Obamacare, Internet Sales Tax and All the Top Market-Moving Stories of the Week You Must Know Now
Here’s your Cheat Sheet to this week’s top stories:
U.S. stock markets were a mixed back on Monday. A lack of major economic catalysts gave investors time to take a breather and reflect on last Friday’s jobs report, which sent the markets into a frenzy.
|DJIA: -0.03% to 14,968.90||S&P 500: +0.19% to 1,617.50||NASDAQ: +0.42% to 3,392.97|
|Gold: +$5.30 to $1,469.50 per ounce||Oil: +$0.18 to $95.79 per barrel||U.S. 10-Year: +0.024 to 1.763%|
Why Are American Investors Feeling So Bullish? With an increasing amount of economic data suggesting that the United States economy has slowed in recent weeks, one would expect investors to feel slightly less bullish. But, according to TD Ameritrade’s Investor Movement Index, numbers indicate that April maintained an overall bullish trend… (Read more.)
European Economic Backdrop Darkens: Overall economic output in the eurozone declined for the fifteenth consecutive month in April, according to the final Eurozone Composite Output Index compiled by Markit. The final reading of 46.9 was just slightly better than March’s 46.5, and indicates that the region remains mired in economic contraction… (Read more.)
European Rescue Mission: Will ECB Cut Interest Rates Even Lower? European Central Bank President Mario Draghi has announced the possibility of reduced interest rates for European banks, only a week after the central bank brought them to a record low. Markets responded, with the euro falling around a half percent against the dollar to $1.3063. European stocks were down slightly as well… (Read more.)
Here’s your Cheat Sheet to Monday’s top stock stories:
BMC Software (NASDAQ:BMC) announced on Monday that it has signed a definitive agreement to be acquired by a private investor group led by Bain Capital and Golden Gate Capital for $46.25 per share, or approximately $6.9 billion.
Cliffs Natural Resources (NYSE:CLF) closed the day up 5.5 percent after analysts at FBR Capital upgraded the stock from Market Perform to Outperform with a price target of $28.00. The upgrade punctuates losses of more than 48 percent this year to date, and has brought the stock right up against its 50-day moving average.
Tyson Foods (NYSE:TSN) closed the day down 3.3 percent after reporting underwhelming earnings. Revenue climbed 1.83 percent to $8.42 billion, missing the average estimate of $8.58 billion. Adjusted earnings decreased 18.18 percent to $0.36 per share, missing the average estimate of $0.45 per share… (Read more.)
Disney (NYSE:DIS) stock closed the day up 0.40 percent as Iron Man 3 continues to pull in tremendous amounts of cash. The film has generated more than $680 million in worldwide sales since its debut 12 days ago, and cost about $200 million to produce. Nearly 75 percent of the film’s gross so far has come from abroad.
Berkshire Hathaway (NYSE:BRK.B) Class B stock closed the day up 1.25 percent after hitting a fresh record high of $111.25 per share. Earnings at Warren Buffett’s holding company jumped 51 percent on the back of strong performance by its insurance companies, while revenue grew 15 percent.
MBIA (NYSE:MBI) closed up 45 percent after reaching a $1.6 billion settlement with Bank of America (NYSE:BAC). BofA was forced to pay cash to the insurance company to resolve long-running litigation over swap deals and senior debt.
Apple (NASDAQ:AAPL) stock closed the day up 2.38 percent. The company took the number-one spot in the Barron’s 500. The publication reports that “Apple has shown what it takes — terrific sales growth and wisely deployed cash flow — to be a winner in our annual ranking, which seeks to identify businesses that have done the best job of investing for growth.” The stock also received an upgrade from analysts at Barclays… (Read more.)
