Tag Archives: Business

Wall Street set to open higher, Fed minutes eyed

Wall Street looked set for a second day of gains on Wednesday as oil prices edged up slightly, and investors awaited the minutes of Federal Reserve’s December meeting in which it raised interest rates.

The Fed cited strength in the labor market and a slight uptick in inflation among reasons for its move. Investors will pore over the minutes to assess policymakers’ view on the incoming administration.

The minutes of the Dec. 13-14 meeting are expected at 2:00 p.m. ET.

With just over two weeks left before President-elect Donald Trump takes office, investors are waiting for the finer details of his proposed policies such as tax cuts and higher fiscal spending.

Some analysts have warned of a potential correction in a post-election rally, which has helped the Dow Jones Industrial Average .DJI to come within a hair’s breadth of 20,000.

“I think the market has gotten ahead of itself and is probably primed to give something back,” said Robert Pavlik, chief market strategist at Boston Private Wealth.

“When it could happen and how long it lasts depends on the new administration’s ability to pass some of the initiatives that they pushed for during the election.”

The SP 500 is trading at 17.5 times forward 12-month earnings, well above the 10-year median of 14.7 times, according to Thomson Reuters data.

Dow e-minis 1YMc1 were up 43 points, or 0.22 percent at 8:26 a.m. ET, with 16,031 contracts changing hands. SP 500 e-minis ESc1 were up 5.75 points, or 0.26 percent, with 106,101 contracts traded. Nasdaq 100 e-minis NQc1 were up 10.75 points, or 0.22 percent, on volume of 12,897 contracts.

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Automakers will report U.S. sales for December and the full year. Encouraging data could push the Dow to the elusive 20,000 mark. The Dow closed at 19,881.76 on Tuesday.

Wall Street ended the first trading of the new year with sharp gains as increases in technology stocks helped offset a decline in oil prices.

Oil, which hit an 18-month high on Tuesday before reversing course due to a strong dollar, was up marginally at $55.67 on Wednesday.

The dollar fell to profit-taking and was down 0.27 percent, a day after its index .DXY rose to a 14-year high.

Tesla (TSLA.O) shares fell 1.2 percent to $214.50 premarket after the electric carmaker reported a 9.4 percent decline in quarterly deliveries.

Agile Therapeutics (AGRX.O) lost 64 percent of its value in heavy trading and is set to open at a record low after the company provided an update on its contraceptive patch trial.

Depomed (DEPO.O) soared 12.5 percent to $22.89 after the NY Post reported that KKR Co was still interested in buying the drugmaker.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)

Tillerson and Exxon part ways; $180M retirement package

FILE - In this Friday, March 27, 2015, file photo, Exxon Mobil CEO Rex Tillerson delivers remarks on the release of a report by the National Petroleum Council on oil drilling in the Arctic, in Washington. Tillerson, the nominee of President-elect Donald Trump for secretary of state, is severing ties with Exxon Mobil through a $180 million retirement package ahead of his Senate confirmation hearing. Photo: Evan Vucci, AP / Copyright 2016 The Associated Press. All rights reserved.

NEW YORK (AP) — Rex Tillerson, the nominee of President-elect Donald Trump for secretary of state, is severing ties with Exxon Mobil through a $180 million retirement package one week before his Senate confirmation hearing begins.

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AP: Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Euro-Area Inflation Outpaces Expectations as Oil Surges

Euro-area inflation accelerated in December at the fastest pace since 2013, suggesting that a debate about the appropriate degree of European Central Bank stimulus is about to gather momentum.

Consumer prices rose 1.1 percent from a year earlier, following a 0.6 percent gain in November, the European Union’s statistics office in Luxembourg said on Wednesday. That’s above a median forecast of 1 percent in a Bloomberg survey of economists. Core inflation, which excludes volatile items such as energy and food, increased to 0.9 percent last month.

The data follow the ECB’s decision to prolong quantitative easing to guarantee a sustained pickup in inflation in a year that could see economies hit by political uncertainty. Surprisingly strong accelerations of headline rates in Germany and Spain, mainly driven by a surge in the cost of oil, may strengthen the central bank’s focus on weakness in underlying price pressures as it assesses policy in coming months.

“It could certainly make for a tricky meeting in the first quarter and when the ECB presents staff projections in March, because by then we’ll have January and February inflation data which will very likely be higher than today,” said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics Ltd in Newcastle. “The ECB has already preempted the situation by changing its focus to core inflation.”

Germany’s inflation rate unexpectedly jumped to 1.7 percent in December in the largest increase since European Union harmonized numbers were first published in 1997. Spain reported price growth of 1.4 percent, while Italy and France both saw inflation pick up for a second consecutive month, though at a slower pace.

The unexpectedly strong acceleration in both regional and national inflation rates follows a 12.6 percent surge in Brent crude last month. ECB President Mario Draghi said in December that price growth remained weak, even as Executive Board member Benoit Coeure told Boersen-Zeitung last week that inflation could face upside risks.

Bundesbank President Jens Weidmann, one of the ECB’s most hawkish officials, has argued in favor of a swift unwinding of stimulus once price growth allows, while Ifo President Clemens Fuest said in an interview published Tuesday the central bank may want to consider ending asset purchases as early as March.

The ECB extended QE last month until at least the end of 2017, while reducing the monthly pace to 60 billion euros ($63 billion) starting in April from the current 80 billion euros.

