US stock market, economy and companies update (February 06, 2014)
February 6, 2014, Thursday, 17:15 GMT | 12:15 EST | 22:45 IST | 01:15 SGT
- What a difference a day makes. Investors are swooping in to snap up discounted equities after the tumult of the last three sessions. Apparently a marginally better weekly claims report has erased memories of the weak ADP numbers and primed markets for volatile excitement with tomorrow's January US jobs report. As of writing, the DJIA is up 0.93%, the S&P500 is up 0.95% and the Nasdaq is up 1.17%.
- The weekly jobless claims data declined to 331K from 351K in the prior week. The spike higher seen in last week's data has been reversed, although claims are no lower now than they were at the end of last summer. Continuing claims remained stubbornly high at 2.964 million.
- The December trade deficit widened sharply in December as exports fell and imports increased slightly. Analysts point out that the December decline in goods exports wiped out most of the gains of the first 11 months of the year. Note that this suggests the second reading of Q4 GDP will be revised lower.
- There were no surprises in either the BOE or ECB rate decisions. President Draghi took a much less dovish tone in the post-rate decision press conference, hammering home the point that the ECB is in no rush to cut rates. Draghi squashed speculation of any imminent halt to the SMP sterilization process and reiterated there was no deflation in the eurozone. EUR/USD climbed over 100 pips as the press conference progressed, putting the pair right back above 1.3600.
- Shares of Twitter are still down more than 21% this morning as analysts pile on with tons of negative comments. The firm's headline numbers were much better than expected, but traders and analysts insist that slower user growth and weaker engagement trends bode ill for the firm. In addition, the first round of lock-up expirations arrives on February 15th, followed by another round on May 7th. Elsewhere in tech, shares of Pandora are down 10% after the firm's FY14 outlook widely missed consensus estimates.
- Coca-Cola has bought a 10% stake in Green Mountain Coffee worth $1.25 billion and will be promoting a new Coke-branded Keurig cold beverage system created by GMCR. Coke is acquiring 16.7M shares at $74.98/shr. The firm also reported first quarter results that grew moderately y/y and met or beat expectations. The firm reiterated its FY14 guidance, although its second quarter outlook was a bit subpar. Shares of GMCR are up 28.8% on the day.
- Insurance giant Allstate nearly doubled its profits in its fourth quarter. Like other insurers have confirmed earlier in earnings season, catastrophe costs were much lower on a y/y basis. In addition, Allstate has dump its annuity business. Both earnings and revenue blew out expectations. Shares of ALL are up nearly 3%.
- Shares of Disney are up more than 5% in the early going this morning, gaining further after yesterday's post-market advance. Net income rose more than 30%, boosted by strong, double-digit gains at its media and studio units. Disney credited hit film Frozen for turning around the animation studio and said there may be a sequel.
- General Motors disappointed in its fourth quarter, with net income up a weak 2% and adjusted EPS well below expectations. The international operation was very weak, with big declines in profits everywhere except China, where the business remains healthy. The firm warned that underperformance would continue in the first quarter thanks to a variety of headwinds. Shares of GM are flat on the day.
- 17:30 (US) Fed's Rosengren speaks at New College in Sarasota, Florida
- 19:30 (AU) RBA Statement on Monetary Policy
- 19:30 (AU) RBA Quarterly Statement on Monetary Policy
- 20:00 (NZ) New Zealand PM Key speaks in Sydney
- 20:45 (CN) China Jan HSBC/Markit Services PMI: No est v 50.9 prior
- (DE) Germany Dec Factory Orders M/M: -0.5% v +0.2%e; Y/Y: 6.0% v 6.3%e
- (RU) Russia Gold and Forex Reserve w/e Jan 31st: $498.9B v $496.7B prior
- (UK) Bank of England (BOE) left both Interest Rate and Asset Purchase Target (APT) unchanged at 0.50% and £375B respectively; as expected
- (CZ) Czech Central Bank left its Repurchase Rate unchanged at 0.05% and maintained its floor in EUR/CZK cross at 27.00; as expected
- (CL) Chile Dec Real Wage M/M: 0.6% v 1.0% prior; Y/Y: 2.4% v 2.9% prior
- (US) Jan Challenger Job Cuts: 45.1 v 30.6K prior; Y/Y: +11.6 v -5.9% prior
- (BR) Brazil Jan Vehicle Production: 237.5K v 235.9K prior; Vehicle Sales: 312.6K v 353.8K prior; Vehicle Exports: 25.8K v 43.3K prior
- (EU) ECB left its main Refi Rate unchanged at 0.25% and other key rates steady (as expected)
- (US) Q4 Preliminary Nonfarm Productivity: 3.2% v 2.8%e; Unit Labor Costs: -1.6% v -0.7%e
- (US) Initial Jobless Claims: 331K v 335Ke; Continuing Claims: 2.964M v 3.00Me
- (US) Dec Trade Balance: -$38.7B v -$36.0Be
- (CA) Canada Dec Int'l Merchandise Trade: -C$1.7B v -C$0.7Be
- (MX) Mexico Dec Leading Indicators M/M: 0.1 v 0.1 prior
- (CA) Canada Jan Ivey Purchasing Managers Index (Seasonally Adj): 56.8 v 51.0e; PMI unadj: 53.6 v 40.2 prior
- (HU) Hungary Jan YTD Budget Balance (HUF): -75.4B v -929.2B prior
- (US) Weekly EIA Natural Gas Inventories: -262 bcf v -265 to -275 bcf expected range