U.S. stocks advanced on Tuesday afternoon and the Dow Jones Industrial Average closed above 15,000 for the first time in its history. Gains were fueled by optimism surrounding central bank stimulus initiatives in Europe and Australia. At its meeting on May 7, the Board of Governors of the Royal Bank of Australia decided to lower the cash rate by 25 basis points to 2.75 percent, effective May 8. This is the seventh time the board has reduced the rate over the last 18 months.
|DJIA: +0.58% to 15,056.20||S&P 500: +0.52% to 1,625.96||NASDAQ: +0.11% to 3,396.63|
|Gold: -$17.10 to $1,450.90 per ounce||Oil: -$0.72 to $95.44 per barrel||U.S. 10-Year: +0.021 to 1.780%|
Will Happy Consumers Make Retail Look Good? “Americans are in phase two of the economic recovery. However, for many it just doesn’t feel that way,” noted Nielsen’s senior vice president of Global Consumer Insights, James Russo, in the firms most recent survey on global consumer sentiment… (Read more.)
Americans Have Never Loved the Economy More: Gallup’s U.S. Economic Confidence Index climbed to -8 for the week ended May 4, matching the five-year weekly high set in February. The index in April also tied the five-year monthly best, with confidence among upper-income Americans breaking out of negative territory for the first time in five years… (Read more.)
Has the Job Market Recovery Shifted Into a Lower Gear? The view of the job market has been shaped by a series of slightly conflicting reports. Last week, data supplied by the Labor Department’s Employment Situation Report for April and the outplacement consultancy firm Challenger, Gray & Christmas gave some evidence that the labor market is moving away from recent weakness. But the movement is sluggish; the number of Americans who are out of work remained at 11.7 million — a sign of how stubbornly slow the recovery has been since the recession officially ended in mid-2009… (Read more.)
Here’s your Cheat Sheet to Tuesday’s top stock stories:
First Solar, Inc. (NASDAQ:FSLR) closed the day down 8.93 percent after reporting first-quarter financial results. Revenue rose 51.9 percent to $755, beating the mean estimate of $725.26 million. Adjusted earnings increased from -$0.08 to $0.69 per share on the year, but still fell short of the mean estimate of $0.75 per share.
Pandora (NYSE:P) closed the day down 5 percent after reporting April audience metrics. Listener hours increased 24 percent on the year to 1.31 billion, active listeners increased 35 percent to 70.1 million, and share of total U.S. radio listening increased from 5.95 percent to 7.33 percent.
American International Group, Inc. (NYSE:AIG) closed the day down 1.93 percent. The insurance company was slapped with a downgrade from Buy to Neutral from Goldman Sachs. The firm sees limited upside potential in the stock now that it has climbed more than 24 percent since the beginning of 2013. Shares closed Monday about 4.8 percent above the mean analyst price target.
OfficeMax Inc. (NYSE:OMX) closed the day down 1.87 percent after reporting a special dividend of $1.50 per share alongside its first-quarter 2013 financial results. Reported sales declined 5.7 percent to $1.76 billion (down 4.3 percent on an adjusted basis), missing the mean estimate of $1.83 billion. Adjusted income fell 50 percent to $0.11 per share, missing the mean estimate of $0.23 per share.
Electronic Arts Inc. (NASDAQ:EA) closed the day up 0.66 percent and climbed as much as 6.6 percent in post-market trading, breaking past its 52-week high of $19.51 per share.
Diageo plc (NYSE:DEO) announced on Tuesday that Paul Walsh will step down from the company’s board of directors at the September 2013 Annual General Meeting, and will retire from the company at the end of June in 2014. He will bee succeeded by Ivan Menezes, who is currently COO.
Don’t Miss: Americans Have Never Loved the Economy More.
U.S. markets advanced on Wednesday, overcoming early-morning tepidness to extend record highs.
|DJIA: +0.32% to 15,105.10||S&P 500: +0.41% to 1,632.69||NASDAQ: +0.49% to 3,413.27|
|Gold: +$23.30 to $1,472.10||Oil: +$0.92 to $96.54 per barrel||U.S. 10-Year: -0.011 points to 1.767%|
Why the Student Loan Bubble Looks Like the Housing Crisis: A group of bankers have just dumped two more problems on the U.S. Federal Reserve’s plate. The Federal Advisory Council, made up of 12 bankers who meet quarterly to advise the central bank, warned that farmland prices are inflating “a bubble” and growth in student loan debt has “parallels to the housing crisis,” which was the primary cause of the 2007 to 2009 recession in the United States… (Read more.)
