw back approximately 28 million from former chief executive John Stumpf who failed to heed warnings about the scale of the problem BLINDED BY SUCCESS Stumpf who retired under pressure from the scandal in October was criticized for failing to grasp the gravity of the sales abuses and their impact on the bank In the 110 page report Stumpf was described as blinded by Wells Fargo s cross selling success He refused to believe the model was seriously impaired and was full of admiration for Tolstedt with whom he had a long working relationship According to one director Stumpf praised Tolstedt as the best banker in America The report said Tolstedt hid the scale of the misconduct from the board which only discovered that 5 300 staff had been fired for opening more than 2 million unauthorized accounts when the bank reached a 185 million settlement with regulators in September A lawyer for Stumpf declined to comment on the report The bank has fired five senior retail bank executives including Tolstedt over the scandal and imposed forfeitures clawbacks and compensation adjustments on senior leaders now totaling more than 180 million including 69 million from Stumpf and 67 million from Tolstedt Since the scandal broke the bank has seen a steady decline in the number of consumers opening checking and credit card accounts and has lost its status as America s most valuable bank by market value A NOTEWORTHY RISK Sales practices were identified as a noteworthy risk to the board and its risk committee of which Sanger was a member in 2014 after a series of stories in the Los Angeles Times detailed some of the practices But Tolstedt was left to deal with the issue and was notoriously resistant to outside intervention and oversight the report said Multiple board members felt misled by a presentation by Tolstedt and others to the risk committee in May 2015 The board members said they left thinking that between 200 and 300 employees had been fired for sales practice abuses and the problem was largely concentrated in southern California The report criticized the board for not centralizing risk functions at the bank earlier not requesting more detailed reports from management and not insisting Stumpf get rid of Tolstedt sooner Tim Sloan who replaced Stumpf as CEO was described in the report as having little contact with sales practices at the bank before becoming chief operating officer and Tolstedt s boss in November 2015 Six months later he told her to step aside Since the scandal broke the bank has ended sales targets changed pay incentives for branch staff separated the role of chairman and CEO and hired new directors to its board NO BAD NEWS NO CONFLICT A big part of Wells Fargo s problem was its decentralized business model which meant the retail bank was able to keep inquiries from head office at arm s length There was no joined up effort by either the bank s human resources or legal divisions to track and analyze the problem As far back as 2002 Wells Fargo s retail bank was taking steps to deal with sales practice violations and in 2004 an internal report recommended eliminating sales goals for employees That report was sent to among others the chief auditor a senior in house employment lawyer retail bank HR personnel and the head of retail bank sales service development No action was taken Externally Wells was lauded by investors for cross selling customers multiple products and for its squeaky clean reputation relative to peers following the financial crisis Internally the sales pressure was oppressive particularly in California and Arizona where senior bankers sometimes called subordinates several times a day to chastise those who failed to meet sales objectives Tolstedt was perceived by high level employees as having the support of Stumpf with whom it was considered best to avoid raising problems with Stumpf was ultimately responsible for enterprise risk management at Wells Fargo but was not perceived within Wells Fargo as someone who wanted to hear bad news or deal with conflict the report said
Wells Fargo shares were down 0 44 percent at 54 6 in early afternoon trade |
CMCSA | Stocks European Markets Open Mixed Draghi Speech in Focus | Investing com European markets opened mixed on Friday as investors eyed an upcoming speech by European Central Bank President Mario Draghi due later in the day and as market sentiment mildly improved following an important step in a U S tax overhaul
The EURO STOXX 50 eased 0 08 France s CAC 40 fell 0 21 while Germany s DAX 30 was up 0 02 by 03 35 a m ET 07 35 GMT
ECB President Draghi was set to deliver a speech titled Europe into a New Era How to Seize the Opportunities at the Frankfurt European Banking Congress at 03 30 a m ET 07 30 GMT
Meanwhile investors were relieved to learn that the U S House of Representatives on Thursday approved a broad package of tax cuts which will now be debated by the Senate
Market participants were still cautious however as the Republican majority is smaller in the Senate and no decisive action is expected until after next week s Thanksgiving holiday
Financial stocks were broadly higher as French lenders Societe Generale PA SOGN and BNP Paribas PA BNPP gained 0 40 and 0 75 while Germany s Commerzbank DE CBKG and Deutsche Bank DE DBKGn advanced 0 82 and 1 17
Among peripheral lenders Italy s Unicredit MI CRDI and Intesa Sanpaolo MI ISP climbed 0 30 and 0 57 respectively while Spanish banks BBVA MC BBVA and Banco Santander MC SAN rose 0 11 and 0 36
Elsewhere Deutsche Lufthansa AG DE LHAG shares advanced 0 71 after Italian airliner Alitalia said on Thursday that it has met with members of its German counterpart and added that reports over a deal with the company were groundless
The news came on the heels of a report published on Tuesday that Lufthansa offered 250 million to take on most of Alitalia s fleet of aircraft and half of its staff
On the downside French telecom giant Bouygues PA BOUY saw shares retreat 0 87 a day after reporting a 37 increase in nine month operating profits beating analysts projections
In London FTSE 100 slipped 0 18 weighed by United Utilities Group PLC LON UU whose shares plummeted 2 58 The stock was closely followed by Dixons Carphone LON DC down 2 47
Mining stocks added to losses on the commodity heavy index as Rio Tinto LON RIO dropped 0 63 and BHP Billiton LON BLT declined 0 65 while rival company Glencore LON GLEN saw shares lose 0 71
In the financial sector stocks were steady to lower Shares in Lloyds Banking LON LLOY and the Royal Bank of Scotland LON RBS inched down 0 03 and 0 07 respectively while Barclays LON BARC slipped 0 16 and HSBC Holdings LON HSBA fell 0 26
Meanwhile Sky Plc LON SKYB was one of the top performers on the index with shares up 2 77 following reports Comcast NASDAQ CMCSA and Verizon have joined the pursuit for 21st Century Fox which owns a 39 stake in the British company
In the U S equity markets pointed to a mixed open The Dow Jones Industrial Average futures pointed to a 0 06 dip S P 500 futures signaled a 0 11 fall while the Nasdaq 100 futures indicated a 0 08 gain |
CMCSA | Here s Why You Should Add Alibaba BABA To Your Portfolio | Alibaba Group Holding Limited NYSE BABA is currently one of the top performing stocks in the technology sector and an increase in share price and strong fundamentals signal its bullish run Therefore if you haven t taken advantage of the share price appreciation yet it s time you add the stock to your portfolio The company has performed well this year and has the potential to carry on the momentum in the near term Why an Attractive Pick Share Price Appreciation A glimpse of the company s price trend shows that the stock has an impressive run on the bourses year to date Alibaba has returned 96 6 compared with the s rally of 60 6 Solid Rank Alibaba sports a Zacks Rank 1 Strong Buy Thus the company appears to be a compelling investment proposition at the moment Northward Estimate Revisions Six estimates for the current year have moved north over the past 60 days against no southward revisions reflecting analysts confidence in the company Over the same period the Zacks Consensus Estimate for the current year has increased 6 0 Also for fiscal 2019 the Zacks Consensus Estimate has inched up 4 0 to 6 73 Positive Earnings Surprise History Garmin has an impressive earnings surprise history The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters with an average positive earnings surprise of 14 95 Strong Growth Prospects The company s Zacks Consensus Estimate for fiscal 2018 earnings of 5 21 reflects year over year growth of 52 8 Moreover earnings are expected to register 29 3 growth in fiscal 2019 The stock has long term expected earnings per share growth rate of 30 7 Growth DriversAlibaba s solid growth in the company s core e commerce business strong growth in metrics mobile strength and international expansion helps it in generating significant revenues Other drivers include strong cloud computing business In a bid to expand the reach of its cloud platform the company has open data centers in a number of places including India and Indonesia Besides this the company has also signed cloud agreements with a number of companies to address the rising demand for cloud services According to the latest fiscal second quarter earnings release the company s cloud computing business grew 99 year over year Also Alibaba s growth has been sparked by a spike in new initiatives like entertainment Recently Alibaba s streaming video site Youku signed new content licensing deals with Comcast NASDAQ CMCSA s NBCUniversal and Sony Pictures further strengthening its foothold in the media industry In its latest quarterly release the digital media and entertainment division registered growth of 33 year over year Apart from this the e commerce giant is leaving no stone unturned to explore new avenues Recently the company teamed up with Ford Motor Company NYSE F to strengthen its presence in the automotive space We believe that increasing investments and innovation in various fields and strong financial position will continue to drive the company s long term growth Alibaba Group Holding Limited Price and Consensus
Other Stocks to ConsiderA few other top ranked stocks in the broader technology sector are Groupon Inc NASDAQ GRPN and SMART Global Holdings Inc NASDAQ SGH each carrying a Zacks Rank 1 You can see Long term earnings per share growth rate for Groupon PetMed Express and SMART Global is projected at 7 and 15 respectively Zacks Best Private Investment Ideas While we are happy to share many articles like this on the website our best recommendations and most in depth research are not available to the public Starting today for the next month you can follow all Zacks private buys and sells in real time Our experts cover all kinds of trades from value to momentum from stocks under 10 to ETF and option moves from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises You can even look inside exclusive portfolios that are normally closed to new investors |
WFC | Canadian dollar to weaken as policy path diverges with U S Reuters poll | By Anu Bararia BENGALURU Reuters The Canadian dollar will weaken over the coming months pressured by an uncertain economic outlook and the prospect of higher interest rates in the United States even as the Bank of Canada stays on the sidelines a Reuters poll showed While the loonie may gain a little in the short term on expectations of stronger first quarter economic growth in Canada the survey of close to 50 foreign exchange strategists showed it will weaken to C 1 35 per U S dollar in three months and close the year at the same level It is already 3 percent lower than at this time last year Even as the U S Federal Reserve raised rates in March its second hike in three months and plans to hike twice more this year the Canadian central bank is not expected to boost rates until 2018 It cut them twice in 2015 CA POLL It is essentially a policy differential story said Shaun Osborne chief currency strategist at Scotiabank Some people have started thinking that perhaps with the Federal Reserve now appearing a bit more fully committed to raising interest rates that may mean something for Canada in the near to medium term which I think is way too premature Even though respondents expected the loonie to rise marginally in one month to C 1 34 from Wednesday s close of C 1 3434 the forecast range remained wide running from C 1 28 to C 1 39 We are possibly looking at the early stages of a renewed sell off in the Canadian dollar in the next few weeks Osborne said There is just a lot of uncertainty here at the moment that rather suggests to me anyway that some of the strength we have seen in the Canadian data over the past few weeks is probably not sustainable Data from the Commodity Futures Trading Commission and Reuters calculations showed that speculators have increased bearish bets on the Canadian dollar to the most since March 2016 Wells Fargo NYSE WFC the top forecaster in Reuters FX polls in 2016 expects the currency to weaken 5 percent over the coming year to C 1 41 CAUTION AHEAD Despite a recent run of strong domestic data Bank of Canada Governor Stephen Poloz has maintained a cautious stance on monetary policy saying a premature rate hike could cause a recession in Canada as the economy has not yet fully recovered from the shock of weak oil prices The price of oil one of Canada s key exports at around 55 a barrel is still down over 50 percent from its mid 2014 high Commodity analysts polled by Reuters are still unsure if output curbs by OPEC members will be enough to offset the increase in U S production O POLL That does not support Canada s highly indebted households that on an average owed C 1 67 for every dollar of disposable income in the fourth quarter much of it because of cheap mortgage borrowing to chase ever rising house prices The property market has turned into a key vulnerability for Canada s financial system posing a challenge to policymakers who can neither lower rates to stoke growth nor raise them to discourage further borrowing Another threat is rising anti trade sentiment in the United States under President Donald Trump that has put the outlook for Canadian exports and the loonie under closer scrutiny Exports tumbled by the most in nearly a year in February sending the loonie to a nearly three week low of C 1 3455 on Tuesday suggesting the monetary policy gap between the U S and Canada is unlikely to be plugged any time soon The policy divergence story will be in play until the end of this year We don t expect the Bank of Canada will raise rates until the first half of next year now said Royce Mendes director and senior economist at CIBC Capital Markets in Toronto
We still see that there has been little evidence of a sustainable acceleration in underlying export growth or investment spending and that s a key component of the recovery we need to see for the Bank of Canada to really be comfortable with tightening policy Polling by Vivek Mishra and Indradip Ghosh Editing by Ross Finley and Bernadette Baum |
WFC | Proxy adviser ISS urges votes against most of Wells Fargo board | By Ross Kerber BOSTON Reuters Influential proxy adviser Institutional Shareholder Services recommended investors vote to replace the majority of directors at Wells Fargo Co N WFC in the wake of the bank s phony account scandal ISS in a report released on Friday by a spokesman said votes against 12 of the bank s 15 directors are warranted after board committees failed for years to provide a timely and sufficient risk oversight process that could have mitigated the problems Wells Fargo reached a 185 million settlement with regulators in September after it emerged that branch employees opened as many as 2 million accounts without customers permission to meet sales goals Directors ISS recommended votes against included the San Francisco bank s chairman Stephen Sanger although it suggested investors vote in support of Timothy Sloan who took over as chief executive in October The report sets the stage for a contentious April 25 annual meeting for the bank On Tuesday proxy adviser Glass Lewis recommended investors vote against six Wells Fargo directors In a statement Wells Fargo called ISS voting recommendations extreme and unprecedented and urged shareholders to make their own judgments about reforms the bank has taken
The Board has already taken numerous actions and supported management s steps to promote accountability strengthen oversight and hold to account those responsible for improper sales practices Wells Fargo said in its statement |
WFC | Exclusive U S regulator removes top examiner for Wells Fargo sources | By Patrick Rucker WASHINGTON Reuters The most senior bank examiner for Wells Fargo Co N WFC has been removed by a U S regulator in the wake of the bank s unauthorized accounts scandal people familiar with the matter told Reuters this week The Office of the Comptroller of the Currency the lead regulator for national banks stripped the examiner Bradley Linskens of his supervisory powers within the last two weeks said three sources who were not authorized to discuss the matter publicly Linskens did not immediately respond to requests for comment OCC spokesman Bryan Hubbard declined to comment Wells Fargo s board is expected to release a report on Monday detailing what went wrong at the fourth largest U S bank according to sources familiar with the matter The bank and its board both declined to comment In September Wells Fargo reached a 190 million settlement with the OCC and other regulators over its opening millions of accounts in customers names without their permission At the time the bank said as many as 2 million accounts were affected but has since said the number might be larger The report is the result of a seven month investigation by Wells Fargo s board of directors into how and why the sales abuses happened Thousands of employees were dismissed over the matter and several have publicly said they opened the fake accounts to hit aggressive sales targets set by managers Wells Fargo now faces probes from other government agencies including the Department of Justice which is investigating whether any laws were broken Linskens was responsible for day to day supervision of Wells Fargo and managed a staff of more than 60 people according to past notices from the OCC He joined the OCC in 1993 and earliest oversight of Wells Fargo began in 2006 In 2016 Linskens was honored with the title senior national bank examiner and received accolades in a news release from Comptroller Thomas Curry who runs the OCC In September Curry ordered an internal review of how the OCC handled the Wells Fargo matter and whether the agency has gaps in our supervision That review is drawing to a close said an OCC official |
WFC | Wall Street shares flat after weak jobs Fed comments | By Sinead Carew NEW YORK Reuters Wall Street s three major indexes were virtually unchanged on Friday but fell well below session highs in late afternoon trading after a key Federal Reserve official shed more light on the Fed s plan to reduce its balance sheet while investors digested a weak jobs report New York Fed President William Dudley discussed the U S central bank s developing plan for when to stop topping up bonds that expire as it currently does how it plans to execute it and how far it will ultimately go in shrinking its balance sheet U S Treasury yields rose after Dudley s remarks which helped push equities lower according to Paul Zemsky chief investment officer Multi Asset Strategies and Solutions at Voya Investment Management in New York At 3 35 P M EDT the Dow Jones Industrial Average DJI was up 3 99 points or 0 02 percent to 20 666 94 the S P 500 SPX had lost 0 59 point or 0 03 percent to 2 356 9 and the Nasdaq Composite IXIC had added 0 33 point or 0 01 percent to 5 879 28 Also in the late afternoon media reports emerged that Syrian warplanes had carried out strikes Reuters cited the Syrian observatory for human rights for its report The news followed a pre dawn U S strike in Syria The United States fired missiles at an airfield from which it said a deadly poison gas attack was launched this week The news of the U S Syria attack sent global stocks lower when it was announced with the S P 500 futures index falling as much as 0 5 percent But most of the losses ebbed after U S officials described the attack as a one off that would not lead to wider escalation We have a full plate of issues today Outside of the economy you have China you have Syria said Sean Lynch co head of global equity strategy at Wells Fargo NYSE WFC Investment Institute in Omaha Nebraska The market had rallied after the Nov 8 election on hopes that U S President Donald Trump would live up to his campaign promises for pro business policies such as tax and regulation reform But investors increasingly question whether they would materialize In the coming days it will be interesting to watch to see if Syria does grab more attention from the White House and delay some of these other issues and programs they are trying to get passed through here said Lynch U S employers added about 98 000 jobs in March the fewest since last May and well below economists expectation of 180 000 as bad weather hit hiring at construction sites However wage growth ticked up slightly and the unemployment rate fell Declining issues outnumbered advancing ones on the NYSE by a 1 11 to 1 ratio on Nasdaq a 1 09 to 1 ratio favored decliners
The S P 500 posted 11 new 52 week highs and two new lows the Nasdaq Composite recorded 48 new highs and 38 new lows |
WFC | Wall Street sees Fed balance sheet normalization plan by year end Reuters poll | By Richard Leong NEW YORK Reuters Wall Street s top banks see the Federal Reserve laying out by year end its plan to scale back reinvestments in Treasuries and mortgage backed securities in order to begin shrinking its 4 5 trillion balance sheet a Reuters poll showed on Friday Five of 15 primary dealers or banks that do business directly with the U S central bank expected the Fed to start paring reinvestments by year end while the rest forecast the central bank would do so by the end of the second quarter of 2018 The median view of 11 dealers was for the Fed to eventually shrink its balance sheet to 2 75 trillion As the U S central bank seems prepared to tackle unwinding its bond holdings primary dealers see the Fed raising interest rates two more times by year end and three times in 2018 Fed policymakers have turned their focus to paring the central bank s massive bond holdings as shown in the minutes of their March policy meeting released on Wednesday Last month the Fed raised rates by a quarter percentage point to 0 75 percent 1 00 percent amid signs of an improving U S economy and stock prices reaching record highs The central bank amassed its Treasuries and MBS during three rounds of large scale purchases known as quantitative easing which was aimed to lower long term borrowing costs and combat the repercussions of a severe recession that was exacerbated by the global credit crisis more than eight years ago On Wednesday the Fed held 2 46 trillion in Treasuries and 1 77 trillion in MBS While the Fed has longed to reduce those holdings it has been reluctant to do so due to concerns that buying fewer bonds could cause a spike in mortgage rates and other long term borrowing costs and hurt an economy that has been stuck at a 2 percent growth rate The Fed s willingness to embark on this change came after Donald Trump s surprise U S presidential victory in November which unleashed hopes of tax cuts looser regulations and infrastructure spending to bolster business investments and job growth That optimism has cooled in recent weeks after Trump and the Republican controlled U S Congress failed to pass healthcare reform This led investors to scale back expectations on tax cuts and infrastructure spending in 2017 Federal fiscal stimuli analysts say would cushion tighter financial conditions from interest rate increases and fewer bond purchases from the Fed A disappointing March jobs report caused traders to briefly slash their bets on a June rate hike on Friday before comments from influential New York Fed chief William Dudley on rate increases and balance sheet normalization revived those bets This report doesn t take away from the Fed s near term outlook on the economy said Sam Bullard senior economist at Wells Fargo NYSE WFC a primary dealer in Charlotte North Carolina In the latest Reuters poll 13 of 17 dealers saw the Fed hiking rates to 1 00 1 25 percent by the end of the second quarter compared with 11 of 17 dealers in a March 15 poll
Eight of 17 dealers saw the Fed lifting rates to 1 25 1 50 percent by the end of the third quarter while 16 of 17 expected that rate range to be reached by year end |
WFC | Bank ETFs Surge Will The Momentum Last | Finally the battered banking stocks found reasons to turn around As soon as the April Fed minutes hinted at a June rate hike possibility banking along with many other financial stocks rallied on May 18 The going was tough for bank stocks and ETFs for quite some time mainly due to the twin attacks of a delay in further Fed rate hike after a liftoff in December and the energy sector slump But things are now falling in space for this woe begotten sector Hawkish Tone in Fed Minutes
Citing plenty of positive drivers in the market including a healing labor market a bullish inflation outlook strong retail consumer sentiment and housing data the Fed minutes brought back the sooner than expected rate hike talks on the table
The yield on the 10 year U S Treasury note jumped 11 bps to 1 87 on May 18 while the yield on the 2 year U S Treasury note rose 8 bps to 0 90 This steepening of the yield curve was a tailwind for banking stocks as these improve banks net interest margins This is because that the interest rates on deposits are usually tied to short term rates while loans are often tied to long term rates read Revival in Oil Prices
U S banks have significant exposure to the long beleaguered energy sector where chances of credit default are higher In February the its outlook on several regional banks with substantial energy sector exposure citing a likely increase in non performing assets
Among the biggies Wells Fargo NYSE WFC reported around and gas credit in February The situation was the same for J P Morgan the energy loan of which accounts for investment grade paper J P Morgan s energy sector exposure was a cause of concern given the below 30 oil per barrel mark a few months back
However those days of crisis seem to have passed with oil prices showing an impressive rally lately and hovering around a high on falling supplies and the possibility of rising demand Political imbalance in countries like Nigeria and Venezuela and expected moderation in shale boom should put a brake in the supply glut This increased hopes for a revival in the energy sector which in turn is likely to benefit the banking sector too read JP Morgan Ups Dividend
This leading financial firm announced a dividend hike on May 17 2016 after the market closed The company declared a quarterly cash dividend of 0 48 per share representing a more than 9 rise over the prior payout Per the strength in its consumer businesses helped the bank to opt for this JPM shares jumped about 3 9 in the key trading session of May 18 benefitting the ETFs that invest heavily in JPM read
Notably JP Morgan s first quarter 2016 earnings of 1 35 per share beat the Zacks Consensus Estimate of 1 26 Net revenue of 24 1 billion was also ahead of the Zacks Consensus Estimate of 23 9 billion Needless to mention this announcement uplifted the big banks financial image
All these showered ample gains in banking stocks on May 18 Below we highlight a few see
SPDR S P Regional Banking ETF Up 4 24
SPDR S P Bank ETF Up 4 15
PowerShares KBW Regional Banking Up 4 14
First Trust NASDAQ ABA Community Bank ETF Up 3 87
PowerShares KBW Bank ETF Up 3 76
iShares DJ US Regional Banks Up 3 73
Apart from banking sector ETFs other financial ETFs also shined on May 18 Among the lot iShares DJ US Broker Dealers Up 3 11 deserves a special mention Notably this ETF is also a beneficiary of the rising rate environment Going Forward
Since all the drivers are likely to remain in place for some time the road ahead for banking ETFs should not be edgy Even if the Fed does not act in June it should act by September Moreover after two years of struggle tension in the oil patch is likely to take a breather as supply demand dynamics look favorable for the near term However if bond yields decline on risk off trade sentiments emanated from global growth issues financial ETFs might come under pressure |
