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WFC | Gold prices ease slightly in early Asian trade following overnight drop | Investing com Gold prices eased slightly in early Asian trade on Tuesday with the dollar holding largely steady from overnight levels following comments by a Federal Reserve official that were hopeful on the economic outlook On the Comex division of the New York Mercantile Exchange gold futures for December delivery traded at USD1 273 40 a troy ounce down 0 04 in a range of 1 272 50 1 275 50 Gold prices hit a session low of USD1 269 60 a troy ounce and high of USD1 289 00 a troy ounce overnight Gold prices dropped overnight after Federal Reserve Bank of New President William C Dudley said he was hopeful the U S economy will see better days ahead and stoked hopes that the U S central bank will begin scaling back stimulus tools more likely sooner than later likely in early 2014 Stimulus tools such as the Fed s USD85 billion in monthly bond prices seek to spur recovery by driving down interest rates weakening the U S dollar in the process and thus making gold an attractive hedge Comments from Dudley often viewed as a policy dove pushed gold prices lower by stoking sentiments that the Fed will announce plans to scale back asset purchases in early 2014 likely around March Elsewhere National Association of Home Builders Wells Fargo Housing Market Index came in unchanged in November at 54 missing analysts calls for an uptick to 55 this month though metals markets shrugged off the report |
LB | Wolverine World Wide WWW Q3 Earnings Top Sales Lag | Wolverine World Wide Inc NYSE WWW reported mixed financial numbers for third quarter 2016 The company reported earnings per share of 49 cents beating the Zacks Consensus Estimate by a penny and also increased 2 1 year over year This was the fourth straight quarter of positive earnings surprise for the company On an adjusted currency basis the company s earnings per share increased 6 year over year to 51 cents However Wolverine s reported revenues of 603 7 million plunged 11 1 year over year and also came below the Zacks Consensus Estimate of 627 million after surpassing the same in the preceding three quarters The sharp decline in revenues was primarily due to dismal performance of the company s Wolverine Outdoor and Lifestyle Group Following the revenue miss shares fell 3 5 on Oct 18 On a reported basis Lifestyle Group revenues were down 13 3 to 219 1 million Revenues of the Heritage and Boston Groups also declined 1 5 to 86 million and 9 to 202 4 million respectively Moreover revenues from the company s other brands and multi brand slumped 24 2 and 16 1 to 15 7 million and 80 5 million respectively Adjusted gross margin on a constant currency basis came in at 40 flat year over year Wolverine s adjusted operating margin on a constant currency basis increased 30 basis points to 12 2 WOLVERINE WORLD Price and EPS Surprise Other Financial AspectsWolverine ended the quarter with cash and cash equivalents of 530 9 million long term debt of 657 7 million and shareholders equity of 1 040 7 million Inventories during the quarter were down about 7 6 to 457 6 million The company announced a fresh four year share buyback program of 300 million overriding the remaining balance of 2014 authorization During the quarter the company repurchased nearly 417 816 shares at an average price of 23 55 per share GuidanceThe Zacks Rank 3 Hold company s projects 2016 revenues to decrease 8 4 3 in the range of 2 475 billion to 2 575 billion Management continues to expect adjusted earnings per share for 2016 in the range of 1 30 1 40 The Zacks Consensus Estimate is currently pegged at 1 36 per share falling within the company s guidance range Moreover on a constant currency basis adjusted earnings are estimated to be in the range of 1 48 1 58 per share The company anticipates inventory levels to decline low teens by the end of 2016 in comparison to 2015 Stocks to ConsiderBetter ranked stocks worth considering in the retail sector include DSW Inc NYSE DSW Foot Locker Inc NYSE FL and L Brands Inc NYSE LB All these stocks carry a Zacks Rank 2 Buy You can see DSW has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average earnings surprise of 24 Shares of Foot Locker have gained more than 16 in the past three months L Brands has a long term earnings growth rate of 11 3 Confidential from ZacksBeyond this Analyst Blog would you like to see Zacks best recommendations that are not available to the public Our Executive VP Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand |
PFE | Exclusive Pharma sector warns Saudis on German drug curbs | By Noah Barkin and Caroline Copley BERLIN Reuters European and U S pharmaceutical associations have waded into a diplomatic row between Germany and Saudi Arabia warning that ongoing restrictions on German made drugs could hurt Saudi patients and dampen future investment in the kingdom In a strongly worded letter to Crown Prince Mohammed bin Salman a copy of which has been seen by Reuters the associations highlighted the level of concern in Germany and elsewhere about restrictive procurement measures implemented by Riyadh in response to criticism of its policies While a human rights row between Canada and Saudi Arabia has dominated headlines in recent weeks Germany has been embroiled in its own spat with the oil rich kingdom since November Germany s foreign minister at the time Sigmar Gabriel condemned adventurism in the Middle East in comments perceived by some as an attack on increasingly assertive Saudi policies Riyadh dismissed the comments as shameful and withdrew its ambassador to Germany Since then Chancellor Angela Merkel has tried to ease the tensions speaking to Prince Mohammed by telephone But the row has rumbled on and German officials say companies such as Siemens Healthineers DE SHLG Bayer DE BAYGn and Boehringer Ingelheim are being excluded from public healthcare tenders in Saudi Arabia For the past six months German healthcare companies have been having trouble doing business in Saudi Arabia said Oliver Oehms of the German chamber of commerce and industry in Riyadh It is not a general boycott but the healthcare sector is clearly suffering The dilemma for Berlin has been deepened by the Canada Saudi dispute which was triggered by a tweet from the Canadian foreign minister calling for the release of human rights activists in Saudi Arabia The kingdom responded by expelling the Canadian ambassador recalling its own envoy freezing new trade and investment suspending flights and ordering Saudi students to leave Canada Some German politicians have denounced the Saudi reaction but the government has remained conspicuously quiet for fear of sabotaging its own conciliation efforts MAJOR NEGATIVE EFFECTS News that Saudi Arabia was punishing German companies broke in May But the existence of the letter dated June 12 and addressed to Prince Mohammed has not been reported previously This action could have major negative effects on the sustainable supply of innovative critically necessary medicines for the treatment of patients in the Kingdom of Saudi Arabia the letter from the German VFA European EFPIA and American PhRMA pharmaceutical associations reads It says a decision to exclude German made products from the centralized Saudi procurement process for medical supplies is likely to significantly dampen industry s perception of Saudi Arabia as a site for future investment in innovative medicines The associations declined to comment further but German officials said there had been no response from the Saudis or an improvement in their situation since the letter was sent The Saudi authorities did not respond immediately to a request for comment Saudi Arabia is the largest pharmaceuticals market in the Middle East and Africa with sales of 7 6 billion last year according to healthcare information company IQVIA With a growing burden of chronic diseases tied to a more Western lifestyle Saudi Arabia s overall drugs market is growing at 10 percent a year and the tender sector is expanding by about 30 percent Neither Bayer nor Boehringer rank among the top 10 drug suppliers in Saudi Arabia That list is led by Novartis S NOVN Pfizer N PFE and local manufacturer Tabuk according to IQVIA German exports to Saudi Arabia fell 5 percent in the first half of 2018 They totaled 6 6 billion euros in 2017 with an estimated 15 percent coming from the healthcare sector AMERICAN HELP Bayer and Boehringer declined to comment But Siemens Healthineers which makes X ray and MRI machines as well as diagnostic equipment acknowledged that its business in Saudi Arabia had been affected and said it had turned to U S authorities for help in ending the impasse The decision of the Saudi Arabian government indeed has an impact on our local business said a spokesman for the Siemens unit which does not provide a breakdown of its Saudi business We are working on a solution together with U S authorities to utilize our global value chain to overcome the restrictions of the Saudi Health Ministry he added declining to provide further details The company employs about 13 000 people in the United States more than a quarter of its global workforce and could make the case to American authorities that its U S operations and jobs will be hit if Saudi restrictions are not lifted It could also rejig supply routes to send more products from the United States instead of Germany Johann Wadephul a senior member of parliament from Merkel s conservative Christian Democrats CDU described the row with Saudi Arabia very damaging Should there be solidarity with Canada Yes But I don t think this should be the focus of German foreign policy in the region he told Reuters
The focus should be on improving relations with Saudi Arabia Unfortunately we haven t achieved this so far |
WFC | U S futures higher on Fed minutes Dow Jones up 0 28 | Investing com U S stock futures pointed to a higher open on Thursday after upbeat Chinese manufacturing data and as the minutes of the Federal Reserve s latest meeting indicated that policymakers remain divided on when to start scaling back the bank s stimulus program Ahead of the open the Dow Jones Industrial Average futures pointed to a 0 28 fall S P 500 futures signaled a 0 36 gain while the Nasdaq 100 futures indicated a 0 57 increase Sentiment strengthened after the preliminary reading of China s HSBC manufacturing purchasing managers index rose to a four month high of 50 1 in August up from 47 7 in July Economists had forecast a reading of 48 3 Investors were cautious after the minutes of the Fed s July meeting showed that officials were broadly comfortable with plans to start unwinding the bank s USD85 billion a month bond buying program However officials remain divided over the timing of possible reduction with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate The minutes described recent U S economic data as mixed indicating that plans to taper could be pushed back if the economy was to weaken The financial sector was expected to be active following reports Wells Fargo will eliminate 2 300 jobs in mortgage production due to a drop in demand for refinancings Mining stocks were also likely to be in focus Barrick Gold rallied 1 63 in pre market trade after Gold Fields agreed to acquire three of its Australian mines In the tech sector Hewlett Packard dove 8 in early trading after forecasting earnings excluding some items of 98 cents to USD1 02 a share for the fiscal fourth quarter while analysts had predicted USD1 01 on average Elsewhere Yahoo was said to have attracted more U S visitors than Google in July for the first time since May 2011 sending the company s shares up 0 78 pre market Google shares dipped 0 03 Other stocks likely to be in focus included Dollar Tree Gamestop Sears Buckle Patterson Companies and Abercrombie and Fitch scheduled to post results later in the day Across the Atlantic European stock markets were sharply higher The EURO STOXX 50 jumpd 1 17 France s CAC 40 gained 0 96 Germany s DAX rallied 1 05 while Britain s FTSE 100 advanced 0 78 During the Asian trading session Hong Kong s Hang Seng Index rose 0 36 while Japan s Nikkei 225 Index slid 0 44 Later in the day the U S was to publish a report on initial jobless claims |
WFC | U S stocks open higher ahead of data Dow Jones up 0 17 | Investing com U S stocks opened higher on Friday a day after trading was halted in all Nasdaq securities for more than three hours as markets eyed the release of U S new home sales data later in the day During early U S trade the Dow Jones Industrial Average added 0 17 the S P 500 index rose 0 27 while the Nasdaq Composite index gained 0 70 On Wednesday the minutes of the Fed s July meeting showed that officials were broadly comfortable with plans to start unwinding the bank s USD85 billion a month bond buying program However officials remain divided over the timing of possible reduction with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate The minutes described recent U S economic data as mixed indicating that plans to taper could be pushed back if the economy was to weaken In the tech sector Apple slipped 0 17 after billionaire investor Carl Icahn tweeted that the company s CEO Tim Cook was planning a bigger buyback The news came after Icahn revealed last week that he had taken a large position in Apple which is estimated to be worth more than USD1 billion Separately a number of images were leaked on Thursday of what could be Apple s new line of iPhones On the upside Microsoft surged 6 51 after the company said CEO Steve Ballmer will retire within 12 months Meanwhile Moody s Investors Service warned it might cut the credit ratings of the six of the biggest U S lenders including Goldman Sachs JPMorgan Chase Morgan Stanley and Wells Fargo The ratings agency said the U S government may be unlikely to bail the banks out should they face trouble in the future At the open of the U S trading session Goldman Sachs fell 0 24 and JP Morgan dipped 0 06 while Morgan Stanley and Wells Fargo gained 0 04 and 0 28 respectively Other stocks likely to be in focus included Foot Locker and Hibbett Sports scheduled to post quarterly results Across the Atlantic European stock markets were higher The EURO STOXX 50 climbed 0 72 France s CAC 40 rose 0 34 Germany s DAX advanced 0 40 while Britain s FTSE 100 jumped 0 93 During the Asian trading session Hong Kong s Hang Seng Index fell 0 15 while Japan s Nikkei 225 Index surged 2 21 Later in the day the U S was to release official data on new home sales |
WFC | U S futures lower ahead of durable goods data Dow Jones down 0 16 | Investing com U S stock futures pointed to a lower open on Monday ahead of the release of U S durable goods data as markets were jittery amid ongoing uncertainty over the future of the Federal Reserve stimulus program Ahead of the open the Dow Jones Industrial Average futures pointed to a 0 16 fall S P 500 futures signaled a 0 14 loss while the Nasdaq 100 futures indicated a 0 03 dip On Friday the Commerce Department said U S new home sales fell by a larger than forecast 13 4 in July the largest decline in more than three years The weak data sparked concerns over the strength of the recovery in the housing sector and fuelled speculation over whether the Fed will start to scale back its USD85 billion a month asset purchase program in September Tech stocks were expected to be active as Microsoft shares dropped 0 60 in pre market trade as the company began looking for a new Chief Executive Officer after announcing that Steve Ballmer said he will retire within 12 months Pharmaceutical companies were also likely to be in the spotlight after Amgen said it will acquire Onyx Pharmaceuticals in a USD10 4 billion transaction giving Amgen access to a rapidly expanding cancer market Following the news shares in Amgen surged 4 18 pre market In the financial sector Goldman Sachs placed four senior technology specialists on administrative leave after a programming error caused the investment bank to send faulty stock options orders last week according to a Financial Times report Separately Moody s Investors Service warned last week that it might cut the credit ratings of the six biggest U S banks including Goldman Sachs JPMorgan Chase Morgan Stanley and Wells Fargo saying the government may be unlikely to bail them out should they face trouble in the future Across the Atlantic European stock markets were lower The EURO STOXX 50 retreated 0 63 France s CAC 40 declined 0 58 Germany s DAX slipped 0 27 while Britain s FTSE 100 remained closed for a national holiday During the Asian trading session Hong Kong s Hang Seng Index climbed 0 65 while Japan s Nikkei 225 Index edged down 0 18 Later in the day the U S was to release data on durable goods orders |
WFC | Gold slides ahead of conclusion of Fed meeting | Investing com Gold futures traded lower in the early part of Wednesday s Asian session as traders in the region braced for a possible tapering announcement when the Federal Reserve wraps up its two day meeting later Wednesday On the Comex division of the New York Mercantile Exchange gold futures for December delivery slipped 1 07 to USD1 295 40 per ounce in Asian trading Wednesday The December contract settled by 0 64 at USD1 309 40 per troy ounce on Tuesday Gold futures were likely to find support at USD1 303 20 a troy ounce Monday s low and resistance at USD1 393 80 the high from Sept 8 Investors remain skittish about the near term outlook for precious metals prices including gold ahead of possible tapering commentary from the Fed A stimulus tool known as quantitative easing that drives down long term interest rates and weakens the dollar to spur recovery a recipe for rising gold prices While the Fed has committed to keep interest rates low some reduction in the central bank s USD85 billion per month bond buying program is expected Tapering to the tune of USD10 billion to USD15 billion is expected by many market participants Data out Tuesday indicate U S inflation is benign eroding gold s utility as an inflation hedge In U S economic news out Tuesday the U S Labor Department said the consumer price index rose 0 1 last month following a 0 2 rise in July Excluding food and energy costs core prices also rose just 0 1 Year over year prices are up 1 5 The National Association of Home Builders said its NAHB Wells Fargo Housing Market Index remained flat at 58 in September The August reading was revised down to 58 from 59 Economists expected a reading of 59 Elsewhere Comex silver for December delivery fell 0 76 to USD21 618 per ounce while copper for December delivery lost 0 47 to USD3 21 per ounce |
WFC | Oil lower after API data show slight inventory drop | Investing com Oil futures traded modestly lower in the early part of Wednesday s Asian session even after data from the American Petroleum Institute showed a slight decline in U S inventories last week On the New York Mercantile Exchange light sweet crude futures for October delivery inched down 0 05 to USD105 37 per barrel in Asian trading Wednesday The October contract settled lower by 1 10 at USD105 42 per barrel on Tuesday Oil prices continued to fall after the U S and Russia agreed over the weekend on terms to dismantle Syria s chemical weapons cache and while the U S has reiterated that it will act of Syria fails to comply energy markets concluded that conflict is becoming much less likely Tepid data points did not help In U S economic news out Tuesday the U S Labor Department said the consumer price index rose 0 1 last month following a 0 2 rise in July Excluding food and energy costs core prices also rose just 0 1 Year over year prices are up 1 5 The National Association of Home Builders said its NAHB Wells Fargo Housing Market Index remained flat at 58 in September The August reading was revised down to 58 from 59 Economists expected a reading of 59 The U S is the world s largest oil consumer The American Petroleum Institute said for week ended September 13 U S oil inventories dropped by 300 000 barrels well below the decrease of 1 5 million barrels analysts expected Gasoline stockpiles fell 600 000 barrels while distillate supplies dropped by 200 000 barrels Analysts expected gasoline inventories to be unchanged while the expectation was for an increase of 1 million barrels in distillates Meanwhile Brent crude futures for November delivery inched down 0 05 to USD107 78 per barrel on the ICE Futures Exchange |
WFC | U S futures rise on Fed statement miners lead Dow Jones up 0 35 | Investing com U S stock futures pointed to a higher open on Thursday led by sharp gains in mining stocks as the Federal Reserve s decision to maintain its stimulus program on Wednesday boosted market sentiment Ahead of the open the Dow Jones Industrial Average futures pointed to a 0 35 rise S P 500 futures signaled a 0 46 increase while the Nasdaq 100 futures indicated a 0 42 climb The Fed refrained from reducing the USD85 billion pace of its monthly asset purchases and said the central bank must determine its policies based on what s needed for the economy even if it surprises markets Speaking after the conclusion of the Fed s two day policy setting meeting Fed Chairman Ben Bernanke Bernanke said he wanted to wait a bit longer and to try to get confirming evidence that the economy is showing signs of lasting improvement Bernanke refused to commit to reducing bond purchases this year saying the stimulus program was not on a preset course Separately the Fed cut its projection for 2013 economic growth to a 2 0 to 2 3 range from a June estimate of 2 3 to 2 6 Commodity linked stocks were expected to be active as the Fed s policy statement sent commodity prices broadly higher Shares in Royal Gold were up 0 04 in extended trading after soaring over 8 on Wednesday while Freeport McMoRan copper and gold mining company rose 0 23 pre market The financial sector was also likely to be in focus as Wells Fargo said it is eliminating about 1 800 more jobs in its home loan production business seeing as rising mortgage rates are weighing on borrowers demand for refinancing Separately JPMorgan Chase up 0 26 after hours was reportedly expected to pay about USD900 million to settle U S and U K claims that lax internal controls led the U S lender to provide inaccurate information about last year s record trading loss to the board Also in company news the Wall Street Journal reported that Blackberry is preparing to lay off up to 40 of its staff by the end of the year In the same sector Apple shares climbed 0 80 in early trading after first reviews of the new iPhones released on Wednesday showed mostly positive reactions for the 5C and 5S Other stocks likely to remain in focus included ConAgra and Rite Aid scheduled to report quarterly earnings later in the day Across the Atlantic European stock markets were sharply higher The EURO STOXX 50 rallied 1 32 France s CAC 40 jumped 1 09 Germany s DAX gained 1 13 while Britain s FTSE 100 surged 1 43 During the Asian trading session Hong Kong s Hang Seng Index jumped 1 67 while Japan s Nikkei 225 Index rallied 1 80 Later in the day the U S was to release the weekly report on initial jobless claims as well as the Philly Fed manufacturing index and data on existing home sales |
WFC | U S stocks open higher as Fed news supports Dow Jones up 0 09 | Investing com U S stocks opened higher on Thursday after the release of better than expected U S jobless data and as the Federal Reserve s decision to hold its stimulus program boosted market sentiment During early U S trade the Dow Jones Industrial Average edged up 0 09 the S P 500 index added 0 27 while the Nasdaq Composite index gained 0 34 The Department of Labor said the number of people who filed for unemployment assistance in the U S in the week ending September 13 rose by 15 000 to a seasonally adjusted 309 000 from an upwardly revised 294 000 the previous week Analysts had expected the number of people who filed for unemployment assistance to rise by 36 000 to 330 000 last week A separate report showed that the U S current account deficit narrowed to USD98 9 billion in the second quarter from an downwardly revised deficit of USD104 9 billion in the three months to March Analysts had expected the current account deficit to improve to a USD97 billion The data came a day after the Fed held back from reducing the USD85 billion pace of its monthly asset purchases Bernanke refused to commit to reducing bond purchases this year saying the stimulus program was not on a preset course Commodity linked stocks were active as the Fed s policy statement sent commodity prices broadly higher Shares in Royal Gold jumped 1 09 at the open of the U S trading session while Freeport McMoRan copper and gold mining company rallied 1 13 In the financial sector Wells Fargo climbed 0 58 after saying it is eliminating about 1 800 more jobs in its home loan production business seeing as rising mortgage rates are weighing on borrowers demand for refinancing Separately JPMorgan Chase shares were up 0 17 amid reports the U S lender is expected to pay about USD900 million to settle U S and U K claims that lax internal controls led the bank to provide inaccurate information about last year s record trading loss to the board Elsewhere Apple shares surged 1 45 after first reviews of the new iPhones released on Wednesday showed mostly positive reactions for the 5C and 5S Blackberry shares trended lower however slipping 0 18 after the Wall Street Journal reported that the smartphone maker is preparing to lay off up to 40 of its staff by the end of the year Other stocks likely to remain in focus included ConAgra and Rite Aid scheduled to report quarterly earnings later in the day Across the Atlantic European stock markets were sharply higher The EURO STOXX 50 rallied 1 21 France s CAC 40 jumped 0 94 Germany s DAX gained 0 92 while Britain s FTSE 100 surged 1 45 During the Asian trading session Hong Kong s Hang Seng Index jumped 1 67 while Japan s Nikkei 225 Index rallied 1 80 Later in the day the U S was to release the Philly Fed manufacturing index as well as data on existing home sales |
PFE | Pfizer PFE Up 2 3 Since Last Earnings Report Can It Continue | It has been about a month since the last earnings report for Pfizer PFE Shares have added about 2 3 in that time frame outperforming the S P 500
Will the recent positive trend continue leading up to its next earnings release or is Pfizer due for a pullback Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers Pfizer Beats on Q1 Earnings Sales Raises EPS ViewPfizer beat estimates for first quarter earnings and sales raised the mid point of its earnings expectations for 2019 by a penny and confirmed its previous guidance for full year salesFirst quarter 2019 adjusted earnings per share of 85 cents beat the Zacks Consensus Estimate of 77 cents Earnings rose 13 year over year driven by higher sales and reduced share count Currency changes had a negative impact of 2 cents per share on adjusted earnings Revenues of 13 12 billion beat the Zacks Consensus Estimate of 12 80 billion Revenues rose 2 from the year ago quarter on a reported basis Currency fluctuation hurt sales by 4 in the quarter On an operational basis excluding the impact of currency revenues rose 5 year over year driven by higher sales of some key brands in Pfizer s Biopharmaceuticals group While volumes rose 8 net prices declined 3 in the quarter International revenues rose 5 up 12 an operational basis to 6 94 billion U S revenues however declined 2 to 6 18 billion Adjusted selling informational and administrative SI A expenses rose 3 operationally in the quarter to 3 31 billion Adjusted R D expenses declined 2 to 1 69 billion In the quarter Pfizer re purchased shares worth 8 9 billion comprising 2 1 billion of open market share repurchases and 6 8 billion in accelerated share repurchases per an agreement executed in February 2019 The remaining share authorization at the end of April was 5 3 billion Change in Segment ReportingIn 2018 Pfizer s reporting segments were Pfizer Innovative Health IH and Pfizer Essential Health EH Beginning the first quarter of 2019 Pfizer is reporting under three new business units Pfizer Biopharmaceuticals Group previous IH unit except Consumer Healthcare Upjohn previous EH unit and Consumer Healthcare However Pfizer re allocated its biosimilar portfolio and certain legacy established products into the Biopharma group from the previous EH unit The Biopharma group now includes the Hospital franchise which comprises Pfizer s global portfolio of sterile injectable and anti infective medicines and also includes revenues from its contract manufacturing operation called Pfizer CentreOne Segment DiscussionPfizer Biopharma sales grew 3 on a reported basis up 7 an operational basis from the year ago period to 9 19 billion Higher sales of Eliquis Ibrance Prevnar 13 Prevenar 13 and Xeljanz drove this segment s sales growth partially offsetting sales in the hospital and rare disease businesses In the Biopharma group which accounted for 70 of Pfizer s revenues in the quarter volumes rose 11 driven by growth in several key brands emerging markets and biosimilars Within the Biopharma group Oncology revenues increased 15 to 1 96 billion Vaccine revenues rose 13 to 1 61 billion Internal Medicine rose 10 to 2 22 billion The Inflammation Immunology franchise rose 8 to 1 04 billion However the portfolio of Rare Disease declined 9 to 470 million Newly added Hospital sub segment s sales declined 3 to 1 9 billion Pfizer s Upjohn group s sales declined 1 to 3 08 billion On an operational basis sales rose 1 in the segment as strong growth in emerging markets mainly China and Japan was offset by decline in developed markets other than Japan due to lower revenues of Viagra authorized generic version of Viagra Lyrica and Greenstone Upjohn s authorized generic subsidiary primarily due to industry wide pricing challenges in the United States Revenues in the Consumer Healthcare unit declined 5 2 on an operational basis to 858 million due to lower sales in the U S market which were partially offset by higher sales in international markets Performance of Key DrugsIbrance revenues rose 25 year over year to 1 13 billion as continued strong uptake in international markets made up for moderating volumes in United States Xeljanz sales rose 34 to 423 million driven by continued growth in rheumatoid arthritis RA revenues and contributions from the drug s recent expansion into psoriatic arthritis and ulcerative colitis in the United States and only ulcerative colitis indication in certain developed markets Global Prevnar 13 Prevenar 13 revenues rose 10 to 1 49 billion Prevnar 13 revenues rose 6 in the United States reflecting increased government purchases for the pediatric indication which made up for the continued decline in revenues for the adult indication Prevenar 13 revenues rose 16 in international markets driven by higher revenues in emerging markets Enbrel revenues declined 3 to 451 million in key European markets due to continued biosimilar competition Xalkori sales declined 16 to 123 million primarily due to competitive pressure Sutent sales declined 6 to 232 million Eliquis alliance revenues and direct sales rose 36 to 1 01 billion Chantix sales rose 10 to 273 million in the quarter Xtandi recorded alliance revenues of 168 million in the quarter up 6 year over year Revenues from the biosimilars portfolio grew 7 operationally in the quarter Inflectra recorded sales of 138 million globally flat year over year In the Upjohn segment sales of key drug Lyrica declined 1 to 1 19 billion reflecting wholesaler destocking ahead of the drug s anticipated loss of exclusivity LOE in June and lower sales in developed Europe due to generic launches Viagra sales declined 19 to 145 million due to generic competition that began in December 2017 2019 GuidancePfizer maintained its sales guidance for 2019 However the company raised the mid point of its earnings guidance by a penny as increased expectation for other income due to a milestone payment recorded in the first quarter was offset by stronger currency headwinds The guidance includes a full year of revenues and expense contribution from the Consumer Healthcare unit Revenues are still expected in the range of 52 0 billion to 54 0 billion Adjusted earnings per share are expected in the range of 2 83 2 93 versus the previous expectation of 2 82 2 92 In 2019 Pfizer expects continued strong growth of key product franchises including Ibrance Eliquis Xeljanz and Prevnar However LOEs are expected to hurt 2019 sales by 2 6 billiion including the expected LOE of key drug Lyrica in the United States in June 2019 Also currency headwinds are expected to significantly pull down 2019 revenues Research and development expense is expected in the range of 7 8 8 3 billion while SI A spending is projected in the range of 13 5 14 5 billion Adjusted tax rate is expected to be approximately 16 in 2019
How Have Estimates Been Moving Since Then
In the past month investors have witnessed an upward trend in fresh estimates
VGM Scores
Currently Pfizer has an average Growth Score of C a grade with the same score on the momentum front Following the exact same course the stock was allocated a grade of C on the value side putting it in the middle 20 for this investment strategy
Overall the stock has an aggregate VGM Score of C If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision has been net zero Notably Pfizer has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
PFE | Blueprint Medicines NDA For Avapritinib On Track For GIST | Blueprint Medicines Corporation NASDAQ BPMC presented data from the NAVIGATOR study on its lead pipeline candidate avapritinib at the annual meeting of American Society of Clinical Oncology ASCO held in Chicago The registration enabling NAVIGATOR study evaluated avapritinib for treating patients with PDGFRA Exon 18 mutant gastrointestinal stromal tumors GIST and the fourth line GIST on two patient groups The indications currently have no approved therapies Data from the program showed that patients with PDGFRA Exon 18 mutant GIST achieved an objective response rate ORR of 86 while the median duration of response DOR was not reached Meanwhile patients with fourth line GIST had an ORR of 22 while the median DOR was 10 2 months Based on the data presented Blueprint Medicines plans to submit a new drug application NDA for avapritinib later this month and subsequently file a regulatory application in Europe during third quarter 2019 for the given indication Meanwhile Blueprint Medicines is also investigating avapritinib in other settings for GIST The phase III VOYAGER program is evaluating the safety and efficacy of avapritinib compared with Bayer s OTC BAYRY Stivarga regorafenib on patients with the third or fourth line GIST The company also has an objective to initiate a global phase III precision medicine probe COMPASS 2L to evaluate the safety and efficacy of avapritinib as compared to Pfizer s NYSE PFE Sutent sunitinib for second line GIST patients with pre specified disease genotypes in the second half of 2019 Shares of Blueprint Medicines have soared 57 so far this year versus the slip of 1 9 We would like to remind investors that other than GIST Blueprint Medicines is pursuing a broad clinical development investigation on avapritinib across the advanced indolent and smoldering forms of systemic mastocytosis SM Avapritinib is currently being evaluated in two studies namely the phase I EXPLORER clinical study and the registration enabling phase II PATHFINDER study for advanced SM The company looks forward to submit an NDA for avapritinib pertaining to the advanced SM indication in the first quarter of 2020 Blueprint Medicines has no approved product in its portfolio at the moment Thus an approval of avapritinib will lower the company s heavy dependence on its partners for revenue generation The company currently has partnership with Roche OTC RHHBY and CStone Pharmaceuticals for the development and commercialization of its pipeline candidates Zacks RankBlueprint Medicines currently has a Zacks Rank 3 Hold You can see Will you retire a millionaire One out of every six people retires a multimillionaire Get smart tips you can do today to become one of them in a new Special Report 7 Things You Can Do Now to Retire a Multimillionaire |
WFC | Crude prices rise as U S earnings beat expectations | Investing com Crude prices rose on Friday after second quarter earnings in the U S financial sector beat expectations and pointed to an economy that continues to recover and will demand more fuel and energy going forward On the New York Mercantile Exchange light sweet crude futures for delivery in August traded up 0 78 at USD105 73 a barrel on Friday off from a session high of USD105 85 and up from an earlier session low of USD104 38 U S financial institutions JPMorgan Chase Co and Wells Fargo Co reported earnings earlier that beat Wall Street expectations which sent crude prices rising on sentiments U S economic recovery continues The U S is the world s largest consumer of crude oil Wells Fargo reported earnings of USD0 98 a share beating forecasts for USD0 93 a share due in part to a stronger housing market which drew applause in energy markets JPMorgan reported earnings of USD1 60 a share well above consensus forecasts for USD1 44 a share Healthy supply data kept prices up as well The Energy Information Administration reported earlier this week that U S crude oil inventories fell by 9 9 million barrels in the week ended July 5 blowing past expectations for a decline of 3 3 million barrels The report also showed that total motor gasoline inventories decreased by 2 6 million barrels confounding expectations for an increase of 1 2 million barrels Elsewhere Federal Reserve Chairman Ben Bernanke said earlier this week that stimulus programs will stay in place for the foreseeable future which gave crude support Stimulus tools such as the Fed s monthly USD85 billion bond buying program weaken the greenback to spur recovery which makes oil an attractive asset on dollar denominated exchanges On the ICE Futures Exchange Brent oil futures for August delivery were up 0 83 at USD108 63 a barrel up USD2 90 from its U S counterpart |
WFC | Oil down slightly after API data | Investing com Oil futures traded slightly lower in the early part of Wednesday s Asian session following the release of weekly inventories data from the American Petroleum Institute On the New York Mercantile Exchange light sweet crude futures for September delivery fell 0 18 to USD105 50 per barrel in Asian trading Wednesday Oil traded modestly higher during Tuesday s U S session amid some decent U S data points In U S economic news out Tuesday the National Association of Home Builders Wells Fargo housing market index rose to 57 in July from 51 in June The July reading is the highest since January 2006 The Labor Department said U S consumer price inflation rose 0 5 in June following a 0 1 rise in May Economists expected a 0 3 June increase Core CPI increased at annualized rate of 1 6 last month in line with forecasts and slowing from 1 7 in May Core prices are viewed by the Federal Reserve as a better gauge of longer term inflationary pressure because they exclude the volatile food and energy categories The Fed is aiming to keep inflation around 2 or less Industrial production rose 0 3 in June the biggest increase in four months The U S is the world s largest oil consumer Earlier Wednesday the American Petroleum Institute said U S oil inventories fell 2 6 million barrels for the week ended July 12 Analysts expected a decline of 2 5 million barrels Gasoline stockpiles rose 2 6 million barrels while distillate stocks jumped 3 8 million barrels The more widely followed inventories report from the U S Energy Information Administration is due out later Wednesday Elsewhere Brent futures for September delivery inched up 0 08 to USD107 97 per barrel on the ICE Futures Exchange |
WFC | Gold continues to fall as traders digest U S data | Investing com Gold futures traded slightly lower in the early part of Thursday s Asian session as traders in the region examined some buoyant U S housing data that weighed on the yellow metal during Wednesday s U S session On the Comex division of the New York Mercantile Exchange gold futures for August delivery inched down 0 01 to USD1 319 35 per troy ounce after settling down 0 48 at USD1 328 35 a troy ounce in U S trading on Wednesday Gold futures were likely to find support at USD1 269 45 a troy ounce the low from July 17 and resistance at USD1 391 35 the high from June 17 In U S economic news out Wednesday the National Association of Home Builders Wells Fargo builder sentiment index climbed to 57 this month from 51 last month The July reading reading is the highest since January 2006 Readings above 50 indicate builders view the market as good New home sales advanced 8 3 the best rate in five years The seasonally adjusted rate was 497 000 units Economists expected 484 000 May s sales rate was also revised up to 459 000 While those numbers did not do much to boost U S equities they did spook traders who believe strong U S data gives the Federal Reserve room to begin tapering its quantitative easing program sooner than later Improving indicators in the U S tend to boost expectations that monetary stimulus programs such as the Fed s monthly USD85 billion bond buying program which weaken the dollar to spur recovery will end soon and allow the greenback to rise Gold recently surged on indications the Fed will keep its monetary policy loose for the foreseeable future and any news that could spark change to the Fed s views could hamper precious metals Elsewhere silver for September delivery jumped 0 40 to USD20 100 per ounce while copper for September delivery was flat at 3 184 per ounce |
