US stock market, economy and companies update (February 07, 2014)
February 7, 2014, Friday, 18:42 GMT | 13:42 EST | 00:12 IST | 02:42 SGT
- Trading has been pretty good in the wake of the jobs report this morning, with yesterday's optimism not destroyed despite the NFP miss. As of writing the DJIA is up 0.30%, the S&P500 is up 0.49% and the Nasdaq is up 0.80%.
- The January US jobs report is being obsessively analyzed from every quarter this morning. The headline non-farm payrolls figure widely missed expectations and the December figure was revised higher by a mere 1K, making for the weakest two-month period of job growth in three years. However, investors are looking past this to find some pretty good news in the numbers. First of all, the numbers were clearly held back by terrible weather, and the unemployment rate fell again, to 6.6%. More significantly, the labor force participation rate edged up to 63% and employment measured by the household survey increased by 616K, complemented by a huge decline in part-time employment.
- Germany's constitutional court did not take away ECB President Draghi's biggest policy bazooka in its decision this morning, however it did say there were substantial reason to believe that OMT sovereign bond program exceeds the ECB mandate. The court passed the final decision on the OMT to the EU's highest court and said it would rule separately on the ESM in March. ECB's Mersch responded by insisting the OMT program is fully within the ECB's mandate and that the German decision does not affect OMT credibility. Moves in EUR/USD have been buffeted by the decision and the jobs data, but the pair remains more or less where it was after the ECB press conference yesterday, just above 1.3600.
- Shares of health insurance name Cigna are down nearly 9% after the company reported a fourth-quarter profit that fell 11% y/y, missing expectations. Revenue held up well in the quarter. The primary factor for the declines was a narrowing of margins even as the firm's medical membership continues to see solid gains. Executives cited elevated medical costs in the Medicare Advantage business.
- Apple disclosed that it has repurchased $14B in common stock over the last two weeks, amounting to 3.1% of its market cap. Over the last 12 months, the company said it has bought back $40B in stock, an all-time record for Apple or any company. CEO Cook said that the company had been surprised by the 8% decline on Jan 28th that came after reporting quarterly results. He also pledged to return $100B to shareholders by the end of 2015.
- LinkedIn topped consensus expectations in its fourth quarter report, however the firm's first quarter and full-year revenue outlook undershot estimates. The firm also outlined big plans for the year, including expansion in China and a hint that it would start targeting the blue-collar market. The company also disclosed the acquisition of a data analytics firm Bright for $120M, mostly in stock. LNKD is down 8%.
- In a season where retail businesses have been slammed by weather, fickle customers and heavy discounting, The Gap continues to outperform. While Gap's +1.0% comp sales gain in January does not look particularly strong, it was the best of the apparel industry outside of solid performer L Brands (formerly Limited Brands). GPS gained 12% in the premarket and has only declined a bit in cash trading.
- Among other movers are retailer Aaron's, with shares up 17% after Vintage Capital disclosed a $30.50/shr non-binding offer for the company. The company said this was the third offer they had made for the firm. Shares of India tech outsourcing firm Genpact are down nearly 13% this morning after the firm reported its fourth quarter profits declined y/y and offered FY14 guidance that undershot expectations.
- 15:00 (US) Dec Consumer Credit: $12.0Be v $12.3B prior
- 15:25 (CA) Bank of Canada (BOC) Dep Gov Macklem speaks in Montreal
- 2014 Winter Olympics begin in Sochi, Russia
- (DE) Germany Dec Industrial Production M/M: -0.6% v +0.3%e; Y/Y: 2.6% v 3.5%e
- (IE) Ireland Dec Industrial Production M/M: -2.1% v +3.5% prior; Y/Y: -6.8% v +4.0% prior
- (CL) Chile Jan CPI M/M: 0.2% v 0.2%e; Y/Y: 2.8% v 3.0%e; CPI Core M/M: 0.2% v 0.1%e
- (BR) Brazil Jan IBGE Inflation IPCA M/M: 0.6% v 0.6%e; Y/Y: 5.6% v 5.7%e
- (CL) Chile Jan Trade Balance: -$268.0M v -$193.5Me; Total Exports: $5.6B v $6.4B prior Total Imports: $5.9B v $6.2B prior
- (CL) Chile Jan Copper Exports: $2.3B v $3.5B prior
- (IN) India Forex Reserves w/e Feb 2nd: $291.1B v $292.2B prior
- (IN) India Q1 Advance GDP estimate: 4.9% v 4.7%e
- (PL) Poland Jan Official Reserves: $106.3B v $106.2B prior
- (US) Jan Change in Non-farm Payrolls: +113K v +180Ke; Change in Private Payrolls: +142K v +185Ke; Change in Manufacturing Payrolls: +21K v +10Ke
- (US) Jan Unemployment Rate: 6.6% v 6.7%e; Underemployment Rate: 12.7% v 13.1% prior; Change in Household Employment: +638K v +143K prior; Labor Force Participation Rate: 63.0% v 62.8% prior
- (US) Jan Average Hourly Earnings M/M: 0.2% v 0.2%e; Y/Y: 1.9% v 1.8%e; Average Weekly Hours: 34.4 v 34.4e
- (CA) Canada Jan Net Change in Employment: +29.4K v +20.0Ke; Unemployment Rate: 7.0% v 7.1%e ; Full Time Employment Change: +50.5K v -60K prior; Part Time Employment Change: -21.1K v +14.2K prior; Participation Rate: 66.3% v 66.4%e
- (MX) Mexico Jan CPI M/M: 0.9% v 1.0%e or; Y/Y: 4.5% v 4.6%e; CPI Core M/M: 0.9% v 0.9%e
- (UK) Jan NIESR GDP Estimate: 0.8% v 0.7% prior