CMCSA | Nintendo near deal to license Mario for Universal movie | In what would be one of Hollywood s biggest licensing deals in years Nintendo NTDOY 1 3 is nearing a deal with Illumination Entertainment which makes animation for Universal Pictures CMCSA 1 1 for an animated Super Mario Bros movie Characters from what may be history s best selling videogame franchise have been salivated over by big studios but Nintendo backed off nearly all licensing deals after a disastrous live action production of Super Mario Brothers in 1993 Now Mario and Luigi could show in in a high profile animated picture and the deal would build on one made for Universal theme parks to build attractions based on Nintendo characters One movie is planned so far according to The Wall Street Journal but the deal under discussion could allow Illumination to make multiple films Now read |
CMCSA | George Soros dumped his stake in Snap and increased positions in cable companies | George Soros hedge fund submitted its quarterly disclosure on Wednesday
The fund disclosed that it had exited its position in Snap and decreased its position in other tech companies
The fund increased its position in a number of cable companies
Watch Snap move in real time
Legendary investor George Soros hedge fund Soros Fund Management disclosed on Wednesday that it had completely exited its 27 5 million position in Snap
Shares of Snap are down 1 59 to about 12 37 after the news
Soros who made his fortune by famously shorting the pound in 1992 disclosed his Snap exit in a quarterly 13 F filing which is required every three months by the SEC from funds valued at more than 100 million Other notable positions from the filing include
Entered a position in Comcast NASDAQ CMCSA CMCSA worth about 47 3 million
Increased position in Time Warner Cable TWX by 71 to 104 5 million
Decreased a position in Facebook NASDAQ FB FB by 77 to 18 7 million
Decreased a position in Paypal PYPL by 59 to 18 4 million
At the end of the quarter Soros top positions were in Liberty Broadband Time Warner Cable and Tivo Corp It s worth noting that Soros fund could have changed its positions since the time of the filing
According to the filing Soros fund rose about 18 in value during the third quarter to 3 80 billion while the S P 500 gained just 4
Read about a 20 billion fund s quarterly filing |
CMCSA | AT T Time Warner Fail To Settle Acquisition Talks With DOJ | AT T Inc NYSE T and media giant Time Warner Inc NYSE TWX are finally heading for a battle in court against the U S Department of Justice DOJ in 2018 over their 85 4 billion big ticket merger deal On Nov 20 2017 the U S Department of Justice DOJ filed a lawsuit against the telecom behemoth over its mega acquisition deal citing that the proposed deal will increase prices for rival pay TV operators as well as subscribers It will also act as a stumbling block for the development of online video Recently AT T and DOJ again engaged in a settlement talk which failed to resolve the issue unanimously The DOJ in its lawsuit complained that the AT T Time Warner merger will be harmful to American consumers AT T has a vast pay TV network As of Sep 30 2017 total video connections were 25 083 million Of the total DIRECTV satellite connections tallied 20 605 million fiber based U verse connections were 3 691 million and DIRECTV NOW online streaming connections were 0 787 million On the other hand Time Warner s media empire includes HBO and Turner Broadcasting which has the rights to sports telecasts It also owns the Warner Bros film studio and cable networks TNT TBS and CNN Moreover Time Warner owns a 10 stake in Internet video provider Hulu Therefore the merged entity will enjoy control over both high quality content and distribution medium which is likely to create room for AT T to raise prices without investing much to offer innovative products The DOJ has asked AT T to either divest it DIRECTV division or Turner Broadcasting assets including CNN However the company denied the arguments AT T s Counter ArgumentsAT T has argued that the proposed deal is technically a vertical merger as neither of the companies shares any overlapping business Therefore the deal is not going to reduce the number of competitors either from media or pay TV or phone industry Earlier in 2011 the DOJ permitted Comcast Corp NASDAQ CMCSA the largest cable MSO multi service operator to acquire media giant NBC Universal Nevertheless AT T is looking forward to continue talks with DOJ officials to find a solution to the deal What Next AT T will challenge the DOJ verdict in court However a court ruling is unlikely to come before May 2018 Notably both the companies have resettled the closing date for the deal at Apr 20 2018 A trial to decide the matter is set to begin on Mar 19 2018 and run for about 15 days according to the filing AT T s growth in 2018 will largely depend on the court ruling on the Time Warner merger deal If the court ruling goes against AT T three options will be available either scrapping the deal divesting its DIRECTV division or acquiring Time Warner without the Turner Broadcasting assets including CNN We believe that disinvestment of DIRECTV is out of question as the company is gradually promoting its satellite based DIRECTV brand over its fiber based U Verse as its new pay TV offerings Moreover DIRECTV NOW online streaming service is quickly gaining market traction which recently surpassed one million subscribers On the other hand disinvestment of Turner Broadcasting s assets including CNN will prevent AT T to derive maximum synergies Management expects the deal to be accretive to both adjusted earnings and free cash flow in the first year post its closure The company is likely to achieve cost synergies of 1 billion per annum within the first three years of the merger The company expects the deal to help in diversifying its revenue mix lower capital expenditure and reduce regulatory restrictions Finally if AT T abandons the Time Warner deal it will be the company s second big ticket merger to fail after the 39 billion merger proposal with T Mobile US Inc NYSE T that was discarded by the FCC On the other hand if the court ruling on the Time Warner deal goes in AT T s favour the merged entity will enjoy control over both high quality content and distribution medium This may enable AT T to raise prices without investing much in innovative products The proposed merger with Time Warner will provide AT T a portfolio of lucrative contents Time Warner s media empire includes HBO and Turner Broadcasting which has the rights to sports telecasts in addition to Warner Brothers movie studio Price Performance of AT T
AT T s shares have increased 1 4 marginally better than the s growth of 1 over the past 90 days The company carries a Zacks Rank 3 Hold You can see Zacks Editor in Chief Goes All In on This StockFull disclosure Kevin Matras now has more of his own money in one particular stock than in any other He believes in its short term profit potential and also in its prospects to more than double by 2019 Today he reveals and explains his surprising move in a new Special Report |
WFC | Consumer spending slows but inflation is rising | By Lucia Mutikani
WASHINGTON Reuters U S consumer spending barely rose in February amid delays in the payment of income tax refunds but the biggest annual increase in inflation in nearly five years supported expectations of further interest rate hikes this year
The slowdown in consumer spending reported by the Commerce Department on Friday is however likely to be temporary with consumer confidence at a more than 16 year high and a tightening labor market pushing up wage growth
Given the weather related weakness in utilities spending as well as some delays in tax refunds for low and middle income earners in February we expect consumer spending to strengthen in the quarters ahead said Eugenio Aleman a senior economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina
The Commerce Department said consumer spending which accounts for more than two thirds of U S economic activity edged up 0 1 percent That was the smallest gain since August and followed an unrevised 0 2 percent rise in January
Economists had expected a 0 2 percent increase The government delayed the issuing of tax refunds this year as part of efforts to combat fraud
Spending last month was held back by a 0 1 percent dip in purchases of big ticket items like automobiles While unseasonably warm weather lowered households heating bills it restricted spending growth last month
Weak consumer spending resulted in the Atlanta Federal Reserve trimming its first quarter economic growth estimate by one tenth of a percentage point to a 0 9 percent annualized rate Gross domestic product increased at a 2 1 percent rate in the fourth quarter stepping down from the July September quarter s brisk 3 5 percent pace
Despite signs of moderate growth economists expect the Federal Reserve will raise interest rates at least twice more this year The U S central bank raised its benchmark overnight interest rates by a quarter of a percentage point this month
Other data on Friday showed the University of Michigan s consumer sentiment index slipping to a reading of 96 9 in March from 97 6 earlier in the month The final reading was a touch higher than February s 96 3 A report from the Conference Board this week showed its consumer confidence index surging in March to its highest reading since December 2000
The dollar was trading slightly higher against a basket of currencies while U S stocks fell marginally as investors skimmed profits off recent gains Prices for U S government bonds rose modestly
INFLATION PRESSURES BUILDINGEven with economic growth slowing at the start of the year inflation is rising The personal consumption expenditures PCE price index gained 0 1 percent last month after jumping 0 4 percent in January
That lifted the year on year rate of increase in the PCE price index to 2 1 percent the biggest gain since April 2012 The PCE price index rose 1 9 percent in January
Excluding food and energy the so called core PCE price index increased 0 2 percent last month after rising 0 3 percent in January In the 12 months through February the core PCE price index increased 1 8 percent after a similar gain in January
The core PCE is the Federal Reserve s preferred inflation measure and is running below its 2 percent target Inflation is now in the upper end of the range that Fed officials in March felt would be reached this year
There is nothing in this report that suggests the Fed should pause in June in its gradual renormalization of monetary policy but the Fed will look closely at the evolution of core inflation over the next two months in making that decision said John Ryding chief economist at RDQ Economics in New York
Rising price pressures are also eating into consumer spending When adjusted for inflation consumer spending fell 0 1 percent in February after declining 0 2 percent in January
That was the first back to back monthly decline in real consumer spending since April 2009 Personal income rose 0 4 percent last month after advancing 0 5 percent in January Wages increased 0 5 percent the biggest gain in five months
Income at the disposal of households after accounting for inflation increased 0 2 percent after dipping 0 1 percent in January Savings rose to a five month high of 808 0 billion from 770 9 billion in January
Rising incomes and higher savings bode well for future consumer spending |
WFC | Government orders Wells Fargo to reinstate whistleblower | By Pete Schroeder Reuters The federal government has ordered Wells Fargo N WFC to reinstate a former bank manager who lost his job after reporting suspected fraudulent behavior at the bank The Labor Department s Occupational Safety and Health Administration OSHA announced on Monday that the bank must rehire the employee as well as pay back wages compensatory damages and attorneys fees totaling 5 4 million OSHA concluded that the manager was abruptly forced to leave a Los Angeles branch of the bank in 2010 after he told superiors he suspected two of his subordinates of bank mail and wire fraud The manager also called the bank s ethics hot line OSHA determined his whistleblowing was at least a contributing factor in his termination The manager was not named The bank is planning to request a full hearing on the OSHA decision before the Labor Department s Office of Administrative Law Judges Such a step will not halt the initial reinstatement order We take seriously the concerns of current and former team members This decision is a preliminary order and to date there has been no hearing on the merits of this case We disagree with the findings and will be requesting a full hearing of the matter said Vince Scanlon a bank spokesman According to OSHA the manager had previously received positive job performance appraisals but in 2010 he was told he had 90 days to find a new job at the bank after being dismissed as a manager He was unable to do so and was terminated and has not found work in banking since The manager worked in Wells Fargo s wealth management group according to the bank
The OSHA decision is unrelated to the bank s woes surrounding the creation of potentially millions of fake accounts by employees looking to hit sales goals In that case the bank has also come under scrutiny over whether it punished whistleblowers that notified superiors of wrongdoing involving Wells Fargo employees |
WFC | Glass Lewis asks Wells Fargo investors to vote against six directors | Reuters Proxy adviser Glass Lewis on Tuesday recommended that Wells Fargo NYSE WFC Co shareholders vote against six directors at an upcoming annual meeting in protest of improper sales practices in its retail bank Wells Fargo s shareholders are expected to vote on the election of directors executive pay and other shareholder proposals at the company s annual meeting on April 26 Wells Fargo reached a 185 million settlement with regulators in September over creating what it then said could be as many as 2 1 million accounts in customers names without their permission The U S bank has since encountered more government probes and lawsuits and its board recently said an internal review may uncover more problematic accounts The board plans to release its findings ahead of the annual meeting
John Baker John Chen Lloyd Dean Enrique Hernandez Cynthia Milligan and Susan Swenson are the directors Glass Lewis wants replaced |
WFC | Wells Fargo s aggressive sales tactics hit small firms WSJ | Reuters Wells Fargo Co N WFC has restructured its credit card processing business after an internal probe found some employees had falsely reported customer sales numbers the Wall Street Journal reported on Wednesday This raises questions about the scope of the sales scandal that hit the lender s retail banking business last year and cost Chief Executive John Stumpf his job The probe also found that employees had pushed small firms toward more expensive contracts as part of aggressive sales tactics the Journal reported Wells Fargo was not immediately available for comment The company had said on a conference call in January that it had made progress on evaluating potentially unauthorized credit card accounts including any impact to customers credit scores and analysis of credit signatures to verify authorization We want to identify anyone who was negatively impacted so we can make things right Chief Executive Tim Sloan said on the call Merchants have battled for years with banks in the courts and in Congress over how much they must pay for accepting card payments Revelations of Wells Fargo s problems with small business customers come almost a month after it reached a 190 million settlement over opening as many as 2 million accounts in retail customers names without their knowledge The bank has said it fired more than 5 000 employees for improperly opening the accounts Wells Fargo is also battling lawsuits from former employees customers and shareholders related to the issue Shares of Wells Fargo which is expected to report first quarter results on April 13 were up 0 3 percent in premarket trading |
WFC | FleetCor defended by Wells Fargo against Citron short report | FleetCor Technologies FLT 1 8 recoups part of yesterday s 5 drubbing caused by Citron s negative report that called FLT a predatory company The report said FLT generates 56 of its revenue from customers rather than from merchants while competitor WEX has a fee structure that generates only 12 of total revenue from customers Wells Fargo NYSE WFC s Timothy Will defends FLT reiterating his Outperform rating and setting a valuation range of 170 180 saying WEX generated at least 34 of its consolidated revenue in 2016 from customers including 39 within the fleet segment although FLT s figure is much higher it represents a more comparable mix to WEX Will says that while FLT s generated 44 more revenue per transaction in its fuel card business than WEX in 2016 we believe the premium is explained by business mix and not company specific fee structures |
WFC | U S consumer financial protection chief defends agency before Congress | By Pete Schroeder Reuters The U S Consumer Financial Protection Bureau s director defended himself in Congress on Wednesday against a barrage of Republican criticism over everything from the agency s handling of the Wells Fargo NYSE WFC accounts scandal to the way he has personally managed his job Appearing before the House Financial Services Committee Richard Cordray got coy when asked whether he would finish his term which expires in July 2018 Republicans on the committee and elsewhere have pushed for President Trump to fire him and Cordray is widely rumored to be a possible Ohio gubernatorial candidate in 2018 Cordray who has headed the agency since 2012 when he was appointed by former President Barack Obama has declined to step down since President Donald Trump took office He did not say whether he will serve out the rest of him term which expires in July 2018 I have no insights to provide he said in response to a related question Under the Dodd Frank law creating the agency the president could only remove Cordray for cause But longtime Republican critics say Cordray s decisions as a regulator provide ample evidence to fire him For all of the harm caused to consumers Richard Cordray should be dismissed by the president said House Financial Services Committee Chairman Jeb Hensarling Hensarling noted that the CFPB has failed to finalize regulatory projects mandated by Congress such as writing rules directing financial institutions to collect data about credit applications by minority and women owned businesses WELLS FARGO Republicans claimed the agency failed to detect wrongdoing at Wells Fargo Co relying on outside investigators and news reports to point out widespread problems with improper account creation The CFPB was asleep at the wheel said Ann Wagner a Missouri Republican The earliest the committee could determine the CFPB began to examine Wells Fargo was in May 2015 after the bank notified the regulator that the Los Angeles City Attorney was already pursuing a civil case she said Yet the CFPB was front and center in September 2016 when the high profile 185 million multi agency settlement was announced Cordray said Wagner was conflating issues and said the oversight work became exponential over time
The CFPB levied a 100 million fine against the bank in an enforcement action with the Office of the Comptroller of the Currency and the City and County of Los Angeles The probe began after a 2013 Los Angeles Times investigative story |
CMCSA | Sony Pictures taps Hulu CEO to chair TV studio | Reuters Sony Pictures Entertainment has named Mike Hopkins the CEO of Hulu as its new chairman of Sony Pictures Television the company announced Tuesday Hopkins since 2013 has headed Hulu the streaming service owned by Comcast Corp NASDAQ CMCSA Walt Disney Co Time Warner Inc NYSE TWX and Twenty First Century Fox Inc Randy Freer who has been president and COO of Fox Networks Group will replace Hopkins at Hulu effective Oct 30 Hulu said in a separate statement
Freer is currently on the board of directors of Hulu |
CMCSA | Comcast 0 5 as revenue narrowly miss video subs drop | Comcast NASDAQ CMCSA is off 0 5 after a Q3 report where EPS came in ahead of expectations but revenues missed slightly and video subscribers dropped as cord cutting continues apace Revenue fell 1 6 but the company noted that excluding last year s Rio Olympics which had an impact of 1 485B revenue would have increased 5 8 EPS meanwhile increased 13 on an adjusted basis In Cable Communications revenues were up 5 1 to 13 2B while at NBCUniversal revenues fell 12 7 to 8 01B again largely due to tough comps against the Rio Olympics Cable Communications revenue breakout Video 5 83B up 4 2 High speed Internet 3 7B up 8 9 Voice 840M down 4 5 Business Services 1 575B up 12 6 Advertising 542M down 13 2 Other 712M up 7 8 NBCUniversal revenue breakout Cable networks 2 6B down 11 5 Broadcast television 2 13B down 30 9 Filmed Entertainment 1 78B down 0 5 Theme Parks 1 55B up 7 7 Total customer relationships rose by 115 000 to 29 1M residential relationships up 83 000 business relationships up 31 000 It lost a net 125 000 video customers and lost a net 94 000 voice customers while high speed Internet saw net adds of 214 000 and security automation net adds were 51 000 Net cash from operations was 5 1B free cash flow came to 2 3B Press Release Now read |
CMCSA | iFOREX Daily Analysis December 05 2017 | The US Dollar traded higher against a basket of global currencies with the US Dollar Index USDX closing 0 2 higher This comes after the US Senate narrowly pushed through the Trump s administration tax plan Emerging market currencies showed significant improvement against the Dollar with the South African Rand ZAR gaining almost 2 against the Dollar on hopes that the business friendly candidate Ramaphosa for the leadership of the ruling ANC could succeed at the election in less than two weeks
Gold continued trading lower after the Senate agreed on the tax proposal on Saturday while showing some upside momentum which could be attributed to the lack of consensus between the Democrats and Republicans on how to extend the government funding before the looming shutdown on Friday Oil pared its gains from Friday as concerns over strong oil supply from the US reemerged
US equity indices settled lower due to weak technology stocks while other stocks from other sectors such as banks industry and materials settled higher There are concerns that the initiated tax legislation by the Republicans could have unfavorable effect on technology companies
While Bitcoin retraced some of its gains from the weekend it continued to push towards a new high As the CBOE is about to launch Bitcoin futures on the 10th December some see this as a breakthrough for mainstream investors to trade the cryptocurrency while others are concerned how the ability to short it will affect the market
On Tuesday the European Union EU publishes retail sales and composite PMI data The United Kingdom will publish the CIPS PMI Services Index Canada will release its trade statistics The US publishes Trade Balance the ISM Non Manufacturing Index and Redbook Store Sales data The American Petroleum Institute API will release oil stockpile figures
Bitcoin
Bitcoin continues to rise to new highs as after regulators in the US indicated that they do not object to the launch of Bitcoin futures CME announced the launch of Bitcoin futures for the 18th December and the CBOE on the 10th December The trading at regulated venues such as the CME or CBOE according to some market analysts would allow ETF and other funds to include the value of Bitcoins in their portfolio and raise its mainstream exposure
While many traditional market analysts and bankers criticize Bitcoin as a bubble it continues its rise alongside other cryptocurrencies Bitcoin with its current market capitalization over 190 bn is worth more than the GDP of New Zealand
Pivot 10907 4 Support 11107 7 10907 4 10397 6Resistance 12090 9 12398 9 12706 9 Scenario 1 as long as 10907 42 is support look for 12398 89 Scenario 2 the downside breakout of 10907 42 would call for 10397 56 and 10094 08 Comment the RSI is above 50 The MACD is positive and below its signal line The pair could retrace Moreover the pair is above its 20 and 50 MAs respectively at 11380 61 and 11258 42
Gold
Gold opened lower on Monday morning after the US Senate passed a bill on the Tax reform adding positive momentum to the US economy Later in the day s trading Gold gained slightly as the US Government shutdown deadline of this Friday is coming closer without a firm assurance between the Republicans and Democrats than an extension deal will be reached in time
On Tuesday Trade Balance the ISM Non Manufacturing Index and Redbook Store Sales figures will be published
Pivot 1278 Support 1270 1266 1260Resistance 1278 1283 1289 Scenario 1 short positions below 1278 00 with targets at 1270 00 1266 00 in extension Scenario 2 above 1278 00 look for further upside with 1283 00 1289 00 as targets Comment the RSI is mixed and calls for caution
WTI Oil
WTI oil traded on Monday over 1 lower amid fears of increasing US output On Friday it was announced that the amount of operating oil rigs in the US rose by two Also the daily output in September according to the Energy Information Administration EIA was at 9 5 million barrels per day the highest number since 2015
On Tuesday the American Petroleum Institute API will release oil stockpile figures followed by the EIA on Wednesday
Pivot 58 Support 57 25 56 75 56 4Resistance 58 58 4 58 9 Scenario 1 short positions below 58 00 with targets at 57 25 56 75 in extension Scenario 2 above 58 00 look for further upside with 58 40 58 90 as targets Comment the RSI advocates for further decline
US 500
US equities settled lower as the Republican tax reform could impact different economic sectors differently while a possible government shutdown on Friday adds insecurity However the losses were mostly isolated within a few sectors such as technology US Technology ETF 1 59 and biotech US Biotech ETF 1 58 as some believe the tax reform as well as possible future Federal Reserve rate hikes could adversely affect those However most other sectors especially banks US Banks ETF 1 88 and financials US Financials ETF 1 78 closed significantly stronger Comcast NASDAQ CMCSA 5 05 and Disney 4 77 were trading higher as both are showing interest in buying some parts of 21st Century Fox businesses which it wants to spin off
Besides ISM and trade balance data markets will pay attention to the further progress of the tax bill as well as the negotiations on the extension of the government shutdown deadline
Pivot 2657 Support 2627 2615 2604 25 Resistance 2657 2662 2670 Scenario 1 short positions below 2657 00 with targets at 2627 00 2615 00 in extension Scenario 2 above 2657 00 look for further upside with 2662 00 2670 00 as targets Comment the RSI shows downside momentum |
WFC | Wells Fargo fails test of community lending bank | WASHINGTON Reuters A U S bank regulator has flunked Wells Fargo N WFC on a national scorecard for community lending the bank said on Tuesday as it tries to repair its reputation after a phony accounts scandal The Office of the Comptroller of the Currency deemed Wells Fargo a bank that needs to improve under the Community Reinvestment Act a law meant to promote lending to poor neighborhoods the bank said Wells Fargo had previously boasted an outstanding score on CRA The new ranking gives regulators a greater say over day to day matters such as branch openings In September Wells Fargo admitted that employees wrongly created as many as 2 million accounts without customer approval The OCC gave Wells Fargo high marks for all around service but the past scandal led to the downgrade Violations across multiple lines of business within the bank resulted in significant harm to large numbers of customers the OCC said in its filing Wells Fargo has a track record of serving needy communities on a day to day basis but the lender has yet to see its way through scandals said Tim Sloan the chief executive officer
We are committed to addressing the OCC s concerns he said in a statement |