WFC | Oil continues to fall in Asia | Investing com Oil futures traded modestly lower during Thursday s Asian session extending losses incurred during U S traded Wednesday On the New York Mercantile Exchange light sweet crude futures for September delivery fell 0 29 to USD105 29 per barrel in Asian trading Thursday despite some encouraging U S real estate data In U S economic news out Wednesday the National Association of Home Builders Wells Fargo builder sentiment index climbed to 57 this month from 51 last month The July reading reading is the highest since January 2006 Readings above 50 indicate builders view the market as good New home sales advanced 8 3 the best rate in five years The seasonally adjusted rate was 497 000 units Economists expected 484 000 May s sales rate was also revised up to 459 000 Even solid weekly inventories could not help oil higher in Asian Thursday On Wednesday the U S Energy Information Administration said in its weekly report that U S crude oil inventories fell by 2 8 million barrels in the week ending July 19 exceeding expectations for a decline of 2 4 million barrels Total U S crude oil inventories stood at 364 2 million barrels as of last week Traders appear to still be concerned about economic data out of China last night that serves as further proof manufacturing activity in the world s second largest economy is slowing China s HSBC manufacturing PMI fell to an 11 month low of 47 7 in July from a final reading of 48 2 last month Analysts had expected the index to rise to 48 6 The U S and China are the world s two largest oil consumers Elsewhere Brent futures for September delivery fell 0 14 to USD106 91 per barrel |
WFC | Most Asian stocks lower Nikkei down 0 56 | Investing com Most Asian stocks traded lower Thursday as some strong U S housing data once again had traders mulling a potentially quick end to quantitative easing by the Federal Reserve In Asian trading Thursday Japan s Nikkei 225 fell 0 56 Asian stocks sagged as investors also fretted about slow earnings growth and slack economic data Earlier Wednesday the Bank Of Japan said that Japan s corporate services price index rose 0 4 last month following a 0 3 increase in May Analysts expected a June increase of 0 7 Hong Kong s Hang Seng dropped 0 41 while the Shanghai Composite declined 0 45 In U S economic news out Wednesday the National Association of Home Builders Wells Fargo builder sentiment index climbed to 57 this month from 51 last month The July reading reading is the highest since January 2006 Readings above 50 indicate builders view the market as good New home sales advanced 8 3 the best rate in five years The seasonally adjusted rate was 497 000 units Economists expected 484 000 May s sales rate was also revised up to 459 000 Australia s S P ASX 200 Index eased by 0 4 New Zealand s NZSE 50 fell 0 64 after Reserve Bank of New Zealand Governor Graeme Wheeler made comments that boosted the kiwi Although removal of monetary stimulus will likely be needed in the future we expect to keep the OCR unchanged through the end of the year said Wheeler in a statement The extent of the monetary policy response will depend largely on the degree to which the growing momentum in the housing market and construction sector spills over into inflation pressures RBNZ pledged to keep rates at 2 5 but a rate hike early next year is on the table South Korea s Kospi fell 0 01 even after Asia s fourth largest economy reported second quarter GDP growth of 2 3 Analysts expected growth of 2 Second quarter growth was 1 1 better than what was seen in the first quarter Singapore s Straits Times Index tumbled 1 11 while S P 500 dropped 0 10 The benchmark U S index is in the midst of its first two day losing streak in over a month |
LB | Why Earnings Season Could Be Great For L Brands LB | Investors are always looking for stocks that are poised to beat at earnings season and L Brands Inc NYSE LB may be one such company The firm has earnings coming up pretty soon and events are shaping up quite nicely for their report That is because L Brands is seeing favorable earnings estimate revision activity as of late which is generally a precursor to an earnings beat After all analysts raising estimates right before earnings with the most up to date information possible is a pretty good indicator of some favorable trends underneath the surface for LB in this report In fact the Most Accurate Estimate for the current quarter is currently at 60 cents per share for LB compared to a broader Zacks Consensus Estimate of 59 cents per share This suggests that analysts have very recently bumped up their estimates for LB giving the stock a Zacks Earnings ESP of 1 70 heading into earnings season L BRANDS INC Price and EPS Surprise Why is this Important A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises and outperforming the market Our recent 10 year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank 3 Hold or better show a positive surprise nearly 70 of the time and have returned over 28 on average in annual returns see more Given that LB has a Zacks Rank 3 Hold and an ESP in positive territory investors might want to consider this stock ahead of earnings Clearly recent earnings estimate revisions suggest that good things are ahead for L Brands and that a beat might be in the cards for the upcoming report |
LB | L Brands LB Posts Q2 Earnings Beats Comps Increase 3 | L Brands Inc NYSE LB just released its second quarter fiscal 2016 earnings results posting adjusted earnings of 70 cents per share and revenue of 2 89 billion
LB was up 1 64 or 2 21 to 75 70 as of 4 27 PM ET in after hours trading shortly after its earnings report was released
Beat earnings estimates The company posted adjusted earnings of 70 cents per share soaring past the Zacks Consensus Estimate of 59 cents per share and gaining 3 year over year This number excludes 17 cents from non recurring items
Beat revenue estimates The company saw revenue figures of 2 89 billion just edging past our consensus estimate of 2 875 billion and increasing 5 year over year
Reported total comparable sales increase of 3 for the quarter Victoria s Secret saw a comps increase of 2 while Bath Body Works saw its comps grow by 5
Posted operating income of 408 2 million an increase of 1 and adjusted net income of 204 7 million also an increase of 1
L Brands now expects Q3 earnings per share to fall in the range of 40 cents to 45 cents and full year earnings between 3 79 to 3 85 per share
Here s a graph that looks at L Brands price consensus and EPS surprise L BRANDS INC Price Consensus and EPS Surprise LB is a Zacks Rank 3 Hold
L Brands Inc operates as a retailer of women s intimate and other apparel beauty and personal care products and accessories primarily in the United States Its brand includes Victoria s Secret Victoria s Secret Pink Bath Body Works La Senza and Henri Bendel The company sells its product through franchise license wholesale partners websites catalogue and other channels L Brands Inc formerly known as Limited Brands Inc is headquartered in Columbus Ohio |
PFE | Ocular s Glaucoma Drug Study Fails To Meet Primary Endpoint | Ocular Therapeutix Inc NASDAQ OCUL announced top line results from the first pivotal phase III study on OTX TP sustained release travoprost for the reduction of intraocular pressure IOP in patients with primary open angle glaucoma or ocular hypertension The study did not meet the primary endpoint and shares of the company fell 2 6 following the news In fact shares of Ocular have declined 15 3 year to date against the s growth of 4 7
The study enrolled 554 subjects with open angle glaucoma or ocular hypertension in the full analysis set FAS population The primary endpoint of the study was reduction of intraocular pressure IOP from baseline on treatment with OTX TP compared with placebo insert treated subjects at nine different time points three diurnal time points at each of 2 6 and 12 weeks following insertion
Top line results showed that the study did not achieve its primary endpoint of statistically significant superiority in mean reduction of IOP compared with placebo at all nine time points However OTX TP treated subjects did have a statistically significant reduction in IOP from baseline relative to placebo insert at eight of the nine pre specified time points
OTX TP was generally well tolerated and no ocular serious adverse events were observed Ocular will continue to review the data from the study and will meet the FDA for a discussion before determining the next steps in its clinical development plans
We remind investors that in March 2019 Aerie Pharmaceuticals Inc NASDAQ AERI received FDA approval for Rocklatan 0 02 0 005 to reduce elevated intraocular pressure IOP in patients with open angle glaucoma or ocular hypertension Rocklatan is a once daily quadruple action fixed dose combination of Rhopressa netarsudil and Pfizer s NYSE PFE Xalatan latanoprost
Zacks Rank Stock to Consider
Ocular currently has a Zacks Rank 3 Hold
A better ranked stock in the same space is Eisai Co OTC ESALY carrying a Zacks Rank 1 Strong Buy You can see
Eisai s earnings per share estimates have moved up from 1 86 to 1 95 for 2019 and from 1 89 to 2 02 for 2020 in the past 90 days
Will you retire a millionaire
One out of every six people retires a multimillionaire Get smart tips you can do today to become one of them in a new Special Report 7 Things You Can Do Now to Retire a Multimillionaire |
PFE | Pfizer CEO expects Trump to eliminate drug rebates | By Michael Erman and Tamara Mathias Reuters Pfizer Inc N PFE Chief Executive Ian Read said on Tuesday he believes the Trump administration intends to stop the practice of allowing rebates on prescription drug purchases suggesting that U S drug pricing reforms may focus on middlemen rather than drugmakers I believe the administration does want to remove rebates and they consider it a priority he said in an interview following similar comments made on Pfizer s conference call to discuss second quarter earnings The administration has already proposed a rule that would scale back protections currently in place that allow rebates between drug manufacturers and insurers and pharmacy benefits managers PBMs Read said he believes the administration wants to get rid of them entirely These rebates are rarely passed along to U S patients Read said Pfizer had discussed the administration s plan for rebates in broad terms with Health and Human Services Secretary Alex Azar The CEO said he does not know how quickly changes to rebate policy could be implemented U S President Donald Trump has made lowering prescription drug costs for U S consumers a top priority His administration has placed blame on middlemen such as PBMs which administer drug benefits for employers and health plans and health insurers for driving up drug prices by demanding hefty rebates in exchange for broad access to patients Read said Pfizer currently receives around 58 percent of its list prices on drugs suggesting that about 40 percent goes to middlemen He said ending the rebate system would allow drugmakers to keep price hikes in line with health care inflation The largest U S drugmaker retreated from planned price hikes on about 40 of its drugs earlier this month following criticism from President Trump Read has spoken with Trump and visited the White House since deferring those price increases Bowing to intensifying political pressure several major drugmakers have also announced drug price freezes until the end of the year Pfizer shares rose 1 09 or 2 8 percent to 39 68 in afternoon trading closing in on near 16 year highs Pfizer on Tuesday also reported better than expected second quarter profit but trimmed its full year revenue forecast due to the strengthening dollar Edward Jones analyst Ashtyn Evans said investors were encouraged by management optimism about new drugs and long term growth prospects after prior disappointment that Pfizer had not done a big acquisition There s more optimism around the internal pipeline and their ability to expand margins long term she said Excluding special items Pfizer earned 81 cents per share beating analysts average estimate by 7 cents according to Thomson Reuters I B E S Pfizer said it now expects 2018 revenue of between 53 billion and 55 billion versus its a prior forecast of 53 5 billion to 55 5 billion It raised both ends of its 2018 adjusted earnings forecast range by 5 cents and now expects 2 95 to 3 05 per share Second quarter results were helped by higher than expected sales of rheumatoid arthritis drug Xeljanz at 463 million and by the staying power of its former top seller Lipitor The off patent cholesterol drug still generated worldwide sales of 521 million
Total revenue in the quarter rose 4 4 percent to 13 47 billion ahead of Wall Street expectations of 13 31 billion |
WFC | Oil slides following tepid U S economic reports | Investing com Following a strong showing in Wednesday s U S session oil futures ebbed lower during Thursday s Asian session as traders pondered another round of lukewarm U S economic data points On the New York Mercantile Exchange light sweet crude futures for March delivery fell 0 17 to USD94 52 per barrel During Wednesday s U S session crude jumped 0 83 to USD94 50 per barrel On Wednesday U S Energy Information Administration said in its weekly report earlier that U S crude oil inventories fell by 951 000 barrels in the week ended Jan 11 That stunned analysts that had been expecting an increase of 2 27 million barrels Total U S crude oil inventories stood at 360 3 million barrels as of last week That may have kept the focus off some data points on Wednesday but traders might be acknowledging those reports in Asian trading today In U S the National Association of Home Builders Wells Fargo builder sentiment index stayed at 47 in December still good for the highest level since April 2006 However readings below 50 indicate negative sentiment The Labor Department said its consumer price index was flat in December following a 0 3 decrease in November Economists expected an unchanged reading The U S is the world s largest oil consuming nation Oil may also be seeing some profit taking due to a disappointing global growth forecast from the World Bank On Wednesday the World Bank pared its 2013 global growth outlook to 2 4 from a prior forecast of 3 The World Bank sees struggles for developed nations some of which are major oil consumers That sent traders scurrying into safer assets such as the U S dollar Earlier Germany s government said that the economy will grow just 0 4 in 2013 down from its previous forecast for 1 growth and that could be weighing on oil as well because Germany the Eurozone s largest economy is also one of the region s largest oil consumers Elsewhere Brent crude futures for March delivery fell 0 2 to USD109 67 per barrel on the ICE Futures Exchange |
LB | L Brands Exhibits Operational Strength Should You Hold | We believe that L Brands Inc s NYSE LB sustained focus on cost containment inventory management merchandise and speed to market initiatives has kept it afloat in a soft consumer environment This is evident from the Columbus OH based company s better than expected comparable store sales comps performance in June L Brands continues to revamp its business by improving store experience localizing assortments and enhancing its direct business We believe these measures will help it to generate incremental sales and increase store transactions through a higher conversion rate Also the company is repositioning its La Senza brand by focusing on the younger generation and providing fashionable assortments at a reasonable price As a leader in the specialty lingerie and personal care market we expect that the company s innovation in merchandise and exclusive assortments will remain popular among consumers and set it apart from its peers Also this specialty retailer with its operational efficiencies as well as new and innovative assortments remains well positioned to capitalize on the same Apart from this L Brands foray into international markets is likely to provide long term growth opportunities and help generate higher sales volumes These find reflection in the company s first quarter fiscal 2016 results wherein it posted the third straight quarter of positive earnings surprise backed by higher sales Despite these positives the competitive retail landscape and short term challenges faced by the company such as foreign currency headwinds cannot be ignored Earnings per share during the first quarter declined 3 3 year over year All these factors compelled management to provide a subdued earnings outlook for the second quarter and fiscal 2016 L BRANDS INC Price and Consensus Management lowered its fiscal 2016 earnings projection to the band of 3 60 3 80 per share from the previous guidance of 3 90 4 10 On the other hand the company expects fiscal second quarter earnings in the range of 50 60 cents per share The Zacks Consensus Estimate of 3 70 and 3 96 for fiscal 2016 and fiscal 2017 has dropped 39 cents and 52 cents respectively over the past 90 days Moreover the Zacks Consensus Estimate for the second quarter has decreased 14 cents to 56 cents over the same time frame However of late estimates have been stable Given the pros and cons embedded L Brands currently carries a Zacks Rank 3 Hold Stocks that Warrant a LookSome better ranked stocks in the retail space include Christopher Banks Corporation NYSE CBK Burlington Stores Inc NYSE BURL both sporting a Zacks Rank 1 Strong Buy and American Eagle Outfitters Inc NYSE AEO carrying a Zacks Rank 2 Buy |
LB | 5 Retail Stocks Queuing Up For Q2 Earnings Beat Add To Gain | The spring season this year was disappointing as sales picked up late in June after witnessing colder than normal weather in April and May Alas this has weighed on the second quarter comparable sales comps performance of most retailers in April and May while sales picked up in June as retailers posted better than expected comps
Despite the odds the future prospects of the retail sector look promising as it is positioned to gain from the improving U S economy which highlight a favorable job scenario and rising consumer spending The third estimate for gross domestic product GDP released by the Bureau of Economic Analysis expanded at an annual rate of 1 1 in first quarter 2016 above the second estimate of 0 8
We note that the U S labor market looks quite stable with unemployment rate for June making a comeback at 4 9 after falling to 4 7 in May Also U S consumer spending rose for the second straight month in May climbing 0 4 after a 1 1 gain in Apr 2016 that marked the strongest rise in seven years This indicates that the U S economy picked up in these two months after a slow start in first quarter 2016 The report further suggested that income rose 0 2 in May following a 0 5 increase in April
Further as we look at the current retail activity retailers are busy with the onset of another significant spending event in the U S the Back to School and Back to College shopping season This period generally extends from mid July through early September with Labor Day usually serving as the symbolic beginning of the school year This is a crucial time for retailers as American households stock up on school and college supplies
Per a research conducted by National Retail Federation NRF total back to school and back to college spending for 2016 is expected to reach 75 8 billion up from last year s 68 billion This selling season represents nearly 17 of the full year retail sales in the U S The key categories of sales during this season are apparel accessories books music computers consumer electronics office equipment supplies toys hobbies and sporting goods to name a few
Now coming to the second earnings season as we enter August only 43 2 of S P retail members have released their earnings numbers meaning there is much more to come from the sector and the trend is actually not clear at this stage The trend so far for the sector looks chic as total earnings are up 9 6 year over year on 6 revenue growth Also the beat ratios are positive with 42 1 in earnings beat and 21 1 in revenue beat making for a blended beat ratio of 5 3
The real picture of the trend so far is visible from our latest report published on Jul 29
That said we bring to you five retail stocks that may show promise based on their favorable Zacks Rank Zacks Rank 1 Strong Buy 2 Buy or 3 Hold and a positive Our research shows that for stocks with this combination the chance of a positive earnings surprise is as high as 70 It makes sense to add these potential winners to your portfolio ahead of their releases A rational investment can fetch higher returns on the heels of an earnings beat
Our Picks
We have highlighted five stocks that not only meet the prescribed criteria but have also convincingly beaten earnings estimates in the trailing four quarters hold excellent prospects and are therefore well positioned for future earnings growth
ULTA Salon Cosmetics Fragrance Inc a retailer of cosmetics fragrance skin and hair care products and provider of salon services is a solid bet The stock flaunts a Zacks Rank 2 and has an Earnings ESP of 2 17 The current Zacks Consensus Estimate for second quarter fiscal 2016 stands at 1 38 reflecting 20 3 growth from the year ago period This Bolingbrook IL based company delivered an average positive earnings surprise of 7 9 over the trailing four quarters and has a long term earnings growth rate of 19 5 The company is scheduled to report results on Aug 25
We also suggest investing in Hibbett Sports Inc a sporting goods retailer in small to mid sized markets in the South Southwest Mid Atlantic and lower Midwest regions with a Zacks Rank 3 a long term earnings growth rate of 10 7 and an Earnings ESP of 3 70 The current Zacks Consensus Estimate for second quarter fiscal 2017 stands at 27 cents This Birmingham AL based company delivered an average positive earnings beat of nearly 3 over the trailing four quarters The company is expected to report results on Aug 19
Investors can also count on Macy s Inc one of the leading department store retailers in the United States with a Zacks Rank 2 and an Earnings ESP of 31 71 The current Zacks Consensus Estimate for second quarter fiscal 2016 stands at 41 cents This Cincinnati OH based company registered an average positive earnings surprise of 3 9 over the trailing four quarters and has a long term earnings growth rate of 8 5 The company is set to report results on Aug 11
Jack in the Box Inc is a restaurant company that operates and franchises Jack in the Box restaurants also holds promise carrying a Zacks Rank 2 and an Earnings ESP of 1 15 The current Zacks Consensus Estimate for third quarter fiscal 2016 stands at 87 cents reflecting 16 growth from the year ago period This San Diego CA based company registered an average positive earnings surprise of 2 5 over the trailing four quarters and has a long term earnings growth rate of 16 7 The company is slated to report results on Aug 3
Last but not the least is L Brands Inc NYSE LB with a Zacks Rank 3 and an Earnings ESP of 8 93 The current Zacks Consensus Estimate for second quarter fiscal 2016 is pegged at 56 cents a share This Columbus OH based specialty retailer of women s intimate and other apparel beauty and personal care products home fragrance products and accessories registered an average positive earnings surprise of nearly 4 over the trailing four quarters and has a long term earnings growth rate of 11 3 The company is scheduled to report results on Aug 17
Bottom Line
We believe that the above stocks with strong fundamentals and growth prospects are capable of meeting investors expectations Your portfolio s chance of giving you higher returns increases if you have a favorably ranked stock powered by the optimism of earnings beat in the upcoming quarter |
LB | Buckle s Dismal Comps Trend Lingers July Numbers Slide | The Buckle Inc NYSE BKE has been continuing with its sluggish comparable store sales comps performance this year Comps for the four week period ended Jul 30 2016 fell 10 9 year over year continuing the trend of decline 10 6 in June 11 in May 13 2 in April 11 8 in March 8 9 in February and 11 3 in January This Zacks Rank 5 Strong Sell company generated net sales of 66 5 million in July down 9 8 year over year We note that net sales decreased 10 1 in June 10 4 in May 12 3 in April 11 in March 7 7 in February and 10 1 in January BUCKLE INC Price Consensus and EPS Surprise Sales at the company s Men s category tumbled 5 year over year This category contributed nearly 47 5 to Buckle s July sales Sales in the Women s category which represented 52 5 of the company s monthly sales declined 13 year over year Buckle has not been able to turn the performance of its struggling Women s business around On a combined basis accessory sales which constituted nearly 10 of the company s July sales dropped 7 5 while footwear sales which accounted for almost 5 of net sales fell 8 Comps for the 13 week period ended Jul 30 2016 went down 10 8 while net sales over the same time frame fell 10 1 to 212 2 million from 236 1 million recorded in the year ago period Comps for the 26 week period ended Jul 30 2016 plunged 10 9 while net sales over the same time frame declined 10 2 to 455 7 million from 507 4 million recorded in the year ago period As of Aug 4 2016 Buckle operated 470 retail stores across 44 states The company opened three new outlets in July Apart from Buckle Zumiez Inc NASDAQ ZUMZ and The Cato Corporation NYSE CATO recorded comps declines of 2 9 and 10 respectively On the other hand L Brands Inc NYSE LB registered an increase of 2 in comps |
PFE | Pfizer Rises 3 06 With Earnings In Focus | Investing com Pfizer NYSE PFE rose by 3 06 to trade at 39 77 by 11 14 15 14 GMT on Tuesday on the NYSE exchange up 3 06 on the day The volume of Pfizer shares traded since the start of the session was 14 61M Pfizer has traded in a range of 38 21 to 39 78 on the day The stock has traded at 39 78 at its highest and 37 14 at its lowest during the past seven days |
LB | New Strong Sell Stocks For May 25th | Here are 5 stocks added to the Zacks Rank 5 Strong Sell List today HSBC Holdings LON HSBA plc NYSE HSBC is a major global banking and financial services firm with over 2 41 trillion in assets as of Dec 31 2015 The Zacks Consensus Estimate for its current year earnings has been revised 7 6 downward over the last 30 days L Brands Inc NYSE LB is a specialty retailer of women s intimate and other apparel beauty and personal care products home fragrance products and accessories The Zacks Consensus Estimate for its current year earnings has declined 9 4 over the last 30 days Skyworks Solutions Inc NASDAQ SWKS designs manufactures and markets a broad range of high performance analog and mixed signal semiconductors that enable wireless connectivity It has seen the Zacks Consensus Estimate for its current year earnings being revised 4 3 downward over the last 30 days Blue Bird Corporation NYSE LB is engaged in the designing engineering manufacturing and sale of school buses and related parts The Zacks Consensus Estimate revision for its current year earnings was a negative 2 3 over the last 30 days Coty Inc NYSE COTY is involved in the manufacturing marketing and distribution of beauty products The Zacks Consensus Estimate for its current year earnings has moved 5 3 lower over the last 30 days View the entire |
PFE | Conatus CNAT Earnings Revenues Miss Estimates In Q1 | Conatus Pharmaceuticals Inc NASDAQ CNAT incurred a loss of 14 cents per share in the first quarter of 2019 wider than the Zacks Consensus Estimate of 12 cents but narrower than the year ago quarter s loss of 17 cents
Revenues came in at 7 million down 27 8 year over year due to lower reimbursement from partner Novartis NYSE NVS for the costs incurred to support the company s development of its lead pipeline candidate emricasan Moreover the top line fell shy of the Zacks Consensus Estimate of 8 million
Shares of Conatus have plunged 47 9 so far this year underperforming the increase of 11 2
Conatus has no approved product in its portfolio at the moment The revenues generated by the company are all related to its collaboration with Novartis for the worldwide development and commercialization of emricasan
Quarter in Detail
In the first quarter research and development expenses were 9 4 million down 22 3 from the year ago period s figure mainly on account of lower spending associated with the ongoing ENCORE PH study on emricasan This was partially offset by higher spending related to ENCORE LF study
General and administrative expenses were 2 6 million marginally down from the year earlier quarter s 2 7 million
Emricasan in Focus
Emricasan a caspase inhibitor is being developed for the treatment of patients with fibrosis or cirrhosis caused by nonalcoholic steatohepatitis NASH Conatus acquired the worldwide rights to emricasan from Pfizer NYSE PFE in July 2010
The company is currently conducting two ongoing phase IIb ENCORE programs on emricasan for treating fibrosis or cirrhosis induced by NASH Those are ENCORE PH for portal hypertension and ENCORE LF for liver function
Last December Conatus announced top line results from a phase IIb ENCORE PH Under the evaluation emricasan demonstrated clinically meaningful treatment effects on compensated NASH cirrhosis patients who stand at a risk of passing to the decompensation state However the probe failed to meet its primary endpoint Following a post hoc analysis emricasan showed a clinically meaningful treatment impact compared with placebo Additional results are now expected in mid 2019
Meanwhile during the first quarter of 2019 Conatus completed enrolling patients in the phase IIb ENCORE LF study the primary endpoint being event free survival Top line data from the investigation is anticipated in mid 2019
Notably this March Conatus announced that the ENCORE NF study which evaluated emricasan for treating patients with biopsy confirmed NASH and liver fibrosis could not achieve the primary goal as it lacked the desired effect on these earlier stage NASH fibrosis patients Shares of the company significantly dropped back then
Additionally in the same month Conatus announced that it has selected CTS 2090 currently in preclinical development to move into clinical studies CTS 2090 is an orally active potent and highly selective inhibitor of caspase 1 The company plans to submit an investigational new drug IND application by the first half of 2020 to begin clinical assessments on the candidate for treating autoinflammatory diseases
As of Mar 31 2019 Conatus had cash cash equivalents and marketable securities of 33 8 million compared with 40 7 million as of Dec 31 2018 Conatus expects the 2019 end balance in the range of 10 15 million excluding any potential milestone fee under the Novartis collaboration
Conatus Pharmaceuticals Inc Price Consensus and EPS Surprise
Zacks Rank Key Pick
Conatus carries a Zacks Rank 3 Hold A better ranked stock in the healthcare sector is PDL BioPharma Inc NASDAQ PDLI sporting a Zacks Rank 1 Strong Buy You can see
PDL BioPharma s earnings estimates have been revised 100 upward for 2019 and 30 for 2020 over the past 60 days The stock has rallied 15 5 year to date
Will you retire a millionaire
One out of every six people retires a multimillionaire Get smart tips you can do today to become one of them in a new Special Report 7 Things You Can Do Now to Retire a Multimillionaire |
PFE | Pfizer to split into three units separates consumer healthcare | Reuters Pfizer Inc N PFE said on Wednesday it would reorganize into three units separating its consumer healthcare business that the U S drugmaker has been trying to sell since last year The news comes a day after the company decided to defer drug price increases for no more than six months following criticism from U S President Donald Trump for raising list prices of some medicines The units would be Innovative Medicines Established Medicines and Consumer Healthcare The company is currently split into two units Innovative Medicines which includes the consumer business and Essential Health This design gives us a sharper focus on diverse patients in diverse markets Albert Bourla chief operating officer said The Innovative Medicines business will now also include biosimilars and a new hospital business unit and together with the Consumer Healthcare business will account for about three quarters of the company s revenue Pfizer s 2017 annual revenue was 52 55 billion Pfizer said it would still evaluate options for its consumer healthcare business and expects to make a decision in 2018 The company said in October last year that it was considering the sale or spin off of the consumer healthcare business which is worth about 15 billion In May Pfizer said that it had not received an acceptable offer The business consists of products ranging from Advil to lip balms The Established Medicines unit would include the majority of the company s off patent brands including Viagra and neurological disease treatment Lyrica as well as some generic drugs The changes would be effective at the start of fiscal 2019
Pfizer shares were flat at 37 40 in premarket trading |
PFE | Trump told Pfizer CEO price hikes hurt his drug plan source | By Michael Erman and Yasmeen Abutaleb NEW YORK WASHINGTON Reuters U S President Donald Trump called Pfizer NYSE PFE Chief Executive Ian Read on Tuesday to say the company s July 1 price hikes had complicated the administration s drug pricing plans prompting the company to defer its planned increases according to a source familiar with the matter Pfizer said on Tuesday it was deferring its drug price increases on around 40 drugs for no more than six months after Read s conversation with Trump U S Health and Human Services secretary Alex Azar called Read previously and the Pfizer CEO asked to speak directly with the president the source said The conversation took place around 4 30 p m ET on Tuesday and lasted about 10 to 15 minutes Trump in Brussels for a NATO meeting had arrived at the U S ambassador s residence at about 3 30 p m ET Trump tweeted about the call at 6 37 p m and Pfizer confirmed it soon after The call and subsequent price rollback came a day after Trump took aim at Pfizer and other U S drugmakers for raising prices on some of their medicines saying in a tweet that they should be ashamed and that his administration would respond Senator Ron Wyden a Democrat from Oregon said he was concerned that Trump had struck a secret sweetheart deal with Pfizer and asked for Azar and Pfizer to release details about what was agreed on the calls Instead of proposing meaningful changes that result in lower costs for families and taxpayers Trump and his Administration are busy scoring cheap PR points that don t address the fundamental challenges that lead to higher prices every year Wyden said in a press release Trump rolled out a blueprint in May on how his administration planned to lower drug prices Later that month Trump said that some drug companies would announce voluntary massive price decreases in two weeks though none have materialized yet Pfizer on Tuesday said it would defer price increases that went into effect on July 1 until the end of the year or until the president s drug pricing blueprint goes into effect whichever is sooner The company said it would return drug prices to their pre July 1 levels as soon as technically possible Pfizer one of the largest pharmaceutical companies now likely will not raise drug prices until after the 2018 midterm elections in November
That gives Trump who made lowering prescription drug prices a top 2016 presidential campaign issue a short term victory he can point to in the run up to the elections which are being closely watched to see if Trump s fellow Republicans will be able to maintain control of both the Senate and the House of Representatives |
PFE | Pfizer launches late stage study of hemophilia B gene therapy | Pfizer PFE 0 4 initiates a Phase 3 open label lead in study evaluating current factor IX prophylaxis replacement therapy in the usual care setting for patients with hemophilia B The results will serve as the within subject control group for those patients that enroll in the next part of the trial assessing gene therapy fidanacogene elaparvovec for the treatment of hemophilia B The interventional portion of the trial will involve patients who have completed at least six months in the lead in study The primary endpoint of the 110 subject study is change in annualized bleed rate from baseline over a six month treatment period According to ClinicalTrials gov the estimated completion date is November 2020 The company inked a collaboration agreement with Spark Therapeutics ONCE 3 2 in December 2014 to develop the gene therapy and recently assumed full responsibility for the program Now read |
PFE | Hikma raising injectable opioids output to help ease shortage at U S hospitals | LONDON Reuters London listed pharmaceutical group Hikma L HIK said on Wednesday it was increasing its supply of hydromorphone to U S hospitals to help ease a shortage of injectable opioids used to treat patients Injectable opioid painkillers which hospitals use to manage pain after operations and in terminal illness have been in short supply for more than a year largely due to production problems at Pfizer N PFE the biggest supplier of the drugs Pfizer has said it is making progress on its recovery plan but it estimates that the supply of some of its injectables will not be fully restored until later this year or in 2019 Opioids are controlled substances and therefore manufacturers are allocated quota for their active ingredients by the Drug Enforcement Administration limiting their ability to increase production Hikma said it had released more than 5 million hydromorphone 2ml vials to U S hospitals in June and expected to release 3 million vials in July Daniel Motto executive vice president of Hikma s U S injectables division said the company was prioritizing the manufacture of opioid products affected by this shortage including fentanyl meperidine morphine and hydromorphone
We have the capacity in our FDA inspected manufacturing facility in Cherry Hill New Jersey for all CII opioid injectable products and believe we can now address the current shortage of these vital and urgently needed medications pending increased quota allowances from the US Drug Enforcement Administration he said |
PFE | Novartis hints at 2018 outlook hike despite drug price freeze | By John Miller ZURICH Reuters Novartis S NOVN may ratchet up its 2018 sales outlook its finance chief said on Wednesday despite halting planned U S drug price hikes amid pressure on the industry from President Donald Trump s administration over the high cost of medicines Shares in the Swiss drugmaker whose decision to freeze prices this year in the world s largest drug market was mirrored by Pfizer N PFE closed 2 5 percent higher in Zurich after the firm beat forecasts with second quarter results Second quarter core operating profit rose 7 percent to 3 54 billion it said better than the average forecast of 3 46 billion in a Reuters poll Sales climbed 5 percent to 13 16 billion topping the 12 92 billion forecast Full year 2018 sales are seen rising at low to mid single digit percentage rates with operating profit rising in the mid to upper single digit percentages But Chief Financial Officer Harry Kirsch told analysts on a conference call he expected continued good momentum for products including psoriasis and arthritis drug Cosentyx and heart failure medicine Entresto That increased the likelihood that Novartis would upgrade its sales targets for 2018 he said You may see us raise the guidance in quarter three Kirsch said It s a bit too early now but I m quite confident we will be at the upper end of the guidance on sales This would come without price hikes as Novartis keeps the lid on medicine costs under pressure from U S lawmakers and Trump A call from the president prompted Pfizer CEO Ian Read this month to reverse course on price hikes his company had enacted on July 1 Novartis said it made its own decision in June to forego what had been planned hikes adding that a range of factors were considered Novartis Chief Executive Narasimhan told Reuters that unlike Pfizer s Read he did not have a direct talk with Trump on drug prices but he said his company has been speaking to the federal Department of Health and Human Services about the U S administration s blueprint to trim costs We don t plan to take any further price increases in the United States for 2018 the Novartis CEO said Right now in a very dynamic environment in the United States we view it as the prudent course Novartis s net U S drug prices this year are flat to declining he said including the impact from its Sandoz generics unit where price pressure continues in the United States Novartis now predicts Sandoz sales for 2018 will fall in the low single digit percentages after previously holding out hopes for them to remain steady Narasimhan is still reviewing options for the U S generics business but said Novartis remained committed to its Sandoz unit as a whole Ahead of the planned spinoff of Novartis s Alcon eye care business to shareholders set for early next year Novartis raised the unit s sales guidance to mid single digit percentage growth for 2018 after revenue in the second quarter grew 5 percent to 1 8 billion Second quarter growth was also helped by a 40 percent increase in Cosentyx sales to 701 billion a development analysts said was a relief after sales of the medicine missed expectations at the start of 2018 It confirms Q1 s blip was a combination of not just rebates but also wholesaler destocking Deutsche Bank s Tim Race wrote in a note All in all we sum up the quarter as solid CASE CLOSED Novartis has been in the firing line over a 1 2 million contract with Trump s former lawyer for consulting work U S lawmakers accused the firm last week of misleading the public about the depth of its contacts with Michael Cohen Novartis disputes this Narasimhan who has said the contract was a mistake said no outstanding U S government or congressional inquiries remained into his company s ties to Cohen s firm that paid 130 000 to pornographic film actress Stormy Daniels I view the Cohen issue as closed at this point he said We re really focused on our future Narasimhan said Novartis was on track to file for regulatory approval by October of its gene therapy for spinal muscular atrophy which came with its 8 7 billion purchase of AveXis
He also said he expected the launch of multiple sclerosis drug BAF312 in early 2019 |