Euro-area inflation data come after a report showed that the region’s economy finished 2016 with the strongest momentum in more than 5 1/2 years. A composite Purchasing Managers’ Index climbed to 54.4 in December from 53.9 in November, with expansions in both manufacturing and services supported in part by a weaker euro, according to IHS Markit.

“There are several hawks on the ECB council who are bound to point to these numbers as an indication that the ECB shouldn’t be continuing its policy support, certainly shouldn’t continue buying such large quantities of assets right until the end of the year,” said Jennifer McKeown, chief European economist at Capital Economics in London. “But I think the consensus will be to continue to look through these increases. They are largely energy-related.”

Trump thanks Ford for halting Mexico plant

Mark Fields_ford_Getty.jpg

Ford CEO Mark Fields said his company had not cut a deal with Trump, but that the president-elect’s promises to make America more business friendly had played a role in the company’s decision. | Getty

One day after criticizing General Motors for manufacturing cars in Mexico, President-elect Donald Trump sung the praises of its chief competitor, Ford Motor Company, for abandoning plans to build a new Mexican plant and build instead in Michigan.

“Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. This is just the beginning – much more to follow,” Trump wrote on Twitter Wednesday morning.

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Ford announced on Tuesday that it will invest $700 million into a plant in Michigan and eliminate plans to build a new facility in Mexico. Ford CEO Mark Fields said his company had not cut a deal with Trump, but that the president-elect’s promises to make America more business friendly had played a role in the company’s decision.

“We see a more positive U.S. manufacturing business environment under President-elect Trump and the pro-growth policies he’s talking about,” Fields said Tuesday at the Michigan factory that will get the new investment. “This is a vote of confidence for president-elect Trump and some of the policies he may be pursuing.”

Trump campaigned hard on his promise to rebuild America’s base of manufacturing jobs, promising to impose a 35 percent tariff on companies that move jobs overseas and then import products back into the U.S. He railed against trade agreements like NAFTA and the Trans-Pacific Partnership, vowing to tear them up and renegotiate more favorable conditions for American workers.

Trump’s praise for Ford came one day after he attacked General Motors for building its Chevrolet Cruze models in Mexico and the importing them back into the U.S. He said the automotive manufacturer should “make in U.S.A. or pay big border tax!” In a statement released in response to Trump, GM said it makes all of its Cruze sedans in Ohio and makes some hatchback models in Mexico, most of which are sold internationally although some are brought back into the U.S.

Wall Street Lawyer Jay Clayton Emerges as Top Candidate for SEC Chairman

WASHINGTON—Wall Street lawyer Jay Clayton has emerged as the leading candidate to be chairman of the Securities and Exchange Commission and could be announced as the nominee as soon as Wednesday, according to an official working with the transition team of President-elect Donald Trump.

Mr. Clayton, whose clients have included Goldman Sachs Group Inc. and Barclays Capital Inc., would succeed SEC Chairman Mary Jo White, another lawyer with a history of representing Wall Street banks before becoming a regulator. Mr. Clayton,…

Exxon Mobil Cashes Out Ex-CEO Tillerson Ahead of Confirmation Hearings

Exxon Mobil Corp. has awarded former Chief Executive Rex Tillerson a $180 million retirement package as the company moves to break financial ties with President-elect Donald Trump’s nominee for secretary of state.

If Mr. Tillerson is confirmed, Exxon will transfer the equivalent value of two million unvested shares that he was set to receive at his previously expected retirement in March into a trust, according to the company.

Toshiba Shares Recover From Early Plunge on Accounting Report

Shares of Toshiba Corp. recovered from an early dive after the Asahi newspaper reported regulatory concerns about the company’s earnings.

Toshiba rose 2.3 percent to 289.6 yen as of 11:13 a.m. in Tokyo after slumping as much as 6.9 percent in early trade. Japan’s Securities and Exchange Surveillance Commission suspects the company padded earnings by about 40 billion yen ($339 million) in the three fiscal years through March 2014, Asahi reported citing unidentified sources. Toshiba didn’t immediately respond to a request for comment.

Toshiba shares have been under pressure for more than a week after announcing it may write down billions of dollars at its energy unit. That news came as the company, which also makes personal computers and memory chips, recovers from an accounting scandal in 2015 that claimed the jobs of three presidents, led to record losses and prompted job cuts and the sale of businesses.

Investors have priced in a lot of bad news and the focus is shifting to positives, such as the company’s semiconductor business, according to Masahiko Ishino, an analyst at Tokai Tokyo Securities.

“The market instead seems to be focusing on the strength in the semiconductor names,” Ishino said. “Whether it is their nuclear or other businesses, Toshiba is an organization that possesses very beneficial technology for Japan. And that’s the frame-of-mind we should be taking when looking at this.”

Semiconductor names rallied globally after Wells Fargo Co. analysts said they see a chip recovery gathering momentum in 2017. Micron Technology Inc. gained 2.9 percent on Tuesday in New York, while Japan’s Sumco Corp. climbed 3.3 percent on Wednesday. 

Toshiba shares slumped 37 percent last week after announcing the potential writedown.

The company is likely to take emergency actions such as selling more assets and negotiating with unions, Claudio Aritomi and Amit Garg, analysts at CLSA Ltd., said in a report last week. The company may also need to carefully work with lenders for continued support.

“Negative newsflow is likely to continue near term, but we expect a rebound once fears of the bankruptcy/delisting scenario starts receding,” the analysts wrote in the report.