WFC | Wells Fargo to pay 110 million to settle lawsuit over account abuses | Reuters Wells Fargo Co N WFC said it agreed to pay 110 million to settle a lawsuit by customers challenging its opening of accounts without their permission a practice that led to a scandal that cost the bank s chief executive his job The bank said on Tuesday it expects the settlement to resolve claims in 11 other pending class actions and will cover claims between Jan 1 2009 through the date the agreement is executed The settlement agreement is yet to be approved by the court After attorneys fees and costs of administration claimants will be reimbursed for any wrong fees Wells Fargo said on Tuesday The remaining amount will be distributed to the claimants based on the number and kinds of unauthorized accounts or services claimed the bank said The lawsuit resolves claims that Wells Fargo s high pressure culture drove branch workers needing to meet sales quotas to open unauthorized accounts including with forged signatures Customers said this saddled them with accounts they did not need or want and fees they knew nothing about The lawsuit dates from May 2015 sixteen months before Wells Fargo agreed to pay 185 million in penalties to settle regulatory charges over the sham accounts estimated to number as many as 2 million That settlement with the U S Consumer Financial Protection Bureau and Los Angeles City Attorney Mike Feuer prompted national outrage leading to the departure in October of the bank s longtime chief executive John Stumpf The named plaintiffs in the lawsuit are Shahriar Jabbari a Californian and Kaylee Heffelfinger from Arizona They believed they each had two accounts at Wells Fargo but said the bank opened a respective nine and seven accounts for them according to court papers Wells Fargo which has abandoned sales quotas had already set aside enough money to cover the 110 million settlement Its new chief executive Tim Sloan in January told analysts that the bank still has a lot of work to do to rebuild trust with customers employees and other stakeholders This agreement is another step in our journey to make things right with customers and rebuild trust Sloan said in a statement on Tuesday
The case is Jabbari et al v Wells Fargo Co et al U S District Court Northern District of California No 15 02159 |
WFC | U S pending home sales surge to ten month high ahead of spring | By Lucia Mutikani WASHINGTON Reuters Contracts to buy previously owned U S homes jumped to a 10 month high in February pointing to robust demand for housing ahead of the busy spring selling season The report on Wednesday from the National Association of Realtors suggested higher home prices and mortgage rates were having little impact on the housing market for now underscoring the economy s resilience despite an apparent slowdown in growth in the first quarter The NAR said its Pending Home Sales Index based on contracts signed last month surged 5 5 percent to 112 3 That was the highest reading since April and the second best showing since May 2006 This bodes well for home sales this spring said Misa Batcheller an economic analyst at Wells Fargo NYSE WFC Securities in Charlotte North Carolina Contract signing last month was likely boosted by unseasonably warm temperatures The gains reversed January s 2 8 percent drop Pending home contracts become sales after a month or two and last month s surge implied a pickup in home resales after they tumbled 3 7 percent in February Economists had forecast pending home sales rising 2 4 percent last month Pending home sales increased 2 6 percent from a year ago U S financial markets were little moved by the data as investors assessed comments from Federal Reserve officials on further interest rate increases this year Chicago Fed President Charles Evans one of the U S central bank s most consistent supporters of low interest rates said he supported additional monetary policy tightening this year The Fed raised its benchmark overnight interest rate by a quarter percentage point earlier this month and has forecast two more rate hikes this year The dollar was trading higher against a basket of currencies while U S stocks were mixed U S government bond prices rose TIGHT INVENTORIES Demand for housing is being driven by a strong labor market which is generating wage increases as it nears full employment Sales activity however remains constrained by tight inventories which are driving up home prices The good news is that warm winter weather has led to a surge in construction that will hopefully result in a bloom of new homes for sale this spring said Joseph Kirchner senior economist at realtor com A report on Tuesday showed home prices increased 5 7 percent in January on a year on year basis The NAR expects sales of previously owned homes to increase 2 3 percent this year to around 5 57 million units Existing homes sales increased 3 8 percent last year Housing market strength suggests an apparent sharp slowdown in economic growth early in the first quarter is likely temporary The Atlanta Fed is forecasting gross domestic product increasing at a 1 0 percent annualized pace in the first quarter The economy grew at a 1 9 percent rate in the final three months of 2016 Given labor market strength economists expect only a modest impact from higher mortgage rates The 30 year fixed mortgage rate is currently at 4 23 percent below a more than 2 1 2 year high of 4 32 percent hit in December In a separate report on Wednesday the Mortgage Bankers Association said applications for home purchase loans rose 1 2 percent last week from the prior week It was the fourth increase in the past five weeks
Last month pending sales of existing homes increased 3 4 percent in the Northeast and jumped 3 1 percent in the West Contracts surged 11 4 percent in the Midwest and rose 4 3 percent in the South |
WFC | Canada s bank oversight in crosshairs after mis selling reports | By Matt Scuffham
TORONTO Reuters Scrutiny of Canada s financial oversight sparked by reports of improper sales practices at the nation s top banks shows its watchdogs lack the muscle and the bite to tackle consumer abuses as aggressively as their U S and European peers
Canada s banking system avoided failures in the 2007 09 financial crisis and the World Economic Forum consistently ranks it as being among the world s soundest crediting strong regulations and oversight for the top billing
But reports by CBC News Canada s public broadcaster that staff at the country s biggest five banks had moved customers to higher fee accounts and raised overdraft and credit card limits without their knowledge made lawmakers and campaign groups question if lenders were properly supervised
If they re doing it with customer service where else might they be doing it said Robert Falcon Ouellette a Liberal MP and a member of Canada s House of Commons Standing Committee on Finance
A review of budgets staffing and legal powers at the disposal of the Financial Consumer Agency of Canada FCAC the primary financial consumer watchdog shows the regulator lacking the firepower of its U S and British peers
The FCAC has a budget of C 18 million 13 5 million for the 2016 17 financial year and employs 89 staff In contrast the Office of the Superintendent of Financial Institutions that oversees the safety of the entire banking system employs 700 with an annual budget of C 144 million
By comparison Britain s Financial Conduct Authority had an annual budget of 519 million pounds 645 million and 3 337 staff at the end of its last fiscal year The U S Consumer Financial Protection Bureau had a budget of 606 million last year and 1 623 employees
The FCAC s fines are also capped at C 500 000 per violation and since its formation in 2001 the FCAC has issued fines totaling just C 1 7 million In contrast Britain s FCA has dished out over 3 billion pounds since its creation in 2013 while the CFPB has handed out fines worth over 5 billion since its creation in 2011
MYSTERY SHOPPERS
One consequence of the tight budget is that the FCAC has not carried out a mystery shopper exercise since 2005
They demand a lot of resources and are not always necessary FCAC s Deputy Commissioner Brigitte Goulard told Reuters in an interview
There are better ways to make sure the banks actually comply with the legislation she added The banks are required to self reveal self assess their own compliance with legislation and I think it s worked fairly well
Consumer advocate Duff Conacher said however that the Canadian regulator s failure to detect questionable business practices reported by the public broadcaster could be down to the lack of mystery shopper checks where inspectors pose as regular customers
To be sure when Wells Fargo N WFC paid 190 million last year to settle charges that its sales staff created 2 million of unauthorized accounts it was down to a whistleblower and media who alerted the authorities about the practices
But mystery shopping helped U S regulators last year to investigate allegations of racial discrimination at BancorpSouth Inc N BXS that led to a 10 6 million settlement
In Britain regulators used the technique in 2008 to investigate banks mis selling of loan insurance in the nation s most costly corporate scandal
Conacher also criticized the FCAC for effectively tipping off banks when it said earlier this month it would review business practices in the federally regulated financial sector in April
It s just another example unfortunately of the Financial Consumer Agency of Canada s negligent lack of enforcement and weak enforcement record he said in an interview
Conacher is a co founder of Democracy Watch a lobby group which has gathered 50 000 signatures under a petition calling for more effective regulation of Canada s biggest banks
One issue that stirred much debate was the continued use of sales incentives by banks named in the CBC reports Royal Bank of Canada TO RY Toronto Dominion Bank TO TD Bank of Nova Scotia TO BNS Bank of Montreal TO BMO and Canadian Imperial Bank of Commerce TO CM
All five have confirmed that they continue to offer sales incentives for staff and defended the practice that some of their British and U S peers have scrapped or modified under pressure from regulators
What we ve created is an incentive system where people might feel pressure to engage in unethical behavior which might actually jeopardize the long term future of the banking market Ouellette said
Since Canadian banks have avoided scandals or failures that have plagued banks their European and U S peers they have avoided similar intense regulatory scrutiny raising the question if any improper practices might have gone undetected banking analysts say
FCAC s Goulard said existing statistics did not suggest that
In the past two years we ve had over 6 000 complaints and about 200 of those have to deal with not obtaining the consent of the consumer she said In some cases consumers have given their consent but have forgotten about it she added
Canada s Liberal government is currently reviewing the regulation of the financial services industry and last August launched a consultation on the issue
Conservative MP Dan Albas who also sits on the parliamentary finance committee said the reports of mis selling made the review particularly critical
If there seem to be systematic issues where there are gaps that consumers are falling through or banks aren t meeting their obligations then that s something the government needs to take very seriously |
CMCSA | FCC head silent on Trump comment about pulling broadcast licenses | By David Shepardson WASHINGTON Reuters A suggestion by President Donald Trump that a U S regulator pull broadcast licenses from TV networks over what Trump calls fake news has been met by silence from the watchdog s head Ajit Pai who has a history of defending free speech rights Pai who was reconfirmed last week for a new five year term at the Federal Communications Commission and named chairman by Trump in January has been urged by members of Congress to denounce Trump for a proposal that has little if any chance of success That is because the commission does not actually license broadcast networks or cable stations and the hurdles to denying licenses to individual stations are extremely high Trump s remarks on Wednesday that threatened to muzzle the media and fellow Republican Pai s strong support for press freedoms could conflict as Pai mounts ambitious plans to overhaul federal communications regulations Trump said in a Twitter post Network news has become so partisan distorted and fake that licenses must be challenged and if appropriate revoked Not fair to public His ire was raised by an NBC News report that said he had called for a massive increase in the U S nuclear arsenal a report Trump denied Trump and his supporters have repeatedly used the term fake news to cast doubt on media reports critical of his administration often without providing any evidence to support their case that the reports were untrue Pai s office has declined to comment despite Reuters repeated requests Wednesday and Thursday The FCC an independent agency does not issue licenses to individual networks but to local stations including those directly owned by broadcasters such as Comcast Corp O CMCSA that owns NBC Comcast and NBC declined to comment on Trump s remarks Pai has defended the First Amendment and press freedoms In October 2016 he said anyone at the FCC has the duty to speak out whenever Americans First Amendment rights are at stake In a 2014 Wall Street Journal piece Pai said the government has no place pressuring media organizations into covering certain stories Pai has an ambitious agenda which he is expected to unveil details of in the coming months It includes proposing to eliminate some significant media ownership restrictions and a plan to roll back former Democratic President Barack Obama s so called net neutrality rules Senator Tom Udall a New Mexico Democrat said on Twitter Trump s comments were unacceptable attacks on the FirstAmendment by POTUS AjitPaiFCC committed to Congress to speak up at times like this We are waiting U S House of Representatives Speaker Paul Ryan defended press freedoms Thursday but did not directly criticize Trump I m for the First Amendment I don t always agree and like what you guys write but you have a right to do it Ryan said Republican Senator Ben Sasse asked if Trump was recanting the oath of office to defend the First Amendment In March Pai told the U S Congress he did not agree with Trump when he said that the media is the enemy of the American people Pai said he would act independently of the White House on media related matters
Last month Pai lamented that people on Twitter demand the FCC yank licenses from cable news channels like Fox News MSNBC or CNN because they disagree with the opinions expressed on those networks Setting aside the fact that the FCC doesn t license cable channels these demands are fundamentally at odds with our legal and cultural traditions |
CMCSA | FCC chairman rejects Trump suggestion on broadcast licenses | By David Shepardson WASHINGTON Reuters The U S Federal Communications Commission s chairman said Tuesday the agency does not have authority to revoke broadcast licenses despite suggestions from President Donald Trump Ajit Pai a Republican who was named chairman of the telecommunications regulator in January broke days of silence by rejecting Trump s tweet that the FCC could challenge the license of NBC after stories Trump declared were not true Under the law the FCC does not have the authority to revoke a license of a broadcast station based on the content Pai said at a forum The FCC under my leadership will stand for the First Amendment The First Amendment of the U S Constitution guarantees freedom of speech and freedom of the press Democrats had been pushing Pai to denounce Trump s suggestion that broadcast licenses could be threatened following reports by NBC News that his secretary of state Rex Tillerson had called him a moron after a discussion of the U S nuclear arsenal With all of the Fake News coming out of NBC and the Networks at what point is it appropriate to challenge their License Bad for country Trump tweeted on Wednesday Trump and his supporters have repeatedly used the term fake news to cast doubt on media reports critical of his administration often without providing any evidence to support their case that the reports were untrue Any move to challenge media companies licenses however would likely face significant hurdles The FCC an independent federal agency does not license broadcast networks but issues them to individual broadcast stations that are renewed on a staggered basis for eight year periods Comcast Corp NASDAQ CMCSA which owns NBC Universal also owns 11 broadcast stations including outlets in New York Washington Los Angeles San Francisco Boston Dallas and Chicago When reviewing licenses the FCC must determine if a renewal is in the public interest Courts have held that a station exercising its First Amendment rights is not adequate grounds to challenge a license The agency does not issue similar licenses for cable networks such as CNN and MSNBC or regulate internet news or other websites
In the early 1970s then President Richard Nixon and his top aides discussed using the FCC s license renewal process as a way of punishing The Washington Post for its coverage of the Watergate burglary that ultimately brought down his presidency |
CMCSA | Snap and NBCUniversal launch studio to produce shows for Snapchat | By Sheila Dang Reuters Snap Inc NYSE SNAP parent company of messaging and video app Snapchat and NBCUniversal launched a joint venture studio on Tuesday to produce scripted shows and other genres to air on Snapchat The two companies have already produced at least three shows for Snapchat in an effort to reach more viewers as mobile audiences continue to grow including a daily news show called Stay Tuned and an entertainment show from E network called The Rundown Financial details were not disclosed NBCUniversal part of Comcast Corp NASDAQ CMCSA made a 500 million investment in Snap as part of the company s initial public offering in March Lauren Anderson previously senior vice president of primetime programming at NBC who oversaw the hit shows The Office and Parks and Recreation will be chief content officer of the new studio the companies said The new studio s first deal is with Donut Studios founded by brothers Mark and Jay Duplass who have produced and acted in shows like HBO s Togetherness and Room 104 Snap and NBCUniversal did not immediately respond to requests for further comment The companies said NBC Sports will continue a partnership with Snapchat and Buzzfeed to create videos on Discover during the 2018 Winter Olympics in South Korea The partnership s previous Snapchat videos during the 2016 Summer Olympics in Rio de Janeiro garnered more than 2 billion views In August Snap said the Stay Tuned news show drew more than 29 million unique total viewers since its launch in July and that more than 40 percent of viewers watched the show at least three days a week showing potential for publishers to reach younger audiences on Snapchat |
WFC | Fed s Dudley says Wells Fargo scandal shows poor incentives at work | By David Milliken LONDON Reuters A top U S Federal Reserve regulator on Tuesday cited Wells Fargo Co s accounts scandal as evidence that incentives to drive performance remain a problem on Wall Street saying banks had a long way to go to reform their internal operating culture William Dudley president of the New York Fed branch that acts as the U S central bank s eyes and ears on Wall Street has complained about rotten bank culture for years In a speech to bankers and regulators in London he said the Wells N WFC case showed that compensation once again seems to be at the center of a scandal It was found last year that thousands of employees at the U S based bank had opened perhaps millions of unauthorized customer accounts a scandal that rocked the bank and led its chief executive John Stumpf to resign Dudley who did not discuss monetary policy or the state of the economy said the Wells case appeared to involve widespread fraud He added Incentives shape behavior and behavior drives culture Speaking later at a Bank of England event to promote ethical conduct in the financial sector he said bank culture needs to be improved suggesting that senior executives lead by example and that firms reward employees who speak out Asked if progress in making banks safer risked being reversed under the administration of U S President Donald Trump Dudley said he was still waiting to see what changes there might be I think we need to see what is actually proposed he told Reuters on the sidelines of the BoE event The key was to ensure banks had sufficient capital and liquidity and that their individual failure did not risk bringing down the rest of the financial system as in 2008
Within those broad contours you can make an adjustment to regulation But it would be a real mistake to throw the baby out with the bath water and made it so that if a failure occurred it would take down the whole system Dudley said |
WFC | Wells Fargo banks on new ad campaign to regain customer trust | By Tina Bellon NEW YORK Reuters Wells Fargo NYSE WFC Co will launch a new multi channel ad campaign its chief executive said on Tuesday in a further sign of the bank s efforts to regain trust after a sales scandal last year caused a sharp drop in account openings The advertising campaign to begin in mid April will be published across different media channels and focus on the changes the bank has implemented since it was rocked by revelations over illegal sales practices in September last year For our team members and customers we want to create a culture that s better every day Chief Executive Officer Timothy Sloan said in explaining the new campaign to employees at a town hall meeting in Orlando Florida on Tuesday Building Better Every Day the slogan of the new campaign will run across broadcast and print ads online and on the bank s mobile app as well as on its internal channels Sloan said A spokesman declined to comment on the budget for the new campaign But following the fallout Wells Fargo last year said it would increase marketing spending and in October 2016 launched its first nation wide campaign to address its sales practices Data by Kantar Media a New York based ad tracking firm showed that Wells Fargo s advertisement expenditure rose by around 15 percent to 183 8 million in the first 11 months of 2016 compared to the year prior In October last year the bank s advertisement expenditure across TV internet radio outdoor displays magazines and newspapers increased by 32 percent on a yearly basis to 27 5 million A Wells Fargo spokeswoman could not immediately comment on whether the increase was directly related to the company s 2016 campaign A spokeswoman for marketing group Omnicom which owns media agency OMD that runs the bank s advertisement campaigns did not reply to requests seeking comment Federal regulators last year had ordered the San Francisco based bank to pay 190 million in fines and restitution because they said its high pressure sales environment pushed employees to open 2 million deposit and credit card accounts without customers permission The bank has since unveiled a new compensation structure for its branch employees that creates incentives based on customer service rather than sales goals Wells Fargo the third largest U S bank saw a sharp drop in account openings customer interactions at its branches and an increase in account closures since the scandal It has since started to report on consumer activity on a monthly basis Its latest retail business figures on Monday showed the bank is still fighting an uphill battle to regain customers Consumers opened 43 percent fewer checking and 55 percent fewer credit card accounts on a yearly basis in February A pick up in marketing spend should benefit account openings the next few months but were that not to occur then it could force us to reconsider the long term growth potential in Wells retail bank Brian Kleinhanzl an analyst with KBW said in a research note on Monday But other analysts said the bank hardly had a choice when it came to investing in public outreach campaigns
If they do spend they get accused of wasting money Stephen Biggar an analyst with Argus Research told Reuters But if they don t spend they get accused of not doing everything they can to regain customers |
WFC | Column Ten fold gain in retirement saving No thanks say Republicans | By Mark Miller
CHICAGO Reuters At the risk of stating the obvious People are much more likely to save for retirement when they can do it automatically at work How much more likely Ten times according to a study released this week
But someone apparently forgot to tell U S Congress and the White House because both are moving to block millions of workers from getting that opportunity Any day now the Senate is expected to approve a resolution already passed by the House that throws a roadblock in front of states preparing to offer government sponsored low cost retirement saving plans to people who do not have them at work
President Donald Trump has pledged to sign the resolution but the Senate could do something important for the future retirement security of millions by rejecting it In fact all it needs to do is nothing
If the Senate does not act a ruling issued last year by the Department of Labor DoL goes forward It makes it easier for states to launch programs that would require employers without their own plans to set up payroll deductions for automatic contributions to a publicly run IRA account The rule exempts state plans from the Employee Retirement Income Security Act of 1974 ERISA if they meet certain conditions That provides important reassurance to employers participating in the plan who worry about compliance cost and legal liability under ERISA
This is the latest in a series of anti consumer pro Wall Street moves coming out of Washington since the Republican Party consolidated its control in January The Trump administration also has moved to throw the brakes on the fiduciary rule that requires financial advisers to act in the best interest of clients
In addition Republican lawmakers are aiming to curtail the oversight powers of the Consumer Financial Protection Bureau which among other achievements last year exposed a massive fraud against customers by Wells Fargo NYSE WFC
Opponents of state auto IRA plans in the financial services industry argue that consumers need the protections of ERISA But that does not hold water since most IRAs are not covered by ERISA Their real concern is that they do not want to see a lower cost government sponsored public option to the retirement products they sell
They further argue that the public option plans would have an unfair competitive advantage over private plans But the tax incentives for employers to provide plans would continue to be much larger than for an IRA and employers would be prohibited from making matching contributions
Research by the Employee Benefit Research Institute EBRI confirms that the impact of auto IRAs would be modest compared with 401 k s because they generally default to a relatively low contribution rate 3 percent of pay and have opt out features for workers
The expected rule rollback will not stop the seven states that already have enacted auto IRA programs from proceeding but it will create uncertainty for them and could discourage other states from starting plans
Auto IRAs have the potential to help 55 million people gain workplace coverage AARP estimates And here is the irony just as the Senate prepares to pull the rug out from under auto IRAs the aforementioned factor of ten research was published indicating just how badly these plans are needed
This week EBRI issued its 27th annual Retirement Confidence Survey the longest running annual study of how well American workers are doing with retirement planning Confidence among workers dipped last year despite the strong stock market the share of workers who say they feel very or somewhat confident about their retirement prospects fell from 64 percent to 60 percent and overall confidence is still well below where it was before the Great Recession
Even more troubling 47 percent say their total household savings and investments total less than 25 000 including 24 percent who have less than 1 000
Successful planning is correlated strongly to availability of a workplace saving option As mentioned workers who participate are 10 times more likely to be saving currently and they have significantly higher savings
But availability is falling Another study released this month looked at retirement plan coverage among households near retirement age 51 56 finding that it shrank from 70 percent in 2004 to 63 percent in 2010 Conducted by the Center for Retirement Research at Boston College CRR the study is based on data from the Health and Retirement Study an ongoing longitudinal survey of older Americans sponsored by the National Institute on Aging and the Social Security Administration