WFC | U S shares open broadly lower on China GDP Spanish debt Dow off 0 46 | Investing com U S stocks opened the trading session lower Friday as Spanish debt fears and a declining Chinese GDP figure weighed on risk appetite At the open of U S trade the Dow Jones Industrial Average fell 0 46 the S P 500 dropped 0 47 while the Nasdaq Composite gave back 0 51 Starting the equity sell off China s gross domestic product expanded just 8 1 from a year earlier in the first quarter following an 8 9 advance in the last three months of 2011 adding to global growth fears and risk off sentiment In additional bearish news U S consumer sentiment decreased to 75 7 in April from 76 2 last month pushing shares lower Euro zone worries weighed on equities with concerns of the ECB resuming its bond repurchase program triggered as Spanish government bonds moved toward a second straight weekly decline signaling the respite in the debt crisis created by the ECB s unlimited three year loans program may be ending German bunds the euro zone benchmark government securities advanced for the first time in three days Adding risk off sentiment seventeen of the 22 economists surveyed by Bloomberg forecast that the ECB will be forced to resume its Securities Market Program to contain bond yields On Thursday dampening greenback enthusiasm the number of people who filed for unemployment assistance in the U S last week rose unexpectedly according to governmental data In a report the U S Department of Labor said the number of individuals filing for initial jobless benefits last week rose to a seasonally adjusted 380K from 367K in the preceding week whose figure was revised up from 357K Analysts had expected initial jobless claims to fall to 355K last week In addition the U S trade balance fell less than expected last month In a report Bureau of Economic Analysis stated that U S trade balance dropped to a seasonally adjusted 46 0B from 52 5B in the preceding month whose figure was revised up from 52 6B Analysts had expected U S trade balance to fall 52 0B last month China s lack luster GDP numbers weighed on commodity producers with Freeport giving back 0 8 and Chesapeake falling 0 7 Wells Fargo reported a 13 increase in first quarter profits but gave back 0 2 in early trade Google added 0 3 on investor optimism over the plan for a new class of non voting shares In the midst of European trade the EURO STOXX 50 trades lower by 1 35 France s CAC 40 fell 1 37 while Germany s DAX dropped 0 89 Meanwhile in the U K the FTSE 100 gave back 0 56 |
LB | Why Buckle s Stock Plunged Post Comparable Sales Results | Shares of The Buckle Inc NYSE BKE declined roughly 9 2 following a disappointing April comparable store sales comps performance Comps for the four week period ended Apr 30 2016 fell 13 2 year over year continuing the trend of decline 11 8 in March 8 9 in February and 11 3 in January This Zacks Rank 4 Sell company generated net sales of 65 2 million in April down 12 3 year over year Net sales decreased 11 in March 7 7 in February and 10 1 in January Sales at the company s Men s category tumbled 3 year over year The category contributed nearly 45 5 to Buckle s April sales Sales in the Women s category which represented 54 5 of the company s monthly sales declined 12 5 year over year Buckle has not been able to turn the performance of its struggling Women s business around On a combined basis accessory sales which constituted nearly 8 5 of the company s April sales dropped 1 5 while footwear sales which accounted for almost 7 of net sales fell 3 Comps for the thirteen week period ended Apr 30 2016 went down 11 1 while net sales over the same time frame fell 10 2 to 243 5 million from 271 3 million recorded in the year ago period As of May 5 2016 Buckle operated 467 retail stores across 44 states Apart from Buckle Zumiez Inc NASDAQ ZUMZ and The Cato Corporation NYSE CATO recorded comps decline of 6 and 3 respectively On the other hand L Brands Inc NYSE LB registered comps growth of 1 |
LB | L Brands LB Stock Down On Mixed Q1 Earnings Results | L Brands Inc LB announced financial results for the first quarter of fiscal 2016 posting earnings of 0 59 per share and net sales of 2 614 billion
Currently L Brands has a Zacks Rank 3 Hold but it is subject to change following the release of the company s latest earnings report Here are 5 key statistics from this just announced report below
L Brands
1 Beat earnings estimates The company posted 0 59 per share beating our Zacks Consensus Estimate of 0 55 The company s EPS figure excludes 0 07 from non recurring items
2 Missed revenue estimates The company saw revenue figures of 2 614 billion narrowly missing our estimate of 2 617
3 The company decreased its guidance for 2016 full year adjusted earnings per share to 3 60 to 3 80 from 3 90 to 4 10 previously and issued guidance for second quarter earnings per share between 0 50 and 0 60
4 Victoria Secret Stores reported nets sales of 1 381 billion for the quarter a 2 65 year over year increase
5 Shares of LB are down 3 88 in after hours trading as of 4 57 PM ET
Here s a graph of L Brands percentage change over 1 year versus the S P 500
L Brands Inc operates as a retailer of women s intimate and other apparel beauty and personal care products and accessories primarily in the United States Its brand includes Victoria s Secret Victoria s Secret Pink Bath Body Works La Senza and Henri Bendel The company sells its product through franchise license wholesale partners websites catalogue and other channels
Check back later for our full analysis on L Brands 2016 first quarter earnings report |
LB | Is There An Upper Limit To Limited Brands Stock | Quality fashion is the key to L Brands Inc NYSE LB success And maybe a little bit of old fashioned marketing Oh and having Taylor Swift bring attention to one of your most popular brands might add a bit The point is that Limited Brands has locked up the demographics they are serving Whether you like it or not teen and millenial girls cannot get enough of Victoria s Secret Frankly as the father of a young girl I am not sure Victoria has any secrets left
What interests me more is the chart of the stock price It had a brief pun intended run higher to start the year before a double top action turned the price back lower The market low on August 24th marked a bottom for Limited Brands as well and it has been moving higher since In fact that day marked a terminal Price Bar at the Potential Reversal Zone of the bullish Shark harmonic
I know not your typical cocktail party market talk What that means is a pattern played out and the reversal signal triggered So far it has seen 13 upside But are future returns limited pun intended again There are several pieces of data in the chart that suggest not
The first is the Golden Cross The opposite of the Death Crosses you have been reading about this one is when the 50 day SMA crosses up through the 200 day SMA and is a broad scale bullish signal Next the target on the reversal from that Shark pattern looks for a retracement now of 61 8 of the pattern or to 87 86 The wedge that has been building since early July looks likely to be tested again and push over the top would look for a move to 95 Finally the momentum indicators are both rising and in the bullish zone supporting more upside price action
I cannot tell you how far this stock will go but maybe the future has some of those Victoria s Secret Angel wings and is not limited
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment I or my affiliates may hold positions or other interests in securities mentioned in the Blog please see my page for my full disclaimer |
LB | Limited Brands Is Still Looking Good | Three weeks ago I noted in Is there an upper limit to Limited Brands stock that L Brands Inc NYSE LB was ready to move higher on the back of some Victoria Secret model wings One week later it was up 9 That was some flight But since then the stock has not moved much staying in a tight range Are those wings just too tired Or was it just a fantasy bra In fact the picture looks even better now
Here are 5 reasons why this stock may have a lot more left in the tank
1 The consolidation resembles a bull flag Measured off of the August 24 bottom a projected move higher out of the current consolidation would target 109 The volume is falling off typical to the end of a bull flag as well
2 The reversal higher out of the bullish Shark harmonic has reached the 88 6 retracement of the pattern Typically this move above the 61 8 level would continue on to at least a full retracement at 95 83
3 The Death Cross from July 29 is reversing This measure of when the 50 day SMA crosses down through the 200 day SMA has math in its favor to reverse to a Golden Cross shortly For the next 30 days even a flat price would drop rising values from the 200 day SMA and falling values from the 50 day SMA It would not be the first time Death Cross has marked a bottom
4 Relative Strength The sis up 9 since the August low while the S P 500 Russell 2000 and Nasdaq 100 are all quickly retracing to that low
5 Momentum is still strong The RSI is holding firmly in the bullish zone and although the MACD is starting to roll over it is still strong positive A reversal in price higher would reverse the MACD
Of course none of this means that Limited Brands will continue higher But all of these indications followed by a a price trigger over 93 50 suggest owning the stock is the right course of action
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment I or my affiliates may hold positions or other interests in securities mentioned in the Blog please see my page for my full disclaimer |
LB | The Only Positive Sector In A Sea Of Red | Year to date the market has seen a lot of red August and September in particular provided some dramatic swings
But it hasn t been bad for one particular sector
In this week s chart we re looking at the performance of Consumer Discretionary stocks As you can see it s the only sector that locked in a positive return through the third quarter
Why has Consumer Discretionary been the sole breadwinner If you ve been paying attention to U S economic data this shouldn t come as a complete surprise Throughout the last few months U S consumers have frequently been mentioned as a source of strength
In a recent Investment U Matthew Carr referred to the American consumer as the most powerful force in the global economy As buyers we contribute more to global GDP than China
Of course just because this sector has performed well over the first nine months of 2015 that s no guarantee it will continue
Or is there
We re coming up on the biggest spending time of the year the holiday shopping season These are the pinnacle months for consumer spending
Roughly 40 of all retailers revenue is generated in the fourth quarter
So with the sector primed for takeoff what s a good company to look at How about L Brands NYSE N LB the parent company of Victoria s Secret and Bath Body Works
It recently reported a better than expected comparable store sales increase of 9 for September That s more than double expectations With shares already up 11 8 YTD and entering what Matt calls its Prime Period for sales L Brands could easily continue higher
But while Consumer Discretionary has performed well this year and continues to do so you may be wondering what to expect from the rest of the market If you read last week s article you know that even after a dismal third quarter the fourth quarter could be a record breaker
So far
The S P 500 is up 6 90
Consumer Discretionary is up 6 73
Healthcare is up 2 49
Energy is up 11 78
The Financials sector is up 5 38
Granted we re only a few weeks into the quarter But it s already shaping up to be a strong end to the year If you ve been sitting on the sidelines waiting for an opportunity to dive back into the markets this could be it
And if you re still lacking the confidence Well perhaps all you need is a little coaching |
PFE | Why Earnings Season Could Be Great For Pfizer PFE | Investors are always looking for stocks that are poised to beat at earnings season and Pfizer Inc NYSE PFE may be one such company The firm has earnings coming up pretty soon and events are shaping up quite nicely for their report That is because Pfizer is seeing favorable earnings estimate revision activity as of late which is generally a precursor to an earnings beat After all analysts raising estimates right before earnings with the most up to date information possible is a pretty good indicator of some favorable trends underneath the surface for PFE in this report In fact the Most Accurate Estimate for the current quarter is currently higher than the broader Zacks Consensus Estimate of 77 cents per share This suggests that analysts have very recently bumped up their estimates for PFE giving the stock a Zacks Earnings ESP of 0 65 heading into earnings season Pfizer Inc Price and EPS Surprise Why is this Important A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises and outperforming the market Our recent 10 year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank 3 Hold or better show a positive surprise nearly 70 of the time and have returned over 28 on average in annual returns see more Given that PFE has a Zacks Rank 3 and an ESP in positive territory investors might want to consider this stock ahead of earnings You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here Clearly recent earnings estimate revisions suggest that good things are ahead for Pfizer and that a beat might be in the cards for the upcoming report Today s Best Stocks from Zacks Would you like to see the updated picks from our best market beating strategies From 2017 through 2018 while the S P 500 gained 15 8 five of our screens returned 38 0 61 3 61 6 68 1 and 98 3 This outperformance has not just been a recent phenomenon From 2000 2018 while the S P averaged 4 8 per year our top strategies averaged up to 56 2 per year |
PFE | Pfizer to pay 23 85 million to resolve U S kickbacks case | Reuters Pfizer Inc N PFE has agreed to pay 23 85 million to resolve U S government charges that the drugmaker illegally used a purportedly independent charity to pay kickbacks to Medicare patients covering their out of pocket drug costs The settlement announced by the U S Department of Justice resolves allegations that Pfizer violated the federal False Claims Act between 2012 and 2016 It resulted from an industrywide probe into drug companies support of patient assistance charities Pfizer did not immediately respond to a request for comment The government accused Pfizer of improperly using the Patient Access Network Foundation which claimed non profit status for tax purposes as a conduit to cover the co pay obligations of Medicare patients taking three Pfizer drugs These drugs included Sutent and Inlyta which both treat renal cell carcinoma and Tikosyn which treats arrhythmia in patients with atrial fibrillation the government said
Pfizer used a third party to saddle Medicare with extra costs enabling the drugmaker to generate more revenue and mask price increases Andrew Lelling the U S attorney in Boston said in a statement |
PFE | Kitov Pharma up 12 premarket ahead of FDA decision on KIT 302 | Thinly traded nano cap Kitov Pharma Ltd NASDAQ KTOV is up 12 premarket on robust volume Today is the FDA s action date for its review of the company s marketing application seeking approval for KIT 302 for osteoarthritis pain and high blood pressure KIT 302 is a combination drug that treats osteoporosis related pain celecoxib branded as Celebrex by Pfizer NYSE PFE and hypertension amlodipine besylate branded as Norvasc Now read |
PFE | Texas high court rules state must reveal supplier of execution drugs | By Jon Herskovitz AUSTIN Texas Reuters Texas must reveal the source of the drugs it uses for executions its Supreme Court affirmed on Friday rejecting the state s arguments that doing so could lead to physical harm of the supplier and impede lethal injections Ever since a sales ban of lethal injection drugs by major pharmaceutical companies a few years ago most states have kept the suppliers of their drugs secret This has prompted lawsuits on behalf of death row inmates arguing that prisoners could be subjected to unconstitutional suffering from faulty drugs in lethal injection mixes from questionable suppliers The Texas Supreme Court on Friday affirmed a May 2017 decision by an appellate court that said there was not enough compelling evidence provided by the state to show that there was a substantial threat of physical harm Today s decision is a win for the fundamental principles of transparency and open government Maurie Levin one of the attorneys who helped bring the lawsuit on behalf of two Texas death row inmates said in a statement The Texas Department of Criminal Justice said in a statement that it intends to file a motion with the court for a rehearing Texas has executed 551 people since capital punishment was reinstated in 1976 37 percent of all U S executions and more than triple any other state according to the Death Penalty Information Center Texas has also been one of the few states in the country able to procure a steady supply of execution drugs In 2016 pharmaceutical company Pfizer Inc N PFE joined a sales ban imposed years earlier by major European drug makers that did not want their products used in executions due to ethical concerns This caused many states to scramble for suppliers and a few to suspend executions due to lack of drugs Although 31 states have the death penalty only eight have held executions since Pfizer s decision which cut off the last major U S source for drugs in the lethal mixtures Many have turned to lightly regulated compounding pharmacies which can mix chemicals The states also have banned the release of the pharmacies names which they have said was a security precaution For its lethal injection Texas uses the barbiturate pentobarbital |
PFE | Pfizer to expand venture investing with 600M commitment to Pfizer ventures | Pfizer NYSE PFE plans to invest 600M in biotechnology and other emerging growth companies through Pfizer Ventures Pfizer Ventures will seek to invest 25 of its available capital 150M in promising early stage neuroscience companies Beyond neuroscience Pfizer Ventures will continue to invest across a broad range of therapeutic areas of interest such as oncology inflammation and immunology rare disease internal medicine and vaccines Shares are up a fraction premarket Now read |
PFE | Drugmaker Lundbeck to settle U S charity probe for 52 6 million | By Nate Raymond BOSTON Reuters Danish drugmaker Lundbeck CO LUN said on Wednesday that it will pay 52 6 million to resolve a U S probe into its financial support of patient assistance charitable foundations The company formally called H Lundbeck A S said it had reached an agreement with the U S Justice Department which has investigating drugmakers support of charities that help Medicare patients cover out of pocket drug costs Lundbeck which develops and distributes drugs for neurological and psychological diseases such as depression and Alzheimer s said the settlement would include no admission of wrongdoing and is subject to further negotiation Drug companies are prohibited from subsidizing co payments for patients enrolled in the Medicare government healthcare program for the elderly But companies may donate to non profits providing co pay assistance as long as they are independent The U S Attorney s Office in Massachusetts has been leading the industry wide investigation A spokeswoman for the office declined to comment The probe most recently resulted in Pfizer Inc N PFE on May 25 agreeing to pay 23 85 million to resolve claims that it used a purportedly independent charity as a conduit to pay illegal kickbacks to Medicare patients In December United Therapeutics Corp O UTHR reached a 210 million settlement to resolve similar allegations it improperly used a charity to cover co payments
Jazz Pharmaceuticals Plc O JAZZ announced on May 8 that it had reached an agreement to pay 57 million to resolve a related investigation |
WFC | GLOBAL MARKETS Global stocks oil rise on European bank moves | Global stocks rise on ECB and Bank of England moves
Euro climbs as ECB holds rates steady aids liquidity
Government debt sags as Europe acts to curb debt crisis
Oil gains a second day on ECB bank move U S jobs data
Adds fresh prices
By Herbert Lash
NEW YORK Oct 6 Reuters Global stocks rallied for a
third straight day and oil prices surged on Thursday on renewed
European efforts to aid ailing regional banks and as a ho hum
U S jobs report still managed to ease fears of a new
recession
The European Central Bank threw a lifeline to struggling
European banks with a renewed offer of longer term loans to
ward off a new credit crunch and the European Union readied a
plan to recapitalize banks For details see ID nL5E7L6311
European stocks jumped and Wall Street rallied further from
recent losses that had driven stocks into bear market territory
on Tuesday as investors took heart that officials in Europe are
finally coming to grips with the simmering debt crisis
Investors have swung from euphoria to despair on headlines
from Europe which has translated into high volatility and a
market that is directionless said Doug Roberts chief
investment strategist of Channel Capital Research
We re popping back up again based on the idea they will
reach an agreement and rescue us Roberts said
The euro rallied for a third day against the dollar and
government debt prices on both sides of the Atlantic slid after
the ECB s actions eased fears the region s recovering economies
would slump back into recession
The euro gained 0 6 percent at 1 3433 and European
shares closed up more than 2 percent Equity markets in London
gained more than 3 percent after the Bank of England moved to
spur a sluggish UK economy by enlarging a stimulus program
Jean Claude Trichet in his final news conference as
president of the ECB said the bank s governing council decided
to launch a covered bond purchase program by spending 40
billion euros over a 12 month period from November Covered
bonds are backed by assets such as mortgages and public sector
bonds and are perceived as safe and high quality assets
ID nECBNEWS
The abundance of liquidity measures announced shows the
ECB s resolve to boost liquidity and that is quite
satisfactory to the market easing tensions in the financial
and banking sectors said Kathy Lien director of FX research
at GFT in Jersey City New Jersey
The Dow Jones industrial average closed up 183 38
points or 1 68 percent at 11 123 33 The Standard Poor s
500 Index rose 20 94 points or 1 83 percent at
1 164 97 The Nasdaq Composite Index gained 46 31
points or 1 88 percent at 2 506 82
The FTSE 100 in London climbed 3 7 percent to
5 291 26 and the FTSEurofirst 300 index of top
European shares rose 2 6 percent to close at 940 65
Reaction to the death of Apple co founder Steve
Jobs was muted as the company s shares slipped 0 2 percent
For further stories on Jobs
Obituary ID nN1E79424F
Apple s lead over rivals could narrow ID nN1E79422U
Breakingviews Apple s impact ID nN1E7950GQ
Jobs a god for designers ID nL5E7L6347
Factbox Apple s history and milestones ID nN1E794246
Graphic Jobs profile http
The euro rose but few market participants believe the new
ECB measures will be sufficient to resolve the debt crisis
Most remained bearish on the euro for the rest of the year
We believe liquidity measures and eventually policy
rate easing are likely to remain a negative for the euro in
the coming months and maintain a bias to sell rallies said
Vassili Serebriakov senior currency strategist at Wells Fargo
in New York
Oil prices surged on the developments in Europe and on U S
data that showed new claims for jobless benefits rose less than
expected last week hinting at an improved labor market a day
before the government s closely watched monthly non farm
payrolls report for September ID nN1E7950UR
The markets are looking to embrace even the slightest
improvement in the economy said John Kilduff a partner at
hedge fund Again Capital in New York
Brent crude futures for November rose 3 00 to
settle at 105 73 a barrel and U S crude gained 2 91
to settle at 82 59 a barrel
The U S Treasuries market slumped as the ECB moves and the
U S jobs data reduced the safe haven bids for bonds
ID nN1E7950WA
The benchmark 10 year U S Treasury note fell
29 32 in price to yield 1 99 percent
Gold rose in thin trade for a second session boosted by a
rally in equities and commodities
Spot gold prices rose 10 19 to 1 650 50 an ounce
U S gold futures for December delivery settled up
11 60 at 1 653 20 an ounce
To read Reuters Global Investing Blog click on
for the MacroScope
Blog click on for Hedge
Fund Blog click on
Reporting by Richard Leong Wanfeng Zhou in New York Blaise
Robinson in Paris Writing by Herbert Lash Editing by Leslie
Adler |
T | Laura Dern Brad Pitt win first acting Oscars Obamas film makes Academy Awards debut | By Jill Serjeant LOS ANGELES Reuters Brad Pitt and Laura Dern won their first acting Oscars on Sunday and South Korean movie Parasite got off to what could be a historic night at the Academy Awards ceremony Dern took home the Oscar for best supporting actress for her role as a ruthless divorce lawyer in Marriage Story and dedicated it to her celebrity parents Diane Ladd and Bruce Dern This is the best birthday present ever said Dern who will turn 53 on Monday Pitt was named best supporting actor for playing a charming stunt double in Once Upon a Time in Hollywood after having collected an armful of trophies earlier this year for the role It was his first acting Oscar I m a bit gobsmacked to tell you the truth said Pitt who recalled his early days starting out as an unknown actor Once Upon a Time in Hollywood ain t that the truth he said dedicating the Academy Award to his six children with former wife Angelina Jolie Parasite got off to strong start by winning the original screenplay Oscar for a delighted Bong Joon Ho the first of six potential Academy Awards for the film on Sunday The social satire about the wealth gap in South Korea is also seen as a front runner for the coveted best picture prize as well as international feature and best director for Bong No film in a foreign language has ever won best picture at the Oscars American Factory about the decline of jobs in the industrial Midwest from former U S President Barack and first lady Michelle Obama s new production company won for best documentary Nazi satire Jojo Rabbit brought a best adapted screenplay Oscar for director star and writer Taika Waititi Despite again having no formal host the Oscars ceremony started with a surprise appearance by former hosts Steve Martin and Chris Rock who delivered a string of barbed jokes about the lack of female directors and people of color among this year s nominees I thought there was something missing this year said Martin Vaginas quipped Rock to loud applause Rock pointed out Cynthia Erivo who played slavery era freedom fighter Harriet Tubman in Harriet and who was the only actor of color nominated this year Cynthia did such a great job hiding black people that the academy got her to hide all the black nominees said Rock In another surprise rapper Eminem took the Oscars stage to perform Lose Yourself his 2003 Oscar winning song from the movie 8 Mile The nominees and winners are chosen by the 8 000 members of the Academy of Motion Picture Arts and Sciences The coveted best picture prize to be announced at the end of the three hour show is thought to be a three way race between Parasite British director Sam Mendes immersive World War One movie 1917 from Universal Pictures and Once Upon a Time in Hollywood Quentin Tarantino s love letter to show business from Sony Pictures T 6758 Dark comic book movie Joker from Warner Bros N T which has a leading 11 nominations Netflix O NFLX divorce drama Marriage Story and the streaming service s mob epic The Irishman race car drama Ford v Ferrari from 20th Century Studios N DIS and novel adaptation Little Women from Sony Pictures round out the competition for the top prize Netflix boosted its Hollywood credentials by getting a leading 24 nominations this year But the coveted best picture Oscar may elude it yet again on Sunday awards watchers say |
T | T Mobile Sprint merger clears hurdle NY attorney general says it s a loss for every American who relies on their cell phone | The 26 billion merger between T Mobile
TMUS 0 88
and Sprint
S 0 29
cleared what might be its last hurdle as a federal judge ruled in the wireless companies favor in an antitrust lawsuit U S District Judge Victor Marrero who was appointed by President Bill Clinton rejected the argument brought forth by attorneys general from 13 states and the District of Columbia that the merger would harm consumers by driving up prices for wireless services and reducing innovation T Mobile has redefined itself over the past decade as a maverick that has spurred the two largest players in its industry to make numerous pro consumer changes Marrero wrote adding that the overwhelming view both within Sprint and in the wider industry is that Sprint is falling further and further short of the targets it must hit to remain relevant In outlining his decision Marrero acknowledged that he relied on witness demeanor rather than hard figures to come to his final ruling in part because the two sides conflicting engineering economic and scholarly business models essentially cancel each other out as helpful evidence Marrero also emphasized the importance of the work the U S Department of Justice and Federal Communications Commission had undertaken to ensure competition via a new wireless carrier As part of a deal struck last summer T Mobile and Sprint agreed to sell some of their assets to satellite TV provider Dish Network
DISH 0 06
to help it set up a new wireless carrier The sale was floated as a response to concerns raised by critics who said the deal could reduce competition and cause prices to rise for cellphone subscribers
The major players Verizon AT T T Mobile and Sprint currently command 98 6 of the wireless market
Dish will be required to create a 5G network with airwaves it already owns and some it will buy from the merged T Mobile Sprint Additionally Dish will buy Sprint s prepaid brands including Boost Mobile and have access to the merged company s airwaves for seven years to get its wireless business going Read more Look out below If Dish tries to take on T Mobile and Sprint it would be very bad for investors analyst says When the merger between T Mobile and Sprint was first announced observers expressed concerns that the wireless market in the U S come become much like the one that exists in Canada Verizon
VZ 0 51
AT T
T 0 53
T Mobile and Sprint currently command 98 6 of the wireless market That s in spite of the fact that other TV service providers such as Charter Communications have sought to build out their own wireless networks as AT T and Verizon have expanded into offering home internet and TV services themselves See also How to get Disney Apple TV Amazon Prime Video or Netflix for free and what to know before you sign up In Canada there are only three major wireless carriers Bell
BCE 0 43
Rogers
RCI 0 68
and Telus
TU 1 77
and their plans are priced basically the same due to the reduced level of competition according to mobile news website iMore Americans therefore could see less variation in price if Sprint and T Mobile s merger comes to fruition Moreover the reduced competition could also lead wireless carriers to get stingier with the benefits they provide such as unlimited data plans Given the current market share of the main players Dish would face an uphill struggle to become a significant fourth player after the T Mobile Sprint merger
Today s decision marks a loss for every American who relies on their cell phone for work to care for a family member and to communicate with friends
New York Attorney General Letitia James
The state attorneys general initially argued that the deal would drive up cell service costs Preliminary estimates based on the submissions made by economists for Sprint and T Mobile show that the merger could cost Sprint and T Mobile subscribers at least 4 5 billion annually and the harm to all retail mobile wireless telecommunications subscribers could be even larger they wrote in their original complaint The merger will negatively impact all retail mobile wireless telecommunications service subscribers but will be particularly harmful to prepaid subscribers they added Many low income subscribers cannot pass a credit check and thus can purchase mobile wireless telecommunications services only on a prepaid basis Also see Verizon risks losing a key 5G battle to AT T and T Mobile says analyst Following the judge s decision opponents of the merger echoed these initial criticisms Today s decision marks a loss for every American who relies on their cell phone for work to care for a family member and to communicate with friends New York Attorney General Letitia James said in a written statement There is no doubt that reducing the mobile market from four to three will be bad for consumers bad for workers and bad for innovation which is why the states stepped up and led this lawsuit James added that the attorneys general are reviewing their options including a possible appeal
If T Mobile and Sprint don t get this deal done they re toast
Jeff Kagan a wireless industry analyst
Proponents of the deal however have argued that a merger is necessary for Sprint and T Mobile to remain competitive as the wireless industry gears up for the shift to 5G service T Mobile and Sprint s merger makes sense because each company fills the gaps in the other Jeff Kagan a wireless industry analyst who had previously expressed some concerns with the deal told MarketWatch last July T Mobile excels at marketing but owns little spectrum the airwaves that wireless carriers use to run their service Sprint he said has the opposite problem If T Mobile and Sprint don t get this deal done they re toast Kagan said Having the combined marketing pizzazz and cache of airwaves is necessary for them to build out a 5G network successfully that could compete with AT T and Verizon he said Shares of Sprint were up 74 Tuesday morning while shares of T Mobile were flat Comparatively the S P 500
SPX 0 15
and Dow Jones Industrial Average
DJIA 0 37
were up 0 47 and 0 31 in Tuesday morning trades This story was updated on Feb 11 2020
More from MarketWatch Hershey raises prices on candy bars Halloween candy is next How the 700 million Equifax settlement could leave you high and dry Why everyone from Betterment to T Mobile wants you to bank with them
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Jacob Passy is a personal finance reporter for MarketWatch and is based in New York
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T | Why T Mobile s deal with Sprint could be the warm up to a wild decade of mergers | T Mobile s deal with Sprint may usher in the next wave of major U S media and telecommunications consolidation the merging of cable and wireless companies The deals if attempted could be some of the largest of all time European telecommunications companies such as Liberty Global and Vodafone already own wireless and cable assets |
LB | The Troubled Dutch Housing Market | The decline in house prices has increased the risk for the banks on mortgage loans It is estimated that 25 of mortgages are under water Dutch mortgage rates are relatively high due to the high Loan to Deposit ratio LtD the lack of competition in the Dutch mortgage market and capacity restrictions Dutch authorities are studying on how to improve competition in the financial markets and how to reduce the exposure of Dutch banks to the wholesale capital markets The Dutch housing market is in the doldrums House prices are about 16 lower than their top in 2008 before the crisis This development has weighed on household consumption and GDP growth In previous articles we paid attention to the housing market problems for the household sector This time we will turn our attention to the consequences for the banking sector Delinquencies have remained remarkably lowThe decline in house prices has increased the risk for the banks on mortgage loans It is estimated that 25 of mortgages are under water which means that in the case of foreclosure the bank might not get fully repaid Even though as a result of the adverse economic conditions loan delinquencies are rising they have been relatively low compared to other countries see chart 1 and 2 According to the Bureau for Credit Registration BKR mortgage in arrear for more than 120 days increased to 82 000 in April 2013 i e 1 6 of all homeowners The low level of delinquencies is related to the several factors First many homeowners whose mortgages are underwater have sufficient savings to repay at least part of the debt Second unlike the United States the mortgage lender has full recourse to the borrower In the case the property is sold below the outstanding mortgage loan the mortgage holder is responsible for the repayment of the residual debt As Dutch personal insolvency law is quite onerous mortgage holders have every interest to avoid getting in such a situation Statistics Netherlands report that the number of personal insolvencies declined in 2012 This is not an indication that payment problems have eased The statistical office attributes this development to efforts by the local authorities and banks to help mortgage holders in finding a way out of the debt spiral Thirdly even though unemployment is rising many households have multiple income earners Finally homeowners have not an easy alternative due to a shortage of rental accommodation in particular for persons earning more than the maximum income for social housing EUR 34 000 in 2013 BY Raymond VAN DER PUTTEN To Read the Entire Report Please Click on the pdf File Below |
LB | L Brands Beats On Earnings | L Brands Inc NYSE LB formerly known as Limited Brands posted first quarter fiscal 2014 earnings of 53 cents a share that came a couple of cents ahead of the Zacks Consensus Estimate and rose 10 from the prior year quarter earnings of 48 cents
This specialty retailer of women s intimate and other apparel beauty and personal care products posted net sales of 2 391 2 million up 5 from 2 268 million reported in the prior year quarter and also beat the Zacks Consensus Estimate of 2 384 million L Brands posted comparable store sales growth of 2 during the quarter compared with 3 in the prior year quarter
Sales at Victoria s Secret Stores increased 5 1 to 1 245 3 million whereas Victoria s Secret Direct sales fell 0 2 to 358 3 million Total Victoria s Secret sales grew 3 9 to 1 603 6 million while comps increased 2 Bath Body Works total sales jumped 3 7 to 581 6 million with a 2 rise in comps Victoria s Secret and Bath Body Works International surged 75 7 to 71 million Other revenue increased 9 7 to 135 million
Gross profit for the quarter climbed 4 to 982 1 million whereas gross margin contracted 40 basis points to 41 1 Operating income increased 8 to 336 1 million whereas operating margin expanded 40 basis points to 14 1
Store Update
During the quarter the company opened 8 Victoria s Secret Stores and closed 2 outlets thereby taking the count to 1 100 stores at the end of the quarter Four Bath Body Works stores were opened while 8 stores were closed bringing the count to 1 634 stores Two Victoria s Secret U K stores were opened while 4 La Senza Canadian stores were closed resulting in 7 and 153 stores respectively at the end of the quarter There were 29 Henri Bendel outlets at quarter end As of May 3 2014 L Brands operated 2 923 stores
Strolling through Guidance
Management now forecasts earnings in the range of 57 cents to 62 cents a share for the second quarter and between 3 00 and 3 15 per share for fiscal 2014 narrowing the range from 3 00 to 3 20 forecasted earlier
The current projection includes the unfavorable impact of about 10 cents to 12 cents a share due to exit from non core categories in the Victoria s Secret direct and beauty operations Management now intends to concentrate more on profitable zones
The current Zacks Consensus Estimate for the second quarter and fiscal 2014 are 61 cents and 3 21 per share respectively which could witness a revision in the coming days
L Brands now anticipates low single digit comp increase for the month of May
Zacks Rank
Currently L Brands holds a Zacks Rank 3 Hold Some better ranked stocks in the retail sector areAmerican Apparel NYSE APP Foot Locker Inc NYSE FL and Pacific Sunwear of California NASDAQ PSUN all sporting a Zacks Rank 2 Buy |
PFE | Exact Sciences EXAS To Post Q1 Earnings What s In Store | Exact Sciences Corporation NASDAQ EXAS is scheduled to report first quarter 2019 earnings results on Apr 30 2019 after the market closes The company s track record has been impressive so far having delivered a positive surprise in each of the trailing four quarters the average being 16 26 In the last reported quarter Exact Sciences came up with an earnings surprise of 12 Shares of Exact Sciences have surged 46 1 in the year so far outperforming the increase of 2 9 Let s see how things are shaping up for the upcoming quarterly results Factors to ConsiderExact Sciences top line mainly consists of laboratory service revenues generated from Cologuard a non invasive screening test for colorectal cancer Cologuard test volume increased both year over year and sequentially in the fourth quarter of 2018 as a large number of healthcare providers ordered their first Cologuard test We expect this positive trend to continue in the first quarter as well In February 2019 Cologuard screening test volume crossed the 2 million mark since its launch in 2014 Exact Sciences is intensely focused on accelerating this momentum by adding a test lab facility and increasing its workforce The company concentrates on raising awareness of the importance of colorectal cancer screening and early cancer detection of the dreadful disease Going forward we expect the number of people undergoing screening for colorectal cancer to burgeon which will be a huge boon to Cologuard We would like to remind investors that Cologuard is the first and the only FDA approved non invasive DNA screening option for colorectal cancer Last August Exact Sciences entered into an agreement with the drug giant Pfizer NYSE PFE to co promote its Cologuard test for the detection of colorectal cancer in the United States This nationwide co promotion deal will be valid through 2021 end We expect investors focus to be on the sales volume generated by Cologuard during the upcoming earnings call Earnings WhispersOur proven model does not conclusively show that Exact Sciences is likely to beat on earnings this reporting cycle This is because the stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold for this to happen But that is not the case here as you will see below Earnings ESP Exact Sciences has an Earnings ESP of 0 00 This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 64 cents each You can uncover the best stocks to buy or sell before they re reported with our Zacks Rank Exact Sciences carries a Zacks Rank 4 Sell which lowers the predictive power of ESP Moreover a 0 00 ESP in the combination makes surprise prediction difficult for the stock this earnings season We caution against stocks with a Zacks Rank of 4 or 5 going into an earnings announcement especially when the company is seeing negative estimate revisions Exact Sciences Corporation Price and EPS Surprise Stocks That Warrant a LookHere are a few health care stocks worth considering as our model shows that these have the right mix of elements to beat estimates this time around Aduro Biotech Inc NASDAQ ADRO has a Zacks Rank 2 and an Earnings ESP of 82 00 You can see Incyte Corporation NASDAQ INCY has an Earnings ESP of 14 47 and a Zacks Rank of 1 The company is scheduled to release first quarter results on Apr 30 before the market opens Is Your Investment Advisor Fumbling Your Financial Future See how you can more effectively safeguard your retirement with a new Special Report 4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future |
