US stock market, economy and companies update (January 28, 2014)
January 28, 2014, Tuesday, 16:21 GMT | 11:21 EST | 21:51 IST | 00:21 SGT
- US equity indices are rebounding this morning after three straight sessions of losses. The FOMC has gathered in Washington for the first day of its two-day policy meeting and the consensus expectation is another round of QE tapering in tomorrow's decision. As of writing, the DJIA is up 0.52%, the S&P500 is up 0.59% and the Nasdaq is up 0.23%.
- The December durable goods report was much weaker than expected almost across the board and the prior November numbers were all revised lower. The shortfall in December was broad-based and the biggest drop since last July, covering defense, aircraft, vehicles and core capital goods orders. USD/JPY was volatile in the wake of the data, giving up all of its overnight gains to fall as low as 102.64 before then returning to the 103 handle.
- The ECB failed to fully sterilize its government bond purchases under the SMP program for a second straight week. Press reports suggested that ECB is comfortable with its current policy stance with no sense of urgency to change things at the upcoming meetings. EUR/USD continues to bounce around in the 1.36 handle. Emerging market currencies have strengthened modestly ahead of the Turkey Central Bank's emergency MPC meeting later today. The Turkish Lira continues to move higher off record lows seen yesterday. Analysts believe Turkey will widen its interest rate corridor.
- Shares of Apple is down 7.3% this morning as investors zero in on perceptions that the company's iPhone business is leveling off. Apple sold 51 million units, +6.7% y/y, which was lower than expectations of 55-57 million. Executives hinted the low growth was due to a contraction in North American sales, and also highlighted rest-of-world sales up by double or even triple digits. Carl Icahn took the opportunity to buy the dip, acquiring another $500 million of the company's shares.
- Steel names Nucor, Steel Dynamics and US Steel are up in line with broader markets this morning. All three firms met or beat expectations in their fourth quarter reports. Note that on an unadjusted basis, US Steel is still racking up big losses from restructuring, while shipments declined y/y. Both Nucor and US Steel warned that steel prices continue to decline along with lower raw material costs.
- Ford had a very strong quarter, with Q4 earnings up 90% y/y and EPS a bit higher than expected, mostly due to favorable tax benefits from European operations. Ford's pre-tax profits were down nearly 25% on an operating basis, although its guidance for FY14 was pretty strong, at $7.0-8.0 billion. The company said the launch of a wide range of new models, including the new F-150, would hold back North America profits in FY14. Shares of Ford are flat on the session.
- Martin Marietta has reached a final deal to acquire Texas Industries in an all-stock deal worth $2.06 billion. Texas Industries shareholders will get 0.7 shares of Martin Marietta for each share held. Based on Monday's closing price, that amounts to $71.95 per share. Martin Marietta will also assume $700 million in Texas Industries debt. Martin Marietta sells granite, limestone, sand and gravel, while Texas Industries makes cement and building materials, with $697 million in revenue in its latest fiscal year. MLM is up 5% on the news.
- 11:30 (US) Treasury to sell $12B in 4-Week Bills
- 12:00 (DE) German Fin Min Schaeuble in Berlin
- 13:00 (US) Treasury to $32B in 2-Year Notes
- 16:30 (US) Weekly API Crude Oil Inventories
- 17:00 (TR) Turkey Central Bank (CBRT) emergency meeting
- 20:00 (US) President Obama delivers the State of the Union address
- (IE) Ireland Dec Retail Sales Volume M/M: 0.6% v 0.0% prior; Y/Y: 3.0% v 1.7% prior
- (US) ICSC Chain Store Sales w/e Jan 25th: w/w +0.2%; y/y: +2.2%
- (US) Dec Durable Goods Orders: -4.3%% v +1.8%e; Durables Ex Transportation: -1.6% v +0.5%e; Capital Goods Orders Non-defense Ex-Aircraft: -1.3% v +0.3%e; Capital Goods Shipments Non-defense Ex-Aircraft: -0.2% v +0.1%e; Ex-Defense: -3.7% v +2.7% prior
- (US) Redbook Retail Sales w/e Jan 25th : +3.2% y/y, Jan MTD: -0.1% m/m; Jan MTD Y/Y: +3.1%
- (US) Nov S&P/CaseShiller 20 City M/M: 0.88% v 0.80%e; Y/Y: 13.71% v 13.80%e; Home Price Index NSA: 165.80 v 165.72e
- (EU) Weekly ECB Lending to Banks: €693.2B v €672.6B prior
- (US) Jan Consumer Confidence Index: 80.7 v 78.0e
- (US) Jan Richmond Fed Manufacturing Index: 12 v 13e