CRR also found that the shift away from traditional pensions to 401 k and IRA accounts has mainly benefited people with more education and wealth In 2010 some 52 percent of wealth in defined contribution plans was held by the top quartile of the households measured by education By contrast 35 percent of wealth from traditional pensions was held in the top quartile
All of this at a time when Social Security is projected to replace less income in the years ahead due to higher retirement ages and as medical costs and longevity are both are rising
The trends underscore the need for state auto IRA plans to proceed said Alicia Munnell CRR s director Everyone needs to save for retirement to supplement Social Security but half of private sector workers do not have an employer based retirement savings plan at any given point and few save outside of workplace plans
She added Since the federal government has not acted to close this enormous coverage gap states are stepping into the breach to help their own citizens
The opinions expressed here are those of the author a columnist for Reuters |
WFC | WFC Analyzing Warren Buffett s Biggest Bet | Wells Fargo NYSE WFC is Warren Buffett s largest holding and he first bought into the company in 1989 Buffett owns businesses with lengthy operating histories durable competitive advantages and excellent management teams and Wells Fargo is no exception
Warren Buffett even added to his stake in the company during the fourth quarter of 2015 making the stock an even more timely idea While we don t own many financial companies in our Top 20 Dividend Stocks portfolio Wells Fargo is one we are fond of
Despite the negative stigma attached to banks following the financial crisis these companies are generally in great financial shape and appear relatively undervalued compared to the market With a dividend yield greater than 3 and mid to upper single digit dividend growth potential Wells Fargo is worth a closer look
Business OverviewWells Fargo was founded in 1852 and was the third largest bank in the country as measured by assets at the end of 2015 Wells Fargo s 90 different business lines collectively generated over 86 billion in revenue last year from a diversified mix of banking insurance investment mortgage and consumer and commercial finance services
Unlike many big banks Wells Fargo has little exposure to investment banking and trading operations Instead the business focuses on simple lending businesses e g mortgages auto loans commercial financing and fee income
Wells Fargo s revenue is split nearly equally between traditional loan making 53 of revenue which generates net interest income from a 50 50 mix of commercial and consumer loans and noninterest income 47 of revenue from brokerage advisory services commissions mortgage originations card fees deposit service charges and more
The company serves more than 70 million customers through its network of more than 8 600 store locations and 13 000 ATMs as well as its website and mobile banking application
Business AnalysisBanks primarily gather deposits and loan them out for interest income As borrowers consumers and businesses are most concerned with getting access to dependable financing at the lowest interest rate possible
In other words banks are largely commodity businesses and the lowest cost operator usually survives the longest in commodity markets As one of the biggest banks in the country Wells Fargo has numerous cost advantages which begin with its track record of gathering low cost deposits from consumers and businesses that it can lend out at higher interest rates
According to Wells Fargo s annual reports the company s total deposits have grown from 3 7 billion in 1966 to 1 2 trillion in 2015 representing growth of 12 6 per year over that period As seen below Wells Fargo s deposits have grown at a healthy high single digit rate in recent years as well The company has more retail deposits than any other bank in the country and is ranked third overall in total deposits
Source Wells Fargo Investor Presentation
Importantly Wells Fargo funds most of the loans it issues with its deposits The company was paying just 0 08 on its deposits as of the fourth quarter of 2015 and its total funding cost including all sources was only 0 25 in 2015
Thanks to its cheap funding base Wells Fargo is virtually guaranteed to generate a positive return on its loan portfolio despite today s low interest rate environment
In some ways banks are similar to another type of Buffett s favorite financial companies insurance companies Insurers write new policies to receive money from premium payments and banks take in money from deposits
Both types of cash will eventually be paid back in the form of insurance policy payouts or a customer withdrawing funds from the bank However the insurer or bank can earn a return with the money before it needs to be given back Insurance companies invest in stocks and bonds and banks make loans
As long as these investments are conservatively managed insurance companies and banks can make a lot of money from their cheap borrowed funds
Wells Fargo serves one in three households in the U S and its convenience and brand recognition are two reasons why it has enjoyed such strong deposit growth The company maintains industry leading distribution channels including storefronts ATMs online and mobile This allows Wells Fargo to serve customers in more locations than any other bank
Many businesses that loan money from banks must also maintain a large deposit with their bank if they desire to secure a line of credit adding to Wells Fargo s low cost deposit base Once a consumer or business opens an account with a bank switching costs are also created given the hassles involved with closing and transferring accounts especially when most mega banks are perceived as being somewhat comparable to one another
Thanks to Wells Fargo s scale efficient operations and low cost funding the company maintains a relatively low efficiency ratio The efficiency ratio essentially measures the percentage of a company s revenue that is consumed by operating costs lower numbers are better
The company s scale and efficient operations helped it realize a 58 1 efficiency ratio in 2015 which is nearly 10 points better than the average efficiency ratio across all community banks and lower than all but one of its mega bank peers
Source Wells Fargo Investor Presentation
As a result of its cost advantages Wells Fargo s return on assets and return on equity metrics are also roughly 30 higher than the average community bank The company s asset turnover as seen below is also the highest of all mega banks
Wells Fargo is also a durable business because its loan book is conservatively managed and its revenue sources are well diversified The company recorded a very low level 0 33 of net charge offs as a percentage of total loans in 2015 and its Common Equity Tier 1 ratio of 10 7 is well above the regulatory minimum required for well capitalized institutions
Buffett s ownership of the stock is another vote of confidence in how management runs the business In Warren Buffett wrote the following about investing in banks The banking business is no favorite of ours When assets are twenty times equity a common ratio in this industry mistakes that involve only a small portion of assets can destroy a major portion of equity Because leverage of 20 1 magnifies the effects of managerial strengths and weaknesses we have no interest in purchasing shares of a poorly managed bank at a cheap price Instead our only interest is in buying into well managed banks at fair prices
Wells Fargo s management team clearly checks his boxes to make the company his largest equity stake As we mentioned earlier it s also comforting to know that Wells Fargo maintains a nice revenue balance between interest income and non interest income This helps the overall business perform better across various economic cycles
Overall we believe Wells Fargo has a large moat The company gains competitive advantages from its substantial scale low cost deposit base strong capitalization leading market share positions and conservative management team We expect Wells Fargo to be around for a long time to come
Wells Fargo s Key RisksBank stocks are more challenging to analyze than most other types of businesses because it s hard to understand what is really going on with their balance sheets and financial health which are the result of numerous subjective accounting assumptions made by management
In other words things usually look fine until they don t
When you think about how a bank makes money it takes in deposits and lends them out at higher interest rates To earn an attractive return on equity banks take on financial leverage to magnify their profit margins
As long as people and businesses feel safe putting their money with the bank and the bank s customers continue making their interest and principal repayments on their loans the bank mints money
However banks leverage cuts both ways When delinquencies rise and loans can no longer be paid a bank s equity can quickly be wiped out
To use a simple example suppose a bank makes a 100 loan to a manufacturing business To fund the loan the bank uses 96 of deposits on hand and contributes 4 of its own capital If the manufacturer is unable to repay its entire loan and only pays 97 the bank s capital will be hit first instead of depositors money In this case the bank would see 75 3 of its capital wiped out
If things get really bad a poorly managed bank that took too much risk can be completely wiped out This is a simple explanation of what happened during the housing crisis when consumers could not make their mortgage payments and banks had taken on far too much financial leverage and credit risk
Wells Fargo has proven to be a conservative lender and benefits from having many sources of non interest income so we don t worry so much about this risk However some investors are concerned about the impact that nonperforming oil gas loans could have on banks Fortunately these loans account for only 2 of Wells Fargo s total loan portfolio and the company has already marked down the value of many of them
In addition to energy sector weakness banks are impacted by economic growth and interest rates Simply put loan growth is stronger when consumers and businesses are healthier and net interest margins generally expand as interest rates rise In today s sluggish environment interest margins and loan growth remain suppressed
Finally the biggest risk to banks is regulation that has actually made them less fundamentally risky However greater safety has come at the expense of lower returns on equity and higher compliance costs
In response to the financial crisis regulators implemented a number of major changes to the financial system The Dodd Frank Act is the most significant financial reform legislation since the 1930s and was enacted in July 2010
These rules implemented new more conservative requirements for big banks like Wells Fargo in regards to how much leverage and liquidity risk they can take and the mix of assets they can hold in order to promote financial stability
As a result of these new capital requirements many big banks have shrunk their operations substantially reduced their leverage and incurred higher costs to comply with new regulations to boost safety
To provide an example the chart below shows the percentage of zero risk assets on bank balance sheets over the last 10 years The proportion has about doubled for global systematically important banks GSIBs
Source
Some investors worry that banks have essentially become utility stocks due to the increased regulations to make them safer With less financial leverage a more conservative mix of assets and more capital required to absorb greater losses without becoming distressed banks will never return to the high returns they earned prior to the financial crisis
While we acknowledge this new normal we believe Wells Fargo is well positioned to earn some of the highest returns in the sector and appreciate the lower risks of banks in general
Dividend Analysis Wells FargoWe analyze 25 years of dividend data and 10 years of fundamental data to understand the safety and growth prospects of a dividend
Dividend Safety ScoreOur Safety Score answers the question Is the current dividend payment safe We look at factors such as current and historical EPS and FCF payout ratios debt levels free cash flow generation industry cyclicality ROIC trends and more Scores of 50 are average 75 or higher is very good and 25 or lower is considered weak
Dividend investors won t forget Wells Fargo s decision to to save 5 billion per year protect against further loan losses and fund its 2008 acquisition of troubled Wachovia
Despite the dividend cut Wells Fargo was actually one of the best positioned banks going into the financial crisis The Federal Reserve declared that Wells Fargo exceeded the capital levels required for well capitalized banks in 2009 and its balance sheet remained healthy enough to let it acquire Wachovia at a bargain price
The Federal Reserve has since required banks to maintain much more conservative balance sheets If you don t believe us about banks improved financial health perhaps an excerpt from will help
The banks will not get this country in trouble I guarantee it The capital ratios are huge the excesses on the asset side have been largely cleared out Our banking system is in the best shape in recent memory
Wells Fargo has a strong Dividend Safety Score of 86 Barring another financial crisis which seems extremely unlikely we think the company is well positioned to continue paying and growing its dividend
Wells Fargo s dividend has consumed 36 of its reported earnings over the past 12 months As seen below the company s payout ratio has historically been between 30 and 50 However the company s financial leverage caused earnings to plunge during the financial crisis which sent its payout ratio to 160 and forced a dividend cut Source Simply Safe Dividends
We can also see that the company s reported earnings have been stable outside of the financial crisis highlighting Wells Fargo s large and diversified revenue base Stable earnings make a dividend payment more reliable Source Simply Safe Dividends
Not surprisingly Wells Fargo also generates a consistent return on equity However as we mentioned earlier we can see the business earns a meaningfully lower return on equity compared to the years leading up the financial crisis Banks are much safer and better capitalized today due to increased regulations Source Simply Safe Dividends
Turning to the balance sheet the company maintains an A credit rating and appears to be financially healthy Overall we believe Wells Fargo s dividend is very reliable Banks are healthier than they have ever been and Wells Fargo is particularly conservative in the way it runs its business
Dividend Growth ScoreOur Growth Score answers the question How fast is the dividend likely to grow It considers many of the same fundamental factors as the Safety Score but places more weight on growth centric metrics like sales and earnings growth and payout ratios Scores of 50 are average 75 or higher is very good and 25 or lower is considered weak
Analyzing the growth potential of a bank company s dividend is tricky compared to other types of businesses Large bank holding companies such as Wells Fargo are required to submit annual capital plans to the Federal Reserve in order to gain regulatory approval for dividend payments and share repurchases
Wells Fargo must comply with strict leverage ratio requirements and liquidity coverage rules to avoid restrictions on capital distributions Capital distributions can also be restricted upon the occurrence of various risk management triggers such as stress tests
Fortunately Wells Fargo is extremely well capitalized The company has grown its dividend every year since 2010 and last received permission from the Federal Reserve in March 2015 to increase its quarterly dividend by 7
As seen below Wells Fargo s dividend is now higher than it was prior to the housing crisis 4 0 annual growth rate since 2005 after sharply recovering over the past five years Source Simply Safe Dividends
Should interest rates begin to edge up over the coming years we believe Wells Fargo can generate a mid single digit earnings growth rate When coupled with the company s 36 earnings payout ratio and healthy capital levels we think its dividend can continue growing at a mid single digit pace However capital distribution will remain subject to the Fed s blessing
Valuation
WFC s stock trades at 11 8x forward earnings estimates and has a dividend yield of 3 0 which is significantly higher than its five year average dividend yield of 2 4
Investors have beaten down shares of bank stocks in recent months on speculation that interest rates and economic growth will remain lower for longer limiting loan growth and net interest income
While stricter capital requirements prevent banks from earning the high returns they enjoyed prior to the financial crisis we believe they can still generate a return better than utility stocks Wells Fargo s return on equity last year was about 14 while enjoying at least mid single digit earnings growth as the recovery continues
Under those assumptions Wells Fargo s stock appears to offer annual total return potential of 7 9 and it currently trades at a meaningful price to earnings multiple discount to utility stocks and the broader market
Conclusion
Wells Fargo is a wonderful company with numerous competitive advantages including its scale brand reputation growing low cost deposit base diversified mix of businesses broad distribution network efficient operations and conservative management team
While bank stocks will always be more challenging to evaluate given the number of subjective assessments management teams must make to account for loan quality on the books most banks are much healthier and better capitalized today than ever before
It will take time for Wells Fargo to regain its reputation as a blue chip dividend stock but we agree with Warren Buffett s recent buying activity that suggests he thinks the company is attractively valued and remains a great long term investment
The stock will also benefit if interest rates begin to rise providing diversification to dividend portfolios that are otherwise overly dependent on low interest rate beneficiaries such as utilities and real estate investment trusts Our Conservative Retirees dividend portfolio holds several of these types of stocks so a company such as Wells Fargo can help balance its exposure to interest rate risk |
WFC | US Existing Home Sales Decline | Sales of previously owned U S homes dropped more than forecast in February after reaching the second highest level since 2007 as low inventory levels continue to limit progress in housing
Closings on existing homes which usually take place a month or two after a contract is signed decreased 7 1 percent to a three month low 5 08 million annual rate after a 5 47 million pace in January the National Association of Realtors said Monday Sales were weaker than the most pessimistic forecast in a Bloomberg survey of economists
Faster growth in residential real estate is being hampered by a limited selection of available properties that has led to higher offering prices While mortgage rates are attractive affordability remains an issue for potential first time and lower income buyers whose participation would help broaden the market s improvement
The recovery in housing continues to held back by a chain of factors Nancy Vanden Houten a senior analyst at Stone McCarthy Research Associates in Princeton New Jersey said before the report It seems like there s certainly upside for the housing sector but I would be surprised if it were to suddenly take off
The median forecast of a Bloomberg survey of 70 economists called for 5 31 million with estimates ranging from 5 15 million to 5 53 million
Purchases of existing homes decreased in all four regions last month led by a 17 1 percent slump in the Northeast and a 13 8 percent decline in the Midwest
While a blizzard on the East Coast may have played a role in the drop in closings the Realtors group said lack of supply and affordability are the bigger restraints
Housing Affordability
The question is is this the beginning where homebuyers are beginning to show resistance to higher prices or is this a one month fluke in the data Lawrence Yun NAR chief economist said in a news conference as the figures were released Now we are seeing fewer renters interested in buying They re indicating affordability is an issue
Compared with a year earlier purchases increased 6 4 percent in February on an unadjusted basis
The number of existing properties on the market fell 1 1 percent to 1 88 million in February from 1 9 million a year earlier
At the current pace it would take 4 4 months to sell those houses compared with 4 months at the end of January It was 4 6 months in February 2015
The median time a home was on the market decreased last month to 59 days from 64 days in January
Median Price
In general tight inventory levels have helped boost the values of homes on the market The median price of an existing home rose to 210 800 from 201 900 in February 2015
Higher prices are keeping homes out of reach for some first time buyers They accounted for 30 percent of all purchases the report showed compared to the 40 percent that is considered more typical
Cash transactions accounted for about 25 percent of all purchases in February according to the report Sales of distressed property including foreclosures accounted for 10 percent of the total
Existing home sales which are tallied only when purchase contracts close account for more than 90 percent of the residential market A timelier barometer is new home purchases because they are tabulated earlier in the process when deals are signed That report is due from the Commerce Department on March 23
New Construction
Some relief from tight inventories may be in store in the months ahead with a separate Commerce Department report showing last week that new home construction rose more than forecast in February to a 1 18 million annualized rate The gain was led by the strongest single family home building in more than eight years
Meanwhile low borrowing costs should continue to support the housing industry Federal Reserve policy makers last week held off on raising interest rates and scaled back forecasts for how high they ll go this year citing the potential impact on the U S economy from weaker global growth and financial market turmoil
The average rate of a 30 year fixed rate mortgage was 3 73 percent in the week ended March 17 according to data from Freddie Mac That s little changed from 3 78 percent a year earlier and compares with a 3 31 percent rate reached in late 2012 that was the lowest in records back to 1971
Still builders remain cautious with their confidence holding in March at a nine month low as a measure of the six month outlook decline to the weakest level in a year according to a report from the National Association of Home Builders and Wells Fargo NYSE WFC |
CMCSA | Bloomberg Sprint T Mobile on final approach for deal this month | Sprint S 1 1 and T Mobile TMUS 1 4 are doing final due diligence on a merger likely to be announced with the two companies earnings at the end of the month Bloomberg reports As expected the key hurdle now is setting the exchange ratio in an all stock deal that will determine what Sprint is worth though they re discussing logistics like the location of headquarters and makeup of the management team as well Sprint owner SoftBank OTCPK SFTBY is expected to take a valuation around Sprint s market cap currently 29 6B The deal s not expected to have a traditional breakup fee Bloomberg says which cuts risk in case the merger is rejected on regulatory grounds similar to when Comcast NASDAQ CMCSA walked away from Time Warner Cable after regulator pressures But SoftBank may yet push for a cash termination payment if it feels like it s compromising in other areas Earnings dates haven t been set yet but last year T Mobile and Sprint reported on Oct 24 25 Now read |
CMCSA | Trump suggests challenging TV network licenses over fake news | By David Shepardson WASHINGTON Reuters U S President Donald Trump suggested challenging licenses for NBC and other broadcast news networks following reports by NBC News that his secretary of state had called him a moron after a discussion of the U S nuclear arsenal With all of the Fake News coming out of NBC and the Networks at what point is it appropriate to challenge their License Bad for country Trump a Republican wrote in a post on Twitter on Wednesday Trump and his supporters have repeatedly used the term fake news to cast doubt on media reports critical of his administration often without providing any evidence to support their case that the reports were untrue Trump kept up his criticism of the media in an appearance with Canadian Prime Minister Justin Trudeau saying It is frankly disgusting the press is able to write whatever it wants to write In a tweet late on Wednesday Trump said Network news has become so partisan distorted and fake that licenses must be challenged and if appropriate revoked Not fair to public Any move to challenge media companies licenses however would likely face significant hurdles The Federal Communications Commission an independent federal agency does not license broadcast networks but issues them to individual broadcast stations that are renewed on a staggered basis for eight year periods Comcast Corp NASDAQ CMCSA which owns NBC Universal also owns 11 broadcast stations including outlets in New York Washington Los Angeles San Francisco Boston Dallas and Chicago A Comcast spokeswoman referred questions to NBC which did not immediately respond ABC owned by Walt Disney Co declined to comment Shares in media companies fell potentially reflecting concerns the war of words could worsen Comcast was down 0 8 percent while Disney shed 1 4 percent CBS Corp NYSE CBS fell 1 2 percent and Twenty First Century Fox slid 2 8 percent Recon Analytics analyst Roger Entner called the market response a short term irrational knee jerk reaction and said Trump faced essentially insurmountable hurdles to getting licenses pulled A spokesman for FCC Chairman Ajit Pai did not immediately comment Gordon Smith the chief executive of the National Association of Broadcasters defended the media s free speech rights It is contrary to this fundamental right for any government official to threaten the revocation of an FCC license simply because of a disagreement with the reporting of a journalist Smith said in a statement ABC owned by Walt Disney Co declined to comment Numerous Democrats criticized Trump and urged Pai to denounce Trump s comments Senator Ed Markey wrote Pai on Wednesday asking him to withstand any urges from President Trump to harm the news media and infringe upon the First Amendment a reference to the U S Constitution s free speech and press freedom guarantee Democratic U S Representative Frank Pallone said Trump seemed to threaten broadcasters licenses only because he disagreed with their reporting This threat alone could intimidate the press and lead to skewed and unfair reporting FCC Commissioner Jessica Rosenworcel responded to Trump by tweeting a link to an FCC fact sheet Not how it works she said on Twitter FAIRNESS DOCTRINE When reviewing licenses the FCC must determine if a renewal is in the public interest according to an agency fact sheet on its website The FCC said in the fact sheet it expects station licensees to be aware of the important problems and issues facing their local communities and to foster public understanding by presenting programming that relates to those local issues The agency does not issue similar licenses for cable networks such as CNN and MSNBC or regulate internet news or other websites The FCC has said the First Amendment expressly prohibits the commission from censoring broadcast matter and that its role in overseeing program content is very limited In the early 1970s then President Richard Nixon and his top aides discussed using the FCC s license renewal process as a way of punishing the Washington Post for its coverage of the Watergate burglary that ultimately brought down his presidency NBC News has reported on tensions between Trump and Secretary of State Rex Tillerson and has said Trump sought a dramatic increase in the U S nuclear arsenal during a meeting with national security advisers in July NBC reported Tillerson made his moron comment after that meeting Trump on Saturday also suggested he should get equal time because of what he described as late night television hosts anti Trump material The FCC s equal time rules apply in limited cases to air time for political candidates and not to criticism of elected leaders