PFE | What s In Store For Bayer BAYRY This Earnings Season | Bayer DE BAYGN Aktiengesellschaft OTC BAYRY is scheduled to report first quarter 2019 results on Apr 25
Bayer has surpassed expectations in the previous four quarters the average positive earnings surprise being 6 98
The stock has dipped 2 3 in the past year compared with the s decline of 0 9
Let s see how things are shaping up for this announcement
Factors to Consider
In 2018 Bayer undertook a series of portfolio efficiency and structural measures including exiting the Animal Health business unit and the Consumer Health brands Coppertone and Dr Scholl s to strengthen its position The company also plans to sell its 60 interest in German site services provider Currenta The company completed the acquisition of Monsanto NYSE MON in June 2018
The combined enterprise will enable Bayer to bring innovations to the market faster and provide customers with better solution In December 2018 Visanne was approved by the Chinese regulatory authorities for the treatment of endometriosis The drug is a once daily oral tablet containing dienogest 2 mg that has been developed specifically for the treatment of this chronic gynecological disease In August 2018 the FDA approved Jivi BAY94 9027 for the routine prophylactic treatment of hemophilia A in previously treated adults and adolescents aged 12 years or older in the United States The FDA also approved the same for on demand treatment and perioperative management of bleeding in the same population
Jivi is a long acting PEGylated recombinant human Factor VIII rFVIII replacement therapy In November 2018 the drug BAY94 9027 was approved by the European Commission for the treatment and prophylaxis of bleeding in previously treated patients aged 12 years or older with hemophilia A
Sales of these drugs should boost revenues for the company during the first quarter of 2019
Bayer is developing Darolutamide for the treatment of non metastatic castration resistant prostate cancer nmCRPC In February 2019 the company completed the rolling submission of a new drug application NDA for darolutamide to the FDA
However Bayer is facing generic competition for many of its products including the Yaz franchise oral contraceptives
What Our Model Indicates
Our proven model does not conclusively show that Bayer is likely to beat earnings in the to be reported quarter This is because a stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold to be able to beat estimates But that is not the case here as you will see below
Earnings ESP Bayer has an Earnings ESP of 0 00 as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at 47 cents You can uncover the best stocks to buy or sell before they re reported with our
Zacks Rank The company carries a Zacks Rank 2
Note that Sell rated stocks Zacks Rank 4 or 5 going into an earnings announcement are best avoided Bayer Aktiengesellschaft Price and EPS Surprise
Stocks That Warrant a Look
Here are some stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter
Pfizer Inc NYSE PFE has an Earnings ESP of 0 65 and a Zacks Rank 3 The company is scheduled to release its first quarter 2019 results on Apr 30 You can see
Glaxo SmithKline plc NYSE GSK has an Earnings ESP of 2 63 and a Zacks Rank 3 The company is scheduled to release its first quarter 2019 results on May 1
Novo Nordisk CO NOVOb A S NYSE NVO has an Earnings ESP of 0 8 and a Zacks Rank 3 The company is scheduled to release its first quarter 2019 results on May 3
Is Your Investment Advisor Fumbling Your Financial Future
See how you can more effectively safeguard your retirement with a new Special Report 4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future |
PFE | Pfizer PFE Expected To Beat Earnings Estimates What To Know Ahead Of Q1 Release | Wall Street expects flat earnings compared to the year ago quarter on lower revenues when Pfizer PFE reports results for the quarter ended March 2019 While this widely known consensus outlook is important in gauging the company s earnings picture a powerful factor that could impact its near term stock price is how the actual results compare to these estimates
The stock might move higher if these key numbers top expectations in the upcoming earnings report which is expected to be released on April 30 On the other hand if they miss the stock may move lower
While management s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations it s worth having a handicapping insight into the odds of a positive EPS surprise
Zacks Consensus Estimate
This drugmaker is expected to post quarterly earnings of 0 77 per share in its upcoming report which represents no change from the year ago quarter
Revenues are expected to be 12 86 billion down 0 3 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 0 65 higher over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out This insight is at the core of our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Pfizer
For Pfizer the Most Accurate Estimate is higher than the Zacks Consensus Estimate suggesting that analysts have recently become bullish on the company s earnings prospects This has resulted in an Earnings ESP of 0 65
On the other hand the stock currently carries a Zacks Rank of 3
So this combination indicates that Pfizer will most likely beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
While calculating estimates for a company s future earnings analysts often consider to what extent it has been able to match past consensus estimates So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Pfizer would post earnings of 0 63 per share when it actually produced earnings of 0 64 delivering a surprise of 1 59
Over the last four quarters the company has beaten consensus EPS estimates four times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Pfizer appears a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
PFE | Lannett LCI To Report Q3 Earnings What s In The Cards | During Lannett Company Inc s NYSE LCI fiscal first quarter 2019 call the focus is expected to be on product launches
Lannett s shares have slumped 54 4 in the past year compared with the s decline of 13
Let s see how things are shaping up for this announcement
Factors in Play
Lannett the generic pharmaceutical company launched 17 products in calendar year 2018 which are expected to contribute significantly to net sales in fiscal third quarter 2019 The company s product launches during the quarter are expected to contribute significantly to sales Investors focus will be on the launch of these products as stated by the management earlier
The company intends to realize 66 million in total savings with 33 million of reinvestment In fact a portion of these savings is expected to be realized in fiscal third quarter 2019
In March 2019 Lannett received approval from the FDA for its abbreviated new drug application ANDA for Aspirin and Extended Release Dipyridamole Capsules 25 mg 200 mg the therapeutic equivalent to the reference listed drug Aggrenox Capsules 25 mg 200 mg of Boehringer Ingelheim Pharmaceuticals Inc The drug should boost sales for the company in fiscal third quarter 2019
What Our Model Indicates
Our proven model does not conclusively show that Lannett is likely to beat on earnings in the to be reported quarter This is because a stock needs to have both a positive and a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold to be able to beat estimates But that is not the case here as you will see below
Earnings ESP Lannett has an Earnings ESP of 0 00 as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at a profit of 62 cents You can uncover the best stocks to buy or sell before they re reported with our Lannett Co Inc Price and EPS Surprise
Zacks Rank The company carries a Zacks Rank 2 which increases the predictive power of ESP However we need to have a positive Earnings ESP to be confident of an earnings beat
Note that Sell rated stocks Zacks Rank 4 or 5 going into an earnings announcement are best avoided
Stocks That Warrant a Look
Here are some health care stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter
Pfizer Inc NYSE PFE has an Earnings ESP of 0 65 and a Zacks Rank 3 The company is scheduled to release first quarter 2019 results on Apr 30 You can see
Glaxo SmithKline plc NYSE GSK has an Earnings ESP of 1 27 and a Zacks Rank 2 The company is scheduled to release first quarter 2019 results on May 1
Novo Nordisk CO NOVOb A S NYSE NVO has an Earnings ESP of 0 8 and a Zacks Rank 3 The company is scheduled to release its first quarter 2019 results on May 3
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PFE | Takeda CEO prescribes surgical R D cuts after 62 billion Shire deal | By Ben Hirschler LONDON Reuters For Christophe Weber the boss of Japan s Takeda Pharmaceutical T 4502 securing a 62 billion deal last week to buy drugmaker Shire L SHP at the fifth time of asking was the easy bit Now he has to steer what will be one of the world s most indebted drugmakers through the big spending cuts needed to make the financial sums work without destroying the lifeblood of future innovation At the same time he must win shareholders support for the largest ever overseas purchase by a Japanese company something he told Reuters could be helped by bringing in one or more long term large strategic investor Talks on this were now starting he said but declined to identify the parties involved Weber said in a interview that his prescription for a smooth merger was planning speed and a surgical focus on culling experimental drugs that fail to offer the high level of medical innovation demanded by cash strapped insurers and governments It s really important that we don t waste resource on assets that are moderately innovative When you combine two pipelines you can be more stringent he said in London where he is meeting investors and analysts Takeda will either dispose of programs that don t make the cut or spin them off into separate biotech companies in which it could retain a stake the latter being a strategy is has pursued around 10 times in the past Weber said It is a delicate task For the past decade ramming together two drugmakers in mega mergers has been unpopular following the R D disruption caused by past deals like Pfizer s N PFE acquisition of Wyeth in 2009 Indeed Frenchman Weber has direct experience of one such deal that fell short of expectations after working at GlaxoSmithKline L GSK when it was formed in 2000 by the combination of Glaxo Wellcome and SmithKline Beecham It s very important that we keep the momentum and don t get disrupted he said We rely on R D to grow LESS DISRUPTIVE Takeda struck the agreement to take over London listed Shire on May 8 a deal that will propel the Japanese company from a mid size pharma player into the top 10 rankings of global drugmakers by sales alongside the likes of Novartis S NOVN and Pfizer N PFE Days later Weber appointed U S based executive Helen Giza to oversee overall integration of the enlarged group which will be tightly focused on gastroenterology neuroscience oncology rare diseases and blood derived therapies There is a big cultural divide to bridge Takeda is a 237 year old Japanese institution that began life selling traditional Japanese and Chinese herbal medicines while Shire was born above a shop in southern England in 1986 But Weber believes he has a key advantage because Shire has been focused on later drug development rather than early research so there is no large research center that needs to be closed I think it will be much less disruptive than in typical M A because of the research set up he said A key testing ground for the merger will be in Boston a global hub of life sciences research where both Shire and Takeda have large teams that must work seamlessly once the deal closes in the first half of 2019 Takeda has forecast annual cost synergies of at least 1 4 billion three years after the deal closes including 600 million in R D costs achieved by cutting duplication and rationalizing research programs Weber said savings would be helped by the fact that R D investment in certain established Takeda drugs was now winding down Still 600 million remains a big bite out of two companies current combined R D spend of 4 4 billion They are cutting quite deep in R D and it is not clear if the amount of money they are saving is going to be beneficial or harmful said John Rountree a partner at pharmaceutical strategy consulting firm Novasecta Merging R D is never easy There are going to be lay offs and that creates uncertainty and disruption and sometimes the best talent just leaves Takeda expects to reduce the overall workforce of 52 000 by 6 7 percent with R D accounting for just under a third of the cuts Weber said he recognized the risk of losing key staff and his team was currently working on a staff retention program FINANCING FEARS Many investors have been lukewarm on the Shire deal because of the debt Takeda is taking on and uncertainty over how it will convert a 31 billion bridge loan into long term financing Takeda has promised to bring the net debt of the enlarged group down to two times EBITDA within three to five years from 4 5 times when the deal closes and believes it can do this without significant disposals or shareholder dilution In the refinancing mechanism we will use a lot of different instruments but none of them are dilutive Weber said Weber said he had never doubted he would persuade investors of the case for the transaction but he acknowledged there had been uncertainty and misunderstanding initially More recently investor comfort with the deal had improved he said The real test will come later this year when Weber will learn if he has secured the necessary two thirds support needed from Takeda shareholders and three quarters backing from Shire investors One Japanese institutional investor who owns Takeda shares said there were some fears the deal would overstretch Takeda s finances but the benefit from business synergies should outweigh this We hope Takeda will provide a good explanation to the market and ease the investors concerns he said Adding strategic investors could help alleviate some of those worries potentially mirroring Bayer s DE BAYGn recent deal to raise 3 7 billion towards its planned takeover of Monsanto N MON by selling a stake to Singapore s state investment company Temasek There are multiple possibilities of long term investors such as government funds or others Weber said A long term strategic stable investor would be great for us |
WFC | FOREX Dollar heading lower with focus on Fed action | Dollar pressured by expectations of more Fed action
Weaker than expected U S jobs data to continue to weigh
Markets on high alert for BOJ or SNB intervention
Recasts adds quotes details updates prices
NEW YORK Sept 2 Reuters The dollar is likely to trend
lower in the week ahead after another abysmal U S jobs report
on Friday which investors perceive as raising the likelihood
of further action by the Federal Reserve to aid the economy
With the benchmark U S interest rate already close to
zero the Fed is limited in the actions it can take
Two rounds of quantitative easing costing 2 3 trillion
where the U S central bank bought government securities for
its own balance sheet simultaneously increasing liquidity in
the economy has failed to increase economic growth
Yet market expectations are rising that the Fed will embark
on a third round of similar action But raising the supply of
dollars lowers its value
With the labor market now at stall speed the data is
likely to keep alive expectations for Fed policy easing at the
September meeting said Vassili Serebriakov currency
strategist at Wells Fargo Bank
The euro shed 2 18 percent against the dollar this week
according to electronic trading platform EBS its
worst week since the week ended July 10 while the dollar was
little changed against the yen
The euro is now up 6 1 percent against the dollar in the
year to date while the dollar is down 5 5 percent against the
yen so far in 2011
Speaking last week in Jackson Hole Wyoming Bernanke said
the Fed had marked down its outlook for the U S economy and
that the Fed would extend its September meeting to two days
from one to consider its options
With the Nonfarm Payroll number coming in at zero and the
prior revised 32 000 lower the Fed has gained greater
political ability to enact a version of QE3 at their meeting in
September said Douglas Borthwick managing director of Faros
Trading in Stamford Connecticut We see this as terrifically
bearish for the U S dollar
U S President Barack Obama will address a joint session of
Congress televised to the the nation next Thursday on ways to
increase job creation and accelerate economic growth For
details see ID nWNA7806
For a graphic on U S non farm payrolls double click
INTERVENTION
Investors will also be keeping a close eye on three central
banks
With the yen and Swiss franc again approaching record lows
on purchases by investors who are shunning risk expectations
are high for intervention by the Bank of Japan and the Swiss
National Bank to stem the strength of their respective
currencies which would aid the dollar
Both banks have recently taken action in the currency
markets While investors are ready to test their resolve by
buying each currency they are equally ready to pull the
trigger and sell rather than stand in the way of unilateral
action
The central banks of developed economies also have deeper
pockets compared with even the wealthiest investors
The euro fell 4 6 percent against the Swiss franc
this week while the dollar slipped 2 6 percent
against the franc
Some of the euro s declines on the week against the dollar
can be traced to euro selling against the Swiss franc
The risk of intervention by the Bank of Japan and the
Swiss National Bank will limit gains in these currencies said
John Praveen chief investment strategist at Prudential
International Investments Advisers in Newark New Jersey
Top Swiss politicians came out on Friday in support of
steps the Swiss National Bank has taken to limit the rally of
the record strong Swiss franc potentially strengthening the
central bank s resolve to consider currency interventions
ID nWEA2973
Adding to investors risk in betting against the dollar is a
meeting of the European Central Bank on Thursday
The ECB has been more hawkish than the Fed even against a
backdrop of sovereign debt concerns centered on Greece and
other peripheral euro zone nations But with euro zone growth
seen at risk that may change
The general expectation is they will change their tone and
indicate they will pause with no rate increases in the near
term said Praveen
That could raise the relative attractiveness of the dollar
against the euro though given the meeting is ahead of Obama s
speech to Congress and the concern about job growth it may
have only limited impact
U S financial markets will be closed on Monday for the
Labor Day holiday the traditional end to the U S summer |
WFC | FOREX Euro falls vs dollar snapping three day advance | Greece bailout funds appear likely
Month and quarter end flows seen swaying euro
Investors await speech by Fed Chairman Bernanke
NEW YORK Sept 28 Reuters The euro reversed course and
fell on Wednesday snapping a three day advance against the
dollar as investors began to square positions ahead of month
and quarter end
Earlier the euro strengthened for the fourth straight
session against the dollar on optimism Greece s creditors will
give it bailout funds crucial to avoid a near term default on
its debt
But month end two way flows dominated euro price action
with U S corporations and speculators selling the single
currency as central banks bought it a trader said
People are probably a little bit long the euro and
squaring up ahead of quarter end and Jewish holidays said
Lane Newman director of foreign exchange trading at ING
Capital Markets in New York
In mid afternoon New York trade the euro was down 0 2
percent at 1 3566 off a one week high of 1 36909
touched in the overseas session in which a U S investment bank
was cited as a large buyer
The single currency has gained 0 7 percent in the last four
sessions but with a 5 6 percent slide month to date the
year to date gain is only 1 4 percent
Greece remains a focus for investors
EU and IMF inspectors return to Greece on Thursday to
decide whether Athens has done enough to secure a new batch of
aid vital to avoid bankruptcy Germany suggested a new bailout
may have to be renegotiated For details see ID nL5E7KS0AC
Finland on Wednesday voted to grant additional powers to
the euro zone bailout fund giving support to the euro The
proposal which euro zone leaders agreed to in July needs to
be approved by the parliaments of all the euro zone nations
Markets remain intensely focused on European developments
where only slow and tentative progress in addressing the
region s debt crisis is being made said Nick Bennenbroek
head of currency strategy at Wells Fargo in New York
Fears of a Greek default and its impact on Europe s banking
system are largely behind the euro s September slide
Talk of proposals to leverage up the region s 440 billion
euro rescue fund the European Financial Stability Facility
had buoyed demand for riskier assets this week though
investors are still cautious about pushing the euro too high
Media reports suggest there are still splits within the
euro zone over Greece s bailout terms highlighting one of the
many hurdles lying ahead for policymakers trying to resolve the
debt crisis ID nL5E7KS00J
For Interactive timeline
Wells Fargo s Bennenbroek said news that bans have been
extended on short selling stocks in France Italy and Spain may
have helped unsettle markets in general and pressured the euro
ID nL5E7KS6QX
The dollar fell 0 5 percent to 76 458 yen within
a yen of the record low of 75 941 hit in August on trading
platform EBS and keeping investors alert for Japanese
intervention to weaken the yen
Investors awaited a late afternoon speech by Federal
Reserve Chairman Ben Bernanke to see if he offers some reaction
to the market s mostly negative response to last week s
Operation Twist by the U S central bank
Any hint of even more monetary easing may further boost the
euro to the detriment of the dollar
Reporting by Nick Olivari and Julie Haviv additional
reporting by Wanfeng Zhou Editing by Dan Grebler |
T | Investors Are Overlooking This Key Risk in AT T s TV Strategy | It s anything but a veiled secret that AT T s NYSE T cable television business in trouble Last quarter alone it shed another 1 16 million video customers bringing its full year attrition up to 3 43 million cable customers The numbers extend a losing streak that began back in 2017 Investors weren t surprised and AT T wasn t concerned either seemingly certain that the upcoming nationwide launch of AT T TV will turn its television fortunes around
While analysts and investors debate the state of AT T s video business though they re overlooking another red flag that could make the cable television matter moot The telco giant is also now losing broadband subscribers who are the company s best cable TV prospects
Losing broadband customers too
AT T s television woes are well documented Its 2015 acquisition of satellite cable name DirecTV has been a bust but its over the top service called AT T TV NOW formerly DirecTV NOW hasn t been any less disappointing AT T Communications CEO Jeff McElfresh explained in December that the company was prioritizing AT T TV jibing with previous comments from MoffettNathanson among others that AT T TV NOW could eventually be shut down outright AT T TV is meant to be the new cable flagship delivered entirely via the internet even its live linear programming
There s just one problem with the premise though For a customer to enjoy their new AT T TV service they ll also need a broadband connection Fewer and fewer consumers are paying AT T for high speed connectivity though The company lost 142 000 cable internet connections during the final quarter of last year and shed another 41 000 DSL customers for a net loss of 182 000 accounts That s the third straight loss of broadband customers with each of those being more dramatic than the prior one
Investors can only speculate as to why AT T internet customers are canceling It s not a stretch though to suggest that consumers who decided they no longer wanted AT T s cable television service also decided they didn t need AT T s broadband service either The customer attrition trends sure look like they re starting to coincide
If that s the case the loss of broadband customers bodes poorly for the future of AT T TV
A problem unique to AT T
The trajectories of AT T s broadband and cable customer counts prompt a key question Is it even possible to retain bundle customers once they decide to un bundle That is to say will consumers bother subscribing to just one service from a telco provider AT T s anecdotal data suggests they won t but AT T s numbers contrast sharply with those from rival Comcast NASDAQ CMCSA
Comcast is losing cable customers as well for the record shedding 149 000 television subscribers during the company s fourth quarter of 2019 Comcast s customers are decidedly unbundling their services too The number of Comcast customers with just one service in fact hasn t been higher in years thanks to the 671 000 cable TV customers that cut the Comcast cord last year Its customers aren t bailing on the company s broadband business though with another 442 000 getting on board during Q4 It added 1 4 million of them in all of 2019 Verizon is also adding high speed internet customers even as it loses cable subscribers Clearly one service can be sold without the other
Comcast s success at least on one key front isn t just a coincidence Though it too is moving away from winning cable customers at all costs only to suffer thin margins in trying to keep them signed on it s proceeding strategically It knows the business of traditional cable television is in permanent retreat but it offers a slimmed down ad supported cable service called Flex to its internet subscribers Meanwhile its NBCUniversal arm will soon launch an ad supported streaming service called Peacock available to all consumers regardless of who their broadband provider is
In contrast AT T just upped its U Verse TV and DirecTV rates again for 2020 with the former s customers paying as much as 7 more per month and the latter paying as much as 8 more per month Indeed the company has effectively done nothing to add meaningful value for broadband customers or reward them for sticking around
Bottom line
It s possible AT T s internet business has simply bumped up against a temporary headwind It could snap out of it and revive growth going forward Never say never
Given the data at hand though such an assumption takes a sizable leap of faith despite the company s blue chip status Until there s clear evidence to the contrary investors have to be concerned that the deteriorating broadband business only makes the AT T TV launch slated for February all the more challenging If they re not AT T internet customers it s awfully easy for them to become a user of any other competing video service |
T | HBO Max Has Already Cost AT T 1 2 Billion | AT T NYSE T already outlined its plans to invest heavily in HBO Max the streaming service aimed at broadening the appeal of its premium cable network But that reality really hit home in the company s fourth quarter earnings report
In its slide presentation accompanying the report AT T notes its WarnerMedia segment forewent about 1 2 billion in licensing revenue by holding back content for HBO Max WarnerMedia previously sold those shows externally to competitors like Netflix NASDAQ NFLX
At its investor day in October AT T said it would see incremental investments of just 100 million in 2019 stepping up to 2 billion in 2020 Our incremental investment includes spending for new content forgone licensing revenue of our content and operating expenses for the direct to consumer platform and customer acquisition costs AT T CFO John Stephens said at the presentation emphasis mine
Even if AT T pulled forward some of those forgone revenues from licensing existing shows it might end up spending more than anticipated when you factor in its HBO Max originals and additional licensing expenses the service will start amortizing once it launches in May plus the necessary investments in marketing and customer acquisition
Hey big spender
Not only is HBO Max licensing a lot of content from its parent company it s also investing in new originals exclusive to the streaming service while boosting the budget for its HBO linear network s programming
HBO Max will launch with 31 original series in 2020 TV series have become increasingly expensive as competition in streaming ramps up That s particularly noticeable at the top end of the market On very competitive shows there s probably been 30 price escalation from this time last year Netflix content chief Ted Sarandos said during the company s third quarter earnings call With several big names attached to its Max Originals Anna Kendrick Elizabeth Banks and Ellen Degeneres to name a few AT T is probably paying a pretty penny to produce its new series
On top of its Max Originals AT T is stepping up the budget for HBO The content budget will rise to 2 5 billion in 2020 up about 500 million from 2018 and 2019 It s not clear whether management includes that number in its definition of incremental investments but considering everything available on HBO will also be on HBO Max and its plans to get all of its legacy HBO subscribers onto HBO Max it very well should count
With 1 2 billion in forgone licensing revenue it s likely HBO Max s spending will come in over budget for 2020
Don t forget about marketing
AT T might have a built in audience with its 34 million HBO subscribers and 170 million total direct customer relationships but it s still going to need to spend money on marketing and customer acquisition for HBO Max
Netflix has seen its marketing budget climb considerably over the last few years as it grows its original content library The company has shifted from marketing what Netflix is to focusing more on marketing specific series films and comedy specials in order to attract new viewers
Likewise HBO is already a well established brand But AT T will need to inform consumers of the new value HBO Max provides on top of HBO That means highlighting new series and films available on the service and explaining how HBO Max is different from HBO
That won t be cheap Netflix spent 2 65 billion on marketing last year Even Disney is spending hundreds of millions on marketing for Disney despite the media company s massive fan base and ability to promote the service at its parks and properties AT T will need to spend a comparable amount if it wants to see success with the launch of the new service
Not too big in the grand scheme of things
Going over its planned budget of 2 1 billion in incremental expenses for HBO Max across 2019 and 2020 won t be the end of the world for AT T Ultimately that s still a fraction of Netflix s budget which will amortize about 12 billion in content expenses in 2020 Disney s budget for Disney content licensed and original and operating expenses is a bit under 3 billion for fiscal 2020
The 1 2 billion in forgone licensing revenue that popped up on AT T s latest report is a bit surprising given management s earlier guidance but how big of an effect that ll have on AT T s bottom line ultimately comes down to the consumer response to the launch of HBO Max later this year |
T | AT T Preferred Stock Offers a Safer Alternative to the Dividend | Besides unsurprising fourth quarter earnings AT T s NYSE T management confirmed the giant telecommunications and entertainment conglomerate was still on track to deliver results in line with its three year plan which means the dividend should remain safe over the next several years
Yet besides a potential recession the company s free cash flow and dividend depend on operational uncertainties such as the decline rate of the legacy TV business and the success of the long awaited video streaming service HBO Max Thus AT T s preferred stock could represent an interesting alternative for investors looking for a safer income stream than the company s dividend
How safe is the dividend
After its recent 2 increase the quarterly dividend of 0 52 per share represents an annual cash outflow of 15 09 billion which is more than covered by the company s free cash flow that increased from 22 35 billion in 2018 to 29 03 billion in 2019
In addition to paying its dividend AT T reduced its debt load thanks to about 18 billion of asset divestitures such as its stake in the video streaming service Hulu now controlled by Disney and its operations in Puerto Rico and the U S Virgin Islands
As a result the company s net debt decreased to 2 5 times its adjusted EBITDA at the end of 2019 compared to 2 8 times a year ago However the net debt of 151 02 billion remains massive
Management aims at increasing the dividend and reducing the debt load over the next couple of years thanks to at least 30 billion of expected annual free cash flow by 2022 AT T s mobility segment which includes its wireless business should support the company s goals over the next several years thanks to the deployment of 5G
Given this encouraging outlook the dividend seems safe and the current dividend yield above 5 5 remains attractive But the company is facing some significant challenges that could have a negative impact on its medium term forecasts
AT T must deal with the steep decline in its legacy video offerings because of the secular cord cutting phenomenon During the last quarter the number of subscribers to premium TV which includes DirecTV dropped to 19 5 million down 945 000 year over year
Obviously the video streaming service HBO Max which the company will launch in May is supposed to offset the decline of its legacy video business Management expects HBO Max to attract 50 million domestic subscribers by 2025 But given the intensifying competitive landscape with the new streaming services such as Disney s Disney Comcast s Peacock and Apple s Apple TV the success of HBO Max remains uncertain
With this challenging context AT T s dividend could become less safe if the company s transition to video streaming delivers disappointing results
Safer than the dividend
With its strategy of reducing the debt load management diversified the company s capital structure Instead of rolling over some debt it issued 1 2 billion of preferred stock in December in the form of depositary shares financial securities that trade on the New York Stock Exchange under the symbol T PA
The dividend of this type of stock is safer than the common stocks AT T would have to cut its common stock s dividend before its preferred stock s in case a prolonged recession or disappointing results lead to diminishing free cash flow Also in contrast with the common stock s dividend the company will have to catch up on any missed preferred stock s dividend payment
Obviously there s no free lunch and you should also consider the drawbacks of this safer instrument
First AT T s preferred stock is currently trading above its issue price which leads to a dividend yield of 4 8 that remains below the common stock s dividend yield of 5 5 Also this preferred stock is callable as from December 2024 at its issue price of 25 which means the company will have the option to buy its preferred stock at that price which would deprive investors of their income stream And in general preferred stocks become less attractive if interest rates rise and their upside potential remains limited because of their fixed dividend
Thus AT T s preferred shares represent an interesting alternative for dividend oriented investors that prioritize the safety of their income stream over some upside potential
But given the company s significant debt load in a challenging context execution remains one of the most important factors investors in the common and preferred stocks should pay attention to over the next several quarters |
T | No longer niche Oscar contenders embraced beyond the art house | By Lisa Richwine LOS ANGELES Reuters From billion dollar blockbuster Joker to one of Quentin Tarantino s highest grossing films many of this year s Oscar best picture nominees have drawn crowds to the box office It is the second straight year that Academy Awards voters have spotlighted widely seen movies bucking a trend toward honoring independent films like Moonlight and The Hurt Locker that played to smaller audiences in art house theaters Six of nine contenders for the film industry s most coveted trophy which will be awarded on Sunday have grossed more than 100 million worldwide according to data from Box Office Mojo Dark comedy Joker from AT T Inc s N T Warner Bros leads the pack with 1 07 billion GRAPHIC How this year s Oscar nominated films for best picture did at the box office Next is the 389 3 million for Tarantino s love letter to 1960s Tinseltown Once Upon a Time in Hollywood released by Sony Corp s T 6758 film studio That ranks as the second biggest box office take of Tarantino s career And both World War One epic 1917 and 1960s racing drama Ford v Ferrari have crossed 200 million worldwide The sizable ticket sales showed that moviegoers last year flocked to adult oriented dramas and not just the action hero spectacles and sequels that dominate modern multiplexes said Vulture film critic Alison Willmore It s been a heartening year in that way Willmore said It felt counter to the narrative that the only movies people really turn out to see in larger crowds are franchises Past honors for smaller films had stoked concern that the Academy of Motion Picture Arts and Sciences was out of touch with movie audiences and that its choices where hurting TV ratings for the Oscars telecast When Moonlight was named best picture in 2017 it had sold just 22 3 million worth of tickets in the United States and Canada Oscars organizers considered creating a best popular film category for the 2019 awards ceremony They dropped the idea after a backlash that it would establish a two tiered system of popular and what might have been seen as unpopular fare Popular films did however break into the best picture race last year The field included Marvel s superhero film Black Panther and rock biopic Bohemian Rhapsody This year s nominees feature two movies from Netflix Inc O NFLX Marriage Story and The Irishman The company does not reveal how much money its films earn in theaters but has said that Mafia epic The Irishman is a hit on streaming More than 26 million Netflix accounts streamed at least 70 percent of the film over the first seven days Chief Content Officer Ted Sarandos said in December He projected that figure would reach 40 million over 28 days Netflix has not released figures for divorce drama Marriage Story Both movies are still playing in theaters and streaming on Netflix Even the Korean language film Parasite a dark satire about inequality and best picture nominee this year has lured audiences to movie houses It has collected 163 3 million at ticket windows around the world
You have a case of a foreign language film that has crossed over and become an incredible success and just a buzzed about phenomenon Variety film critic Owen Gleiberman said |
T | Lions Gate Pops on Streaming Takeover Speculation | By Kim Khan
Investing com Movie studio Lions Gate Entertainment climbed Wednesday on speculation that it could be a hot acquisition commodity as the streaming wars heat up
Shares of Lions Gate Entertainment NYSE LGFa rose 5 following a naming it as a candidate to become the first Silicon Valley studio
While huge deals by Walt Disney NYSE DIS and AT T NYSE T make the merger space at the top extremely limited streaming companies may want to snap up a mini studio for production like Lions Gate MGM or Sony Entertainment Forbes said
A deal like that would also give suitors like Netflix NASDAQ NFLX or Apple NASDAQ AAPL a library of existing movie and TV content it added
That would be especially important as Disney turns up the heat The House of Mouse just reported that its Disney streaming service hit 26 5 million subscribers The service can draw on an entire catalog of Disney Marvel and Star Wars content
Lions Gate owns franchises like The Hunger Games and Twilight
The stock was up about 20 in the last three months before today s jump |
T | How Safe Are AT T Stock and Its Dividend | A streak of annual payout hikes has helped to make AT T NYSE T a high yield dividend stock Moreover the excitement of 5G contributed to a 37 1 rise in the stock price during 2019
However shares have fallen so far in 2020 Competition and massive capital spending have worried investors This may leave investors wondering if AT T stock can soon return to growth adding share price appreciation to the returns it gives investors in the form of lucrative dividends
AT T s dividend may look solid at first glance The company s long history of phone and internet services has given the company a dividend that has increased every year for the last 35 years The 2 08 per share annual payout in dividends yields 5 5 Moreover assuming the merger of T Mobile NASDAQ TMUS and Sprint NYSE S occurs it will make AT T just one of three companies that will offer nationwide 5G service in the United States Due to the massive cost of the 5G buildouts neither Verizon NYSE VZ nor T Mobile will likely have the appetite for the price wars of the 3G and 4G eras