Trump may have been referring to the Fairness Doctrine that was designed to ensure broadcasters present opposing viewpoints about public issues Republican President Ronald Reagan s administration eliminated it in 1987 |
WFC | Wells Fargo CEO receives pay bump despite sales scandal | By Tina Bellon NEW YORK Reuters Wells Fargo NYSE WFC Co s board of directors awarded Chief Executive Timothy Sloan 12 8 million for his work last year a 17 percent increase despite scrapping executive bonuses in light of an accounts scandal that rocked the bank last year according to a proxy filing on Wednesday Sloan was CEO for only a few months in 2016 He took over after his predecessor John Stumpf resigned in light of revelations that thousands of Wells Fargo employees had opened perhaps millions of unauthorized customer accounts Sloan 56 had been president and chief operating officer until October Though his promotion came with a higher base salary and more long term stock awards his total package was less than the 19 3 million Stumpf received for 2015 Finance chief John Shrewsberry and David Carroll who heads wealth and investment management also received bigger pay packages for 2016 despite the absence of bonuses Wells Fargo reached a 185 million settlement with regulators in September over creating what it then said could be as many as 2 1 million accounts in customers names without their permission The third largest U S bank has since encountered more government probes and lawsuits and its board recently said an internal review may uncover more problematic accounts The board plans to release its findings ahead of Wells Fargo s annual meeting on April 26 where shareholders will vote on matters in the proxy including the election of directors executive pay and shareholder proposals This year s proxy includes a proposal submitted by a group of mostly religious affiliated activist investors who want the board to produce a report into the root causes of the sales scandal Employees have said they were pressured by supervisors to hit aggressive sales targets that were ultimately put in place by top management Shareholders also submitted proposals urging the bank to consider divesting businesses prepare a report on the gap between what it pays men and women and adopt a policy on the rights of indigenous people in light of its involvement in financing the controversial Dakota Access Pipeline Wells Fargo s board urged shareholders to reject the shareholder proposals Responding to the call for the root cause report the proxy stated that the Wells Fargo board believes the topics that would be covered are already being addressed by other reviews underway A representative of the lead filer of the proposal Nora Nash of the Sisters of St Francis of Philadelphia said via e mail the group was disappointed by the bank s opposition since the resolution seeks information that would set the course for real systemic change in culture ethics values and financial sustainability at the bank
We believe that we will get a strong YES vote from shareholders Nash wrote |
WFC | House Democrat seeks interviews with Wells Fargo executives | By Sarah N Lynch WASHINGTON Reuters The top Democrat on a key House of Representatives committee has demanded a chance to interview executives of Wells Fargo Co N WFC which has been embroiled in a scandal over fake accounts because she said Republicans already had that opportunity in December In a letter to the bank on Friday House Financial Services ranking member Maxine Waters of California said she wants to ask Chief Executive Timothy Sloan and other senior Wells Fargo officials questions about the scandal I reiterate my request that Wells Fargo provide Democratic Committee staff the same opportunity it provided to Republican Committee staff to meet with the aforementioned executives for unrecorded interviews Waters wrote Scheduling these interviews would be a small step in reassuring me and my staff that Wells Fargo is sincere when it says it wants to make things right for its customers A Wells Fargo spokeswoman said the bank is committed to responding appropriately to committee requests We have fully cooperated with the House Financial Services Committee s investigation including by voluntarily participating in the September 2016 hearing producing over 140 000 pages of documents answering more than 50 written and numerous oral questions and making our most senior leadership available for interviews the spokeswoman said Last September Wells Fargo paid 190 million to settle with the U S Consumer Financial Protection Bureau and other regulators after its staff opened as many as 2 1 million checking savings and credit card accounts without customer consent The scandal prompted then CEO John Stumpf to resign and the bank still faces investigations by multiple states a parallel criminal probe by the U S Justice Department and a civil probe by the Securities and Exchange Commission into whether it misled investors and wrongfully retaliated against whistleblowers Wells Fargo has said it is focused on providing the accountability and oversight its customers deserve Waters as a member of the minority political party in Congress cannot subpoena the Wells Fargo executives without consent from the committee s Republican majority In her letter she said Sloan along with Chief Financial Officer John Shrewsberry General Counsel James Strother and Chief Risk Officer Michael Loughlin participated in unrecorded interviews with Republican committee staffers between Dec 5 and Dec 7 2016
A spokesman for House Financial Services Chairman Jeb Hensarling said the Republican staffers briefed the minority member staffers on the interviews and shared more than 100 000 pages of records gathered for the panel s investigation into the matter |
WFC | Credit card applications drop at Wells Fargo in February | NEW YORK Reuters Wells Fargo Co N WFC saw a drop in consumers opening checking and credit card accounts in February the bank said on Monday marking the sixth straight month of decline since a sales scandal rocked the bank last year Consumers opened 3 percent fewer checking accounts from January and 43 percent or 0 3 million fewer compared with February 2016 according to a company statement Requests for new credit cards saw a 4 percent monthly decline and a 55 percent drop on a yearly basis its highest rate since illegal sales practices at its retail branches surfaced in September 2016 It will take time for us to work through the changes we are making in our business but we remain focused on strengthening our relationships with existing customers and building new ones with potential customers Mary Mack Wells Fargo s head of community banking said in the statement Wells Fargo has been reporting each month on customer activity at its branch banking unit since it reached a 185 million settlement with regulators in September over creating as many as 2 1 million accounts in customers names without their permission The third largest U S bank has since encountered more government probes and lawsuits and its board recently said an internal review may uncover more problematic accounts Overall branch interactions fell 1 percent from January and were down 11 percent on a yearly basis After factoring in day count differences February trends were generally similar to January s and were within our expectations Mack added |
WFC | US Jobless Claims Rise | The number of Americans filing applications for unemployment benefits rose last week from a three month low in part reflecting the typical swings during holiday periods
Jobless claims increased by 10 000 to 272 000 in the week ended Feb 20 a report from the Labor Department showed on Thursday in Washington The median forecast of 46 economists surveyed by Bloomberg called for 270 000 The average over the past four weeks was the lowest so far this year
Since Feb 15 was Presidents Day the jump may be more indicative of volatility associated with staff adjustments around a holiday rather than weakness in the labor market The struggles of the energy industry may also push up jobless claims in coming months though growth in consumer spending means businesses will need to keep adding workers
Claims will remain pretty low Sarah House an economist at Wells Fargo N WFC Securities LLC in Charlotte North Carolina said before the report The level of layoffs is remarkably low It s consistent with an improving labor market
Another report showed orders for capital goods rebounded in January rising by the most since June 2014 signaling a pause in the manufacturing slump according to figures from the Commerce Department
No states estimated data for jobless claims last week and there was nothing unusual in the figures according to the Labor Department
Survey Results
Economists estimates in the Bloomberg survey for weekly claims ranged from 257 000 to 285 000 The previous week s figure was unrevised at 262 000
The four week moving average a less volatile measure than the weekly claims numbers decreased to 272 000 last week the lowest since mid December from 273 250
The number of people continuing to receive jobless benefits fell by 19 000 to 2 25 million in the week ended Feb 13 The unemployment rate among people eligible for benefits held at 1 7 percent These data are reported with a one week lag
Since early March claims have been below the 300 000 level that economists say is typically consistent with an improving job market
The national payrolls report due March 4 from the Labor Department may show employers took on close to 200 000 workers this month after a 151 000 gain in January according to the median forecast in a Bloomberg survey The unemployment rate probably held at 4 9 percent matching the lowest since 2008
Initial jobless claims reflect weekly firings and a sustained low level of applications has typically coincided with faster job gains Many layoffs may also reflect company or industry specific causes such as cost cutting or business restructuring rather than underlying labor market trends |
WFC | US GDP Revised Higher | The U S economy unexpectedly expanded at a faster pace in the fourth quarter than initially estimated reflecting a higher value of business inventories
Gross domestic product the value of all goods and services produced grew at a 1 percent annualized rate compared with an initial estimate of 0 7 percent Commerce Department figures showed Friday in Washington The median forecast in a Bloomberg survey called for a 0 4 percent gain Consumer spending was revised lower
Although the economy slowed in the fourth quarter from 2 percent in the previous three months growth is projected to re accelerate this year as consumers tap into the benefits of a strengthening job market and savings on gasoline to boost spending An improving outlook in the U S and abroad will be needed to give companies the incentive to increase investment after cutting back at the end of 2015
The lackluster pace of fourth quarter growth overstates the slowdown that we re seeing Sarah House an economist at Wells Fargo Securities N WFC in Charlotte North Carolina said before the report Looking ahead the consumer is still going to be the strongest part of the economy but we may see spending moderate this year
Economists estimates in the Bloomberg survey ranged from annualized growth rates of 0 1 percent to 0 9 percent The GDP estimate is the second of three for the quarter with the other release scheduled for next month when more information can be incorporated The revision shows GDP expanded 2 4 percent in 2015
The changes to fourth quarter growth largely reflected how unsold goods are valued In inflation adjusted terms there was more inventory accumulation that previously estimated as underlying price data were revised up
Business Inventories
Inventories grew at an 81 7 billion annualized rate from October through December and reduced growth by 0 14 percentage point compared with a previously reported 0 45 percentage point drag
The trade gap also weighed less on growth than earlier estimated The difference between exports and imports shaved 0 25 percentage point from growth primarily due to fewer goods shipments from overseas It was previously estimated to have subtracted 0 47 percentage point
Stripping out inventories and trade the two most volatile components of GDP so called final sales to domestic purchasers increased at a 1 4 percent rate compared with a previously reported 1 6 percent pace
Consumer Spending
Household consumption which accounts for almost 70 percent of the economy grew at a 2 percent annualized rate weaker than the 2 2 percent pace initially estimated
The report also included revisions to third quarter personal income which held less encouraging news for consumers Wages and salaries rose by 78 2 billion from the previous three months revised down from an initially reported 103 9 billion gain They increased by an additional 83 3 billion in the fourth quarter
Non residential fixed investment decreased at a 1 9 percent annualized rate little changed from a previously estimated 1 8 percent decline
A separate report this week indicated that the investment slowdown may be easing Orders for capital equipment a harbinger of business spending on such things as machinery and computers jumped in January after plunging to a more than two year low at the end of 2015 figures from the Commerce Department showed Thursday in Washington
The report corroborated recent more upbeat manufacturing production and employment figures that had been called into question as surveys showed confidence among factory managers was sinking |
CMCSA | Jamie Lee Curtis reprises famous horror role in 2018 s Halloween | LOS ANGELES Reuters Actress Jamie Lee Curtis will reprise her role as the resilient protagonist in 2018 s Halloween Universal Pictures said on Friday 40 years after she made her movie debut in the original horror movie of the same name and became Hollywood s scream queen Curtis 58 will once again play Laurie Strode the babysitter who faced the deadly hockey masked serial killer Michael Myers in John Carpenter s 1978 horror Halloween The 2018 film will see Curtis Strode face her final confrontation with Myers Comcast NASDAQ CMCSA Corp owned Universal said Carpenter will return to executive produce and consult on the new film Halloween has become one of Hollywood s most famous slasher film franchises with nine sequels and reboots over the years the last being Rob Zombie s 2009 Halloween II Curtis last appearance in the franchise was in 2002 s Halloween Resurrection in which her character was killed Universal said the 2018 film carves a new path from the events in the landmark 1978 film suggesting that it will ignore the events in the 2002 film
This version of the story refiles to add dropped word name in lead paragraph |
CMCSA | This Is Us Stranger Things stars arrive early for Emmys | By Jill Serjeant LOS ANGELES Reuters Jane Fonda comedians James Corden and Samantha Bee and the young cast of supernatural mystery Stranger Things walked the Emmy red carpet on Sunday ahead of a ceremony expected to crown a slew of new television stars Milo Ventimiglia one of the Emmy nominated stars of heartbreaking family drama This Is Us told reporters he was excited to celebrate our group and its success in its first season Millie Bobby Brown 13 who could become the youngest actress ever to win an Emmy for her role as a girl with special powers in Stranger Things sported a romantic white ballgown Satirical sketch show Saturday Night Live is expected to be one of the big winners at Sunday s ceremony in Los Angeles after earning 22 nominations and enjoying its most watched season in 23 years Alec Baldwin is a favorite for the supporting actor comedy Emmy for his withering impersonations of U S President Donald Trump while Kate McKinnon is competing for her spoofs of former presidential candidate Hillary Clinton and White House aide Kellyanne Conway on the show that airs on Comcast NASDAQ CMCSA Corp s NBC Melissa McCarthy s winning turn as former White House spokesman Sean Spicer won her an Emmy last week Politics promise to run through Sunday s ceremony starting with host Stephen Colbert whose relentless attacks on Trump have brought a surge of viewers to The Late Show The biggest TV star of this year is undoubtedly Donald Trump No one s close quipped Colbert ahead of the ceremony Netflix s dark Washington drama House of Cards and its stars Kevin Spacey and Robin Wright are competing in a drama series category that includes fan favorite Stranger Things dystopian series The Handmaid s Tale lawyer show Better Call Saul sci fi drama Westworld British royal series The Crown and NBC s This Is Us Two time Emmy champ Game of Thrones is out of the running this year because of a later broadcast date for its seventh season Julia Louis Dreyfus is expected to win her sixth consecutive Emmy for playing an egotistical losing presidential candidate on Time Warner s HBO comedy Veep Veep could also be a repeat winner for best comedy series with actor director Donald Glover s hip hop themed Atlanta and contemporary African American family show black ish seen by pundits as its closest rivals Nicole Kidman s battered wife in HBO s Big Little Lies is seen as leading the limited series category that features three other Oscar winners Reese Witherspoon also for Big Little Lies and Feud co stars Susan Sarandon and Jessica Lange
Nicole is the one to beat She is having a career resurgence and she played the courageous role of the survivor of physical abuse in marriage said Tom O Neil founder of awards website goldderby com |
WFC | More Wells Fargo customers may be affected by sales scandal filing | By Dan Freed Reuters More Wells Fargo Co N WFC customers may have been affected by a scandal over phony accounts than previously believed the third largest U S lender said in a regulatory filing on Wednesday Wells Fargo had previously estimated that up to 2 1 million customers may have had checking and credit card accounts opened in their names without their permission over a period of several years As part of an expanded review there could be an increase in the identified number of potentially impacted customers Wells said The search for unauthorized accounts now covers a broader time frame from 2009 to September 2016 An ongoing analysis of customer data may also be turning up more affected customers according to Wells annual 10 K filing with the U S Securities and Exchange Commission In a separate filing the bank said it expects to release findings of the review ahead of its annual meeting on April 25 Wells initially disclosed the number of affected customers as part of a 185 million settlement in September leading to multiple government probes lawsuits and an internal review and hurting Wells Fargo s reputation Thousands of employees were fired over customer abuses which stemmed from aggressive sales targets implemented by managers Wells then CEO John Stumpf abruptly left the bank because of the scandal Wells has been working to repair the damage in part by determining whether customers were charged improper fees or had their credit scores hurt by the phony accounts The San Francisco based lender does not expect that any additional remediation efforts will have a significant financial impact However it said the review could lead to more legal or regulatory proceedings reputational damage and other negative consequences
Eight senior executives including Chief Executive Tim Sloan and Chief Financial Officer John Shrewsberry are not receiving cash bonuses for 2016 The bank also dismissed four mid level executives as part of the probe |
WFC | Wells Fargo names Allen Parker general counsel | Reuters Wells Fargo Co N WFC named Allen Parker general counsel on Monday at a time when the third largest U S lender looks to restore its battered reputation following a scandal over phony accounts Parker succeeds company veteran James Strother who will retire after 30 years with the company the lender said Strother had originally planned to retire by the end of 2016 but stayed on to deal with the fallout from the sales scandal Parker is joining from law firm Cravath Swaine Moore LLP where he served as a partner His appointment will be effective March 27 Wells Fargo said Parker will be based in San Francisco and will be part of the company s operating committee The scandal pertains to Wells Fargo opening as many as 2 million accounts in customers names without their permission Wells Fargo reached a 190 million regulatory settlement over the phony accounts in September and parted ways with the then chief executive John Stumpf the following month Last week the company said more customers may have been affected by the scandal than previously believed
The bank fired four mid level executives and stripped them of bonuses and stock awards in February as a result of the improper sales practices |
WFC | Confronted by market doubts Federal Reserve drove March rate rise expectations | By Jonathan Spicer and Ann Saphir NEW YORK SAN FRANCISCO Reuters Early last week financial markets saw just a 30 percent chance of the Federal Reserve raising interest rates in March but by Friday after a striking series of comments from Fed officials including Chair Janet Yellen traders saw an 80 percent chance Investors were aware that improving U S economic data a stable global economy a booming U S stock market and easy financial conditions provided some justification for further Fed interest rates rises this year But policymakers had to ensure that global markets were indeed ready for a rate increase as soon as its next policy meeting on March 14 15 and further rises later this year after a series of false starts in 2015 and 2016 The U S central bank prefers to have market expectations aligned with its own policy plans Of the 27 rises in interest rates of a quarter of a percentage point since 1991 only three occurred with a market probability forecast of less than 60 percent a month beforehand research from U S bank Wells Fargo N WFC research showed We didn t clearly see how the balance of risks was shifting so they have to slap our faces and say Look you are missing the point said Tim Duy an economics professor at the University of Oregon U S economic data had been improving in recent weeks as the Fed forecast and the jump in U S stock prices alongside improved consumer and business confidence readings provided an opening to hike rates without overly rocking markets public and private comments by Fed officials suggested A series of previously scheduled speeches by Fed officials as well at least two television interviews without prepared remarks gave the Federal Reserve the platform it needed to alert markets before the traditional black out period went into effect ahead of the March 14 15 meeting The result over the course of four days Fed policymakers successfully shifted market expectations for perhaps only two rate rises this year to fully expecting three and perhaps more according to Reuters data New York Fed President William Dudley whose branch of the U S central bank serves as its eyes and ears on Wall Street and who generally spends a couple of hours a week planning policy with Yellen played a key role in orchestrating the messaging Dudley gave markets an initial jolt when he said in a television interview that animal spirits had been unleashed By the time of Yellen s speech on Friday five other policymakers had also flagged a March rate hike It was pretty extreme in that they left little doubt said David Stockton a senior fellow at the Peterson Institute for International Research and a former chief economist at the Fed Moving now gives them more optionality for three or even four hikes this year Click for graphic on How comments from Fed officials drove rate hike expectations higher WALL STREET DOUBTS In December last year the Fed had telegraphed the likelihood of at least three rate rises in 2017 but few believed the U S central bank would follow through After all the Fed had over promised two years in a row forecasting more rate hikes than they delivered As a result Wall Street s most influential banks predicted just two rises this year in June and December according to the New York Fed s January survey of primary dealers Traders of interest rate futures contracts placed similar bets The minutes of the Fed s Jan 31 Feb 1 meeting showed many policymakers were coalescing around the need for a rate hike fairly soon with language nearly identical to the relatively soon phrasing the Fed had used the last two times to signal an imminent hike Yet markets oddly reacted by trimming not boosting expectations for a March rise So last week the time had come to bring out the big guns Fed governors Lael Brainard Jerome Powell and Vice Chair Stanley Fischer all helped drive the blunt message that barring some unexpected shock a rate hike would come soon Other policymakers echoed those sentiments both publicly and privately but also nodded to the need to get markets in line with Fed intentions
Michael Gapen chief economist at Barclays LON BARC said A little messaging got the markets where the Fed wanted it without adverse consequences |
WFC | Wells Fargo demotes senior executives in retail banking unit WSJ | Reuters Wells Fargo Co N WFC has taken further steps to restructure its retail banking business demoting some senior executives within the bank the Wall Street Journal reported on Thursday citing employees and memos
Mary Mack who took over the retail banking unit in July wrote in a memo on Tuesday that she was reorganizing groups within the business to expand its focus on about 6 000 branches across the U S the WSJ reported
Wells Fargo had estimated in September that up to 2 1 million customers may have had checking and credit card accounts opened in their names without their permission over a period of several years
Thousands of employees were fired due to customer abuses which stemmed from aggressive sales targets implemented by managers Wells then CEO John Stumpf abruptly left the bank because of the scandal
Wells Fargo could not be immediately reached for comment |
CMCSA | Comcast s shares plunge as company expects drop in video subscribers | Investing com Comcast Corporation s NASDAQ CMCSA shares plunged on Thursday after the company warned that it expects to lose 100 000 150 000 video subscribers in the third quarter versus prior expectations for a gain due to increased competition and Hurricane Harvey
Speaking at Merrill Lynch s investor conference Comcast s executive vice president for Comcast s Xfinity services Matt Strauss said that the current quarter is the most competitive in recent memory Even though the company is expecting a drop in subscribers it is expecting its financials to be in line
Comcast s shares fell as much as 7 in early trading but have since regrouped a bit and were recently down 5 |
CMCSA | Comcast also closing Florida Universal parks to let hurricane pass | Comcast CMCSA 1 is also closing its Florida parks ahead of the arrival of Hurricane Irma and like Walt Disney which is battening down Walt Disney World anticipates a two day closure Comcast s Universal Orlando Resort will close most parks starting at 5 p m Saturday and expects to reopen Tuesday after the storm is thought to have passed Park visitors had already been canceling trips to Disney World due to the incoming hurricane The closures are likely to cost Comcast and Disney tens of millions of dollars or more in lost revenues Now read |
CMCSA | TV viewership drops for NBC S first NFL game | By Sheila Dang Reuters The NFL kickoff game broadcast on Thursday night on NBC a win by the Kansas City Chiefs over the New England Patriots attracted 21 8 million TV viewers down more than 13 percent from last year s opening game data from NBC and Nielsen showed Last year s game between the Carolina Panthers and Denver Broncos also on Comcast Corp NASDAQ CMCSA unit NBC drew 25 2 million TV viewers Despite competition for attention advertisers and television networks are optimistic for this season due to a more compelling game lineup and the NFL s traditional broad reach Viewership of the Thursday night game was probably reduced as fans in Texas Florida and Georgia focused on recovering from Hurricane Harvey and bracing for Hurricane Irma said Jason Kanefsky director of strategic investments at marketing firm Havas Media Group in an interview Still this season s NFL primetime lineup of match ups between highly ranked teams is improved from last year said Michael Nathanson senior research analyst at MoffettNathanson in a note on Wednesday The schedule could stoke enough excitement among fans to bring up to 5 percent viewership growth for NBC s Sunday Night Football Nathanson said Walt Disney Co s ESPN which holds the rights to Monday Night Football could see 11 percent growth over last year Except for the Olympics nothing compares to the NFL in the eyes of advertisers who remain optimistic this season Kanefsky said The ratings may be coming down but it s still an unbelievable media vehicle Kanefsky said of the NFL Havas brand clients planning to buy ad time this season include those in retail pharmaceuticals and banking Kanefsky added NFL interest is still largely driven by Baby Boomers and Gen X viewers large attractive audiences for brands said Michelle Palmer president The Marketing Arm a sports marketing agency whose clients include insurance communications and auto companies The 2016 presidential election campaign hurt ratings last season analysts have said Viewership rebounded after the November election but was still down 5 percent from the previous season