But some investors may be spooked by AT T s payout ratio the percentage of net income allocated to the dividend The key ratio has risen to 108 5 leading to concerns about the future of AT T s payout This compares to a manageable 52 47 for Verizon
AT T has struggled to stay relevant
AT T stock has experienced pain in many areas besides price wars Cord cutting decimated a once profitable pay TV business Moves such as its purchase of DirecTV for 67 billion including debt at its peak have left it with massive obligations The total debt has risen to 184 95 billion a level not that far below the market cap of just over 265 1 billion
Moreover this blue chip company has had to spend tens of billions to build a 5G to keep itself relevant in the communications business Across the world analysts expect almost 1 trillion in worldwide 5G infrastructure costs between 2019 and 2025
Yes both Verizon and T Mobile also face this cost However Verizon the only other dividend payer took more of an all in strategy on 5G foregoing the media ventures of AT T This means the 240 billion company has a more manageable debt level of 133 14 billion Despite its lower 4 1 dividend yield the lower debt makes this a safer dividend
However with the declining value of pay TV products AT T s foreseeable future also depends primarily on the success of 5G Regardless of how much AT T focuses on non 5G assets the company is essentially all in on 5G from an investor standpoint The fact that Verizon is more up front about this fact gives it the advantage
AT T s stagnant stock price
For much of the latter 20th century AT T stock climbed steadily This changed following the dot com bust as investors sold stock and the nature of telecom began to make dramatic changes As a result AT T still trades at levels it first saw in 1998
T data by YCharts
It does not help that the century ushered in the decline of a once reliable source of cash flow the landline The rise of streaming media in the 2010s encouraged a rash of cord cutting on its pay TV products Streaming services such as Netflix Amazon Disney and many others have induced millions to cut the cord
The remaining case for AT T stock
However the financial condition of AT T and the stock s decline so far in 2020 could entice investors Despite the increases it saw in 2019 the forward P E ratio stands at around 9 7
Also while the current dividend exceeds net income the company produced enough free cash flow in the previous quarter 8 191 billion to meet the quarterly dividend obligation of 3 726 billion Moreover over time the payout ratio should come down The previous annual dividend increase from 2 04 per share to 2 08 per share amounted to a 1 96 increase Wall Street forecasts average yearly profit growth of 4 90 pointing to an anticipated gradual reduction in the payout ratio over time For these reasons AT T appears to have a safer payout than the dividend payout ratio would indicate
Interestingly the stock s consistent dividend increases may help make this dividend safer Dividend aristocrats stocks with annual dividend increase streaks of at least 25 years tend to continue their payout hikes
Of course any company that ends annual payout hikes could face short term and possibly even long term selling Former dividend aristocrat Bank of America suffered for years after payout cuts General Electric continues to struggle since it cut its dividend Given the stock s underperformance over the past two decades management probably does not want to give investors an additional reason to sell AT T stock If the company can maintain its dividend streak it more than likely will
AT T should benefit as more customers adopt 5G The lack of competition should give AT T Verizon and T Mobile significant pricing power
Furthermore the company has contemplated selling DirecTV While that would mean it loses DirecTV it would enable AT T to unload a money losing unit and give the company some capital to pay down its debt
Consider AT T stock
AT T s dividend should remain safe Given the potential of 5G and a high yielding growing dividend AT T stock may appeal to income oriented investors at first glance However the decline of once stable business units as well as the cost of building out 5G has hurt this company During this time the pressure of maintaining a dividend streak squeezed AT T
However the beginning of 5G could give AT T pricing power it has not seen in years Additionally if it sells assets such as DirecTV it would have an opportunity to lower debt to more sustainable levels |
T | AT T CEO talks Friends reunion Elliott intervention | AT T T N A chairman and CEO Randall Stephenson appears on CNBC s Squawk Box and says he thinks HBO Max will be one of the most exciting streaming products in the market
On rumors that WarnerMedia is nearing a deal for a Friends reunion I read that too We didn t announce that We own all of the rights for Friends and Big Bang Theory so those will obviously be stalwarts on our streaming platform in May
Stephenson says Elliott Management s AT T intervention was an intense period but the company agreed with the highlighted areas of opportunity and was way down the path of executing
On the race for 5G development We need to innovate our way out of this competitive quagmire |
T | AT T s Stephenson stands by promise to remain CEO through 2020 but refuses to look beyond that | AT T CEO Randall Stephenson said he will remain chief executive officer through the end of this year I m not giving any indication beyond that The board and I have to have that conversation obviously he added Stephenson also addressed rumors about a Friends reunion special as part of the upcoming HBO Max video streaming service I read that too We didn t announce it he said |
LB | FOMC Minutes Hint At End Of Stimulus | EquitiesAsian markets traded mixed on Thursday despite upbeat economic data from China The ASX 200 advanced 7 to 4741 lifted by miners extending Wednesday s 1 2 gain The Hang Seng edged up 4 to 23398 while the Kospi declined 6 as automakers skidded Markets in Japan and China were closed In Europe the leading indexes ended mixed after Wednesday s sharp gains The DAX and CAC40 40 both eased 3 while the FTSE managed a gain of 3 to 6047 Switzerland s SMI Index which was closed on Wednesday jumped 2 9 as shares caught up to the region s gains from the previous session US stocks pulled back modestly from Wednesday s sharp gains The Dow slipped 21 points to 13391 the S P 500 declined 2 to 1459 and the Nasdaq retreated 4 to 3101 The Fed released the minutes from the most recent FOMC meeting indicating that there was debate over how long the Fed s bond purchase program better known as QE3 should continue Transocean rallied 6 4 after reaching a 1 4 billion settlement agreement with the government regarding the BP spill of 2010 Limited Brands parent of Victoria s Secret sank 5 7 after same store sales growth fell short of forecasts Meanwhile Gap advanced 2 3 after announcing sales growth of 5 stronger than expected CurrenciesThe Dollar rallied against European currencies as the Euro tanked 1 1 to 1 3046 and the Pound slumped 9 to 1 6100 The Australian Dollar dropped 4 to 1 0465 while the Yen edged up fractionally to title EUR USD width 524 height 301 Economic OutlookThe ADP payroll report was surprisingly strong showing job growth of 215K last month In contrast weekly unemployment claims unexpectedly increased to 372K from 362K Friday s focal point will be the official non farm payroll report which is expected to show a gain of 150K Also due are the unemployment rate factory orders ISM non manufacturing PMI and crude oil inventories |
WFC | FOREX Euro soars after Europe eyes solutions for Greece | Euro rallies versus dollar Swiss franc
Europe eyes sweeping new powers for rescue fund
W House sees momentum toward balanced debt deal
Updates prices adds details comment byline
By Wanfeng Zhou
NEW YORK July 21 Reuters The euro rallied to a
two week high against the dollar on Thursday after a draft plan
by European officials to provide cheap loans to Greece and
other heavily indebted euro zone countries eased fears of
contagion
They were considering a sweeping expansion of the role of
the European Financial Stability Facility rescue fund to help
states sooner recapitalize banks and intervene in the
secondary bond market a draft summit statement obtained by
Reuters showed For details see ID nL6E7IK2VL
The fact that the EU has thrown everything including the
kitchen sink into this is very comforting for investors and
unless the rating agencies say this is not enough for Greece to
avoid a default the euro should hold onto its gains said
Kathy Lien director of currency research at GFT in New York
The euro climbed as high as 1 4402 on trading
platform EBS the highest level since July 6 before easing
slightly to 1 4371 up 1 1 percent on the day It also rose
about 0 8 percent to 1 1744 Swiss francs
According to the draft the EFSF will provide loans to
Greece Ireland and Portugal at a lower interest rate and for
longer maturities
In a policy reversal the European Central Bank signaled
that it is willing to let Greece default temporarily under the
crisis response that would also involve a bond buyback and a
debt swap but no new tax on banks
Slow progress on resolving Greece s debt crisis has been a
major headwind for the euro Investors fear Europe s debt
crisis which has also engulfed Portugal and Ireland could
spread to the much bigger economies of Spain and Italy
If the ECB was not able to accept Greek bonds as a
collateral the financing for Greek banks would stop and that
would pull down the whole European banking system said
Vassili Serebriakov currency strategist at Wells Fargo in New
York That s where the biggest worry was before the meeting
Peripheral debt rallied after news of the draft documents
Yields tumbled on short dated Greek debt down more than 4 5
percent in the two year segment while the more liquid Italian
and Spanish debt markets also showed substantial relief
CONCERNS REMAIN
Some key questions remained analysts said such as the
total cost of the program whether it can win the backing of
member nations and how weaker economies can reduce their debt
burdens to sustainable levels over the long term
The ultimate success of the new EU crisis management
program will be determined not by its ability to halt the
market contagion of recent weeks but by its ability to halt the
fundamental deterioration of EU sovereign credits The total
cost of stabilizing the EU s weakest link has yet to become
clear said Lena Komileva global head of G10 strategy at
Brown Brothers Harriman in London
In contrast to the optimism on Europe investors remained
wary ahead of an August 2 deadline for raising the U S public
debt ceiling to avoid a default and the threat of a downgrade
to the United States triple A credit rating
Ratings agency Standard Poor s said on Thursday there was
a 50 50 chance it would lower the long term U S credit rating
within the next three months ID nN1E76K0FL
The White House said there was growing momentum toward a
significant deficit reduction plan that would include both
spending cuts and tax increases Congressional aides however
said the parameters of any potential agreement remained fluid
See ID nN1E76J292
The dollar hit a four month low against the yen of 78 31
according to Reuters data the lowest since joint G7
intervention in mid March to stem a rise in the Japanese
currency The dollar was last down 0 3 percent at 78 55 yen
The pendulum is clearly swinging toward Europe right
now whereas the U S is a little bit trailing behind in terms
of waiting for positive news Wells Fargo s Serebriakov said
Additional reporting by Nick Olivari Editing by Dan
Grebler |
WFC | GLOBAL MARKETS Stocks fall on debt data woes gold rises | World stocks on track for worst week since August 2010
Threats of Spain downgrade U S default data weigh
Safe haven Swiss franc gold Treasuries rally
Updates prices adds comment details
By Wanfeng Zhou
NEW YORK July 29 Reuters World stocks headed for their
biggest weekly loss in almost a year on Friday as investors
piled into safe haven assets on worries about sovereign debt
crises on both sides of the Atlantic and data that showed
meager growth in the U S economy
The Swiss franc a traditional safe haven currency rose to
record highs against both the dollar and the euro and gold
prices soared to a record high above 1 630
With four days remaining until the United States hits its
debt limit President Barack Obama on Friday told deeply
divided Republicans and Democrats to stop bickering and find a
way out of this mess For details see ID nN1E76S004
Fears that Europe s debt crisis was spreading grew after
Moody s Investors Service threatened to downgrade Spain s
credit rating ID nN1E76S004
Adding to investor gloom the government reported the U S
economy grew at a meager 1 3 percent annual rate in the second
quarter as consumer spending barely rose The government also
said the economy came perilously close to flat lining in the
first quarter a sharp downward revision from its previous
estimate ID nCAT005481
The U S debt talks will remain front and center going
into the weekend and the uncertain outcome will probably lead
to more deleveraging especially after weak U S data and
Moody s decision to put Spanish debt on negative watch said
Kathy Lien director of currency research at GFT in New York
Stock markets pared losses after Obama said he was
confident a solution could be reached on the debt ceiling
talks Republicans in the House of Representatives said they
expected to vote on Friday on a retooled deficit reduction
measure
At 2 53 p m EDT 1853 GMT the Dow Jones industrial
average was down 49 87 points or 0 41 percent at
12 190 24 The Standard Poor s 500 Index was down 2 70
points or 0 21 percent at 1 297 97 The Nasdaq Composite
Index was up 1 43 points or 0 05 percent at
2 767 68
World equities as measured by the MSCI world equity index
fell 0 3 percent The benchmark index has
fallen 2 7 percent this week and is on track for its biggest
weekly loss since August 2010
European stocks closed out their worst week since March
with the pan European FTSEurofirst 300 finishing down
0 7 percent Emerging market stocks were down 0 7
percent
Even if U S lawmakers agree on a last minute debt limit
deal many investors believed that would not prevent credit
ratings agencies from downgrading the United States triple A
ratings
We re basically standing on the edge of an abyss peeking
over with the bottom nowhere to be seen That s the situation
facing all financial markets heading into a weekend that could
prove to be one of the most crucial in history said Ben
Potter a strategist at IG Markets
Full coverage of U S budget and debt nUSBUDGET
SCENARIOS Obama options if no debt deal nN1E76O0QG
Graphics package
SAFE HAVENS IN VOGUE
The dollar plunged to all time lows against the Swiss franc
of 0 7853 It also hit a four month trough against
the yen of 77 01 on trading platform EBS edging
close to a record low of 76 25 and heightening worries that
Japanese authorities may step in to stem currency strength
The dollar was on track for a monthly loss of about 4 2
percent against the yen the biggest since December 2008 It
shed about 6 1 percent against the Swiss franc in July the
worst monthly performance since December 2010
Japan Finance Minister Yoshihiko Noda warned about the
strong yen saying he would consider how long Japan could
ignore current exchange rate moves without acting
ID nT9E7IE01O
The euro last traded at 1 4374 up 0 3 percent
after Moody s placed Spain s Aa2 credit rating on review for
possible downgrade The move followed Thursday s disappointing
Italian debt auction which saw 10 year bonds sold at the
highest yield in 11 years
The weak U S economic data raised the prospect of further
monetary accommodation boosting demand for gold and U S
government debt
Spot gold rose as high as 1 632 30 per ounce
before easing back to around 1 624 Ten year Treasury notes
were more than a point in price pushing yields to
2 83 percent and 30 year bonds rose 1 22 32 with yields
easing to 4 16 percent
U S crude oil fell 1 67 to 95 77 a barrel
Economic growth was much weaker than the government had
previously estimated and this opens the door for potentially
another round of quantitative easing from the Federal Reserve
said Gary Thayer chief macro strategist at Wells Fargo
Advisors in St Louis
Additional reporting by Angela Moon Gertrude
Chavez Dreyfuss Frank Tang and Ellen Freilich Editing by
Leslie Adler |
WFC | FOREX Swiss franc yen jump on U S downgrade euro fears | Euro falls as euphoria over ECB bond buying fades
Swiss franc yen soar after S P downgrade
Markets on alert for intervention by Japan Switzerland
Updates prices adds fresh quote
By Wanfeng Zhou
NEW YORK Aug 8 Reuters The safe haven Swiss franc and
the yen soared on Monday after Standard Poor s cut the U S
credit rating and on fears euro zone debt troubles could worsen
into a global crisis despite efforts to contain it
The euro fell against the U S dollar retracing early
gains after European Central Bank purchases of Spanish and
Italian debt did little to alleviate concern the region s debt
crisis is moving into core countries
The fallout from Standard Poor s downgrade of the United
States on Friday pushed world stocks to their lowest level in
nearly a year hitting investors already nervous about a
slowing global economy
The world s industrial powers pledged on Sunday to take
whatever actions were needed to steady financial markets
The perception in markets is increasingly that central
banks do not have the tools to solve the problems the advanced
economies face and that worse the responses to date might have
caused more harm than good said Camilla Sutton senior
currency strategist at Scotia Capital in Toronto
The euro slumped to a record low of 1 0640 Swiss francs
and last traded down 2 5 percent at 1 06991 It
also lost 2 percent versus the yen
The dollar fell 0 6 percent to 77 62 yen having
slipped to around 77 60 on EBS It was down 1 8 percent at
0 7538 Swiss franc after falling to 0 7480 earlier
also a record low
Traders said the European Central Bank bought Spanish and
Italian debt early in the European session after it said on
Sunday it would actively implement its bond buying program
The euro climbed to a high of 1 4432 before falling back to
trade at 1 4196 down 0 6 percent For more see
ID nL6E7J704K
The next downside target for the euro dollar is seen around
Friday s low at 1 4055 Support lies around 1 4030 the
euro dollar s 200 week moving average strategists said
The complete unwind of the euro dollar rally speaks
volumes about the currency market s fear of the euro zone
credit crisis said Boris Schlossberg director of currency
research at GFT in New York
Today s price action is shaping up as a battle of
confidence between central banks and the bond vigilantes which
continue to press the credit markets in Spain Italy and
perhaps France next he added
Five year credit default swaps on U S government debt were
little changed at 57 basis points while the price on 5 year
French sovereign CS rose 15 5 basis points to 160 basis points
a record high according to data monitor Markit
INTERVENTION THREAT
Demand for the franc and the yen kept alive the threat of
intervention by Swiss and Japanese authorities to weaken their
currencies whose strength eats into export competitiveness
Market participants expect Japanese authorities will
re enter the market if the dollar falls to 77 10 yen the
level at which it sold yen for dollars last week
Nick Bennenbroek head of currency strategy at Wells Fargo
in New York said the U S downgrade will spur continued market
volatility and perhaps counter intuitively the U S dollar
could gain in the coming weeks along with the Swiss franc and
Japanese yen as risk aversion continues
Investors will also turn their attention to a Federal
Reserve policy meeting on Tuesday
We expect the Fed to move closer to or even announce
that maturing Treasury securities will be invested in the
middle of the yield curve That should overwhelm the S P
headlines in the short term causing dollar weakness across the
board said Axel Merk president of Merk Investments in Palo
Alto California
Additional reporting by Richard Leong Editing by Dan
Grebler |
WFC | FOREX Euro dollar soar vs Swiss on talk of currency peg | Swiss franc dives as SNB eyes more steps to weaken it
SNB s Jordan says bank could peg euro franc temporarily
Yen near record high markets on alert for intervention
Updates prices adds comment
By Gertrude Chavez Dreyfuss
NEW YORK Aug 11 Reuters The dollar and euro posted
their best days ever against the Swiss franc on Thursday
jumping as much as 6 percent after falling to record lows this
week as the Swiss National Bank said it could peg the franc to
the euro to rein in a soaring currency
SNB Vice Chairman Thomas Jordan when asked about
temporarily pegging the franc said the bank was open to
measures consistent with long term price stability Traders
said the euro Swiss pair could be fixed at 1 15 francs
A proposed peg of the Swiss currency however drew
criticism from most market participants
This is very short term Intervention or these types of
programs where you try to subsidize and try to move a market
don t work as the Japanese found out in March when they
intervened said Rodney Johnson co portfolio manager at Dent
Tactical ETF in Tampa Florida
It may have a short term impact but it won t change the
direction People would still buy the Swiss franc especially if
uncertainty in Europe continues he added
Johnson said given the volatility in the market he has
moved 70 percent of his portfolio into cash with the remaining
30 percent invested in the euro and commodities
In late afternoon trading the euro was up 5 3 percent at
1 08580 francs compared with a record low of
1 00750 hit on Tuesday It rose as high as 1 09220 francs on
Thursday up more than 6 percent its best trading day
The euro though was still down 0 2 percent this week and
13 1 percent lower so far this year
Implied volatility a measure of the market s expectations
of future movements slid on Thursday after the plunge in the
Swiss franc with one month euro franc implied vols
at 23 40 percent The currency pair s one month
vols surged to a record 32 percent on Tuesday
The dollar was last up 4 9 percent to 0 76260 franc
also its best one day gain after hitting a high of
0 76895 Earlier in the week the dollar plunged to a record
low of 0 70676 on trading platform EBS
Deutsche Bank s global head of G10 FX strategy Alan Ruskin
said anchoring a currency on a fairly unstable euro which is
currently beset by the euro zone s fiscal crisis could end up
destabilizing the Swiss franc itself
If the SNB were to do the peg it would be like jumping
into the old exchange rate mechanism in the midst of
unprecedented turmoil while probably being left to defend the
band by itself with limited solidarity from the others in
this case the European Central Bank he added
Sharp gains in the euro versus the Swiss franc further
helped lift the euro zone common currency against the dollar
The euro last traded up 0 4 percent at 1 42247
SWISS PEG NEGATIVE INTEREST RATES
Other analysts said there may be no need to do the peg
after all Credit Suisse said Swiss franc Libor futures are
already trading in negative territory Spot Libors may also go
negative as Swiss banks try to discourage foreign wholesale
deposits the bank added
Negative interest rates essentially forcing banks to
charge clients to hold their money could dissuade some
investors from buying the safe haven franc although the peg
could be limited
Markets are not holding Swiss francs for their return
they re holding them for insurance said Vassili Serebriakov
senior currency strategist at Wells Fargo in New York So a
slight negative interest rate may not discourage too much
demand for the currency
The yen meanwhile hovered near a record high against the
dollar as investors continued to sell riskier assets fueling
speculation Japan may step in to stem the yen s gains
The dollar fell as low as 76 302 yen on trading platform
EBS within striking distance of an all time trough of 76 25
yen set in mid March It last traded little changed on the day
at 76 830
Earlier in London the dollar briefly jumped above 77 yen
from 76 30 yen after dealers cited talk that the Bank of Japan
was in the market checking the exchange rate for dollar yen
That is usually an indication Japan is getting ready to buy
more dollars to weaken the yen
The greenback however soon fell back after traders said
they had not seen any yen selling intervention by Japanese
authorities A finance ministry official declined to comment
Additional reporting by Wanfeng Zhou Editing by Chizu
Nomiyama |
WFC | GLOBAL MARKETS Brent falls gold rallies stocks cut gains | U S stocks pare gains near flat
Brent crude oil falls on hopes for end to Libya conflict
Gold sets record high again near 1 900 an ounce
Updates adds details
By Caroline Valetkevitch
NEW YORK Aug 22 Reuters Brent crude oil fell on Monday
as Libya s civil war appeared to be nearing an end while gold
rallied to another record high as economic worries kept
investors flocking to the commodity
Stocks pared early gains and were near flat in midday U S
trading with financials among the hardest hit In the United
States shares of JPMorgan Chase down 1 6 percent at
33 79 were the top drag on the Dow industrials followed by
Bank of America down 6 3 percent at 6 53
Persistent worries that the United States may be headed for
another recession and that the sovereign debt crisis in euro
zone peripheral countries may spread to the larger economies
have kept investors on edge for weeks
Banks are seen as most vulnerable to the crisis in Europe
An early bounce in U S stocks following four weeks of losses
tapered off toward noon
The ground zero of all worries is financials said
Charlie Smith chief investment officer at Pittsburgh based
Fort Pitt Capital Group
Brent crude fell more than a dollar as investors
anticipated the resumption of oil exports from OPEC member
Libya U S crude oil however rose
Brent is taking more of a battering but that s only to be
expected said Christopher Bellew a trader at Jefferies
Bache
Brent crude was down 1 47 to 107 15
The potential for a restart of Libyan oil flows into the
market if the Gaddafi regime collapses weighed on the benchmark
oil price If Libyan production comes back it would ease
gasoline prices and increase disposable income potentially
boosting economies worldwide
Libyan government tanks and snipers put up scattered
resistance in Tripoli after rebels swept into the heart of the
capital cheered on by crowds hailing the end of Muammar
Gaddafi s 42 years in power For more see ID nL5E7JL0LD
On Wall Street the Dow Jones industrial average was
up 49 42 points or 0 46 percent at 10 867 07 The Standard
Poor s 500 Index was up 2 01 points or 0 18 percent at
1 125 54 The Nasdaq Composite Index was up 5 62
points or 0 24 percent at 2 347 46
The cost for euro zone banks to borrow money from one
another rose again on Monday heading back toward their highest
levels since late 2008 as U S banks remained wary of lending
to European counterparts in the face of the intractable debt
crisis For details see ID nL5E7JM1B5
The MSCI world equity index slipped 0 1
percent erasing early gains The index has fallen for five
weeks in a row and looks to be heading for its worst monthly
performance since October 2008 when markets were reeling after
the collapse of Lehman Brothers
Some investors are hoping for the Federal Reserve to
announce a new form of stimulus not long after it promised to
keep interest rates exceptionally low at least through
mid 2013
Additional bond purchases by the Fed could help reflate
asset prices but many view the chances of a third round of
quantitative easing as limited and expect the Fed to take
gradual measures to boost the economy
The Fed will host its annual retreat in Wyoming this week
and recent market turmoil and signs of weaker U S growth have
boosted expectations that Fed Chairman Ben Bernanke may hint at
more emergency stimulus for the economy
The speculation put some early pressure on the dollar But
the U S currency was last up 0 1 percent against a
basket of major currencies
The Fed is definitely on people s minds and you could
argue that some of the bounce seen in high yield commodity
currencies is at least in part related to hopes for more policy
measures said Wells Fargo strategist Vassili Serebriakov in
New York
The benchmark 10 year Treasury note was last
down 9 32 in price yielding 2 09 percent versus Friday s close
of 2 06 percent with traders preparing for a 99 billion slate
of bond auctions this week
Gold hit a third consecutive all time high near 1 900
after staging its biggest weekly gain in 2 1 2 years last
week
Spot gold was up 1 6 percent at 1 888 90 an ounce
by 11 33 a m EDT 1533 GMT having earlier hit a record
1 894 10
Reporting by Caroline Valetkevitch and David Gaffen with
additional reporting by Ashley Lau and Steven Johnson in New
York and Claire Milhench in London Editing by Dan Grebler |
T | AT T Inc T Q4 2019 Earnings Call Transcript | AT T Inc NYSE T Q4 2019 Earnings CallJan 29 2020 8 30 a m ETContents
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks
OperatorWelcome to the AT T Fourth Quarter Earnings Conference Call Operator Instructions I would now like to turn the conference over to your host Michael Viola Senior Vice President of Investor Relations Please go ahead Mike Viola Senior Vice President Investor RelationsThank you and good morning everyone Welcome to our fourth quarter conference call I m Mike Viola Head of Investor Relations for AT T And joining me on the call today is Randall Stephenson AT T s Chairman and CEO John Stankey Chief Operating Officer for AT T and John Stephens AT T s Chief Financial Officer Randall will begin the call with a brief overview of the 2019 accomplishments and a look at our three year plans John Stephens will then discuss fourth quarter results And then John Stankey will walk you through key areas of our 2020 operating plan John Stephens will then close the presentation with an update on our capital allocation plan and 2020 financial guidance Then we ll take your questions Before I begin I want to call your attention to our Safe Harbor statement which says that some of our comments today may be forward looking And as such they re subject to risks and uncertainties results may differ materially and additional information is available on the Investor Relations website I also want to remind you that we re in the quiet period for the FCC Spectrum Auction 103 so we cannot address any questions about that today As always our earnings materials are available on the Investor Relations page of the AT T website That includes our news release investor briefing 8 K and other associated schedules And so with that I m going to turn the call over to Randall Stephenson Randall Randall L Stephenson Chairman and Chief Executive OfficerThanks Mike I want to start on Slide 3 to close out 2019 And coming into 2019 we laid out a detailed plan for the year And that plan was the series of specific steps necessary to exit 2019 on a path of sustained growth A simple summary on Slide 3 is that we met or exceeded every single one of those objectives And the roadmap is set for the next three years I told you that our top priority for 2019 was to reduce our debt and exit the year at around 2 5 times debt to EBITDA done We have now reduced net debt by about 30 billion since we closed Time Warner And at the end of 2019 our net debt to adjusted EBITDA was about 2 5 times We gave you the formula for exactly what it would take to get to this debt level First we would need to generate 26 billion of free cash flow done We exceeded that handily generating a record 29 billion for the year Second we would need to monetize non strategic assets and generate 6 billion to 8 billion of cash done We actually generated nearly 18 billion more than double our target And we ve already announced an additional 2 billion which will close in 2020 On adjusted EPS we came in right on plan low single digit growth At WarnerMedia we achieved the 2019 merger synergies and we re preparing to launch HBO Max in May Growing wireless service revenues was critical and those revenues were up nearly 2 for the full year We stabilized Entertainment Group EBITDA and brought in our capital investment right on plan And after sustained investment in our network AT T exited 2019 with the best and fastest wireless network in the United States Our 5G network covers 50 million people today and we expect to have nationwide 5G coverage in the second quarter As we look forward our 2019 performance positions us well for the next three years Our plan is very straightforward and we ve laid it out for you on Slide 4 We see revenue growth every year and expect a 1 to 2 three year CAGR through 2022 By 2022 adjusted EBITDA margins expand by 200 basis points adjusted EBITDA grows by about 6 billion free cash flow is between 30 billion and 32 billion and adjusted EPS grows to between 4 50 and 4 80 This is a plan that generates a lot of cash over the next three years And the board has developed a very thoughtful capital allocation approach that will maintain a solid balance sheet and drive shareholder value First we ll continue to invest aggressively and at top tier levels into our core businesses We expect to invest 20 billion in 2020 Leading in 5G is critical for AT T and we re not slowing down We re more than 75 complete on our FirstNet build and that will continue and we re continuing to deploy fiber In terms of our capital structure over the last 18 months we retired the lion share of the debt we issued to acquire Time Warner and we ll continue to pay down debt but at a much slower pace Our cash will be focused over the next three years on retiring the shares we issued to acquire Time Warner By the end of 2022 we will have retired 100 of the debt and 70 of the shares from our Time Warner transaction In fact we retired 56 million of these shares in 2019 We also plan to retire about 100 million more in the first quarter of this year through a 4 billion accelerated share repurchase agreement By 2022 our leverage target is a very comfortable net debt to adjusted EBITDA ratio of 2 0 times to 2 25 times You can also expect us to continue streamlining our portfolio as we monetize additional assets of 5 billion to 10 billion this year And as I said earlier we ve already executed agreements that will generate 2 billion this year John Stephens will cover the specific steps in the plan later but first he is going to cover our fourth quarter results So I ll turn it over to you now John John J Stephens Senior Executive Vice President and Chief Financial OfficerThanks Randall Let me begin with the financial summary on Slide 6 As Randall mentioned we hit or exceeded all our 2019 targets Let s take a closer look We grew earnings Adjusted EPS was 0 89 up 3 5 for the quarter and up 1 4 for the full year Cash from operations came in strong at 11 9 billion for the quarter and 48 7 billion for the year Free cash flow was a record 29 billion for the full year up 30 The addition of WarnerMedia made an impact as did adding their receivables to our securitization efforts Our ability to generate cash continues to provide a strong foundation for our capital allocation plan We continued to aggressively invest Capex was nearly 20 billion for the full year and total gross capital investment was 23 7 billion when you include our investments in FirstNet and other vendor payments And without the impact of foreign exchange and foregone licensing revenue in advance of our HBO Max launch fourth quarter and full year revenues would have been 48 billion and about 184 billion representing growth in both the quarter and the year Even with these items operating income margins were stable in the quarter and up 70 basis points for the year All in all a very good year as we hit our 2019 targets Let s now look at our segment operating results starting with our Communications segment on Slide 7 In our Communications segment Mobility continues to build momentum and delivered solid results Service revenue grew by about 2 in the quarter and for the year EBITDA grew both in the quarter and for the year And EBITDA margins expanded by 40 basis points for the year while service margins were stable even with a heavily promotional fourth quarter Postpaid phone growth was solid adding 229 000 in the quarter For the year we had about 1 million phone net adds both postpaid and prepaid This strong performance was driven by our industry leading network and came even while postpaid phone churn was up as competitors ramped up promotional efforts You should note total churn postpaid and prepaid combined improved year over year by 12 basis points As Randall mentioned our Entertainment Group hit its full year target of EBITDA stability Long term customer value continues to be our focus as we head into 2020 That focus itself drive growth in video and IP broadband ARPUs AT T Fiber continues to grow adding nearly 200 000 customers That brings us to nearly 4 million AT T Fiber customers and we have lots of room left to grow Premium video net losses improved sequentially by more than 200 000 subscribers but video losses continue to impact our broadband numbers especially our bundled customers Our new simplified video offerings position us for the long term and our subscriber trends are improving Let s turn to Business Wireline The trends in Business Wireline continue to improve Revenues grew sequentially and were down just 1 7 year over year And when you include wireless business solutions grew 1 1 EBITDA was relatively steady in the quarter and EBITDA margins were up 40 basis points Let s move to WarnerMedia and Latin America results which are on Slide 8 WarnerMedia had a great quarter when you consider the decision to forego content licensing revenue Subscriber revenue growth at both Turner and HBO combined with lower film and television production costs at Warner Bros help to offset that pressure We made the strategic decision to give HBO Max exclusive streaming rights for top programs including Friends Big Bang Theory and other popular shows In the past we would have sold these externally Looking at the impact in the fourth quarter WarnerMedia revenues would have grown by about 10 if these shows would have been sold In fact that 10 organic growth would represent WarnerMedia s best growth rate in three years And EBITDA would have increased by about 300 million or about 11 Obviously this has an upfront cost for us but we see this as an investment that makes HBO Max even stronger and will pay off over the long term The big news in our Latin American operations is Mexico turning EBITDA positive in the quarter The team has done an excellent job of reducing costs and growing revenue in a challenging environment Fourth quarter Mexico EBITDA improved nearly 200 million year over year and grew by more than 300 million for the full year We continue to press for further gains A new wholesale agreement with Telefonica will add to both revenues and EBITDA Going forward we expect continued improvement Vrio continues to work against economic and foreign exchange headwinds But even in this environment it continues to be profitable and generate positive cash flows Now let me turn it over to John Stankey to cover our 2020 operating plans and then I ll come back and discuss our capital allocation update John John Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCThanks John and good morning everyone Starting on Slide 10 these are the four key areas of our 2020 operating plan where we will be focused in executing to drive our performance I ll go into some detail on each of these over the next few minutes but I ll give you the headlines first Number one is continuing our momentum in Mobility because we expect Mobility will continue to be the biggest driver of revenue growth and profitability and be a key factor in meeting our 2020 goals Second a successful launch of HBO Max is critical to our plans in each of the next three years Many of you were with us for the Analyst Day in October and have seen firsthand why we re so excited about HBO Max and the opportunities it gives us We re right on track to launch it in May Third is growing our broadband revenues by increasing our fiber penetration Key to this will be bundling our fiber broadband offer with AT T TV which has delivered over our software based video architecture Finally we re laser focused on improving both the effectiveness and the efficiency of our overall operations and as a result driving additional costs out of the business Let me dive into each of these four drivers beginning with Mobility on Slide 11 Last year our wireless network was recognized as the nation s best and also fastest Thanks in part to our FirstNet build In fact we did a few of our own spot tests in December to see how our existing nationwide 5G Evolution network compared to the 5G network one of our competitors rolled out last month In three out of the four test cities our network had faster speeds and lower latency on average Point is our strong spectrum position gives us a leg up and allows us to execute a different 5G deployment strategy than our competitors We have the low and mid band spectrum to deploy 5G nationwide We cover 50 million people today and expect to be nationwide in the second quarter We also have the millimeter wave spectrum we need to deploy 5G and its gigabit speeds and super low latency to more densely populated cities We re in 35 cities today and we re adding more this year There is an important point to be made here once we have 5G nationwide As you know smartphone upgrades across the industry have been down for a while now In fact we re coming off a record low upgrade rate for any fourth quarter in our history But fast forward to the back half of this year when popular 5G smartphones and devices should be more available at scale you can expect higher upgrade rates and equipment revenue growth The timing for this upgrade cycle couldn t be more perfect when you consider that we ll be offering HBO Max on our highest ARPU wireless plans with features tuned for premium media consumption and then at the time when people are