Amy Yong an analyst at Macquarie Bank who covers Comcast said advertising rates for games aired on NBC are expected to hold steady or even increase despite lower ratings due to the network selling fewer ad spots and using digital to help their ad reach |
CMCSA | NFL ratings on hold as Nielsen staff evacuates from storm Irma | By Sheila Dang Reuters The highly anticipated television ratings for the Sunday night NFL win by the Dallas Cowboys over the New York Giants will be delayed because Nielsen evacuated its ratings staff in Tampa Bay Florida ahead of Hurricane Irma the company said on Monday After a disappointing season last year with lower viewership many are watching the National Football League s early ratings results to see how it fares Attention in the United States has been focused over the last two weeks on Hurricanes Harvey and Irma which hit the states of Texas and Florida respectively The Thursday night season kick off between the Kansas City Chiefs and New England Patriots on Comcast NASDAQ CMCSA Corp s NBC had nearly 13 percent fewer viewers than the previous season s kick off according to Nielsen data Nielsen was monitoring the situation in Florida and ratings will be delayed in the near term the company said on its website A Nielsen spokesman declined to provide additional detail but said the Tampa Bay office is its main data processing center The NFL generates about 2 5 billion in advertising revenue across its programs on NBC Walt Disney Co s ESPN CBS Corp NYSE CBS and FOX said John Janedis an equities analyst at Jefferies in a note on Monday Janedis said a 10 percent ad revenue decline could result in a risk to earnings before interest and taxes of 200 million though he added that it is too early to estimate results for the season The market is hoping for ratings that are in line with last year and would see that as a positive Janedis said in an interview This season s NFL lineup of match ups between highly ranked teams is improved from last year and could result in viewership growth for NBC and ESPN said Michael Nathanson senior research analyst at Moffett Nathanson in a note last week The Cowboys and Giants a popular match up also played on a Sunday night in 2015 and posted 26 8 million viewers which was up 10 percent year over year Janedis noted |
CMCSA | Comcast 1 2 as Moffett sees value in pullback | Comcast NASDAQ CMCSA is up 1 2 premarket after a boost to Buy from analyst Craig Moffett who thinks the stock has gotten much cheaper since Thursday s warning about declining video subscribership
Shares fell 6 2 Thursday and are down 8 1 overall in those past three trading days making the stock significantly cheaper than it was and now likely to draw value investors who might see the negative subscriber sentiment as a buy signal
He doesn t believe hurricane damage to subscribers financials will have any lasting impact while conceding not much of a basis on which to make damage estimates yet
Now read |
WFC | U S house prices to rise analysts wary of deregulation Reuters poll | By Rahul Karunakar Reuters The U S housing market will rise steadily and contribute significantly to economic growth in the coming year according to a majority of analysts in a Reuters poll who nearly all agreed that further stimulus was not required Steady turnover will drive home prices to rise at almost double the current rate of expected underlying consumer inflation and wages over the next few years according to the survey conducted Feb 16 23 The S P Case Shiller composite index of prices in 20 metropolitan areas is forecast to rise 4 9 percent in 2017 and 4 0 percent next year according to the poll of about 30 analysts Those are similar to predictions made in December However analysts were evenly split over the prospect of deregulation U S President Donald Trump signed an executive order in early February to review major banking rules put in place after the 2008 financial crisis caused millions of people to lose their jobs and homes Moving to ease back on those regulations now when the market is already recovering and house prices are rising would only increase the risk of another dangerous bubble forming said Capital Economics property economist Matthew Pointon Nearly a decade since the start of a crash that led to the collapse of U S investment bank Lehman Brothers and a punishing global recession the U S housing market has recovered most of its losses Those who said deregulation in the housing market was not a good idea cautioned of a repeat Do you really want another housing crisis FAO Economics chief economist Robert Brusca said in response to the survey s question on deregulation Been there Done that Made that mistake Analysts said U S housing was strong enough to withstand the Federal Reserve s plans for further interest rate hikes that in turn will increase mortgage costs Poll respondents expect the 30 year mortgage rate to average 4 40 percent this year and rise to average 5 00 percent in 2018 above forecasts in the previous survey The latest housing market data suggests no drag from higher mortgage rates and indicates the kind of turnover from before the last crisis U S home resales in January rose to just below a decade high A robust housing market ought to contribute significantly to economic growth this year according to 24 of 37 analysts in the poll Almost 90 percent of respondents said the housing market needed no stimulus as that would probably make already expensive homes more unaffordable for first time buyers If the U S housing market doesn t need one thing it s a boost in demand said Ralph McLaughlin chief economist of San Francisco based online residential real estate website Trulia The name of the housing game over the past several years has been tight inventory not weak demand McLaughlin said so any stimulus might cause prices to become even more out of reach in some of the country s most expensive markets Demand for housing has been underpinned by a strengthening labor market which is improving employment opportunities for young adults and in turn boosting household formation But a persistent shortage of properties remains a challenge Housing inventory increased in January but remained near a record low That led to a 7 1 percent surge in median house prices from a year earlier the biggest increase in a year to 228 900 Asked to rate affordability of U S housing on a scale of 1 being the cheapest and 10 the most unaffordable the median answer was 6 similar to what analysts rated British property in a separate poll While that consensus view has remained unchanged in polls since May the range of forecasts in the latest survey is tilted toward house prices being more expensive Rising mortgage rates and home price appreciation is becoming a substantial hurdle said Wells Fargo NYSE WFC senior economist Sam Bullard Polling and additional reporting by Vartika Sahu Analysis by Sujith Pai and Hari Kishan Editing by Ross Finley and Lisa Von Ahn |
WFC | U S new home sales rebound consumer sentiment dips | By Lucia Mutikani WASHINGTON Reuters New U S single family home sales rose less than expected in January likely held back by heavy rains and flooding in California but continued to point to a strengthening housing market despite higher prices and mortgage rates Other data on Friday showed a dip in consumer sentiment this month though it remained at a level consistent with a healthy pace of consumer spending The economy has gained momentum supported by a labor market that is near full employment It is clear that the economy is moving forward solidly Consumers are confident and are buying homes but builders are not getting their share of that demand said Joel Naroff chief economist at Naroff Economic Advisors in Holland Pennsylvania The Commerce Department said new home sales increased 3 7 percent to a seasonally adjusted annual rate of 555 000 units last month Economists had forecast single family home sales which account for about 9 percent of overall home sales surging 6 3 percent to a 570 000 unit rate New home sales which are derived from building permits are volatile on a month to month basis and subject to large revisions Sales were up 5 5 percent compared to January 2016 Last month homes sales soared 15 8 percent in the Northeast to their highest level since January 2008 They rose 14 8 percent in the Midwest and advanced 4 3 percent in the South Sales in the West which has been hit by extremely rainy weather fell 4 4 percent The unusually wet winter may have held back sales in January but sales are still trending higher on a three month moving average basis said Mark Vitner a senior economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina Data this week showed sales of previously owned homes jumped 3 3 percent to a 10 year high in January House prices increased 6 2 percent in December from a year ago SUPPLY SIDE CHALLENGES In a separate report on Friday the University of Michigan said its consumer sentiment index fell to a reading of 96 3 this month from 98 5 in January The index had surged in the prior three months after Donald Trump s presidential election victory With the focus shifting from campaign promises and philosophical goals consumers may be acknowledging the difficult task ahead for the Trump administration to actually advance his agenda said Jim Baird chief investment officer at Plante Moran Financial Advisors in Kalamazoo Michigan The University of Michigan said February s consumer sentiment reading suggested a 2 7 percent annualized growth pace in consumer spending this year U S stocks were trading lower on Friday with the Dow Jones Industrial Average DJI on track to snap a 10 day record setting winning streak The PHLX housing index HGX fell marginally U S government bond prices rose while the dollar DXY dipped against a basket of currencies The housing market has firmed even as the 30 year fixed mortgage rate rose above 4 0 percent outpacing annual wage growth that has been stuck below 3 percent The tightening job market is driving the gains in housing While the healthy labor market has not unleashed a stronger pace of wage growth it has improved employment opportunities for young Americans encouraging them to form their own households But a shortage of properties available for sale remains an obstacle to a robust housing market Mortgage rates aren t to blame A big part of the problem is the supply side challenges builders are facing like regulatory burdens labor shortages and a lack of capital and financing options said Jonathan Smoke an economist at realtor com in Atlanta The inventory of new homes on the market increased 3 5 percent to 265 000 units last month the highest level since July 2009 New housing stock remains less than half of what it was at its peak during the housing boom in 2006
At January s sales pace it would take 5 7 months to clear the supply of houses on the market which was unchanged from December A six month supply is viewed as a healthy balance between supply and demand The median price for a new home increased 7 5 percent to 312 900 in January from a year ago |
WFC | Global stocks mixed as Trump offers few policy details dollar firms on rate talk | By Nichola Saminather SINGAPORE Reuters U S stock futures pared gains on Wednesday on disappointment that President Donald Trump did not offer further details on his plans for infrastructure spending and tax reforms but the dollar firmed on growing expectations of a rate hike this month European stock markets were poised for a positive start with financial spreadbetters expecting Britain s FTSE 100 and Germany s DAX to open 0 2 percent higher and France s CAC 40 to start the day up 0 3 percent Trump pledged to overhaul the immigration system improve jobs and wages for Americans and promised massive tax relief to the middle class and tax cuts for companies but offered few clues on how they would be achieved Investors had little to grasp and market reaction during the speech was choppy and directionless market strategists Paul Christopher Scott Wren and Sameer Samana at Wells Fargo NYSE WFC Investment Institute in St Louis said The speech was short on details and did not even prioritize the president s goals Capital Economics Paul Ashworth said Trump has been struggling to implement his agenda With Congress getting bogged down by Republican infighting over efforts to repeal and replace existing health care legislation it will take considerably longer to pass tax reform than we initially thought on election night Ashworth said in a note There is now a good chance that it won t happen until early next year U S stock futures still pointed to a higher open after Trump s address though gains shrank as the speech progressed E mini S P futures edged up 0 2 percent after the Dow Jones Industrial Average snapped a 12 day winning streak to close down 0 1 percent in the prior session The dollar index which tracks the greenback against a basket of trade weighted peers advanced 0 5 percent to 101 58 after wobbling during the speech The U S currency also rebounded against the yen rising more than 0 6 percent to 113 47 yen after erasing its session gains during Trump s speech Reaction in Asian stock markets to Trump s speech was largely muted with the MSCI s broadest index of Asia Pacific shares outside Japan down about 0 2 percent A raft of surveys pointing to stronger factory activity in China Japan and other parts of the region were largely overshadowed by Trump s speech The market has been looking for reassurance that Trump intends to follow through on his campaign promises for fiscal spending tax cuts and deregulation said James Woods global investment analyst at Rivkin in Sydney He mentioned these policies but did not provide any actual details or time lines which is what investors are looking for However in particular I think his rhetoric has been toned down around protectionism when mentioning China and Mexico easing concerns around trade wars Markets took note of that shift with the Mexican peso trading higher after Trump s speech although it inched lower later in the session While still pledging to build a wall on the U S s border with Mexico Trump made no mention of his earlier promises to make the latter pay for it The dollar gained 0 1 percent to 20 116 pesos In Asia Chinese stocks advanced 0 2 percent after the stronger than expected factory readings Japan s Nikkei extended gains to close up 1 4 percent buoyed by a weaker yen and data showing manufacturing activity expanded in February at the fastest pace in almost three years Australian shares narrowed earlier losses to end the day 0 1 percent lower and the Australian dollar edged up 0 1 percent to 0 7666 after stronger than expected GDP data showed the economy had returned to growth in the fourth quarter Treasury yields which had jumped after Fed officials suggested an interest rate rise might be delivered later this month hovered slightly below that level after Trump s speech U S 2 year Treasury yields were at 1 2961 after Trump s speech after touching 1 304 their highest level since Dec 15 earlier in the session New York Fed President William Dudley among the most influential U S central bankers said overnight on CNN that the case for tightening monetary policy has become a lot more compelling since Trump s election U S 10 year Treasury yields rose to 2 4132 percent after touching a session high of 2 426 Traders now see a better than 62 percent chance of a rate increase in March a surge from 31 percent earlier according to CME Group s FedWatch tool The sharp shift came despite disappointing U S fourth quarter gross domestic product growth as downward revisions to business and government investment offset robust consumer spending Data releases later in the session include German unemployment for February and U S personal consumption expenditure inflation and manufacturing activity In commodities oil prices inched higher as supply cuts by the Organization of Petroleum Exporting Countries offset concerns about rising U S crude inventories U S crude rose almost 0 1 percent to 54 07 a barrel Global benchmark Brent LCOc1 jumped 1 9 percent to 56 63
The stronger dollar weighed on gold which dropped 0 3 percent to 1 244 36 an ounce extending Tuesday s 0 3 percent decline |
WFC | Wells Fargo says no 2016 cash bonuses for eight senior executives | Reuters Wells Fargo NYSE WFC Co said eight senior executives including Chief Executive Tim Sloan and Chief Financial Officer John Shrewsberry will not receive cash bonuses for 2016 as the bank looks to increase accountability following a sales scandal The three year equity awards made in 2014 will also be reduced by up to 50 percent for the executives the lender said on Wednesday Wells Fargo said the board had taken these actions based on the accountability of all those in senior management and not on any findings of improper behavior in its ongoing independent investigation of the sales scandal Since the scandal and paying a 185 million fine the third largest U S bank by deposits has been trying to show it is holding the management accountable The scandal led to the departure of former Chairman and Chief Executive Officer John Stumpf last October who along with another executive forfeited tens of millions of dollars in compensation The Wall Street Journal said last month that Wells Fargo s board was likely to eliminate 2016 bonuses for the bank s top executives citing people familiar with the matter |
CMCSA | AT T considers sale of home security business sources | By Liana B Baker Reuters AT T Inc N T is exploring options for its Digital Life home security business including selling it as it seeks to pay down debt following its planned 85 4 billion acquisition of Time Warner Inc N TWX people familiar with the matter said The divestiture would mark a reversal for AT T which entered the U S home security market with the introduction of Digital Life in 2013 The service offers customers sensors and cameras so they can monitor their homes and pets on their phones Digital Life accounted for a tiny fraction of AT T s 163 8 billion in revenue in 2016 It is estimated to have between 400 000 and 500 000 customers and may fetch close to 1 billion in a sale the sources said While this would do little to reduce AT T s debt which totaled 143 7 billion on June 30 the sale could be a prelude to more divestitures the sources added They requested anonymity because the deliberations are confidential AT T declined to comment AT T will carry an incredible debt load after the Time Warner deal closes which is a risky proposition for a company with declining revenues MoffettNathanson research analyst Craig Moffett said in an email They will almost certainly have to find assets to sell to appease the bond rating agencies AT T has said it expects the Time Warner acquisition to close by the end of the year The deal is currently under antitrust review by the U S Department of Justice Digital Life reaches 80 U S markets including large cities such as Chicago and New York but it has not matched the scale of U S cable company Comcast Corp s O CMCSA rival service Comcast introduced its Xfinity Home service in 2012 and said this year that it was approaching 1 million customers Cable operators turned to home security services a few years ago for a new revenue stream and as a way to rebuild margins whittled away by swelling programming costs Buyout firms and home security companies may show interest in the AT T unit the sources said Private equity firm Apollo Global Management LLC N APO for example bought home security company ADT Corp for about 7 billion in 2016 and merged it with smaller U S peer Protection 1 Last month AT T sold LifeShield the home security unit of DirecTV to private equity firm Hawk Capital Partners for an undisclosed sum
Glenn Lurie a senior AT T executive who oversaw Digital Life said earlier this month that he would retire in September |
CMCSA | Videotron to build IPTV service off Comcast s Xfinity | Quebecor s Videotron OTC QBCAF OTCPK QBCRF is working on building an IPTV service based on Comcast s NASDAQ CMCSA Xfinity X1 platform The two have entered a strategic partnership agreement to develop the offering As of quarter s end Videotron sported nearly 1 66M cable TV customers 1 597M digital TV subs along with 1 63M cable Internet subscribers and 337 600 members of its over the top video service Now read |
CMCSA | Comcast sues Vermont PUC over franchise conditions | Comcast CMCSA 1 6 has sued Vermont s Public Utilities Commission a month after the agency denied a request to lighten the requirements in its franchise agreement The company requested the removal of requirements tied to network expansion and to public educational and government channels but the PUC rebuffed the request Comcast says integrating the PEG channels into its interactive guide not just the scrolling program grid could cost 4M and that customers don t want to pay for that It s also objecting to a requirement to build out 550 miles of new cable Comcast says the conditions contravene federal and state law amount to undue speaker based burdens on Comcast s protected speech under the First Amendment Now read |
CMCSA | Comcast 6 3 warning of heavy video subscriber decline | Comcast NASDAQ CMCSA has tumbled 6 3 after warning that it expects to lose 100 000 150 000 video subscribers in Q3 vs expectations for a gain a decline it attributes to competition and Hurricane Harvey Speaking at an investor conference Comcast s Matt Strauss says the current quarter is the most competitive in recent memory though financials should be in line He also said the company s very open to carrying new services from Disney Now read |
CMCSA | Comcast CMCSA Tops Q3 Earnings Misses Revenues | Comcast Corp NASDAQ CMCSA is the largest cable MSO multi service operator in the U S and a leading media and entertainment company Comcast provides basic video digital video high speed broadband Internet and telephony services to individuals and business enterprises In addition the company provides filmed entertainment cable networks broadcast TV services and operates theme parks Comcast s decision to venture into the U S wireless space bodes well with its diversified business model The company acquired 73 licenses of 600 MHz low band wireless spectrum in the Incentive Auction It has completed the nationwide rollout of its wireless services under the Xfinity Mobile brand along with plans to include YouTube in its X1 video platform On the other hand we are concerned about Comcast s operation in a saturated and competitive multi channel U S video market Like other cable operators the company continues to lose subscribers to online video streaming service providers because of their cheap source of TV programming In the second quarter of 2017 Comcast lost 34 000 video customers and 22 000 voice customers in the residential segment Zacks Rank Comcast currently carries a Zacks Rank 3 Hold You can see The company has generated a positive average earnings surprise of 7 77 in the previous four quarters We have highlighted some of the key stats from this just revealed announcement below Earnings Comcast Beats Q3 2017 earnings estimate Our consensus earnings estimate called for an adjusted EPS earnings per share of 49 cents and the company reported adjusted EPS of 52 cents Investors should note that these figures take out stock option expenses Revenue Comcast reported total revenues of 20 983 million missing our estimate by nearly 140 million Key States to Note In the reported quarter high speed broadband customer addition was 214 000 At the end of the third quarter the company had 25 518 million high speed Internet subscribers up 4 9 year over year However Comcast lost 125 000 video customers At the end of the reported quarter the company had 22 390 million video subscribers down 0 2 year over year It also lost 94 000 voice customers At third quarter end the company had 11 565 million voice subscribers down 0 7 year over year Stock Price At the time of writing the stock price of Comcast was down nearly 0 62 in the pre market trade on Nasdaq Clearly the initial reaction to the release is negative The company lost significant numbers of video and voice customers We believe this unimpressive performance is the primary reasons for this initial negative sentiment Comcast Corporation Price and EPS Surprise
Check back later for our full write up on this Comcast earnings report later Looking for Stocks with Skyrocketing Upside Zacks has just released a Special Report on the booming investment opportunities of legal marijuana Ignited by new referendums and legislation this industry is expected to blast from an already robust 6 7 billion to 20 2 billion in 2021 Early investors stand to make a killing but you have to be ready to act and know just where to look |
WFC | Wells Fargo to oppose nuns on review resolution document | By Ross Kerber BOSTON Reuters The board of Wells Fargo Co plans to oppose a resolution filed by shareholder activists led by the Sisters of St Francis of Philadelphia seeking a review of the root causes of the bank s unauthorized accounts scandal according to a draft document seen by Reuters The draft dated Feb 10 states the board s position on the measure to be included in its forthcoming proxy for this year s springtime shareholder meeting is that because the bank has its own investigation and reforms under way the concerns raised by the proposal are being addressed According to the document our Board and our Company believe we are already providing through our current and anticipated future disclosures the information requested by this proposal An ongoing disagreement over the resolution could complicate the bank s drive to regain shareholder confidence A Wells Fargo N WFC spokesman Mark Folk declined to comment on whether the draft was still the bank s current position He said via e mail that We are committed to regular engagement with our investors in order to understand and discuss points of view on governance and related matters Through a representative the lead filer of the proposal Nora Nash of the Sisters of St Francis declined to comment Tim Smith director of shareowner engagement at Walden Asset Management a co filer of the resolution said talks are still underway between the bank and proponents Whatever the outcome Smith said he is pleased the board has embraced other reforms and what he called the need for more transparency Wells Fargo has changed how it compensates its retail bank staff and reformed risk controls since it emerged branch employees opened as many as 2 million accounts without customers permission to meet sales goals The San Francisco bank agreed in September to pay a 185 million settlement with regulators and the City Attorney of Los Angeles over the accounts scandal Shortly after the settlement some investors called on the bank to split the roles of CEO and chairman When the San Francisco bank s veteran boss John Stumpf resigned a month later those roles were separated and the bank codified the new board structure That led activists including Connecticut pension fund officials to withdraw a resolution calling for an independent board chair Corporate boards often oppose shareholder resolutions but then go on to adopt some that receive high support Wells Fargo is challenging whether other shareholder proposals will appear on its proxy however In one case the investor Bart Naylor who works for consumer advocacy group Public Citizen said the bank has asked permission from U S securities regulators to omit his resolution calling for it to study divestitures or a break up
The bank also wants to skip a resolution by New York State retirement officials that would have it review pay tied to metrics that could lead to material losses Among other things the bank says the New York proposal overlaps with the Sisters of Saint Francis proposal already set for the proxy according to its request to regulators |
WFC | Wells Fargo sees relatively stable January retail trends | Reuters Wells Fargo Co N WFC saw relatively stable trends in branch banking in January the executive in charge of the unit said on Friday Branch interactions fell 12 percent from December and four percent from January 2016 but other metrics showed growth versus a year ago After factoring in day count differences and typical seasonality trends were relatively stable in January and within our expectations Mary Mack who took over leadership of Wells Fargo s branch banking unit last year said in a press release Wells Fargo has been reporting monthly on customer activity in its branch banking unit ever since the bank was rocked in September by revelations that employees opened as many as two million credit card and checking accounts without customer authorization Total customer branch interactions were down 12 percent from December and four percent versus a year ago Customers opened 18 percent more checking accounts than they did in December but 31 percent fewer than in January of 2016 Debit and credit card use were both up compared to a year ago but down versus December in what the bank said was a typical seasonal slowdown after the holidays
Wells Fargo shares were down 0 71 percent Friday morning at 57 71 |
WFC | Wells Fargo fund business on the defensive amid sales scandal | By Tim McLaughlin Reuters When a scandal over unauthorized accounts rocked Wells Fargo Co s N WFC retail division last fall executives at its asset management arm sprang into action to limit its fallout at an already tough time for their business A Reuters review of minutes from about two dozen state and municipal pension board meetings across the country from October to December showed Wells Fargo wealth management executives offering apologies weighing fee cuts and emphasizing their own controls on staff hiring and vetting Joe Ready head of Wells Fargo s institutional retirement plan business for example told trustees of the city of San Diego s defined contribution plan that participants 1 billion in assets were walled off from other parts of Wells Fargo Last September the bank said it reached a settlement with the authorities over findings that its branch staff opened up to 2 million unauthorized customer accounts Mr Ready apologized for any inconveniences the recent incident has caused Mr Ready confirmed that the retirement plan accounts are not impacted by the recent events according to minutes of the Oct 6 meeting published on the city s website San Diego pension officials declined to comment for this story Wells Fargo declined to make Ready available and said it would not comment on its interactions with specific clients but said in a statement We certainly understand the concerns about what happened in our community bank and have been in regular dialogue with our investor clients regarding the settlement the bank said It is difficult to determine the scandal s precise business impact Like other fund managers Wells Fargo is grappling with the seismic shift of money into funds that track indices Even before the scandal erupted investors had been pulling money out of its funds Yet its fund unit has seen faster outflows than its peers and the withdrawals accelerated in the last quarter of 2016 Wells Fargo s core mutual funds business for example had the biggest market share decline among large U S fund families in 2016 according to Morningstar Inc data In December alone the funds recorded 7 1 billion in net withdrawals two and a half times more than second worst performer Graphic CYCLICAL UNDERPERFORMANCE Asked to comment on the data the bank said in a statement it did not believe there is a connection between our fund flows and the September 2016 sales practice settlement between Wells Fargo and regulators The recent underperformance of many active managers is simply cyclical it added in the statement The bank declined to make executives available for further comment In one case however the accounts debacle played a role in a lost bid for new business The bank s 482 billion asset management arm was among three finalists to run a 40 million bond portfolio for Oakland s police and fire pension fund last fall The contract went to a firm with 17 employees and 1 5 billion in assets and David Sancewich a consultant who helped the pension fund with the selection told Reuters the scandal influenced Oakland s choice It was one variable as part of the decision process he said in an email In another instance however Wells Fargo s assurances appeared to have had some mitigating effect In Vermont administrators of Champlain College who considered dropping the bank as an underwriter of a 77 million bond because of the scandal ultimately chose to stick with Wells Fargo following a review of the bank s operations When contacted the college provided Reuters with a copy of an October memo which said it made the decision following a robust discussion while stressing that the school had no relationship with Wells Fargo s retail unit Champlain declined further comment To be sure Wells Fargo funds business which ranks 28th nationally plays a secondary role for investors who focus more on other bigger divisions of the bank It s a small piece of Wells Fargo s business and doesn t drive the stock price said Shannon Stemm an analyst at Edward Jones Still at least in the immediate aftermath of the scandal that led to a 185 million settlement and dismissal of 5 300 employees some of the bank s staff grappled with the repercussions Employees at Wells Fargo s institutional retirement and trust unit were fielding about 75 calls a week after the settlement from participants in pension plans in which the bank acts as custodian or record keeper Ready told San Diego pension officials at a special meeting in October the minutes showed The callers wanted assurances that their money was walled off from the retail banking operations Wells Fargo executives told San Diego pension officials One executive sought to distance herself from the head office altogether At a Nov 10 meeting of the North Carolina supplemental retirement board Carrie Callahan a managing partner at Galliard Asset Management noted how Galliard was a subsidiary of Wells Fargo but a distinct brand She stressed that there had been no impact to Galliard s business due to the activity at Wells Fargo according to the meeting s minutes
Callahan declined to comment North Carolina officials were not available to comment |
WFC | Burger King and Tim Hortons owner to buy Popeyes for 1 8 billion | Reuters Restaurant Brands International Inc TO QSR owner of the Burger King and Tim Hortons fast food chains said on Tuesday it would acquire Popeyes Louisiana Kitchen O PLKI for 1 8 billion in cash The deal is a bet by Oakville Ontario based Restaurant Brands that it can use its international reach to introduce Popeyes Louisiana style fried chicken and buttermilk biscuits to more diners globally Popeyes shareholders will get 79 00 for each share they hold a 19 5 percent premium to the stock s Friday close Popeyes whose fans include pop singer Beyonc began 45 years ago as a Southern fried Chicken on the Run restaurant in a New Orleans suburb It has since expanded to more than 2 000 restaurants of which 1 600 are in the United States Restaurant Brands was formed in 2014 when 3G Capital backed Burger King acquired Canadian coffee and doughnut chain Tim Hortons Inc for 11 billion Reuters reported on Monday that Restaurant Brands was nearing a deal to buy Popeyes citing people familiar with the matter Restaurant Brands said on Tuesday it would finance the deal with cash on hand and a financing commitment from J P Morgan and Wells Fargo NYSE WFC The company was advised by Paul Weiss Rifkind Wharton and Garrison LLP Popeyes received financial advice from UBS and Genesis Capital LLC and legal counsel from King Spalding LLP |
WFC | S P 500 Makes High Of 2050 00 | Last night on the globex open the S P 500 bid higher throughout the Asian and Euro sessions making high of 2050 00 just after 5 00 am CT and maintained a trade near those highs
At the US regular trading hours open the ESH15 traded at 2048 25 and sprung higher to an early print of 2052 25 before trading low the rest of the morning session down to 2035 50 before grinding higher into the FOMC announcement Post Fed the S P took out the low trading down to 2031 and then set it s sights on the highs and maintained a late day bid in the face of a 1 billion USD MOC market on close sell imbalance settling higher by 25 handles
Heard across the news wires today was the decision by the Federal Reserve to raise interest rates for the first time since 2006 Outside of that Fedex which is seen as an economic barometer trimmed their forecast for next year
From Barclays Therefore we expect markets to focus on forward looking matters including the anticipated pace of tightening the updated set of economic projections and the overall tone of today s communications While much of this messaging will come in the press conference to follow the statement does speak to the committee s expectation that the rate hike path will be gradual
Credit Suisse We retain a USD bullish view given the fact that so little has been priced in for the Fed s hiking cycle We think this Fed hiking cycle will be different from those in decades past where the liftoff marked an end to broader USD strength Instead we see some key differences in the current macro backdrop that suggest broad based USD strength can continue
Wells Fargo N WFC reportedly became the first to raise their prime rate benchmark lending rate to 3 5 Banks don t often move that quick on rate changes The fact rates are going up will obviously mean they ll be quicker to keep that margin They won t be changing their standard deposit rate though so savers are out of luck
JP Morgan
The Fed raised rates today for the first time since 2006 lifting the funds rate target range to 0 25 0 50 The interest rate forecast dots came down but only slightly The statement was generally dovish in tone In particular the FOMC stated that In light of the current shortfall of inflation from 2 percent the Committee will carefully monitor actual and expected progress toward its inflation goal In view of its forecast of inflation this implied only gradual increases in the funds rate In fact gradual was noted twice in the statement
Deutsche Bank DE DBKGn
December post meeting communique struck an upbeat tone with respect to the economic outlook For example the December statement repeated that household and business spending have been increasing at solid rates while the labour market has improved further The inflation language noted that market based measures remain low and survey based measures edged down This latter is important because it tells us the Fed is slightly more concerned about inflation expectations
Heading into tomorrow the calendar will start to focus on this week s quad witching as Thursday s stats are weak while the S P could stand to back and fill before going higher as the Friday stats are positive having closed higher in 22 of the last 31 years I don t know about anyone else but I am glad that the Fed meeting is OVER
Floor Pivots For Tomorrow s RTH E mini
R3 2130 00
R2 2092 25
R1 2077 75
PP 2054 50
S1 2040 00
S2 2016 75
S3 1979 00 |
CMCSA | Comcast FX team to offer direct to consumer video | Comcast NASDAQ CMCSA is teaming with another channel to help establish streaming video on demand launching a plan to build a service for FX FOX 0 4 FOXA 0 3 That follows a deal the cableco made with AMC Networks AMCX 0 4 to build AMC Premiere a commercial free service for 4 99 month Comcast and FX will launch FX on Sept 5 for 5 99 month initially with commercial free versions of current seasons for original series from FX and FXX and every season of several current and library titles for FX That s estimated to be more than 1 100 episodes on offering of shows including American Horror Story Damages It s Always Sunny in Philadelphia Louie Nip Tuck The Shield and Sons of Anarchy including in season stacking rights to the originals Now read |
CMCSA | Sprint T Mobile rumored to have reopened merger talks | Investing com According to Bloomberg T Mobile US Inc NASDAQ TMUS and Sprint have reopened their merger talks now that an exclusive window for Sprint to talk to Charter and Comcast NASDAQ CMCSA has expired
T Mobile and Sprint the number 3 and number 4 wireless providers attempted a merger three years ago but concerns that regulators wouldn t approve the combination lead to its unraveling |
WFC | U S consumer sentiment falls as election euphoria fizzles | By Lucia Mutikani
WASHINGTON Reuters U S consumer sentiment eased off a 13 year high in early February likely as some of the jubilation over Donald Trump s election victory ebbed but it remained strong enough to suggest that consumers will continue to drive the economy
Confidence surged in the wake of Trump s victory last November The jump in sentiment tracked a stock market rally as both consumers and investors focused on the business mogul turned politician s promises to cut taxes and reduce regulations
These proposals whose details remain vague were viewed as pro business and favorable for economic growth At a meeting with airline executives on Thursday President Trump said he would announce a phenomenal tax plan in the next few weeks but offered no specifics
The University of Michigan on Friday said its consumer sentiment index fell to 95 7 early this month from a reading of 98 5 in January which was the highest since January 2004 The survey s current conditions sub index of consumer expectations dropped to 85 7 from January s reading of 90 3
This might be due to a lack of follow through from Washington on the details of the plans for tax cuts reforming healthcare and infrastructure spending said John Ryding chief economist at RDQ Economics in New York
The University of Michigan said consumers who participated in this month s survey were split in their views on the Trump administration s economic policies Thirty percent of respondents had a favorable view while 29 percent had a negative perception
As such nearly six in 10 consumers made a positive or negative mention of government policies which the university said was an unusually high reading for the survey
Consumers views were split along party lines with self identified Democrats anticipating an economic recession while self identified Republicans expected continued growth
America is clearly in a politically charged environment and that was evident in the survey results said Jim Baird chief investment officer at Plante Moran Financial Advisors in Kalamazoo Michigan
The bottom line is that consumers remain understandably upbeat supported by continued strength in the labor markets and appear to be of the positive mindset for spending growth to continue in the coming months
Consumer spending accounts for more than two thirds of U S economic activity The dollar was trading higher against a basket of currencies while prices for U S government debt fell Stocks on Wall Street hit record highs on the back of Trump s promised tax announcement
LOW INFLATION EXPECTATIONS
The University of Michigan survey also showed consumers inflation expectations remaining generally low early this month The low inflation theme was also evident in a separate report from the Labor Department on Friday
Import prices increased 0 4 percent last month amid further gains in the cost of energy products after advancing 0 5 percent in December In the 12 months through January import prices jumped 3 7 percent the largest gain since February 2012 after advancing 2 0 percent in December
But import prices excluding fuels fell 0 2 percent following a 0 1 percent dip the prior month They were unchanged in the 12 months through January
Import prices are rising as firming global demand lifts prices for oil and other commodities but the spillover to a broader increase in inflation is being limited by dollar strength
The dollar gained 4 4 percent against the currencies of the United States main trading partners in 2016 with most of the appreciation occurring in the last months of the year
This suggests that the greenback will continue to depress imported inflation in the near term even though the dollar has weakened 2 9 percent on a trade weighted basis this year
We expect to see the dollar generally strengthen in the coming months which will keep non fuel import price inflation tame said Sarah House an economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina
Prices for imported fuels increased 5 8 percent last month
after rising 6 6 percent in December The cost of imported food dropped 1 3 percent after declining 1 5 percent in December
Prices for imported capital goods edged down 0 1 percent while those for automobiles dropped 0 5 percent the biggest decline since January 2015 |
WFC | Wells Fargo sets up artificial intelligence team in tech push | By Anna Irrera NEW YORK Reuters Wells Fargo NYSE WFC Co has created a team to develop artificial intelligence based technology and appointed a lead for its newly combined payments businesses as part of an ongoing push to strengthen its digital offerings Wells Fargo s AI team will work on creating technology that can help the bank provide more personalized customer service through its bankers and online the bank said on Friday It will be led by Steve Ellis head of Wells Fargo s innovation group Well Fargo s AI focus comes as banks and other large financial institutions increase their investment in the emerging technology which seeks to train computers to perform tasks that would normally require human intelligence Projects range from systems that can spot payments fraud or misconduct by employees to technology that can make more personal recommendations on financial products to clients The bank also announced that it had appointed Danny Peltz head of treasury merchant and payment solutions to head business development and strategy for its combined payments businesses Peltz s group which comprises of the bank s consumer small business commercial and corporate banking payments businesses will also be tasked with establishing relationship with other companies in the payments landscape It will also be in charge of the bank s new API application program interface services or technology that allows customers to integrate Wells Fargo products and services into their own applications Both teams will report into Avid Modjtabai head of payments virtual solutions and innovation Modjtabai s division was set up in October as part of efforts to enhance the bank s digital products and services by combining its innovation teams with some of the businesses most affected by changes in technology such as payments
This version of the story was refiled to correct paragraph 6 typographical error to Peltz instead of Pelz |
WFC | Robo advisers shrug off U S fiduciary rule hubbub | By Anna Irrera and Elizabeth Dilts
NEW YORK Reuters As century old Wall Street brokerages have agonized over the fate of a major U S regulation on retirement advice younger Silicon Valley counterparts have coolly shrugged their shoulders
At issue is when and how the federal government will implement the so called fiduciary rule handed down by the U S Labor Department last year
The rule which aims to protect retirees by eliminating conflicts of interest for the brokers paid to advise them was set to go into effect in April but is being challenged by the Trump administration
The rule is now on track to be delayed by 180 days creating a great deal of uncertainty about its future
Big wealth managers and insurers most affected by the rule have welcomed signs that the new White House may roll it back They have fought hard against the rule in court and on Capitol Hill arguing that it would raise compliance and technology costs while restricting brokers ability to charge commissions and sell certain high fee products
Critics have said the additional costs would force brokerages to dump less well heeled clients in favor of wealthier ones Startups offering digital wealth management services have taken the opposite tack saying the rule would benefit retirees and their own businesses Investors abandoned by big firms might move to digital providers which offer transparent lower cost alternatives the thinking goes
In interviews since Trump instructed the Labor Department to review the rule earlier this month executives at robo advisers which manage investor money with algorithms brushed off the impact of the rule on their business
Although the rule might have sped up a broader shift of investor money to robo advisers the trend had been gathering momentum anyway they said
An expansion of the fiduciary rule would be nice for our business but in no way affects our ultimate success said Andy Rachleff chief executive officer of Wealthfront one of the largest robo advisers that deals directly with investors
Wealthfront competitor Betterment has encouraged Democrats in recent weeks to fight efforts to delay or gut the rule Nonetheless Betterment s Associate General Counsel Seth Rosenbloom said any regulatory changes would have little impact on the company s growth
We are sad that it looks like the rule might go away be delayed or watered down Rosenbloom said But we are optimistic that the attention around the issue will make for better informed investors in the long run
Among robo advisers that provide services to brokerages Mike Sha co founder and chief executive of robo adviser SigFig said he did not expect the rule s delay to impact its business or partnerships at all Wealth units of Wells Fargo NYSE WFC Co and UBS Group AG use SigFig s technology and offer its online investing tools to their clients
Robo advisers represent a small piece of the wealth management industry overseeing roughly 200 billion of client assets in 2016 according to consulting firm A T Kearney It expects the total to surge to 2 2 trillion by 2020
Interrupting the fiduciary rule could slow that growth for some companies Last week for instance LPL Financial Holdings said if the rule was delayed it might move more slowly in rolling out some compliance plans which include its robo adviser and other new technology
But the shift to less expensive digital options began before the rule was formalized driven primarily by customer demand for more digital options That trend is unlikely to be stopped with or without the rule analysts said
By all projections there is unbelievable demand for digital advice and solutions said Kendra Thompson a managing director in the financial services group at the consultancy Accenture The rule is an accelerator for digital not an originator she said |
WFC | U S producer inflation boosted by higher energy prices | By Lucia Mutikani WASHINGTON Reuters U S producer prices recorded their largest gain in more than four years in January amid increases in the cost of energy products but a strong dollar continued to keep underlying inflation at the factory gate tame Rising raw material costs are boosting producer prices across the globe notably in China which is the biggest source of U S imports But economists still expect overall U S inflation to keep climbing gradually given the buoyant dollar China saw the biggest price gain since 2011 in January Given that most of the upward price pressure is the result of raw materials prices returning from the depths of last year the longer term view continues to be wary but not alarmed said Jay Morelock an economist at FTN Financial in New York The U S Labor Department said on Tuesday its producer price index for final demand jumped 0 6 percent last month which was the biggest rise since September 2012 and followed a 0 2 percent gain in December Higher prices for some services also contributed to the increase in January Economists had expected the PPI to rise 0 3 percent in January Despite the surge the PPI only increased 1 6 percent in the 12 months through January after a similar gain in December A measure of underlying producer price pressures that excludes food energy and trade services advanced 0 2 percent after edging up 0 1 percent in December The so called core PPI rose 1 6 percent in the 12 months through January slowing from December s 1 7 percent gain The Federal Reserve has a 2 percent inflation target Gradually rising inflation together with a tightening labor market and firming economic growth should position the Fed to continue raising interest rates this year The U S central bank raised rates in December and projected three more hikes in 2017 Fed Chair Janet Yellen told U S lawmakers on Tuesday that waiting too long to raise borrowing costs would be unwise The dollar DXY was trading higher on Yellen s comments touching a three week high against a basket of currencies U S government bond prices fell while stocks on Wall Street were mixed DOLLAR STRENGTH More U S manufacturers are reporting paying higher prices for raw materials The Institute for Supply Management s ISM prices index surged in January to its highest level since May 2011 Closely correlated to the PPI the ISM index has advanced for 11 straight months Those gains largely reflected increases in the prices of commodities such as crude oil which are rising due to a steadily growing global economy Oil prices have climbed above 50 per barrel But with the dollar strengthening further against the currencies of the United States main trading partners and wage growth still moderate the spillover to consumer inflation from rising commodity prices is likely to be limited A government report on Friday showed import prices excluding fuels fell in January for a third straight month Data on Wednesday is expected to show the consumer price index increased 0 3 percent last month after a similar gain in December according to a Reuters survey of economists While the trend in inflation remains upward it is not quickening as fast as today s headline suggests Inflation is not an immediate issue for the Fed said Sarah House an economist at Wells Fargo NYSE WFC Securities in New York Last month prices for final demand goods increased 1 0 percent the largest rise since May 2015 The gain accounted for more than 60 percent of the increase in the PPI Prices for final demand goods advanced 0 6 percent in December Wholesale food prices were unchanged last month after climbing 0 5 percent in December Healthcare costs edged up 0 2 percent Those costs feed into the Fed s preferred inflation measure the core personal consumption expenditures PCE index The volatile trade services component which measures changes in margins received by wholesalers and retailers shot up 0 9 percent in January after being unchanged in the prior month |
WFC | Banks lift stocks U S yields climb after data | By Chuck Mikolajczak NEW YORK Reuters Stocks on major world markets rose further on Wednesday and U S Treasury yields rose after a batch of U S economic data increased the possibility of an interest rate rise by the Federal Reserve U S retail sales rose more than expected in January while other data showed consumer prices recorded their biggest increase in nearly four years last month and manufacturing output steadily rising The reports come on the back of comments from U S Fed Chair Janet Yellen on Tuesday that the central bank would probably need to raise rates at one of the upcoming meetings The economic data and Yellen s comments heightened expectations of a March interest rate hike with U S short term interest rates futures implying a 27 percent chance of a 25 basis point rise at its March meeting It makes it more interesting March for sure said Brian Rehling co head of global fixed income strategy for Wells Fargo NYSE WFC Investment Institute in St Louis There is a chance more so than when she started speaking but just to the extent that she kept it in play rather than saying it is coming in March The prospect of higher rates pushed U S financial stocks SPSY 0 5 percent higher on Wall Street for their fifth straight day and lifted the benchmark S P 500 index SPX slightly higher to another record The Dow Jones Industrial Average DJI rose 80 19 points or 0 39 percent to 20 584 6 the S P 500 SPX gained 4 38 points or 0 19 percent to 2 341 96 and the Nasdaq Composite IXIC added 15 89 points or 0 27 percent to 5 798 46 MSCI s benchmark global equity index rose 0 48 percent to 442 26 points MIWD00000PUS less than a point off its intraday record of 443 75 Europe s index of leading 300 stocks FTEU3 rose nearly 1 percent earlier to its highest since December 2015 buoyed by bank earnings but had given up some gains to trade up 0 5 percent Benchmark U S Treasury yields rose to a two and a half week high of 2 524 percent after the data and were last down 9 32 in price to yield 2 5022 percent The U S dollar DXY reversed course after touching a one month high in the wake of the U S data and was last down 0 08 percent against a basket of major currencies The greenback has advanced for eleven straight session before weakening on Wednesday Yellen testifies to the U S Congress again on Wednesday this time to the House of Representatives U S crude CLc1 was down 0 4 percent at 52 99 and Brent shed 0 4 percent to 55 73 a barrel LCOc1 after a bearish increase in U S crude inventories to record highs nL4N1G026V |