coming into our stores to upgrade It s a natural opportunity to further the distribution of HBO Max while adding new Mobility subscribers and improving our wireless ARPUs HBO Max s content has something for everyone in the family And that makes it a natural fit for our nearly 25 million postpaid accounts that average more than three lines per account As a result we expect our wireless service revenue growth rate to be higher in 2020 And after adding nearly 1 million phone net adds in 2019 both postpaid and prepaid we expect 2020 will be an even better year for net adds FirstNet plays an important role here We now serve more than 10 000 first responder agencies and more than 1 million connections with FirstNet We expect those numbers will grow nicely as our FirstNet deployment reaches 80 and new devices and capabilities come to market in the coming months We also expect a higher adoption of our unlimited plans We re at a little more than 50 penetration today but we expect the 5G device upgrade cycle will bring into our stores lots of customers not on unlimited plans today Increasing the adoption of our best unlimited plans is obviously an ARPU growth opportunity for us When you add into the mix of customers on select unlimited plans will get HBO Max for free it s a great opportunity to also improve our overall churn which we ve seen happen from giving HBO to current unlimited customers A reduction of one basis point of wireless churn across the base is worth about 100 million to us annually To sum it up we re expecting growth of more than 2 in Mobility service revenues this year Let s go to Slide 12 and the headlines for why we believe HBO Max will be a game changer for our customers and for AT T I expect many of you were at the HBO Max Analyst Day in October And you heard me talk about the three pillars required for success in streaming premier content the technology platform and marketing and distribution Only AT T enters this space with a solid footing in all three My excitement and confidence in the HBO Max opportunity have only grown since then The team has made tremendous progress in every area and we re on track to launch in May with a unique offering Quite simply we believe HBO Max will be the highest quality premium SVOD in the market with the great experience better curation and higher percentage of culturally relevant offerings than competing products We re excited to launch HBO Max coming off the tail one of one of our strongest award seasons ever with new and exciting breakthrough offerings leading the way We captured an industry leading 34 Emmys and 6 Golden Globe Awards Joker had more Academy Award nominations than any other film highlighting our deep and diverse theatrical content The awards are only the latest indicator that we continue to create high quality culturally relevant content that appeals to a broad consumer base And our additional investment in great content is only going to expand the appeal of the service With HBO Max we ll offer consumers more than twice the amount of programming for the same price as HBO today We re making great progress on the HBO product platform as well Our controlled non public beta is getting solid reviews and we re gaining invaluable feedback on important but subtle issues like user navigation and screen layout This work is no less important than award winning content Finally we continue to fine tune our go to market plans consistent with the unique position with which we enter the market leveraging our extensive AT T distribution and embedded base of more than 30 million domestic HBO subscribers We re in active discussions across our potential distribution partners both digital platforms and MVPDs We re making progress and we expect we ll have deals to announce prior to launch Our focus continues to be on providing a compelling value proposition for our HBO distribution partners and our mutual customers Our more than 10 million HBO subscribers on AT T distribution platforms will be offered immediate access to HBO Max at launch So we ll get off to a fast start To drive incremental growth we have unique advantages when combining media and distribution including our 170 million direct customer relationships across mobile pay TV and broadband Plus we have 5 500 retail stores who will be focused on driving incremental HBO Max adoption by bundling it with premium tiered wireless broadband or pay TV offers and will use AT T customer insights for WarnerMedia advertising analytics and curation We have very high expectations for HBO Max And at the same time we re thrilled about the possibilities of increasing the adoption of higher ARPU services and strengthening the long term value proposition of our highest quality and highest ARPU customers We fully expect HBO Max will have a positive and immediate impact on the stickiness of our wireless and pay TV and broadband offerings Now let s look at Entertainment Group those details are on Slide 13 Our EG team delivered our target of stable EBITDA last year In 2020 you re going to see a supply of the same high value customer centric focus while increasing our fiber customer base and launching AT T TV We ll see higher amortization costs in the video business in the first quarter which creates some tough year over year comparisons for EG EBITDA But on a cash from operations basis we expect EG to be stable in 2020 versus last year We believe the greatest opportunity within EG is to significantly grow our AT T Fiber customer base and broadband revenues We have 4 million fiber customers today and our recent fiber expansion gives us 14 million locations to sell into Based on our fiber sales experience we expect to exit 2022 with about 3 million more fiber customers than we have today or a total of about 7 million This will be a significant lift in market share compared to our traditional performance in our legacy hybrid fiber copper base footprint It represents an organic market share growth opportunity on an existing product that I ve never experienced in my career Where we offer competitive broadband speeds you can expect that we ll lean into video acquisition given the better economics of our improved product portfolio including AT T TV and HBO Max all software based products with low acquisition costs Within our broadband footprint expected as we exit the year our premium video subscriber declines will be more in line with overall video industry trends Looking at our total premium video customer base we expect year over year improvements in subscriber losses Now let s turn to Slide 14 to talk about our efficiency and cost initiatives New work to improve the overall efficiency and effectiveness of our operations has progressed over the past few months We ve previously shared with you that we re targeting an additional 4 reduction in labor related costs including benefits and contract employees in 2020 alone That work will ramp quickly and we plan for it to deliver 1 5 billion in additional cost savings In fact we ve already identified and implemented about half of those savings Another significant opportunity for us is product and information technology rationalization We feel comfortable that we can generate another 2 billion of annual run rate efficiencies exiting 2022 This will come from winning our product portfolio simplifying our market offers rationalizing call centers modernizing our information technology and enhancing the level of customer self support In addition streamlining will have the added benefit of enhancing our market agility that ultimately lead to improved market effectiveness Our assessment work continues And I expect in the next 90 days we ll have additional efficiency initiatives under way for some of our network corporate sales and procurement functions I ll turn it back to John now for his look at capital allocation 2020 financial guidance John J Stephens Senior Executive Vice President and Chief Financial OfficerThanks John Strengthening our balance sheet was our top priority last year and our teams did an excellent job of reducing debt and monetizing our asset portfolio This allowed us to begin retiring shares at the end of last year while still meeting our net debt ratio goals In 2020 you can expect that momentum to continue It all starts with strong free cash flows We had record free cash flow last year and expect to be in a similar range this year We achieved this even with some voluntary funding for retiring medical costs and higher tax payments in the fourth quarter We also overachieved on asset monetizations We expect to do another 5 billion to 10 billion net monetizations this year with significant efforts already under way At the same time we continue to evolve our capital structure We added more preferred to our capital stack last year when we monetized more than 6 billion of our long term tower purchase options And we also issued 1 2 billion of traditional preferred stock The publicly traded preferred stock is new to us but there is a market for it and it provides investors another alternative to invest with AT T In fact these shares are currently trading at a premium to par Investors are looking for secure dependable returns which is exactly what this offers and dividend rates as less than our common stock dividend yield make it attractive for us The tower preferreds also allow us to use very long term assets to generate cash at a tax efficient manner We are also continuing to be focused on our three year debt reduction targets Depending on the timing of share retirements and asset monetizations you will see our net debt to adjusted EBITDA ratios fluctuate throughout the year But we expect to continue reducing debt for the full year and intend to target leverage in the 2 to 2 25 range by the end of 2022 Our share retirement has begun in earnest We told you we wanted to buy shares as early in the year as possible and that is what you are seeing Thanks to our 4 billion ASR we ve already bought back about 85 million shares in January and expect to see another 20 million in the remainder of the first quarter You can expect us to continue to buy back shares during the remainder of the year and meet or exceed our 250 million share retirement target for 2020 That s on top of the 56 million shares we bought back in 2019 We have a lot of levers we can pull to optimize our capital structure We re focused on managing debt and have a wealth of opportunities with our balance sheet as we showed last year You can expect us to continue to manage it in a prudent way including issuing additional preferred shares Now let me revisit our 2020 guidance on Slide 17 Our guidance remains consistent with what we told you in October This year more so than most our results will be more weighted to the second half of the year For example in the first part of the year we expect pressure from heavy HBO Max investment which you saw begin in the fourth quarter And in EG higher content and non cash amortization costs as well as continued pressure on video subs But in the second half of the year you will see our momentum build For example share retirements have been aggressive and will continue and the EPS benefits will flow increasingly throughout the year HBO Max will have launched leading to strong subscriber growth The run rate benefits of our cost reduction plans will be clearly visible And 5G combined with HBO Max will drive more upgrades and stronger wireless revenue growth later in the year Again all of this has been factored into our full year guidance With that in mind here s what we ve committed to 1 to 2 revenue growth Adjusted EPS of 3 60 to 3 70 a share Stable adjusted EBITDA margins Free cash flow in the 28 billion range with our dividend payout ratio in the low 50s Gross capital investment in the 20 billion range and this doesn t include our investments in content Continued debt reduction with share retirement of 250 million or more common shares in 2020 And our net asset monetizations between 5 billion and 10 billion Mike that concludes our presentation We re now ready for Q A Mike Viola Senior Vice President Investor RelationsOperator we ll take the first question Questions and Answers OperatorThank you Operator Instructions Your first question comes from the line of John Hodulik Please go ahead John Hodulik UBS AnalystGreat Thank you Maybe a couple of questions for John Stankey Yeah thanks for the commentary on the entertainment sub trends but maybe a little bit more clarity I mean first of all you saw a slowdown in fiber adds in the quarter what was driving that And I guess in conjunction with the guidance for sort of more improvement in the back end of the year do you expect that trend to reverse Or when how do you do you expect those adds to sort of play out over the course of the year and what drives the acceleration And then in terms of the HBO Max guidance the 500 million in incremental expense we saw in 19 does that impact your guidance for the 2 billion in 2020 Thanks John Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCHi John Happy New Year So first of all fourth quarter of 19 fourth quarter is seasonally a slower quarter December is a pretty slow month in general for home based services given the dynamics of the holiday and the like So that s part of the contribution to the issue of the slowdown The second is our gross add performance on video wasn t strong You see the subscriber trends as we ve shared with you as we move through this year and we start shifting to AT T TV our gross add performance starts to get much stronger And naturally when you re able to put AT T TV a software based product with fiber it s a much more natural combination than a satellite dish and fiber And so as we start to rollout AT T TV now in markets and we move in we re going to see much stronger performance on the fiber side I ll tell you as I look at where we are right now and current customer trends I feel pretty good that that s in fact the case and we re going to be where we need to be on that Frankly it s not a hard sell it s a great product it s a product that customers like I think we can do very well with it and I don t expect that we re going to see that continue through So that s what I would tell you you re going to see recovery in 20 On the Max side we gave you a range on what to expect in 2020 in terms of dilution and we re not changing any of that range The range is a range for a reason There is a lot of moving parts on Max introduction It s a combination of both going to market with subscribers and it s a product that s going to continue to grow over the coming years and we re going to be looking in the market for opportunities for other content acquisition and the like And it s entirely possible we may be opportunistic or look at something and we want the management team to have that flexibility to be able to balance those things out We have subscriber growth coming and things are working well with our strategies We may go a little heavier on trying to build up subscribers and what we expected I think that s the nature of building a new and subscription oriented business And so that range is important that we have the flexibility for the management team to do what they want to do We feel very strongly we re going to get back that investment as we build this new distribution platform over the coming years That s why we re doing this We like the dynamic of ultimately having some control of those customers and being in a position where we can manage that lifecycle going forward And we think it s a good smart long term investment John Hodulik UBS AnalystOkay Thanks John OperatorYour next question comes from the line of Philip Cusick Please go ahead Philip Cusick J P Morgan AnalystHey guys Thanks John can you update us on the WarnerMedia strategy from here away from Max We see video industry bundled units declining pretty quickly even away from you as you decelerate How does that change your thoughts on Turner over time and the strategic value there And then can you also give us an update on the low value video subs that are remaining in the base and how those should come out over the next few quarters Thanks very much John Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCSure Happy to do that Phil So if you step back and think about the position we sit in in the what I would call the traditional pay TV universe I mean everybody knows it s in transition And it s a mature product that s kind of working its way through the back end of a life cycle But I like where we stand in that and that our total percentage of cost of goods sold in that space relative to the size of the bundle that the customer buys is not huge Our network portfolio is a fairly concentrated network portfolio If you think about it the bulk of our profitability comes from three primary networks it s TNT TBS and CNN And I think if you look at trends we all know that general entertainment content and the bundle is not performing as well and the nice part about our two general entertainment networks TNT and TBS is they re really hybrids They re a combination of general entertainment and sports And so they historically perform at the upper end of desirability from a ratings perspective and attractiveness from an advertisers perspective because of that mix of content that we have So one having more contained portfolio and two having that mix of content I think is important to basically ride through this transition and have some resiliency And my view of what s been happening in most carriage agreement negotiations as we go back out in the market and renew things is our distributors see that and understand that those are important networks to carry forward And we re continuing to see that people place value on those things even in a more skinny down or a smaller pay TV universe moving forward and feel pretty good about that Now let s be clear the reason we re doing Max is we also know that new distribution platforms need to be out there that are the growth platforms and that match general entertainment content how consumers want to see them And that pivot between what we re doing with linear networks and what we re doing with Max is a key part of the WarnerMedia strategy It s an important dance and choreography that we have to do to get that right And we feel we re positioned very well and make that happen We spent a lot of time in the Investor Day explaining why we think it s a natural place to go To keep the networks relevant what you should expect us to do we will continue to invest in them We ll continue to make sure that they re viable for our distributors But you ll see the content shift start to occur a little bit What we see with subscribers is that obviously they like news and sports They also like content that s socially relevant And so probably a mix of starting to see a little bit more unscripted content come in things that cause people go into the office and talk about it around the water cooler And that will probably start to supplant hours that might have been more general entertainment oriented content that you are going to see showing up on SVOD platforms like HBO Max moving forward And we think that mix in conjunction with what we re doing with Max will allow us to ensure that the content we re producing in our great studios across our different brands will have a place to market that we can monetize with end users either through distributors in the traditional fashion or through direct to consumer constructs where maybe we have a direct relationship with the customer On the subscriber pay TV low value construct look we re mostly through that I would tell you we ve got a little bit more work to do on some promotional roll offs in the first quarter that is going to continue to show up And when we shared as I shared earlier what s going to happen on subscriber trends that I think will be more at the rate of decline by the time we exit this year you should expect you re going to see continuing improvement in our subscriber trends each quarter as we move through But I will tell you you just can t flip a switch and get there overnight And that s why I m kind of suggesting you should think that we re on a glide path to get back to that ratable decline with subscriber base decline in the aggregate pay TV industry by the time we exit the year We re going to see probably our heaviest losses in first quarter When I look at what s happening from an operational performance perspective and what the team is doing on gross add improvements what we re seeing in churn improvements the rollout of AT T TV that really hits its stride in the second quarter in terms of its availability across the customer base we ll start to see those subscriber trends incrementally improve as those capabilities start to roll into the base And we ll get to what I just indicated by the time we exit the year Philip Cusick J P Morgan AnalystThat s helpful Thanks John Mike Viola Senior Vice President Investor RelationsTake the next question Greg OperatorYour next question comes from the line of Simon Flannery Please go ahead Simon Flannery Morgan Stanley AnalystGreat Good morning Thank you Randall we put out a lot of targets here for 2020 and beyond Perhaps you could just share about how the executive incentives are being set up for the year what the KPIs and metrics are I know last year deleveraging was I think 25 of the short or 20 of the short term comp So any color you could give around what the kind of two or three key focuses are for the year And then one for John Stankey You talked about the investment in the network the capacity there I think in the past you ve talked about the opportunities in the wholesale market Perhaps you could just give us an update on how things are going there and the opportunity perhaps to sign up some cable companies Thanks Randall L Stephenson Chairman and Chief Executive OfficerHi Simon This is Randall Yeah as you articulated and for those who aren t familiar coming into 2019 I told all of you that our number one priority for 2019 was to reduce our debt and get our leverage ratios down to that 2 5 times debt to EBITDA And it was going to require strong cash flow generation selling some non core assets All that was instrumental in getting there And to really drive at home and get the focus for the management team as you said we set that debt to EBITDA target as a significant amount of executive compensation and mission accomplished I think the team executed at an amazing level in terms of identifying asset opportunities to dispose getting those things driven through the process negotiated actually getting good prices for all of those assets and then driving just strong cash flows and some impressive working capital opportunities we re taking advantage of and these working capital initiatives that are put in place are not one and done What we re most excited about are these are working capital initiatives that are repeatable And so I feel really good about our ability to generate in 2020 even with the HBO Max investments another 28 billion of free cash flow Coming into this year the debt objective of 2 5 times isn t what we re working toward What we re working toward is making sure we re continuing to generate the cash flow to execute the broader capital allocation strategy meaning more specifically retiring the shares we issued for Time Warner And as both John Stephens and I articulated in our opening comments that is a focus and our objective is to retire at least 250 million additional shares this year We ll get about 100 million of those knocked out in the first quarter And there s at least 150 million more to be coming in the back part of the year that will generate nice EPS accretion as we move throughout the course of the year And so all that said the management team is going to be focused on hitting these earnings objectives that we ve laid out for you and the cash flow targets And that s what compensation will be really focused on And I think it s going to be effective in generating the cash we need to execute the share buyback programs and the overall capital allocation strategy John Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCSimon thanks for asking the question because I think it highlights a really important aspect of how we re going to grow wireless revenues next year because we already have that strength as you indicated the network performance and that perception As we do research out the market is now starting to grow among the customer base I think we have some plans to even fine tune our brand positioning messages as we move into this year a little bit more And we know that as we move that perception which is happening right now we see momentum in subscriber growth And so we ve got just pure subscriber economics that are going to help us there make some shifts in distribution We ve got the tailwinds of FirstNet behind us which are starting to help us dramatically And I think the coverage improvements that occur as we get into the second phase of FirstNet will allow us to move through that And then we talked about just a few minutes ago what we re doing on the upgrade cycles and the Max launch There s a lot of good things moving our direction what I would call the core organic part of the wireless business to grow revenues And frankly over the last several years our wholesale business had been a bit of a headwind in our wireless business because we didn t have the flash capacity that we ve now been able to turn up with these key investments over the last year and a half We re now in a much different position than we ve historically been and where we ve had to be very guarded about our wholesale position largely because we needed capacity to support our retail base And we re now I think in a position in the industry when I look at what has to happen with people either in a deal or no deal situation in spectrum and their spectrum holdings that we are probably more flashed than others in the industry And we can in fact play in a different way in the wholesale space We re not just focused on cable I think we want to do as I ve indicated previously the right deal a deal that s constructive for the industry in general Certainly if there was an opportunity to do something in that space we might do it But there s a lot of other wholesale options out there that we expect to lean into and I expect we can step up to in the most accretive fashion possible And what I would indicate to you that I think whether you believe a T Mobile Sprint deal occurs or doesn t occur either way they are going to need to be partners in the industry that need to round out networks and do some things differently And we would also try to understand whether or not we have other partners in the industry emerging partners in the industry that we can help with on the wholesale side So there are plenty of options for us to go and start pulling that wholesale lever and driving it up And I think that will be an incremental difference for us than what we ve seen over the last couple of years that we ve been managing that number down John J Stephens Senior Executive Vice President and Chief Financial OfficerSimon to add to what John said this is the first year that we ve had stable reseller revenues throughout the year And in fact sequentially we grew reseller revenues and in year over year and the fourth quarter So what John is talking about we are not only well positioned for but it s starting in a small way right now but with the opportunity to make much bigger It s already occurring and it s contributing to that service revenue growth that we ve had both in the quarter and the year Simon Flannery Morgan Stanley AnalystOkay thanks Mike Viola Senior Vice President Investor RelationsOkay Thanks Simon Greg we ll take the next question OperatorYour next question comes from the line of David Barden Please go ahead David Barden Bank of America Merrill Lynch AnalystHey guys Thanks for taking the question I guess two first John Stankey Your it sounds like you guys really have bought into this idea of 5G smartphone super cycle And I feel like that is not a consensus view I know that there s a lot of debate about it internally here between our tech guys and our chipset guys and our phone guys And so if you could kind of give us some perspective on where that conviction comes from that we re going to get enough of a boost in demand for products that I don t know that the consumers really understand it s a lot different than what they re already buying that would be super helpful And then John Stephens could you walk us through the science behind this kind of new embrace of the preferred securities Because it seems a little odd to be buying back stock but then at the same time issuing preferred stock and debt has deductible interest and preferreds don t And so I think that there s some confusion as to kind of what the net benefit to the equity holder is of kind of looking at preferreds and capital stack Thanks John Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCHi Dave So I don t know that I would use the term super cycle I don t look at the plan and say we re expecting a super cycle but we are expecting an increase or a step up in what s occurring And look I think that the foundation of that assumption is based on we ve done a couple of different area interface changes We did the UMTS air interface change we did the LTE air interface change And I think there were similar discussions going on at that point in time Well will somebody really need the increased LTE speed over UMTS It works perfectly fine And I would tell you we do see this step up occur because naturally speaking people have a tendency to sit around and run speed test on their devices And when somebody next to them is getting better performance it raises awareness among the subscriber base And I expect that there s going to be a certain number of folks who look at that and just say because that device performs better because these new devices have access to a much broader swath of bands it s going to perform better And we are going to see a degree of uptick simply because the subscriber base is going to notice that there is a degree of performance etc as a result of that Secondly as I said we re going to be driving some of this ourselves We re going to be out there with some pretty aggressive promotion on HBO Max and we re going to be tying these to our better plans And when you look at what we re assuming in our business plan for the year our increases in the number of customers moving into unlimited aren t crazy silly step function changes They re more of the trend and taking advantage of the fact that we are going to put more advertising dollars into the market to support Max and support 5G And we ll get some nominal uptick in what those migrations into our higher value unlimited plans are So we want to stimulate some of that We re coming off of historic lows of upgrades And we think the market is set up to basically go through renewal cycle given how we re promoting It s coming at the end of the year in the holiday season There s going to be better networks out there We do expect there s going to be an uptick in the upgrade cycle Super cycle maybe a little bit too strong a word than an uptick yes John J Stephens Senior Executive Vice President and Chief Financial OfficerDavid just to add to what John said we have had three years here of very low upgrade rates Just to some extent people are going to need new phones And so this is just also this aging of the phone base has been occurring over multiple years Secondly this is the first time we re going to have a 5G network up and running and available before the devices are out the next generation networks in there And as John made very clear the HBO Max and other products we have they re going to really meld well The convergence of all three of those things is going to be really attractive for us With regard to the science of a preferred it s simply this The market is open to it Investors want it They like this certainty At today s rates our preferred that s out there is actually trading below 5 yield about a 4 7 4 8 I am seeing it today about a 4 8 yield So that s lower cash cost than our common dividend so that saves us money there Secondly as you know they don t share in the common profits of it Third it s a diversification for us And so it gives us an opportunity to go into a different investor base So just like we had done over the last 10 years have really diversified our debt base This gives us an opportunity to diversify our shareholder base And we believe that that s good for everybody and also allows us to bring in the volume or the quantum of common shares that are out there Additionally when you look at the preferred partnership interest that we ve done and the preferred interest we ve done there that has a very efficient those dividend costs are much lower because they re very tax efficient So those costs get well below 4 And once again they allow us to give recognition to assets that people may not have realized For example our tower receivables and over 6 billion worth of real option cash that we have a high likelihood of getting I don t know that anybody was paying much attention to that Now it gives us the opportunity to put that spotlight that we really already achieved that value So but the clear science of the preferred is one the dividend costs are lower than our common second they re stable and our common is going to continue to grow third it gets us to another market segment another investor base which is helpful and fourth that allows us to reduce the reliance on the common share base that s out there For that perspective we feel very good about I feel like it s a really it s a good move for all of our shareholders Mike Viola Senior Vice President Investor RelationsThanks Dave Greg we ll take the next question OperatorYour next question comes from the line of Michael Rollins Please go ahead Michael Rollins Citigroup AnalystThanks and good morning If you fast forward to the end of your financial plan in 2022 given the capex that you ve articulated can you frame what the network capabilities are going to look like for 5G mobile fixed wireless broadband coverage and fiber to the home coverage And then secondly can you just unpack a little more of what you see driving the strength in industry wireless postpaid phone net add And as you look at your own customer trend are you seeing any meaningful differences in customers and markets that have 5G Evolution versus those that haven t received it yet Thanks John Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCSure So Mike let me see if I can hit a combination of things you laid out So first of all I think one of the significant shifts you ll see in 2022 by the time we get to that point and a lot of this is being driven by work on FirstNet is I think we ll be in a much better position on macro coverage and not only from a number of square miles but I think you re going to see the improvement in core interior performance given how we densify things to support our FirstNet subscribers and the agencies we have there And as I said this is really where last year was a year of us getting coverage macro coverage in place kind of getting the umbrella the footprint turned up this year is where we do a lot of the make the network better stuff So we ve been doing all the site acquisition all the fill in And we start turning up sites and just going to make the network better It s going to make the network better on the inside of a building that s going to make the network better in terms of the square miles that are covered And when you add that to the great spectrum position that you re already seeing and the wonderful reviews of speed and performance that we re getting back on test today that only makes things stronger Secondly we are as you know in filling with millimeter wave and we ve already turned up over 30 markets with millimeter wave We re continuing to increase that footprint And we re going to be very opportunistic of where we can do that We re in a unique position especially in the places where we offer wireline businesses that we can densify on a fiber infrastructure in a way that s really economic and is advantageous to our cost structure as we move forward That millimeter wave fill in is where you re going to get unique performance characteristics It will be obviously probably more pronounced in the urban areas of large cities Our plan right now is we re not as optimistic as maybe some are on what I would call the fixed wireless replacement construct We obviously believe there ll be some part of the subscriber base that might decide that they don t need a fixed broadband connection I think that s going to take a couple of years to start to emerge when you get the density a little bit more robust I think as we see more mid band spectrum coming in place to support the millimeter wave and make the performance a little bit more consistent So I wouldn t tell you any of our financial plans and our business plans We re out there expecting wonderful revenue increases from a push in the fixed wireless space On what we do in the fixed space you should expect that we re going to continue to add to the wireless excuse me the fiber footprint Right now as we ve shared with you our goal is to get a little better return out of what we ve deployed because between consumer and business we have about 20 million locations we can be aggressively working penetration in And we think that we need to ensure we ve got the right business practices and marketing practices to get the return on that footprint that s there And as soon as I get indications that the team is actually executing on that well and we have the right formula on it we ll probably release the ticket on some additional bill You should expect just by natural growth of the population you ll probably see somewhere between 350 000 to 0 5 million new fiber locations coming into the portfolio Right now that is just kind of what I would call the natural growth rate that s going to happen If we step that up a little bit it will be because we feel good about how we re executing on the embedded footprint we have in place And we know exactly where the next incremental place as we go and build And I think it s entirely possible that this operating team could build another 1 million to 2 million a year if we felt like we had the operating momentum to do that On the postpaid trends look there s the difference between prepaid and postpaid is changing It s getting they re getting closer together We ve been in a situation where we frankly as we shared with you our prepaid base looks a lot more like a postpaid base in what may be the broader industry prepaid base looks like Once we get these folks on prepaid once we get them on smartphones we start seeing churn characteristics with multi line accounts that are very similar to what we have in postpaid And so I think as the economies improve as the differences between the two products have gotten a little less as smartphones have worked their way into the prepaid base because of the cycle of maybe previous generation phones being available we see customers now starting to opt into a postpaid construct Does that reverse itself if we see some economic headwinds and maybe people become a little bit more careful about what they do That s possible But the net of it is when you look at whether a customer goes with our prepaid offer or a postpaid offer we have a lot of similar characteristics between the two It s we can hit them in both places But we feel very comfortable that we can catch the transition if there s more of a move to postpaid which is what I think is occurring largely driven by economy and the way the networks are performing and the differences between the two products Mike Viola Senior Vice President Investor RelationsThanks Mike Greg we ll take one more question OperatorOkay That question comes from the line of Kannan Venkateshwar Please go ahead Kannan Venkateshwar Barclays AnalystThank you A couple if I could Firstly I mean when you think about the decline rates of video at DIRECTV although it will moderate over the course of 2020 based on your guidance If at some point DIRECTV becomes smaller than say Comcast and because of the video losses and those lines cross is there any kind of an impact on your programming cost because of the most stable nation clauses and others that you get on account of your scale And how does that impact margins if it does And secondly when you think about the attach rates for broadband in video homes could you give us a sense of what that is And within the base of homes that you ve lost as a result of the promotional roll offs last year is it in line with the average or is it higher or lower That will help us get a sense of where trends are Thanks John Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCSo the short answer to your first question Kannan is no We first of all as you re aware we went through a fairly significant renegotiation cycle over the last 12 months So those are all baked in the bag through the next three to five years depending on the nature of the particular content and I don t see any exposure in any of those agreements that would suggest we re not going to continue to pay at the best part of the rate card given the size and the scale of our business as we move forward I think frankly what s more likely to happen in pay TV moving forward is what I talked about earlier where I think there ll be some pruning and trimming of offers in the market As folks move forward to manage their cost of goods sold on programming costs it will be dropping or shifting away from less traffic networks I think that s going to be a bigger driver of cost structure than renegotiation or anything around that But we re pretty well baked in that regard As you know one of the things we re working through is we have a step up in our content cost as a result of that significant renegotiation work we did last year We re going to have to work through that in 2020 And then in the subsequent years 21 22 you ll see us on what I would call more industry traditional step ups year over year in programming costs But we re in the bag on those things and I think we re in pretty good shape On the broadband attach rates the attach rates in footprint where we offer broadband are extremely high and they haven t changed We would expect to see a modest step up as we move away from satellite combined with broadband and get into our software product distributed over broadband Those sales rates I think will help us on gross not necessarily a significant change in attach rates When we are successful selling we typically attach both The reality is is we want more gross We don t necessarily want to change the attach rate We get more gross by the fact that for example in footprint solid 10 of those subscribers have line of sight related issues on satellite They won t have that on the software driven product That helps us on gross intake and that s one of those things that helps us as we move through this year change those subscriber trends Randall L Stephenson Chairman and Chief Executive OfficerOkay This is Randall First of all I just want to thank everybody for joining us again this morning for the call and your interest in AT T We re coming off of 2019 where we told you exactly what we re going to do And in terms of debt repayment operational performance etc capital allocation we checked every box We ve now given you our playbook for 2020 through 2022 It s a playbook that we feel very confident that we can achieve We re now gaining momentum in our wireless business which we feel very good about that We have a capital allocation plan that we have a high degree of confidence and we ll be able to execute over the next three years And we have a media business that s performing at a very high level even in an industry that s in transition And with HBO Max coming and the investment we re making there we re confident that it s just another growth vehicle for this business over the next three years So bottom line we have a plan that we think stacks up very nicely We re confident in our ability to execute We love the management team and looking forward to 2020 Again thank you for joining us this morning John J Stephens Senior Executive Vice President and Chief Financial OfficerThanks Operator Operator Closing Remarks Duration 65 minutesCall participants Mike Viola Senior Vice President Investor RelationsRandall L Stephenson Chairman and Chief Executive OfficerJohn J Stephens Senior Executive Vice President and Chief Financial OfficerJohn Stankey President Chief Operating Officer AT T Inc and Chief Executive Officer Warner Media LLCJohn Hodulik UBS AnalystPhilip Cusick J P Morgan AnalystSimon Flannery Morgan Stanley AnalystDavid Barden Bank of America Merrill Lynch AnalystMichael Rollins Citigroup AnalystKannan Venkateshwar Barclays Analyst