WFC | All Eyes On U S Q3 GDP | US economic output is widely expected to post substantially slower growth in the government s preliminary estimate of third quarter GDP that s scheduled for release this Thursday Oct 29 Exactly how much deceleration we ll see vs Q2 s strong 3 9 rise real seasonally adjusted annual rate is a matter of some debate Indeed the projections vary from tepid expectations that border on stall speed assumptions up to a moderate pace that s still worrisome but strong enough to fend off the view that a new recession is near
Let s start with The Capital Spectator s outlook the average Q3 GDP estimate via several econometric forecasts ticked up to 2 5 from 2 2 in last month s update This estimate is currently the poster boy for the high end of assumptions from the wider world of macro forecasts But here too there s a spectrum of figures behind The Capital Spectator s average prediction ranging from 2 0 to 2 9
Substantially darker estimates can be found elsewhere including the Atlanta Fed s Oct 20 forecast of only 0 9 Wells Fargo N WFC has a similarly diminished outlook of just 1 0 for Q3 GDP growth By contrast BMO Capital s Oct 23 estimate is a relatively upbeat 2 2
Thursday s GDP number is not going to look good on the surface but if you look at consumer spending and housing and business spending the numbers are going to be closer to 4 RBS Michelle Girard told CNBC yesterday
Perhaps but if the headline growth rate stumbles in Thursday s preliminary GDP report for Q3 the crowd will have a tough time focusing on underlying details that paint a brighter profile
Here s a summary of The Capital Spectator s Q3 2015 average estimate vs recent history and forecasts from various sources
Here are the various forecasts that are used to calculate CapitalSpectator com s average estimate
As updated estimates are published based on incoming economic data the chart below tracks the changes in the evolution of The Capital Spectator s projections
Finally here s a brief profile for each of The Capital Spectator s GDP forecast methodologies
R 4 This estimate is based on a multiple regression in R of historical GDP data vs quarterly changes for four key economic indicators real personal consumption expenditures or real retail sales for the current month until the PCE report is published real personal income less government transfers industrial production and private non farm payrolls The model estimates the statistical relationships from the early 1970s to the present The estimates are revised as new data is published
R 10 This model also uses a multiple regression framework based on numbers dating to the early 1970s and updates the estimates as new data arrives The methodology is identical to the 4 factor model above except that R 10 uses additional factors 10 in all to forecast GDP In addition to the data quartet in the 4 factor model the 10 factor forecast also incorporates the following six series ISM Manufacturing PMI Composite Index housing starts initial jobless claims the stock market Wilshire 5000 crude oil prices spot price for West Texas Intermediate and the Treasury yield curve spread 10 year Note less 3 month T bill
ARIMA GDP The econometric engine for this forecast is known as an autoregressive integrated moving average This ARIMA model uses GDP s history dating from the early 1970s to the present for anticipating the target quarter s change As the historical GDP data is revised so too is the forecast which is calculated in R via the forecast package which optimizes the parameters based on the data set s historical record
ARIMA R 4 This model combines ARIMA estimates with regression analysis to project GDP data The ARIMA R 4 model analyzes four historical data sets real personal consumption expenditures real personal income less government transfers industrial production and private non farm payrolls This model uses the historical relationships between those indicators and GDP for projections by filling in the missing data points in the current quarter with ARIMA estimates As the indicators are updated actual data replaces the ARIMA estimates and the forecast is recalculated
VAR 4 This vector autoregression model uses four data series in search of interdependent relationships for estimating GDP The historical data sets in the R 4 and ARIMA R 4 models noted above are also used in VAR 4 albeit with a different econometric engine As new data is published so too is the VAR 4 forecast The data sets range from the early 1970s to the present using the vars package in R to crunch the numbers
ARIMA R NIPA The model uses an autoregressive integrated moving average to estimate future values of GDP based on the datasets of four primary categories of the national income and product accounts NIPA personal consumption expenditures gross private domestic investment net exports of goods and services and government consumption expenditures and gross investment The model uses historical data from the early 1970s to the present for anticipating the target quarter s change As the historical numbers are revised so too is the estimate which is calculated in R via the forecast package which optimizes the parameters based on the data set s historical record |
WFC | Potential Trades On A Likely Binary Outcome | The recent plunge in Eros International EROS is finally getting some mainstream media attention in the U S This attention finally prodded EROS management to issue about the latest drama in its stock Forbes Asia did it on October 27th From EROS
With reference to letters received from BSE NSE with regards to article appearing in The Economic Times dated October 25 2015 captioned Eros International under Wells Fargo s scanner stock downgraded We believe that the recent movement in share price volatility at our NYSE listed parent level and today at Indian stock exchanges are based on speculative media reports
We would like to reassure our shareholders that there has been no material change to the previously announced strong fundamentals of the company
Our Q1 results have been strong and nothing has materially changed since then in fact a further string of hits by the Company such as Bajrangi Bhaijaan in Q2 We will be announcing what we expect to be a strong second quarter results in the first half of November specific date to follow and that will be another opportunity for us to answer further questions regarding all aspects of our operations and finance during that earning s call
The press release also referenced an October 23rd Wells Fargo N WFC analyst report that is apparently driving the renewed selling in EROS The company essentially dismissed the negative implications of the report by pointing out that the analyst did not change earnings estimates or the price target The company further pointed out that a Macquerie analyst sang praises for EROS on the same day with an outperform rating and 25 price target
This press release was good enough for a gap up and strong close off recent 52 week lows The buying interest was not sustained At the close of trading on October 29th EROS closed at levels last seen around March 2014
Eros International EROS continues to face unrelenting pressure
The continued selling speaks volumes about the lingering skepticism facing EROS Traders and investors are clearly unwilling to wait until yet another company meeting to find answers to the nagging questions about the company s business
There appear to be two main issues dogging the company
A credible explanation for the rapid growth in revenue from the United Arab Emirates UAE from 14 5M in 2013 t0 45 6M in 2014 and so far 103 8M this year EROS has yet to address this head on
A clear quantification of its user base EROS reported that it has 30M registered users The Forbes piece references an EROS press release I could not find it myself even in SEC filings clarifying its base of 30 million registered users is a combination of web WAP and APP customers acquired organically and through an acquisition However this COULD mean EROS is double counting
These doubts reminded me that I neglected to note in that the selling in the stock could be the result of an ABSENCE of information With these additional details it seems indeed that the Investor Day was a complete failure for EROS Failing to receive answers to questions and doubts in a satisfactory manner investors are choosing to assume the worst and bail
Given this drama I do not think EROS can be treated as an investment meaning buy these shares on the cheap and then hold on or buy even more shares through all the uncertainty and likely additional selling hoping that the company delivers in November s meeting where it did not earlier this month However there are potential trading opportunities here that offer good risk reward assuming that the outcome for EROS is close to a binary one either 1 the company turns out to be fraudulent and EROS collapses into the low single digits or 2 all the ruckus just reflects management s poor communication abilities and EROS soars toward previous heights
Options are a great tool in these cases As an example here is how I have traded EROS
After seeing the buying interest in EROS on Friday October 23 I bought shares married to put options expiring November 20th and a 12 50 strike price This placement SHOULD give me enough runway to the company s next presentation I held the position even after the shares gained enough value on Monday s rally to pay for the put options I did not want to miss out if the rally was sustained It was not On today s 16 plunge I went back into the red but I am fully covered on any additional downside and start to make a net profit if EROS falls into single digits So I took the opportunity to double down on the trade with a fresh batch of options and a lot more shares My assumption is that at these levels the potential upside is far greater than the downside The next batch of options also expire November 20th but are at a 10 strike price For additional coverage I sold March 17 50 call options against some of my shares Now I have paid for a portion of my put options I left some shares uncovered to benefit if EROS for example hits analyst price targets at some point
The basic idea is that any trade has to be hedged whether bullishly or bearishly Options are best for the short term hedge shares to match the longer term bias and provide maximum flexibility and liquidity I am currently biased towards the bull case since I think EROS is in a great market So I am buying shares and put options The catalyst of the November meeting is the presumed trigger point of a binary outcome If the meeting does not trigger the binary outcome I will have to develop a longer term configuration I have done a little more longer term preparation by selling the March out of the money call options against the shares Hitting the 17 50 strike price would deliver significant profits for the trade
If you are biased bearish short shares and buy call options This is a mirror image of the trade I described for myself However given the potential for great loss if EROS soars it makes sense to quickly cover shares if significant profits develop In other words do not be a greedy bear
Here are two other ideas if you are not convinced that EROS faces a likely binary outcome but want to limit potential losses betting on the company
If you are very bullish sell out of the money put options This is best done at the end of a day like today when fear accelerates and drives option premiums a lot higher The premiums are very high given the volatility and uncertainty in the stock Be prepared to own the shares if the stock does indeed collapse further Upside is limited to the premium sold in the put options
If you prefer low risk and are not trying to make money in an extreme binary outcome buy shares and sell call options against them Use the premium on the call options to buy put options This trade neutralizes most of the additional premium inflating the options because of current volatility This trade limits downside with a cap on the upside as a trade off This trade is also called a collar and is biased bullish
In all these trades the positions fully respect the risks involved in a story like EROS and seek to limit potential loss while allowing for enough profit to justify the risk If executed properly a trader need not be either bullish or bearish when specifically targeting a binary outcome Note well that I am NOT staking a specific claim on whether the market s concerns are justified or not
If you have any other trade ideas or questions feel free to post below or hit me up on or
Be careful out there
Full disclosure long EROS shares and put options short call options |
WFC | Eros Plunge Triggers Adjustments | Eros International N EROS faced the public and once again failed to deliver reassurance EROS management attended the Wells Fargo N WFC Technology Media Telecom Conference on November 11 2016 and the stock promptly plunged By the end of the day the carnage totaled to a 26 loss On the 13th the selling resumed I guess EROS was over optimistic that Wells Fargo would deliver good fortune this time around
The Eros plunge continues apace as the company completely fails to allay investor concerns
Source FreeStockCharts com
After watching the stock plunge all over again the company clearly felt compelled to release yet another press release even though it seems these pronouncements are just shouts in the wind From November 12th
On November 11 2015 the management team attended the Wells Fargo Technology Media Telecom Conference in New York where it did not disclose any new information to the market and only reinforced its business fundamentals No statement was provided concerning the Alpha Exposure article dated November 10 2015 which made further baseless allegations about the Company s core business its content library and film slate
From what I can surmise EROS has still not addressed head on one of the biggest concerns that launched the selling the surprisingly rapid and large revenue growth from the United Arab Emirates UAE The failure to do so has left the company vulnerable and exposed to additional charges of fraud The press release strangely titled Eros Says Content is at the Core of Their Business and Baseless and Misleading Allegations Don t Change Their Fundamentals goes on to reiterate its confidence in the strength of its film library Here is one key defense
As part of the NYSE IPO process in November 2013 the Company s entire film library and not just the new release slate tables went through full due diligence in which each and every agreement was vetted This same process was repeated for the follow on equity offering in July 2014 Every year when the Company files its Form 20F the Company and its auditors review the entire slate for that particular year
The Company has been very clear and transparent with analysts and investors on the categorization of films Conclusions drawn purely based on Indian box office reports are grossly misleading Such reports are compiled using informal informational sources that are not as reliable as Rentrak internationally only include theatrically released Hindi films in India and no non theatrical Hindi films and entirely exclude regional language films thereby creating a distorted picture
The above chart of course demonstrates that the press release failed to accomplish its mission for now
With EROS dropping toward my low single digit target in the worst case scenario I have made additional adjustments in my positioning for a binary outcome
On November 11 I made my first trade by locking in profits on my November 20 12 50 puts With expiration approaching I decided it was a good time to close them out under the don t be a greedy short concept Obviously with hindsight that sale was early I could have even held for another day the chart above is a snapshot at the time I sold the puts Realizing that EROS s binary outcome looked more likely to be heading toward zero than recovery I used Nov 12th s small bounce to add back in put options December 18 7 50s Keeping the hedge I added a single call option for December 18 10 For the upside part of the trade I have moved to call options over shares because of the increasing likelihood of EROS approaching zero I want to commit a lot less money to the upside part of the binary trade while still exposing my position to upside potential Finally with EROS plunging to 7 I sold all my November 20th 10 put options Frankly these were put options I thought would expire worthless
Going forward I will use any rallies in EROS to load up on a fresh batch of put options unless of course the rally occurs on a solidly positive catalyst With securities lawyers circling in on EROS the company is running out of time to produce a winning story The next and perhaps final catalyst will come the next time EROS has to report earnings The current tentative date appears to be November 18th This date comes from briefing com I find it extremely hard to get basic press release announcements at EROS s main corporate website
Be careful out there
Full disclosure on EROS long shares short call options long put options |
WFC | BlackBerry inks hardware licensing deal covering India | TORONTO Reuters BlackBerry Ltd TO BB has signed a hardware licensing agreement covering India and nearby countries the Canadian company said on Monday filling in the last markets where a third party will manufacture its once ubiquitous devices as it turns fully to software
The Waterloo Ontario based company said the long term licensing deal with Optiemus Infracom Ltd BO OPTI covers India one of BlackBerry s biggest handset markets as well as Sri Lanka Nepal and Bangladesh
The company did not provide financial terms of the deal but one analyst estimates that BlackBerry is collecting 1 per handset from around 7 million third party sales a quarter
Visibility to the success of its partners to drive new and upgrade sales remains limited Wells Fargo NYSE WFC analyst Maynard Um wrote in a note to clients adding that existing deals have not driven hardware sales
The news follows a similar according covering Indonesia that was announced last September and a global deal excluding Indonesia and some South Asian countries signed with China s TCL Communication Technology Holdings Ltd in December |
WFC | Wells Fargo likely to eliminate 2016 bonuses for top executives WSJ | Reuters Wells Fargo NYSE WFC Co s board is likely to eliminate 2016 bonuses for the bank s top executives following the bogus account scandal the Wall Street Journal reported on Wednesday citing people familiar with the matter The board met in late January and discussed withholding bonuses for senior executives including Chief Executive Timothy Sloan and Chief Financial Officer John Shrewsberry the WSJ said The board is expected to finalize its decision which could affect annual incentive awards that are paid in cash or stock in coming weeks A Wells Fargo spokesman declined to comment In September the lender agreed to pay a 185 million settlement over its staff opening as many as 2 million accounts without customers knowledge The misconduct carried out by low level branch staff to meet internal sales targets shattered the bank s folksy image triggered a raft of federal and state investigations and cost former CEO and chairman John Stumpf his job Sloan was chief operating officer at San Francisco based Wells Fargo the third largest U S bank by assets before he replaced Stumpf
For the fourth quarter Wells Fargo reported its fifth straight decline in quarterly profit and said it believed it had reimbursed the customers it needed to in order to comply with at least one of three settlements over the scandal |
WFC | Why go back to junk food diet for retirement investors | By Mark Miller
WASHINGTON Reuters Let s hear it for unhealthy retirement advice
The Donald Trump administration ordered a review last week of a new federal rule prohibiting conflicted advice to retirement savers a move that signals its intention to withdraw or defang the regulation As things stand now companies have until April 10 to comply with the rule
What is the White House s complaint against the so called fiduciary standard promulgated by the U S Department of Labor This is like putting only healthy food on the menu because unhealthy food tastes good but you still shouldn t eat it because you might die younger Gary Cohn director of the National Economic Council was quoted as saying in the Wall Street Journal
This is the sound of ideology roaring loudly free markets and consumer choice over paternalistic government regulation
Much is at stake The DoL rule does require anyone advising clients on their retirement accounts to act in the client s best interest and earn only reasonable compensation and disclose information to clients about fees and conflicts A U S District Court judge on Wednesday upheld the rule in a stunning defeat for the business and financial services groups that had sought to overturn it
Investors can sue advisers who fail to meet those standards And an Obama administration study found that middle class families are ripped off to the tune of 17 billion annually due to backdoor payments and hidden fees
If we are going to repeal and revert to a free market ideology consumers will at least need reliable high quality information to help them make judgments about what is good for them and what is financial junk food
FIDUCIARY LITE
A growing number of retirement investors understand the difference Recent research shows a rising understanding of the value of paying for financial planning advice and a preference for paying a fee rather than commissions on product sales which often appear to be free to the investor but often lead to conflicts that cost them money over time And the industry has seen a tectonic shift to low cost passive investing and software driven robo advisory services
But investors still must sort through the equivalent of
a clever head feint toward a customer first pledge from the banks brokerage firms and insurance companies that have fought the DoL standard tooth and nail as the Consumer Federation of America noted in a recent study
Call it fiduciary lite Consider the marketing pitches you can find online right now
J P Morgan Chase Our advisors focus on what YOU need
Raymond James Financial We believe financial advice is about more than just having a plan It s about having the right plan for you
Voya Financial We ve already done most of the vetting for you With a Voya retirement consultant you know you re getting a qualified professional who is thoroughly familiar with all of our products and services able to offer good advice and make sound financial decisions on your behalf
This week I contacted these companies and three others Wells Fargo NYSE WFC Co Edward Jones and Lincoln Financial Group for comment on the apparent contradiction between this type of language and their opposition to the DoL rule
I also posed five other questions about transparency they provide to clients to help them understand the cost of their services and competitors products whether they sell only their own proprietary products how they ensure that client best interests are served when deciding whether to roll over funds from 401 k s into individual retirement accounts and how their compensation models have changed to avoid adviser conflicts
Five of the six companies either declined to comment or did not immediately respond to my query
NO RIGHT OF ACTION
Lincoln Financial Group offered via a representative that it supports the intent of the DOL rule and its overarching goal to further ensure that client best interest is served by increasing transparency of cost and by allowing clients to choose how their financial advisors should be compensated
Lincoln added it supports a single standard for all financial products via the U S Securities and Exchange Commission SEC or Financial Industry Regulatory Authority and that it opposes a right of action created through regulation that applies only to qualified markets
But the SEC has had a decade to approve a standard as authorized under Dodd Frank and has failed to do it
Ask the trade lobby groups that represent these companies and they will tell you they support a best interest standard but that the DoL standard would raise the cost of advice for middle class households to prohibitive levels
This argument has always struck me as nonsense and a 2015 survey by fiduciary advocates of investment advisers and brokers confirms this More than 90 percent see no reason that working with a fiduciary adviser should cost more 83 percent say a fiduciary standard would not price investors out of the market for advice
The survey solicited anonymous responses to this question Do you believe a fiduciary duty for brokers who provide advice would reduce product and service availability for investors
Said one dually registered broker and fiduciary adviser No The marketplace would change Isn t it time |
WFC | Banks Give Up Hopes of Hikes Plow Into Long Dated Treasuries Mortgages | Banks have become convinced the Fed simply isn t going to hike So instead of waiting any longer large banks like Wells Fargo N WFC are plowing billions of dollars into longer dated treasuries and agencies
Simply put
In the years since the crisis the banks have grown used to grappling with higher costs and subdued demand for credit while keeping plenty of cash and cash like instruments on hand in the hope of benefiting from an uptick in short term rates
But after the decision from the US Federal Reserve to keep its target overnight rate on hold this month more lenders are taking their cue from Wells Fargo the biggest bank in the world by market capitalisation said analysts
Over the past year the San Francisco based bank has run down its cash and short term investments to buy longer term assets on the basis that rates will stay lower for longer according to John Shrewsberry chief financial officer
That conviction is now catching said Jason Goldberg an analyst at Barclays which recently hosted representatives from about 150 banks at a conference in New York The consensus was give up on the Fed said Mr Goldberg
n the second quarter noted Barclays about half of banks under its coverage reduced their sensitivity to rate rises by converting cash to higher yielding assets the highest proportion for more than four years
Wells Fargo added 50bn of securities to its held to maturity investment portfolio over the year to June according to public filings with much of it going to Treasuries and bonds issued by Fannie Mae and Freddie Mac the government backed mortgage companies We re earning today rather than maintaining all of that sensitivity for the future said Mr Shrewsberry during the bank s second quarter results presentation
Bankers are starting to say we can t run these institutions based on hope for higher rates so let s figure out what we can do said Fred Cannon global director of research at Keefe Bruyette Woods
Futures Still Suggest March as First Hike
A quick check on still shows the first hike in March of 2016 Based on futures prices it will be an eighth of a point hike at that |
CMCSA | Channel checks prompt Needham to reiterate Buy on Facebook | Needham has reiterated its Buy rating on Facebook FB 1 6 saying channel checks are pointing to better than expected ad revenue growth particularly as its Instagram is less likely to see real competition from Snap SNAP 2 6 We now believe Facebook is becoming the de facto near monopoly mobile choice for brands and direct response i e lead generation advertisers writes analyst Laura Martin She s boosting Q2 expectations to revenues of 9 18B vs consensus expectations for 9 19B and EPS of 1 09 slightly below Street expectations for 1 11 Snap meanwhile is up nicely today after announcing a partnership with NBC News NASDAQ CMCSA to produce a twice daily newscast Stay Tuned NBC will share revenue with Snap from ads sold on the show Now read |
WFC | Wells Fargo replaces asset based lending head | Reuters Wells Fargo Co s N WFC asset based lending head Guy Fuchs will resign according to a bank spokesman
Fuchs will be replaced by Ed Blakey a longtime Wells Fargo executive |
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