More T analysis
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T | Cramer s lightning round I am a buyer of AT T here | It s that time again Mad Money host Jim Cramer rings the lightning round bell which means he s giving his answers to callers stock questions at rapid speed |
T | The Ratings Game AT T stock gets a downgrade as analyst braces for imminent wave of 5G deals | Wireless carriers are likely to heap on the promotions as more 5G phones hit the market which could be good news for consumers but less positive for wireless industry earnings An expected wave of 5G promotions has UBS analyst John Hodulik feeling nervous about AT T Inc s
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prospects prompting him to downgrade the stock in a Thursday note to clients The stock is up about 0 2 in the trading session See also HBO Max chief not worried about its 15 subscription price Wireless generates half of AT T s profits and continues to be the key growth driver of the business Hodulik wrote We believe 2019 was the low point for wireless competition and expect the launch of the 5G iPhone in 2H to lift upgrade rates off record lows increase churn and lead to intense promotional activity Apple Inc
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is widely thought to be planning a 5G phone launch in the fall while Samsung Electronics Co Ltd
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has a smartphone unveiling event scheduled for February The downgrade comes a day after AT T reported quarterly results which showed an increase in subscriber churn rate Higher churn was a trend across the industry showing up in Verizon Communication Inc s
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and Sprint Corp s
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numbers as well He thinks that trend will intensify as the year progresses Hodulik moved his rating on AT T down to neutral from buy while lowering his price target to 39 from 42 Don t miss Apple investors are cheering a record quarter and tax collectors might be too Wireless competition was also an issue in the commentary that followed Verizon s Thursday report with some analysts writing that they were hoping to see the company s more aggressive promotional stance result in a better financial payoff The company s service revenue and average revenue per user both came in shy of expectations Shares of the big wireless names have lagged the market over a three month span with AT T s stock down 2 9 Verizon s down 3 4 and T Mobile US Inc s
TMUS 0 34
off 3 6 The S P 500
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has increased 6 8 in that time
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I m 34 built a 500K nest egg own several properties and plan to retire by 40 My girlfriend bought a 37K Mercedes and says I ve saved enough for both of us
Emily
Bary
Emily Bary is a MarketWatch reporter based in New York
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T | AT T will likely be broken up and will move on from WarnerMedia analyst Craig Moffett predicts | Analyst Craig Moffett said AT T will probably be broken up at some point in the future I think if you take your crystal ball and look out a little bit it s hard to see that portfolio staying together forever Moffett said AT T bought Time Warner in 2018 |
LB | Global Markets Overview 3 January 2012 | From Morrison Securities Pty Ltd United StatesThe final Labor Department jobs report for 2011 will punctuate another holiday shortened week In addition to the figures on joblessness some of the most closely watched indicators markets will mull over monthly sales figures from retailers for the key holiday shopping month of December Major U S stock exchanges closed Monday in observance of the New Year s holiday the day before Heading the slate of economic indicators this week are nonfarm payrolls data and the latest unemployment rate from the U S Department of Labor on Friday The report will determine whether 2011 ends with continuing improvement in the job market In the prior month the U S unemployment rate fell to 8 6 the lowest level since March 2009 Economists surveyed by Dow Jones Newswires predict payrolls will rise by 155 000 but the unemployment rate which is deter mined by a separate survey will tick up to 8 7 The Institute for Supply Management releases data on manufacturing activity Tuesday and services Thursday and the U S Census Bureau s factory orders report comes Wednesday U S retailers will report December s same store sales results the broadest indication yet of how the key holiday shopping season played out Analysts surveyed by Thomson Reuters expect same store sales to climb across store categories for an average increase of 4 3 They expect discounters like Costco Wholesale Corp and Target Corp to report the strongest growth at 6 on average with apparel retailers like Gap and Limited Brands expected to have the weakest at 2 The auto industry will report its December U S sales on Wed Online automotive information provider Edmunds com expects December new car sales to rise 24 from November although transactions slowed down by the middle of the month It came down to the wire last Friday but in the final minute of 2011 trading the Standard Poor s 500 stock index closed the year virtually unchanged from where it closed in 2010 The S P 500 closed Friday down 5 42 points or 0 43 to 1257 60 The full year decline of 0 04 of a point or 0 0028 was the smallest annual move since at least 1947 according to preliminary S P calculations S P Indices scrambled after the close of trading to determine an extra decimal place in the 1947 data to figure out which was the slimmer move of the two years The Dow Jones Industrial Average fared better in 2011 The Dow finished down 69 48 points or 0 57 to 12217 56 on Friday but closed the year up 5 53 The blue chip index closed the fourth quarter up 12 its biggest quarterly percentage jump since 2003 The technology heavy Nasdaq Composite fell 8 59 points or 0 3 to 2605 15 and closed the year down 1 8 The year was defined by fits and starts related to Europe s sovereign debt crisis and global economic growth concerns prompting investors to flock to defensive and dividend paying stocks But Friday s moves were slim as a dearth of news and low trading volume gave investors little incentive to take a stand ahead of the long New Year holiday weekend EUROPEEuropean stock markets closed higher on Monday given a boost by strong German economic data in thin holiday trade With London and Wall Street shut for public holidays investors had little to go on but welcomed positive employment consumer spending and manufacturing figures in Germany Europe s biggest economy In Paris the CAC 40 index gained 1 98 percent to 3 222 30 points and in Frankfurt the DAX 30 jumped 3 00 percent to 6 075 52 points Other markets showed similar gains with Milan up 2 42 percent as Madrid put on 1 84 percent despite Spain s new government warning that the 2011 public finances will prove to be in even worse shape than first thought Stock gains were led by Frankfurt after the German Chamber of Commerce and Industry DIHK said that private consumption in Germany was at its strongest level for more than a decade in 2011 despite the ongoing euro crisis Separately official figures showed the number of people in work hit a record 41 04 million with more than half a million jobs created last year The German economy appears to be holding up despite the long running debt crisis thanks to the deep restructuring it has undertaken in recent years ASIA PACIFICSouth Korean shares ended with fractional gains after a choppy first trading session of 2012 as data showing a stronger than expected growth in December exports supported the market despite a contraction in monthly manufacturing activity Taiwanese shares fell sharply however pressured after weak manufacturing data and concerns about unresolved debt troubles in the euro zone Trading volumes were thin as several major regional markets including those in Japan China Australia and Singapore were closed for a holiday U S and U K stock markets were also slated to shut Monday South Korea s Kospi ended with a gain of less than 0 1 at 1826 37 after moving in both directions during the session The benchmark lost 11 of its value in 2011 Leading gainers in Seoul heavyweight Samsung Electronics Co rose 2 1 and LG Display Co added 1 8 Those gains helped counter a 3 5 drop in Daewoo Shipbuilding Marine Engineering Co and a 1 1 fall in Woori Finance Holdings Co The performance came after data released by HSBC showed South Korea s manufacturing activity shrank for a fifth straight month in December with the monthly Purchasing Managers Index printing at 46 4 down from 47 1 in November A reading below 50 shows a contraction while a reading above 50 shows an expansion On the brighter side data released Sunday showed South Korea s exports rose a better than expected 12 5 in December from the year ago month helping the nation record a 4 billion trade surplus Shares of Hyundai Motor Co slipped 0 2 and its affili ate Kia Motors Corp dropped 0 3 after saying they aim to grow sales by just 6 1 in 2012 compared to a 15 rise in 2011 Meanwhile Taiwan s Taiex tumbled 1 7 to 6952 21 Taiwan s December PMI came in at 47 1 an improvement from the previous month s 43 9 reading but still below the threshold level of 50 a separate HSBC survey showed Shares of Cathay Financial Holdings dropped 3 1 Asia Cement Corp fell 1 8 and China Airlines Ltd declined 2 7 COMMODITIESThe copper market may have closed the year on a positive note ending 2011 s final open outcry trade on the London Metal Exchange 2 3 higher than its previous close but the bounce was far from enough to recover losses endured in recent months with the red metal finishing the year down some 21 LME copper for three month delivery on the exchange ended the last trading session of the year at 7 600 a metric ton This compares with a close of 9 600 ton on Dec 31 2010 The red metal which rose as high as 10 190 ton in February and was the favorite for 2011 in many analyst forecasts last year fell out of favor with investors as uncertainty clouded the global outlook Instead the best performer among the metals for the year was aluminium which limited its losses to 18 closing at 2 019 ton The worst performer of the metals meanwhile was tin falling 29 on the year to close at just 19 200 ton The thinly traded metal had also been tipped to be one of the strongest performers this year and rallied to a record 33 600 ton in April as supply concerns worried market participants World oil prices could soar to 200 per barrel if Iran s petroleum sector is hit with new Western sanctions Brent North Sea crude was at 107 02 per barrel while New York s main contract light sweet West Texas Intermediate crude was at 98 99 a barrel After frantic selloffs in September and again last month gold was in danger of snapping its decadelong winning streak Futures came within about 100 troy ounce of 2011 s break even point Thursday before rebounding Friday Comex February contract settled at 1 566 80 helping gold log a 10 gain on the year and the 11th consecutive annual increase Precious metals with more industrial applications all ended the year deep in the red Silver fell 10 platinum 22 and palladium 18 |
PFE | P G s vitamin boost could signal more to come | By Martinne Geller and Richa Naidu LONDON CHICAGO Reuters Procter Gamble s 4 2 billion deal for Merck s vitamin and supplements business is the latest example of a major consumer company stocking up on health related products The U S based maker of Tide detergent and Gillette razors announced the deal on Thursday giving it brands such as Seven Seas vitamins and expanding its portfolio of healthcare products Just last month cleaning product maker Clorox Co agreed to buy multivitamin company Nutranext for 700 million And in December Nestle SA SIX NESN paid 2 billion for vitamin maker Atrium Innovations The moves show how global consumer goods companies are looking to new interesting areas to offset flagging growth in their core businesses The vitamins and supplements sector is attractive due to the emergence of new brands marketing themselves digitally and selling directly online to young consumers said investment banker William Hood of William Hood Co It s what the millennials are buying and how they re buying it Hood said Large companies are realizing they need to figure it out A spokeswoman for P G declined to comment on the company s strategy to expand its vitamins minerals and supplements business P G already owns consumer health brands including Vick s Metamucil and Pepto Bismol Globally the vitamin and supplements category has grown between 5 and 7 percent annually for the past five years according to Euromonitor The category is very fragmented with market leader Amway Corp having only 3 6 percent share Euromonitor data showed That implies a consolidator could easily boost margins by building scale Consumer goods firm Reckitt Benckiser has owned Schiff maker of MegaRed tablets for heart health and Airborne for immunity for five years It was a very different business to other health or home goods said CEO Rakesh Kapoor on a post earnings call in February adding that sales and margins were improving after some stumbles This is a category which is here to stay It is one of the single largest categories in health he said A PRELUDE TO MORE P G was in talks with Pfizer NYSE PFE about buying the U S drugmaker s consumer health business CNBC reported earlier this month Pfizer hoped to bring in 20 billion through an auction for the business which includes Centrum vitamins and Advil painkillers The auction hit a roadblock after GlaxoSmithKline and Reckitt Benckiser dropped out of the running When asked about its interest in Pfizer on Thursday P G chief executive David Taylor declined to comment Referring to the P G Merck deal Liberum analyst Robert Waldschmidt said The question is is it a prelude to more Is P G still theoretically on the hunt for Pfizer
Bernstein analysts noted that the Pfizer business may still be an acquisition candidate for P G since it doesn t seem to raise anti trust concerns on the surface |
PFE | FDA advisory committees back cardiovascular safety data for Pfizer s Celebrex | The FDA s Arthritis Advisory Committee and the Drug Safety and Risk Management Advisory Committee have voted 15 5 1 abstain in favor that the results from the large scale Phase 4 PRECISION study demonstrated comparable cardiovascular safety of Pfizer s PFE 0 8 arthritis med CELEBREX celecoxib to naproxen Aleve and ibuprofen Motrin If formerly approved by the FDA which seems likely the data will be added to the labeling of CELEBREX Now read |
WFC | GLOBAL MARKETS Stocks rally on Chinese U S data as euro gains | Less grim Chinese U S data revive investor optimism
Chinese inflation high but within central bank control
Global stocks rally S P pct rise biggest since April
Euro oil gold strengthen bonds tumble
Recasts lead updates market action adds fresh quote
By Richard Leong
NEW YORK June 14 Reuters Chinese data showing the
world s second biggest economy might be able to avoid a hard
landing and U S retail sales data that was not as weak as
feared lifted stocks oil and other growth oriented markets on
Tuesday
In the currency market emboldened investors drove up the
euro despite lingering jitters over Greece s debt problems
after it became S P s lowest rated sovereign borrower The
renewed appetite for risk however routed low risk government
bonds
China s inflation accelerated to its fastest level in
almost three years and its industrial output grew a solid 13
percent from a year ago Its central bank in an effort to curb
inflation later increased the reserve requirement ratio for
commercial lenders by 50 basis points For details see
ID nL3E7HE05P
The data showed inflation at multi year highs but did not
worsen fears that it is running out of the control This raised
hopes that Chinese policy makers could gradually tighten policy
to cool local wage growth and its red hot property market
without subtracting too much from overall growth a so called
soft landing
People are waiting to see whether there will be a soft
landing or a hard landing in China Based on the data
overnight the odds are favoring a soft landing It s making
people more optimistic said Brian Jacobsen chief portfolio
strategist at Wells Fargo Funds Management in Menomonee Falls
Wisconsin which oversees 400 billion in assets
In the United States retail sales in May fell for the
first time 11 months but the drop was less than expected
signaling the resilience of American consumers despite sluggish
job growth and a lousy housing market ID nN14189765
We were seeing an over reaction in the last few days to a
slowdown in the economy At some point we will get a better
tone in consumer spending and overall growth rate said Frank
Germack director of the investment department at Rehmann
Financial in Troy Michigan
The U S stock market jumped with the Dow Jones industrial
average up 163 97 points or 1 37 percent at 12 116 94
The Standard Poor s 500 Index was up 19 70 points or
1 55 percent at 1 291 53 The Nasdaq Composite Index
was up 44 86 points or 1 70 percent at 2 684 55
The S P 500 is on track for its biggest one day percentage
rise since March shaving its month to date loss to 4 percent
Top European stocks rose 0 8 percent while
Tokyo s Nikkei ended 1 0 percent higher
Some analysts cautioned the gains in stocks and risky
markets could be short lived as sovereign debt problems in
Europe and the United States fester and the Federal Reserve s
600 billion bond program expires at the end of June
A one day rally is not going to change the situation
said Robbert Van Batenburg head of global research at Louis
Capital Markets in New York
GREECE SELLS DEBT
Also reducing investor anxiety was Greece s ability to
raise short term funds after Standard Poor s downgraded its
rating closer to default territory ID nN13126859
Greece sold 1 625 billion euros 2 33 billion of 6 month
T bills at a yield of 4 96 percent This was higher than May s
4 88 percent but attracted a larger percentage of foreign
buyers than the previous auction reflecting market
expectations Greece will secure a second rescue package worth
about 120 billion euros to stave off default
On the other hand the cost of insuring Greek debt against
default over five years rose to record peak of 1 615 basis
points as did the yield on Greek government bonds
ID nLDE75D0ZT
Greece s trials did little to discourage investors from
buying the euro
The euro rebounded a day after it hit a record low against
the Swiss franc The Swiss currency which falls
when investors turn away from safe havens declined more than
0 9 percent versus the euro and the U S dollar
The euro rose to 1 4480 against the greenback up 0 5
percent on the day
Investors also channeled money into commodities at the
expense of government bonds
ICE Brent July crude rose 88 cents to 119 98 a
barrel touching its highest level in more than five weeks
U S oil futures were up 1 6 percent at 98 88
Spot gold climbed to 1 523 29 an ounce from
1 514 73 on Monday when it suffered its biggest one day loss
in a month touching a three week low of 1 511 11
A sell off in the U S government bond markets pushed
benchmark yields to their highest level in almost two weeks at
3 08 percent German Bund futures fell 54 basis points at
125 40 after posting a contract high of 126 11 on Monday
Reporting by Caroline Valetkevitch and Nick Olivari in New
York and Simon Falush Amanda Cooper in London Editing by
Chizu Nomiyama |
WFC | FOREX Rising risk appetite lifts euro gains seen limited | China U S economic data boosts optimism
Euro a sell on rallies dogged by Greek debt resolution
Australia Canada dollars rally
Adds quote byline updates prices
By Wanfeng Zhou
NEW YORK June 14 Reuters The euro rose for a second
day against the U S dollar on Tuesday buoyed by an increase
in risk appetite though gains could be fleeting on nagging
worries over Greece s debt crisis
Encouraging Chinese and U S economic data lifted stocks
oil and other growth oriented markets That also boosted gains
in higher yielding commodity linked currencies such as the
Australian and New Zealand dollars
Traders remained cautious the single currency remained a
sell on rallies owing to Greece s debt crisis and uncertainty
over how much the private sector will be involved in a new
financial aid package for Athens
The temporary calming in market conditions is the key
driver in FX moves said Nick Bennenbroek head of currency
strategy at Wells Fargo in New York
The European debt crisis hasn t exactly disappeared as a
market issue but with no new significant headlines it is
having a lesser impact on the euro for today at least
The euro hit a session high of 1 4498 on
electronic trading platform EBS before easing back to 1 4479
up 0 4 percent for the day
Technical traders said the break back above the 55 day
moving average at 1 44062 was a positive sign suggesting the
euro could run a bit further in the very short term Resistance
is seen around 1 4520 the high in mid April
Euro zone finance ministers meet to discuss on Tuesday how
private Greek bondholders should be involved in a second
financing package for the debt laden country ahead of a
self imposed June 20 deadline for a deal No decisions are
expected on Tuesday For details see ID nLDE75D0JH
Debt issued by peripheral economies were under broad
pressure as Greek Portuguese and Irish 10 year bond yields hit
fresh euro lifetime highs Traders expect yields to rise
further at least until details of a new bailout package for
Greece are agreed
European policymakers struggled to sort out their
differences over Greece with the stand off between German
officials and the European Central Bank over the prospect of a
voluntary debt rollover threatening a resolution
On Monday Standard Poor s slashed Greece s credit rating
to CCC making the country its lowest rated in the world
ID nN13126859
The euro remains a sell on rallies as there is still a
very high risk of growth momentum slowing down Also problems
in the periphery should not be underestimated as Germany will
stick to its stance on Greece and there is a risk of technical
default said Manuel Oliveri currency analyst at UBS in
Zurich
FX COLUMN Euro dollar in ranged trading ID LnLDE75C0X2
Bond market sees risk of Greek default ID nLDE75919U
BREAKINGVIEWS China gives global investors hope of soft
landing ID nLDE75D0N1
The Australian dollar was up 0 9 percent at
1 0697 The Canadian dollar also rallied with the greenback
falling 0 8 percent to C 0 9681
China s inflation accelerated in May to its fastest level
in almost three years and its industrial output grew a solid
13 percent from a year ago
While the data showed inflation at multiyear highs it did
not stoke fears that it is running beyond the control of policy
makers as its central bank later increased the reserve
requirement ratio for commercial lenders by 50 basis points
ID nL3E7HE05P
Against the yen the dollar rose 0 4 percent to 80 51
helped by a rise in U S Treasury yields It climbed to
a session peak of 80 63 yen on Reuters data after a report
showed U S retail sales fell less than expected in May
ID nN14189765
Additional reporting by Nick Olivari Editing by Diane
Craft |
WFC | GLOBAL MARKETS Stocks jump on Chinese U S data as euro gains | Less grim Chinese U S data revive investor optimism
Chinese inflation high but within central bank control
Global stocks rally S P pct rise biggest since April
Euro oil gold strengthen bonds tumble
Updates market action adds Bernanke in paragraph 12
By Richard Leong
NEW YORK June 14 Reuters Chinese data showing the
world s second biggest economy might be able to avoid a hard
landing and U S retail sales data that was not as weak as
feared lifted stocks oil and other growth oriented markets on
Tuesday
In the currency market emboldened investors drove up the
euro despite lingering jitters over Greece s debt problems
after it became S P s lowest rated sovereign borrower The
renewed appetite for risk however routed low risk government
bonds
China s inflation accelerated to its fastest in almost
three years and its industrial output grew a solid 13 percent
from a year ago Its central bank in an effort to curb
inflation later increased the reserve requirement ratio for
commercial lenders by 50 basis points For details see
ID nL3E7HE05P
The data showed inflation at multi year highs but did not
exacerbate fears that it is running out of control This raised
hopes that Chinese policy makers could gradually tighten policy
to cool local wage growth and its red hot property market
without subtracting too much from overall growth a so called
soft landing
Based on the data overnight the odds are favoring a soft
landing It s making people more optimistic said Brian
Jacobsen chief portfolio strategist at Wells Fargo Funds
Management in Menomonee Falls Wisconsin which oversees 400
billion in assets
In the United States retail sales in May fell for the
first time 11 months but the drop was less than expected
signaling the resilience of American consumers despite sluggish
job growth and a lousy housing market ID nN14189765
The U S stock market jumped with the Dow Jones industrial
average was up 154 85 points or 1 30 percent at
12 107 82 The Standard Poor s 500 Index was up 19 00
points or 1 49 percent at 1 290 83 The Nasdaq Composite
Index was up 43 22 points or 1 64 percent at
2 682 91
The S P 500 is on track for its biggest one day percentage
rise since March shaving its month to date loss to 4 percent
Top European stocks rose 0 8 percent while
Tokyo s Nikkei ended 1 0 percent higher
Some analysts cautioned the gains in stocks and risky
markets could be short lived as sovereign debt problems in
Europe and the United States fester and the Federal Reserve s
600 billion bond program expires at the end of June
A one day rally is not going to change the situation
said Robbert Van Batenburg head of global research at Louis
Capital Markets in New York
U S Fed Chairman Ben Bernanke speaking at an event
sponsored by the Committee for a Responsible Federal Budget
warned that a failure to increase the government s 14 3
trillion debt ceiling would risk United States coveted
AAA rating and damage the dollar s status as a reserve
currency For more see ID nW1E7GV02N
GREECE SELLS DEBT
Also reducing investor anxiety was Greece s ability to
raise short term funds after Standard Poor s downgraded its
rating closer to default territory ID nN13126859
Greece sold 1 625 billion euros 2 33 billion of 6 month
T bills at a yield of 4 96 percent which was higher than May
But the bill auction attracted more foreign buyers reflecting
market expectations Greece will secure a second rescue package
worth about 120 billion euros to stave off default
On the other hand the five year cost of insuring against a
Greek default rose to a record peak of 1 615 basis points as
did the yield on Greek government bonds ID nLDE75D0ZT
Greece s trials did little to discourage investors from
buying the euro
The euro rebounded a day after it hit a record low against
the Swiss franc The Swiss currency which falls
when investors turn away from safe havens declined more than
0 9 percent versus the euro and the U S dollar
The euro rose to 1 4480 against the greenback up 0 5
percent on the day
Investors also channeled money into commodities at the
expense of government bonds
ICE Brent July crude rose 90 cents to 120 00 a
barrel touching its highest level in more than five weeks
U S oil futures were up 2 percent at 99 26
Spot gold climbed to 1 523 40 an ounce from
1 514 73 on Monday when it suffered its biggest one day loss
in a month touching a three week low of 1 511 11
A sell off in the U S government bond market pushed
benchmark yields to their highest level in almost two weeks at
3 09 percent German Bund futures fell 49 basis points at
125 45 after posting a contract high of 126 11 on Monday
Reporting by Caroline Valetkevitch Chris Reese Robert
Gibbons Frank Tang and Wanfeng Zhou Editing by Chizu
Nomiyama |
WFC | GLOBAL MARKETS Stocks rally on Chinese U S data as euro rises | Global stocks rally S P pct rise biggest since April
Less grim Chinese U S data revive investor optimism
Chinese inflation high but within central bank control
Euro oil gold strengthen bonds tumble
Recasts lead updates with Wall Street close levels
By Richard Leong
NEW YORK June 14 Reuters Chinese data showing strong
economic growth in the world s second biggest economy and U S
consumer spending report that was not as weak as feared lifted
stocks oil and other growth oriented markets on Tuesday
In the currency market investors drove up the euro after
Greece managed to raise cash by selling bills on Tuesday even
though Greece became Standard and Poor s lowest rated sovereign
borrower on Monday
The renewed appetite for risk however hammered government
bonds with U S benchmark yields recording their biggest
single day jump in more than five months
China s industrial output grew 13 percent in May from a
year ago and inflation accelerated to 5 2 percent its fastest
in almost three years but its central bank raised the reserve
requirement ratio for commercial lenders by 50 basis points for
the ninth time in an effort to control rising prices See
ID nL3E7HE05P
The determination of Chinese authorities to bring the 5 2
percent inflation rate down raised hopes they could gradually
cool local wage increases and its red hot property market
without sacrificing much in overall economic growth
Based on the data overnight the odds are favoring a soft
landing It s making people more optimistic said Brian
Jacobsen chief portfolio strategist at Wells Fargo Funds
Management in Menomonee Falls Wisconsin which oversees 400
billion in assets Sometimes no bad news is good news
In the United States retail sales in May fell for the
first time 11 months but the drop was less than expected
signaling the resilience of American consumers despite sluggish
job growth and a lousy housing market ID nN14189765
The U S stock market jumped with the Dow Jones industrial
average was up 123 14 points or 1 03 percent at
12 076 11 The Standard Poor s 500 Index was up 16 04
points or 1 26 percent at 1 287 87 The Nasdaq Composite
Index was up 39 03 points or 1 48 percent at
2 678 72
The S P 500 posted its biggest one day percentage rise
since March shaving its month to date loss to 4 percent
Top European stocks gained 0 8 percent while
Tokyo s Nikkei ended 1 0 percent higher
Nikkei futures in Chicago 2NKc1 ended at 9 435 compared
with its Osaka close of 9 570
Some analysts cautioned the gains in stocks and could be
short lived as sovereign debt problems in Europe and the United
States fester and the Federal Reserve s 600 billion bond
program which has helped support financial markets expires at
the end of June
It s the long term trend which is still disturbing If you
look at the S P 500 they ve lost over 1 trillion in value
since the beginning of May that is telling said Alan
Valdes director of floor operations at DME Securities in New
York We were so oversold you had to see a plus day
U S Fed Chairman Ben Bernanke speaking at an event
sponsored by the Committee for a Responsible Federal Budget
warned that a failure to increase the government s 14 3
trillion debt ceiling would risk United States coveted
AAA rating and damage the U S dollar s status as a reserve
currency For more see ID nW1E7GV02N
GREECE SELLS DEBT
Also reducing investor anxiety was Greece s ability to
raise short term funds after Standard Poor s downgraded its
rating closer to default territory ID nN13126859
Greece sold 1 625 billion euros 2 33 billion of 6 month
T bills at a yield of 4 96 percent which was higher than May
But the bill auction attracted more foreign buyers reflecting
market expectations Greece will secure a second rescue package
worth about 120 billion euros to stave off default
On the other hand the five year cost of insuring against a
Greek default rose to a record peak of 1 615 basis points as
did the yield on Greek government bonds ID nLDE75D0ZT
Greece s trials did little to discourage investors from
buying the euro a day after it hit a record low against the
Swiss franc
The Swiss currency which falls when investors turn away
from safe havens declined more than 0 9 percent versus the
euro and the U S dollar
The euro rose to 1 4480 against the greenback up 0 5
percent on the day
Investors also channeled money into commodities at the
expense of government bonds
ICE Brent July crude closed up 90 cents to 120 00
a barrel touching its highest level in more than five weeks
U S oil futures ended up 2 percent at 99 20
Spot gold rose to 1 524 70 an ounce in New York
from 1 514 73 on Monday when it suffered its biggest one day
loss in a month touching a three week low of 1 511 11
A sell off in the U S government bond market pushed
benchmark yields to their highest level in almost two weeks at
3 09 percent German Bund futures fell 49 basis points at
125 45 after posting a contract high of 126 11 on Monday
Reporting by Chuck Mikolajczak Chris Reese Robert Gibbons
Frank Tang and Wanfeng Zhou |
WFC | FOREX Euro declines for 3rd day on Greece aid uncertainty | Euro falls on doubts Greek austerity vote will pass
Initial gains from strong German IFO quickly fizzle
Signs of dollar funding strains may support dollar
Updates prices adds quote and background changes
byline
By Julie Haviv
NEW YORK June 24 Reuters The euro dropped against the
dollar for a third straight session on Friday and hit a record
low against the Swiss franc with more losses expected if
Greece s parliament doesn t approve a package of austerity
measures next week
Passage is mandatory for the country to secure more bailout
funds from euro zone governments If more funds aren t found
Greece could default on its massive debt a development that
would roil markets
Banks and policymakers moved closer to a deal on Friday
See ID nLDE75M1V1
Thomas Robopoulos a deputy of Greece s ruling PASOK party
rattled markets when he said he will vote against the mix of
higher taxes spending cuts and sales of state owned assets
His remarks helped the euro wipe out initial gains made on the
back of a stronger than expected survey of German business
sentiment
Investors are awaiting the Greek parliament s vote on the
austerity plan on June 29 and 30 before committing to a stance
on the euro s prospects in the coming weeks said Nick
Bennenbroek head of currency strategy at Wells Fargo in New
York
Investors had earlier cheered the surprisingly strong IFO
reading which painted a rosier picture of the German economy
compared with a recent run of weak data ID nLDE75NOE4
The euro is down nonetheless as market participants await
a concrete resolution to the latest phase of the European debt
crisis he said
Concerns about Italy also weighed on the euro with some
Italian bank shares tumbling before being halted
ID nLDE75N0SC
In early afternoon New York trading the euro fell 0 5
percent on the day to 1 41860 The euro was down 0 7
percent for the week and off 1 4 percent this month
The euro was near technical support around 1 41904 its
100 day moving average A close below that was seen as paving
the way to more losses
The euro was last at 1 1876 Swiss francs down
0 7 percent after hitting a record low of 1 1844 on electronic
trading platform EBS
The single euro zone currency was also weaker versus the
yen trading down 0 7 percent at 114 04 yen
Charting Europe s debt crisis
Greece s austerity plan deal with EU IMF ID nLDE75M1V1
European leaders agreement on Greek support ID nLDE75M1V0
The Eurogroup the finance ministers of the euro zone
meets on July 3 to decide on a Greek bailout package which has
been made conditional on Athens approving the austerity plan
It seems Europe is committed to providing Greece with the
resources it needs to survive the current crisis said Michael
Woolfolk senior currency strategist at BNY Mellon in New
York
However the question is not whether Greece gets enough
money to survive the crisis but whether it gets enough money
to keep it from pulling out of the euro zone and going its own
way Either way a technical default seems unavoidable
Greece accepted a package of 110 billion euros of European
Union and International Monetary Fund loans in May 2010 but now
needs a second bailout of a similar size to meet its financial
obligations until the end of 2014
An opinion poll on Friday put Greece s conservative
opposition which has refused to support the plan 2 1
points ahead of Prime Minister George Papandreou s PASOK party
It also showed three quarters of Greeks were opposed to the
raft of tax hikes and spending cuts that would hit them hard
ID nLDE75N0CC
Recent signs of dollar funding strains may cap any euro
rally against the dollar with investors watching to see
whether European banks dollar funding demand will increase in
currency forwards and cross currency basis swaps
Dollar funding costs implied by euro dollar one year cross
currency basis swaps as well as three month euro dollar
forwards both rose on Friday pointing to
an increase in dollar funding demand through such instruments
The dollar fell 0 2 percent to 80 34 yen The dollar
index which measures its value against a basket of
currencies traded 0 1 percent higher on the day at 75 534
Additional reporting by Gertrude Chavez Dreyfuss in New
York Editing by Padraic Cassidy |
WFC | FOREX Euro rises on Greek vote optimism gains seen limited | Greek austerity expected to pass debt problems remain
U S dollar falls to record low versus Swiss franc
Updates prices
By Wanfeng Zhou and Steven C Johnson
NEW YORK June 28 Reuters The euro rose on Tuesday as
investors bet Greece would pass an austerity package needed to
avert a debt default though traders said uncertainty about a
long term solution would limit further gains in the currency
Tough talk on inflation from European Central Bank
President Jean Claude Trichet also boosted euro demand Markets
expect the ECB to raise interest rates next month despite the
debt woes in Greece and elsewhere ID nL6E7HS1H4
Greece s parliament will vote Wednesday and Thursday on a
package of spending cuts tax hikes and privatizations required
by international lenders as a condition for further aid
Without the money Greece could be bust by next month
There seems to be a little bit more enthusiasm for the
Greek vote tomorrow said Vassili Serebriakov currency
strategist at Wells Fargo in New York The significance of
this would be avoiding an involuntary restructuring of debt in
the coming months
While a voluntary restructuring of Greek debt is possible
in the future Serebriakov said a yes vote on the austerity
measures would remove the worst case scenario for the euro
The euro last rose 0 5 percent to 1 4362 It hit a
session high after the Portuguese government said it plans to
be scrupulous in meeting terms of a bailout ID nLSB001126
Traders said the euro could see a relief rally if the vote
passes though it could struggle to rise above its June high
just below 1 47
The possibility that the austerity plan may be rejected
kept the price of options to sell the euro elevated Analysts
see the possibility of a fall below the psychological support
level of 1 40 if this happens
One month implied euro dollar volatility last
traded around 13 percent One month 25 delta euro dollar risk
reversals which measure the skew between euro
puts and calls traded around 2 6 in favor of puts suggesting
bearish sentiment on the euro
I think the measures will be passed Most people do but
euro puts are expensive on the off chance that they don t go
through said a trader in London
The euro climbed to an almost eight week high of 89 80
pence Sterling also fell to a 13 month low versus
a currency basket GBP See ID nL6E7HS27P
The dollar rose 0 4 percent to 81 12 yen while it
fell to a record low of 0 8276 Swiss francs
UNCERTAINTY REMAINS
Analysts said the euro may still have some rough sailing
ahead though Investors fear Greece s access to bailout funds
may just delay an eventual default
It is going to be very very tight and we are getting more
and more bearish on the euro given there are larger issues at
stake here apart from the Greek austerity vote said Neal
Mellor currency strategist at Bank of New York Mellon
Anti austerity protests turned violent in Athens on Tuesday
as the European Union warned Greek lawmakers the country faces
immediate default unless they back an unpopular economic plan
Progress was meanwhile reported in talks to persuade
European banks and insurers to voluntarily roll over maturing
Greek debt as part of a planned second rescue package designed
to give the euro zone country breathing space ID nWEB7502
Additional reporting by Chris Reese Editing by Chizu
Nomiyama |
WFC | FOREX Euro headed for best week since January ECB eyed | Euro hits 3 week high above 1 45 Swiss franc tumbles
Greece fears temporarily ease ECB to hike next week
U S manufacturing rises but euro zone loses steam
Updates prices adds quotes changes byline
By Julie Haviv
NEW YORK July 1 Reuters The euro hit a three week high
and headed for its best weekly performance against the U S
dollar since January as global risk appetite improved but
gains are seen limited given investors belief that Greece s
debt crisis is far from over
The Greek parliament passed two crucial austerity bills
this week opening the way for international lenders to release
a 12 billion euro 17 billion loan installment that Athens
urgently needs to stave off bankruptcy
Overall it has been a positive week for global risk
sentiment and a negative week for safe haven currencies such as
the U S dollar yen and Swiss franc said Vassili
Serebriakov currency strategist at Wells Fargo in New York
The euro is on track to garner its first weekly gain
against the dollar in a month
Uncertainty remains about a longer term solution for
Greece Euro zone finance ministers are scheduled to hold
preliminary talks this weekend on the second financing package
for Greece for 2011 2014 which could total up to 120 billion
euros 175 billion
The euro last traded at 1 4512 up 0 1 percent on the
day It had earlier risen to a three week high of 1 4553
on trading platform EBS At current rates it s up 2 3
percent this week on pace for its biggest weekly advance since
January
Against the Swiss franc the euro hit a one month high of
1 2325 francs as investors cut back long positions
in the safe haven currency It was last up 0 9 percent at
1 2306
The dollar climbed 0 9 percent to 0 8476 franc
moving further away from an all time low of 0 8276 set on EBS
earlier in the week
U S financial markets will be closed on Monday for the
Fourth of July holiday
The market may start to rebuild long euro positions ahead
of an expected interest rate hike by the European Central Bank
next Thursday which would further move interest rate
differentials in favor of the euro
Markets are expecting ECB President Jean Claude Trichet to
strike a hawkish tone after the meeting However they remain
reluctant to price in further tightening See ID nL6E7I10UK
Feels like the euro is caught between reluctance to set up
shorts before the ECB meeting and the gentle reminder from the
periphery PMI today that the last thing that is needed for a
fragile periphery is a stronger euro said Alan Ruskin global
head of G10 currency strategy at Deutsche Bank in New York
A key survey on Friday showed the euro zone s manufacturing
sector lost steam last month while the region s weaker
economies appear to be slipping back into recession
ID nL3E7I11C0
Against the yen the dollar rose 0 4 percent to 80 84 yen
hitting a session peak of 81 152 on EBS after data
showed the pace of growth in U S manufacturing picked up for
the first time in four months in June ID nN1E7600JI
Additional reporting by Wanfeng Zhou Editing by Chizu
Nomiyama |
WFC | FOREX Euro has best week since Jan but no curtain call seen | Euro had best week since January as Greece fears ebb
ECB to hike next week but more increases questioned
U S jobs data debt ceiling debate seen swaying dollar
Updates prices adds quotes
By Julie Haviv
NEW YORK July 1 Reuters It was a banner week for the
euro as Greece evaded a near term default and investors
embraced risk but don t expect a repeat performance given
investors belief that the country s debt crisis is far from
over and concerns about the global economic recovery
Relief over Greece caused the euro to enjoy its best weekly
performance against the U S dollar since January
After days of Greece headlines market participants next
week will turn their focus on U S economic data and a European
Central Bank monetary policy meeting
The Greek parliament passed two crucial austerity bills
this week opening the way for international lenders to release
a 12 billion euro 17 billion loan installment that Athens
urgently needs to stave off bankruptcy
The market turned a corner this week in terms of risk
sentiment but the market is also extremely near sighted said
Brian Dolan chief currency strategist at Forex com in
Bedminster New Jersey
What we had this past week was a relief rally and the
market can only breathe a sigh of relief for so long he said
Next week we will see whether the euro s strength is sustained
or falters but I am betting on the latter
Uncertainty remains about a longer term solution for
Greece Euro zone finance ministers are scheduled to hold
preliminary talks this weekend on the second financing package
for Greece for 2011 2014 which could total up to 120 billion
euros 175 billion
The longer term picture still stands and a Greece default
is still very likely with all the issues likely to arise again
in September Dolan said
The euro last traded at 1 4512 up 0 1 percent on the day
It had earlier risen to a three week high of 1 4553
on trading platform EBS At current rates it s up 2 3 percent
this week on pace for its biggest weekly advance since
January It was also its first weekly gain against the dollar
in a month
The reemergence of risk aversion should send the euro to
1 4250 by the end of next week Dolan said
Overall it has been a positive week for global risk
sentiment and a negative week for safe haven currencies such as
the U S dollar yen and Swiss franc said Vassili
Serebriakov currency strategist at Wells Fargo in New York
U S financial markets will be closed on Monday for the
Fourth of July holiday
The market may start to rebuild long euro positions ahead
of an expected interest rate hike by the European Central Bank
next Thursday which would further move interest rate
differentials in favor of the euro
Markets are expecting ECB President Jean Claude Trichet to
strike a hawkish tone after the meeting However they remain
reluctant to price in further tightening See ID nL6E7I10UK
Weaker euro area activity data over the past month puts the
ECB in a precarious position at this juncture analysts said
Against the yen the dollar rose 0 4 percent to 80 84 yen
In the U S a slew of U S economic data could sway
currency market sentiment next week namely ADP private
payrolls data on Wednesday and the U S Labor Department s
nonfarm payrolls report on Friday
This week marked the end of the U S Federal Reserve s
second round of quantitative easing or QE2 as the program was
known QE2 entailed buying 600 billion in U S Treasury
securities and was negative for the dollar as it was tantamount
to printing money
The end of the program is positive for the dollar but U S
fiscal concerns and the government s debt ceiling debate should
continue to weigh on the dollar
While the end of the Fed s Treasury purchase program does
in our view remove a source of selling pressure on the dollar
the uncertainty over the debt ceiling is becoming an
increasingly troubling issue for the greenback Wells Fargo s
Serebriakov said
Until that uncertainty is resolved the upside for the
dollar should remain limited he said
Additional reporting by Wanfeng Zhou Editing by Chizu
Nomiyama |
T | Analysts shrug off AT T s mixed quarter | Evercore In Line 40 target notes that AT T s NYSE T fourth quarter pay TV customer loss was higher than anticipated but didn t see much in the report that should significantly move the stock
The overall print was modestly better than Evercore expected largely due to organic performance at Warner Media
Morgan Stanley Overweight 42 target says that the operational metrics across the entertainment group continued to miss estimates despite upside revenue and EBITDA
The firm also highlights that broadband net adds worsened which AT T attributed to heavily discounted IP broadband plans
AT T shares are down 0 9 to 38 25 The company has a Bullish average Sell Side rating |
T | Do AT T Stock Investors Have Something to Look Forward To | AT T Inc NYSE T released its fourth quarter financial results before the markets opened on Wednesday The telecom giant said that it had 0 89 in earnings per share EPS and 46 8 billion in revenue while consensus estimates had called for 0 87 in EPS and revenue of 46 96 billion In the same period of last year AT T said it had EPS of 0 86 and 47 99 billion in revenue During the most recent quarter growth in domestic wireless services and strategic and managed business services revenues partially offset declines in revenues from domestic video legacy wireline services and WarnerMedia Looking ahead to the 2020 full year the company expects to see EPS in the range of 3 60 to 3 70 and revenue growth of 1 to 2 Consensus estimates call for 3 60 in EPS and 182 09 billion in revenue for the coming year div connatix margin bottom 1 5em div connatix img margin unset Instinet analyst Jeffrey Kvaal published a research note this morning on AT T s fourth quarter earnings reiterating a Buy rating and a 44 price target The firm considers fourth quarter results uninspired Mobility was generally in line Entertainment was soft and WarnerMedia suffered from HBO Max preparation This summed to a slight revenue miss though EPS of 0 89 did beat by 0 02 AT T reiterated its FY20 and three year guidance targets Randall Stephenson AT T s board chair and CEO commented in the earning release We delivered what we promised in 2019 and we begin this year with strong momentum in wireless with HBO Max set to launch in May and our share retirement plan well underway Our 2020 outlook positions us to deliver meaningful progress on our 3 year financial and capital allocation plans as we continue to invest in growth opportunities and create value for our owners as we did last year Shares of AT T traded down 1 5 early Wednesday at 38 06 in a 52 week range of 28 92 to 39 70 The consensus analyst price target is 39 31
By Chris Lange |
T | Sell side shrugs off AT T s mixed quarter | Evercore In Line 40 target notes that AT T s NYSE T fourth quarter pay TV customer loss was higher than anticipated but didn t see much in the report that should significantly move the stock
The overall print was modestly better than Evercore expected largely due to organic performance at Warner Media
Morgan Stanley Overweight 42 target says that the operational metrics across the entertainment group continued to miss estimates despite upside revenue and EBITDA
The firm also highlights that broadband net adds worsened which AT T attributed to heavily discounted IP broadband plans
AT T shares are down 0 9 to 38 25 The company has a Bullish average Sell Side rating |
T | AT T stock falls after earnings beat but revenue misses | An earlier headline misstated the direction of AT T s premarket stock move after the results
AT T Inc shares
T 0 75
were down 0 9 in premarket trading Wednesday after the media and telecommunications giant posted better than expected earnings for its fourth quarter but fell short on the top line The company recorded net income of 2 4 billion or 33 cents a share compared with 4 9 billion or 66 cents a share in the year earlier period After adjusting for merger related expenses and other items earnings per share grew to 89 cents from 86 cents a year earlier while analysts surveyed by FactSet had been projecting 87 cents AT T posted consolidated revenue of 46 8 billion compared with 48 billion a year ago whereas analysts were modeling 47 billion AT T said its revenue would have been about 48 billion excluding its HBO Max investment For the full year the company reaffirmed its revenue forecast for 1 to 2 growth AT T also continues to expect 3 60 to 3 70 in earnings per share including its HBO Max investment AT T shares have gained 1 4 over the past three months as the S P 500
SPX 0 05
has risen 7 9
div gpt ad 1569967089584 0 div iframe width 100 important min width 300px max width 800px |
T | The Ratings Game AT T stock falls as bulls grapple with the changing video landscape | AT T Inc ended the year with a whimper or maybe it was with a sign that financials are heading in the right direction Analysts were split on the telecommunications giant s Wednesday morning results which showed a profit beat but also some growing pains as the company works through its integration of Time Warner as well as plans for a more aggressive role in the video streaming ecosystem and decaying trends in satellite TV See more AT T stock falls after earnings beat but revenue misses On the plus side AT T
T 0 75
meaningfully exceeded expectations on free cash flow wrote Citi Research s Michael Rollins who admitted that the company s metrics were mixed during the quarter even as AT T showed signs of positive financial progress He was encouraged by the company s growth in wireless subscribers while flagging that AT T saw wider subscriber losses in video and broadband than he was expecting Guidance was maintained for 2020 and we continue to see opportunities for AT T to improve wireless performance shrink premium video losses and support favorable cash repatriation to shareholders from a combination of dividends and buybacks concluded Rollins who has a buy rating and 42 target on the stock Bank of America s David Barden called the quarter solid driven by what he said were strong trends in wireless and media The key storyline heading into results was if after a 37 stock move in 2019 and providing three year guidance AT T could report results that erode the execution bear thesis push consensus estimates up to closer to the low end of the 2022 guide and bring incremental buyers to the name he wrote It appears the company continues to operate well with solid wireless and WarnerMedia results Barden rates the stock a buy with a 43 target Don t miss HBO Max chief not worried about its 15 subscription price Instinet s Jeffrey Kvaal also highlighted that the company kept its outlook intact but he described the actual results as being uninspired and a whimper mainly stemming from the problems in AT T s entertainment group he also rates AT T s stock at buy and he has a 44 target price on the stock Both linear and streaming lost more net adds than expected combined 1 2 million versus consensus of 0 94 million he wrote Industry trends and promotional churn seemed higher than thought The video decline and cable competition weighed more heavily on broadband 182 000 net losses versus consensus 86 000 Comcast s color suggests neither trend will improve in 2020 MoffettNathanson s Craig Moffett said the company s results are a reminder that even as AT T aggressively sheds costs in a valiant effort to sustain earnings they are racing against the clock or rather two clocks One is the countdown to the next recession in which case he wrote that AT T will need to have gotten its debt leverage down to a sustainable level The other is counting down to the obsolescence of the company s DirecTV and WarnerMedia businesses The company will have to grow revenue and cut losses from new businesses before these legacy businesses wither wrote Moffett who has a sell rating and 30 target on the shares Today s results show what a tall order that will be The report followed numbers from Comcast Corp
CMCSA 0 24
a week ago that also showed troubling trends in linear video a big reason why both companies are accelerating their streaming efforts See more Comcast s Peacock launch can draw some lessons from biology Stifel s Scott Devitt commented in a note to clients Wednesday that AT T s results indicate that consumers continue to shift from premium linear services to more economically priced over the top video services such as Netflix He has a buy rating and 390 target on Netflix Inc s stock
NFLX 0 86
which is off over 1 in Wednesday s session
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PFE | Why The Earnings Surprise Streak Could Continue For Pfizer PFE | Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report Pfizer PFE which belongs to the Zacks Large Cap Pharmaceuticals industry could be a great candidate to consider
This drugmaker has seen a nice streak of beating earnings estimates especially when looking at the previous two reports The average surprise for the last two quarters was 2 11
For the last reported quarter Pfizer came out with earnings of 0 64 per share versus the Zacks Consensus Estimate of 0 63 per share representing a surprise of 1 59 For the previous quarter the company was expected to post earnings of 0 76 per share and it actually produced earnings of 0 78 per share delivering a surprise of 2 63
Price and EPS Surprise
For Pfizer estimates have been trending higher thanks in part to this earnings surprise history And when you look at the stock s positive Zacks Earnings ESP Expected Surprise Prediction it s a great indicator of a future earnings beat especially when combined with its solid Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Pfizer currently has an Earnings ESP of 5 13 which suggests that analysts have recently become bullish on the company s earnings prospects This positive Earnings ESP when combined with the stock s Zacks Rank 3 Hold indicates that another beat is possibly around the corner We expect the company s next earnings report to be released on April 30 2019
When the Earnings ESP comes up negative investors should note that this will reduce the predictive power of the metric But a negative value is not indicative of a stock s earnings miss
Many companies end up beating the consensus EPS estimate but that may not be the sole basis for their stocks moving higher On the other hand some stocks may hold their ground even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
PFE | Sangamo Rises On Positive Phase I II Hemophilia Study Data | Sangamo Therapeutics Inc NASDAQ SGMO and its partner Pfizer NYSE PFE announced encouraging interim data from the phase I II Alta study evaluating their gene therapy candidate SB 525 in patients with severe hemophilia A Data showed that the gene therapy candidate holds potential Shares of Sangamo rallied almost 28 on Apr 2 following the data readout However shares of the company have increased 7 so far this year compared with the s rise of 11 7 The phase I II study evaluated four doses of SB 525 9e11 vg kg 2e12 vg kg 1e13 vg kg and 3e13 vg kg with two patients per cohort Data from the study showed that patients treated with the highest dosage 3e13 vg kg achieved normal factor VIII levels Dose dependent increase in factor VIII levels were observed in the eight patients treated with SB 525 gene therapy across the four dosage cohorts Factor VIII boosts blood clotting which is a major symptom of haemophilia Moreover the candidate was well tolerated in every dosage cohort The company believes that SB 525 may achieve predictability and sustained treatment effect which can lead to clinical benefit in haemophilia A patients Based on the data from the study the Safety Monitoring Committee SMC recommended expansion of the 3e13 vg kg cohort Total patients in the cohort will increase to five Longer term follow up data will be presented at a future scientific meeting Although interim data from the study seems promising the clinical development of SB 525 is in early stage with commercialization prospects years away We note that there are other treatments available for treating hemophilia A and several others are in development including gene therapies In February 2019 Novo Nordisk s NYSE NVO was approved for the indication Companies developing gene therapy candidates for treating hemophilia A include Spark Therapeutics NASDAQ ONCE and uniQure The most advanced gene therapy for hemophilia A treatment in clinical studies is BioMarin s valoctocogene roxaparvovec BMN 270 Late stage studies are evaluating 6e13 vg kg and 4e13 vg kg doses of the candidate Apart from SB 525 Sangamo is also developing gene therapies in collaboration with Pfizer for treating amyotrophic lateral sclerosis and frontotemporal lobar degeneration Sangamo Therapeutics Inc Price
Zacks RankSangamo currently carries a Zacks Rank 3 Hold You can see Is Your Investment Advisor Fumbling Your Financial Future See how you can more effectively safeguard your retirement with a new Special Report 4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future |
PFE | Pfizer s marketing applications for dacomitinib in first line NSCLC accepted in U S and Europe | Pfizer NYSE PFE announces that its marketing applications seeking approval for dacomitinib for the first line treatment of patients with locally advanced or metastatic non small cell lung cancer NSCLC with EGFR activating mutations have been accepted for review in the U S and Europe The FDA has designated the filing for Priority Review with an action date in September The data supporting the applications were generated in the Phase 3 ARCHER 1050 study that showed treatment with dacomitinib extended median progression free survival PFS to 14 7 months compared to 9 2 months with gefitinib AstraZeneca s IRESSA with 41 less risk of cancer progression or death hazard ratio 0 59 Dacomitinib is an orally available pan human epidermal growth factor receptor EGFR tyrosine kinase inhibitor TKI Now read |
WFC | FOREX Dollar falls sterling slumps on rate outlooks | Dollar rebound fades euro Swiss franc rise
Sterling slumps weak data casts doubt on rate hikes
Rate outlook fiscal issues leave dollar vulnerable
Recasts updates prices adds detail comment
By Steven C Johnson
NEW YORK May 3 Reuters The dollar was near a 17 month
trough against the euro and hit a record low against the Swiss
franc on Tuesday as expectations U S interest rates would stay
low indefinitely dulled demand for the greenback
Among major currencies only sterling was down sharply
against the dollar falling after weak factory data cast doubt
on when the Bank of England would lift interest rates
The European Central Bank raised rates last month for the
first time since 2008 and is expected to do so again this year
though traders expect it to stand pat when it meets this week
The euro was up 0 4 percent at 1 4874 more than a cent
above its session low and near Monday s 17 month high above
1 49 It rose 1 1 percent to 89 94 pence
The story has been about divergent rate expectations
said Wells Fargo strategist Vassili Serebriakov The Fed is on
hold and now the BoE may be coming out of the picture The ECB
is uniquely the only major central bank expected to raise
rates and that benefits the euro
The dollar had earlier posted broader gains as investors
took profits after weeks of steady selling took it to a
three year low against major currencies on Monday
But by late morning it was either flat or weaker against
all major currencies save sterling
The backdrop hasn t changed and there s really no trigger
for a sustained dollar rally said David Watt currency
strategist at RBC Capital Markets
The dollar has lost nearly 8 percent against major
currencies this year almost 4 percent in April alone and
that prompted a brief bit of profit taking overnight
Some analysts have tied the retreat of higher yield
currencies and assets such as oil to fears of reprisal after
U S special forces killed Osama bin Laden but Watt said that
sounded like an excuse to take profits
The dollar hit a record low of 0 8595 Swiss francs and shed
0 3 percent to trade at 80 98 yen The Swiss and Japanese
currencies often rise when risk appetite fades
But the U S currency hardly looks ready to stage a
sustained rally analysts said particularly with the U S
central bank hinting that interest rates will remain at zero
for some time and with markets fretting about Washington s
ability to get a yawning federal budget deficit under control
Emerging market currencies which unlike some majors are
far from overvalued against the dollar will also continue to
appreciate which will keep the dollar under pressure
BNP Paribas strategists said a euro retreat below 1 47
may prove an opportunity for traders to look for even better
levels to re set dollar shorts ahead of Thursday s ECB policy
meeting and Friday s U S employment data
Hawkish comments about inflation from the ECB and any sign
of slower U S job growth on Friday could add to dollar
selling they said
It s very much a case of buying the dips in euro dollar at
these levels Rate hike expectations are anchoring the euro
said Chris Walker currency strategist at UBS in
London
The Australian dollar fell after the central bank left
interest rates at 4 75 percent but sounded a bit less hawkish
than expected But it recovered from session lows and was last
down just 0 2 percent at 1 0916 not far from Monday s
1 1011 its highest level in nearly three decades
The Canadian dollar rose up modestly after Canada s ruling
Conservatives won a crushing victory in the federal election
and
Additional reporting by Neal Armstrong in London Editing
by Andrew Hay |
WFC | FOREX Euro posts worst week since January prospects dim | Report Greece considering leaving FX bloc hits euro
Greece denial of euro zone exit has little impact
Commodities high yielders in clearing out process
U S jobs report boosts dollar yen
Updates prices adds comment
By Gertrude Chavez Dreyfuss
NEW YORK May 6 Reuters The euro on Friday headed for
its worst week against the dollar since January and further
losses were seen as likely as sovereign debt concerns
reappeared after a German news report later denied suggested
Greece had raised the possibility of leaving the euro zone
Spiegel Online reported euro zone finance ministers were
meeting in Luxembourg on Friday to discuss Greece including
the issue of its possible exit from the currency bloc Greece
through its Finance Ministry later denied it was considering
leaving the euro zone
The Greece headlines however were enough to send
investors further unwinding long positions on the euro which
hit a low of 1 43150 its weakest level since April 19 on
electronic trading platform EBS
Market participants said the pullback in the euro was a
natural correction in a currency that at one point had surged
more than 10 percent so far this year
What s happening today also reflects the fact that markets
are increasingly unwilling to hold long euro positions into the
weekend said Vassili Serebriakov senior currency strategist
at Wells Fargo in New York
It really depends on how much substance there is behind
the press reports on Greece but from a technical
perspective the drop below 1 45 is fairly significant It s
probably too early to say that the euro is back on a declining
path but a test of 1 50 is now off the table for the moment
he said
In late afternoon New York trading the euro traded lower
at 1 43480 down 1 3 percent on the day further retreating
from a 17 month peak fo 1 49404 scaled on Wednesday With
losses for the week of 3 3 percent the euro was on pace for
its worst week against the dollar since January
But some traders said the euro is still likely to gain
against the dollar in the medium term as euro zone rates are
expected to rise more quickly than those in the United States
Speculators said as much as they boosted short dollar bets
to their highest in two months and increased long euro
positions to their highest since July 2007 according to data
from the Commodity Futures Trading Commission
The euro fell nearly 2 percent on Thursday after ECB
President Jean Claude Trichet signaled a rate hike was unlikely
next month but left the door open for a move in July
The dollar meanwhile also got a boost from data on Friday
showing U S employers added 244 000 jobs last month well
above what economists had expected That boosted U S bond
yields and increased the dollar s appeal against the yen It
was last up 0 5 percent at 80 54 yen
It also offered respite for a market that was trying to
digest a recent run of weaker than expected U S data that some
feared pointed to a slowdown in the pace of U S growth
Concerns the world economy could also lose steam spurred a
massive run for the exit on Thursday sending oil into freefall
and hurting high yielding currencies such as the Australian
dollar that are sensitive to commodity prices and the global
growth outlook
Thursday s commodity rout spurred traders to unwind trades
financed with cheaply borrowed dollars and the greenback had
its best day against major rivals since October
Those moves were partly reversed on Friday though oil
dipped back under 100 a barrel and was down 2 percent after
the Der Spiegel online report on Greece It fell 10 percent on
Thursday
Meanwhile the Australian dollar recouped losses to trade
more than 1 2 percent higher at US 1 0703 although it was
still some distance away from a near three decade peak above
US 1 10 hit early this week
It s a natural clearing out process after being
overbought said Adrian Lee president and chief investment
officer at Lee Overlay Partners referring to Thursday s
sell off in commodities and high yielding currencies
But commodities and high yielders will be back In fact
those long positions could be put back on next week There s
definitely pressure for these assets to appreciate because the
global economy is definitely improving Lee said in New York
Lee Overlay has assets under management of 8 5 billion |
WFC | FOREX Euro up but fragile vs dollar as Greek debt weighs | Greek concern lingers Juncker talks of soft restructure
Some see dollar gains after Fed bond buying ends
Cross yen pairs rally on talk of M A flows
Adds quote and graphics updates prices changes byline
By Julie Haviv
NEW YORK May 17 Reuters The euro rose against the
dollar in choppy trading on Tuesday but remains vulnerable to
global risk aversion and the possibility that Greece might
restructure its massive debt
European finance ministers approved a financial aid package
for Portugal on Monday but Greece s debt situation is a
significant wild card A restructuring of Greece s debt could
erode the euro zone s credibility with investors
The U S dollar had received a boost against most major
currencies as investors unwound bets in commodities stocks
and high yielding units such as the Australian dollar on
concerns global growth has stalled
The dollar s recent outperformance against other
safe haven currencies is probably a reflection of short
speculative positioning on the greenback being scaled back as
global market jitters persist said to Vassili Serebriakov
currency strategist at Wells Fargo in New York
Commodities and stocks were weaker as a result with U S
oil futures and the S P 500 0 3 percent weaker on
the day Nervousness related to Greece s debt situation also
supported safe haven U S Treasury debt ID nN17160326
Greece s Deputy Foreign Minister Spyros Kouvelis said it was
open to a soft debt restructuring if needed Kouvelis
comments came after euro zone officials including Jean Claude
Juncker chairman of the euro zone finance ministers said for
the first time on Tuesday Greece may have to ask investors to
extend the maturities of its debt or agree to a soft
restructuring Click on ID nLDE74G1IK For Juncker s
comments see ID nWEA1772
But key European Union officials including German
Chancellor Angela Merkel vehemently opposed restructuring any
euro zone country s debt Merkel on Monday said such a scenario
could lead to massive investor flight from euro zone bonds
A voluntary Greek restructuring would still be a euro
negative event in the short term by setting a dangerous
precedent Serebriakov said
The euro was last at 1 4194 up 0 3 percent
recovering from a seven week low of around 1 4048 hit on
Monday on trading platform EBS Some traders said as long as it
stayed below its 55 day moving average of 1 4280 it was
vulnerable to a test of its recent lows
The 1 40 trading level has kept the euro supported with
buying from central banks and hedge funds
DiDi Weinblatt vice president of mutual fund portfolios at
USAA Investment Management Company in San Antonio Texas said
the June conclusion of the U S Federal Reserve s second round
of quantitative easing called QE2 should cause Treasury
yields to rise
The Fed s bond buying program launched in November and
entailed buying 600 billion in Treasury securities
With the end of QE2 nearing I am nervous about buying
Treasuries right now she said The whole world is based on
supply and demand dynamics and so the Fed is going to leave a
large void which should push Treasury yields higher
Weinblatt who oversees just under 4 billion in assets
said higher yields should make dollar denominated assets more
appealing and that should buoy the dollar
The euro still faces peripheral debt issues and that
should weigh on the currency she said
The U S dollar index which tracks the performance
of the greenback against a basket of currencies is down 0 4
percent since Nov 3 and down 9 percent since late August when
Fed Chairman Ben Bernanke signaled QE2 was on the horizon
For graphic on asset moves since August
The euro hit a 17 month peak near 1 4940 in early May
buoyed by market expectations that the ECB would raise interest
rates further in the coming months while the Federal Reserve
is expected to keep interest rates near zero this year
The yen meanwhile fell broadly as Toshiba Corp 6502 T
was said to be close to buying Swiss based Landis Gyr and media
reports said Takeda was in advanced talks to purchase
Swiss based rival Nycomed developments that were the catalyst
for yen selling ID nL4E7GH09K
The euro rose 1 3 percent to 115 82 yen while
the Swiss franc was up 0 5 percent at 91 86 yen The
dollar was up 0 9 percent against the yen at 81 52 yen
with traders citing demand from funds and stops above 82 yen
Additional reporting by Gertrude Chavez Dreyfuss Editing by
Padraic Cassidy |
WFC | FOREX Euro skids vs dollar but losses seen limited | Euro dips as German official casts doubt on Greece aid
Euro stays near 1 month high vs dollar on rate outlook
ECB set to signal July rate hike dollar sentiment weak
Updates prices adds Juncker comments
By Gertrude Chavez Dreyfuss
NEW YORK June 6 Reuters The euro faltered on Monday
after two days of gains pressured by a German official s
comment that a second Greek bailout was not yet certain
although belief that Greece will be able to avert default on
its massive debt should limit the currency s losses
Jean Claude Juncker chairman of the euro zone finance
ministers further fueled selling in the euro in the afternoon
session when he said the currency was overvalued He made the
comment before the European Parliament s economic committee in
Strasbourg France See ID nBRU011530
Policymakers have inched toward a new bailout package for
Greece that German media said could exceed 100 billion euros
That helped push the euro to a one month high of 1 46590
early in the session on trading platform EBS But the euro
slipped after a spokesman for the German finance ministry said
a second aid program was not certain and after Juncker made his
valuation remarks The euro was last down 0 5 percent at
1 45650
Greece received a 110 billion euro aid package a year ago
For more see ID nB4E7GU00T and ID LDE7551RS
However traders said the market expects to see a deal that
gives Greece more time to repay its debt
We re seeing a bit of a corrective pullback in the euro
after gains last week and in general the euro remains sensitive
to headlines on Greece said Vassili Serebriakov currency
strategist at Wells Fargo in New York
There are a lot of moving parts and a lot of details to
fine tune on Greece s second aid plan but overall I see
everything working out It is clear that the EU won t allow
Greece to fail
Eurogroup chairman Juncker said as much on Monday saying
everything should be done to save Greece See ID nBRU011531
Investors are also looking to Thursday s European Central
Bank meeting at which ECB President Jean Claude Trichet is
expected to hint at a July interest rate hike
The focus will turn toward interest rate differentials
and with the Federal Reserve unlikely to do anything this year
an ECB rate hike will pull money toward the euro and other
currencies said Boris Schlossberg director of FX research at
GFT Forex There s no reason whatsoever to own dollars now
If Trichet hints at a July rate hike by talking tough on
inflation Schlossberg said the euro could retest a 2011 high
around 1 4940
Trichet speaking in Montreal added to the market s
hawkish view on euro zone interest rates by reiterating the
need to prevent commodity price increases from triggering
second round effects on inflation ID nN06286699
For now options barriers were stacked around 1 47000
traders said with resistance also seen at 1 47100 the 76 4
percent retracement of the euro s May decline
Some currency portfolio managers have also shifted back
toward a long euro position in the latest week according to
Quaesta Capital a 3 5 billion fund of funds based in Zurich
Switzerland
The dollar hit a one month low beneath 80 yen before
rebounding to 80 130 yen down about 0 2 percent Asian
sovereigns were said to be dollar buyers below the 80 level
Commodity currencies also benefited from weakness in the
greenback The Australian dollar traded at US 1 0700
near Friday s 3 1 2 week high of US 1 0775
The dollar index dipped as low as 73 643 a trough
not seen since May 5 A recent spate of soft U S data has
raised concerns about the strength of the U S economy A
report Friday showed a sharp slowdown in job creation pushing
the unemployment rate up to 9 1 percent ID nOAT004818
But by late afternoon the dollar index was up 0 3 percent
at 74 015
With the Fed not likely to lift interest rates for some
time investors should continue to short the dollar
especially against capacity constrained rising interest rate
currencies like the Indian rupee and Brazilian real
said Faros Trading head of research Dan Dorrow
Reporting by Gertrude Chavez Dreyfuss Editing by Chizu
Nomiyama |
WFC | GLOBAL MARKETS Euro slips after ECB s Trichet stocks rebound | U S stocks open higher after six days of losses
Euro reverses gains after Trichet s comments
ECB is strongly vigilant on inflation Trichet
Updates prices adds comment adds byline
By Wanfeng Zhou
NEW YORK June 9 Reuters The euro fell against the U S
dollar on Thursday after the president of the European Central
Bank signaled an interest rate increase next month as had been
widely expected while U S and European stocks rebounded after
six days of losses
Crude oil prices drifted higher a day after OPEC failed to
raise production targets though they pared gains as the U S
dollar strengthened following the ECB meeting
The ECB left its benchmark interest rates at 1 25 percent
as expected In a news conference following the decision ECB
President Jean Claude Trichet said the central bank is in
strong vigilance mode over inflation using a code word to
signal a rate hike is probably only a month away For more see
ID nFAT007213
The euro initially rose on the comments before retreating
with analysts saying a hike in July had already been priced in
Persistent worries about debt problems in Greece and other
peripheral euro zone economies also dented sentiment
The euro has slipped in what appears to be a buy the
rumor sell the fact reaction said Vassili Serebriakov
currency strategist at Wells Fargo in New York We also
suspect that negative headlines on Greece and wider regional
debt concerns are raising some question marks over the
prospects for ongoing ECB policy tightening and euro
strength
The euro last traded 0 6 percent lower at 1 4483
and also slipped 0 2 percent to 116 38 yen
U S stocks rose as a narrowed U S trade deficit was seen
as one positive point for growth in a recent avalanche of weak
economic data But the mood remained fragile with many analysts
expecting the S P 500 to retest its March 2010 lows after
falling more than 6 percent since a peak in May
We re basically trading off technicals said William
Larkin a portfolio manager with Cabot Money Management in
Salem Massachusetts
We re going to be in a very active trading range and we
just need a couple of key warnings on consumer confidence
energy prices whatever and markets could continue to
weaken
The Dow Jones industrial average was up 83 89
points or 0 70 percent at 12 132 83 The Standard Poor s
500 Index was up 9 62 points or 0 75 percent at
1 289 18 The Nasdaq Composite Index was up 10 09
points or 0 38 percent at 2 685 47
World stocks as measured by the MSCI world equity index
rose 0 4 percent The Thomson Reuters global
stock index gained 0 3 percent Emerging market
stocks dropped 0 7 percent
The FTSEurofirst 300 index of top European shares
advanced 1 percent at 1105 346 points
PERIPHERAL WORRIES
Greek Irish and Portuguese bonds came under pressure
pushing spreads over German Bunds wider after Moody s said a
Greek default would also impact the credit ratings of other
bailed out countries
Moody s also said it was hard to imagine resolving Greece s
debt crisis with private investors participating on a voluntary
basis ID nFAB016108
A new international bailout being put together for Greece
is likely to total around 120 billion euros euro zone official
sources said on Thursday That was higher than the 90 billion
euro figure previously suggested by officials See
ID nLDE75819V
In the oil market U S crude for July delivery rose
56 cents to 101 31 Brent crude added 15 cents to
118 02 a barrel
Concerns about supply bolstered prices as investors
assessed the impact of OPEC s failure to agree on a rise in
output supported prices Oil prices are at levels that
governments around the world fear are hurting demand and
threatening economic recovery
U S Treasury yields dipped to six month lows as a rise in
U S weekly jobless claims added to recent evidence the
economic recovery is stumbling bolstering the safe haven
appeal of U S government debt
Benchmark 10 year notes were trading with a
yield of 2 95 percent The yield dipped to 2 92 percent early
on Thursday marking the lowest since early December
Additional reporting by Gertrude Chavez Dreyfuss and Edward
Krudy in New York and Simon Falush in London Editing by Chizu
Nomiyama |
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