Did Obamacare End Medical-Billing Secrecy? As made abundantly clear from data released by the International Federation of Health Plans, which reports the prices insurers are actually paying for different drugs, devices, and medical services in different countries, healthcare in the United States costs much more than it does in other countries. Excluding the politics — leaving behind arguments over whether the government should become more or less involved in healthcare — simple facts show a great disparity in the actual cost of health services compared to the prices listed on hospitals’ chargemasters… (Read more.)
Here’s your Cheat Sheet to Wednesday’s top stock stories:
Whole Foods Market (NASDAQ:WFM) closed the day up 10 percent after reporting fiscal second-quarter results. Revenue increased 13.4 percent on the year to $3.0 billion, in line with the average analyst estimate. Adjusted earnings increased 18.8 percent on the year to $0.76 per share, beating the average analyst estimate of $0.73 per share. Same-store sales increased 6.9 percent during the same period. The company also raised its fiscal-2013 earnings outlook to a range between $2.86 and $2.89 per share, as well as a two-for-one stock split.
J.C. Penney Company (NYSE:JCP) closed the day up 7.4 percent after reporting preliminary first-quarter financial information. The retailer anticipates total sales of approximately $2.635 billion, a 16.4 percent decline from the year-ago period, and a 16.6 percent decline in comparable-store sales. The company added that the sales decline is partially attributable to both construction activities as well as “its prior pricing and marketing strategies, which are being changed under new leadership.” J.C. Penney will report full results on May 16.
Symantec Corp. (NASDAQ:SYMC) closed the day down 2.43 percent after reporting earnings. Revenue rose 4 percent on the year to $1.75 billion, beating the average analyst estimate of $1.73 billion. Adjusted earnings increased 15.8 percent on the year to $0.44, beating the mean analyst estimate of $0.38 per share. However, weak forecasts drove the stock down.
Electronic Arts (NASDAQ:EA) closed the day up 17 percent following its fiscal fourth-quarter earnings report on Tuesday.Revenue decreased by 23.98 percent on the year to $1.04 billion, meeting the average analyst expectation. Adjusted earnings increased 223.5 percent to $0.55 per share, missing the average estimate of $0.58 per share.
AOL (NYSE:AOL) closed the day down 8.9 percent after reporting financial results. Revenue rose 1.7 percent on the year to $538.3 million, beating the average analyst estimate of $537.15 million. Adjusted earnings increased 45.5 percent on the year to $0.32, missing the average estimate of $0.35 per share.
More on the economy:
Will Germany Allow the European Commission as Banking Authority? As illiquid European banks continue to present problems in the EU, leaders are now contemplating the potential of creating authority for the European Commission or the European Stability Mechanism to wind down faltering banks. While Germany continues to be the key variable in the bailouts of banks, the EU has slowed progress towards creating a banking union due to previous German disinterest… (Read more.)
6 Answers to the Big Questions on the New Sales Tax: On Monday, the Senate made its move to push a new bill forward that would have some major implications on the e-commerce industry. The bill in question is the Marketplace Fairness Act, which targets retailers that sell over $1 million in goods over the Internet. So far, those retailers have been able to avoid tagging a sales tax on their goods. This may have been a boon for their business, as it freed them from the hassle of having to sort out the tax, and it also made it easier to beat competitors’ prices and steal away customers… (Read more.)
U.S. stocks declined on Thursday, ending the S&P 500′s five-day rally. Philadelphia Federal Reserve President Charles Plosser said that he wanted the central bank to begin winding down asset purchases as early as June, sending shivers of negative sentiment through the markets.
|DJIA: -0.15% to 15,082.60||S&P 500: -0.37% to 1,626.67||NASDAQ: -0.12% to 3,409.17|
|Gold: -$17.90 to $1,455.80 per ounce||Oil: -$0.74 to $95.88 per ounce||U.S. 10-Year: +0.003 to 1.813%|
Are Layoffs Nearing Pre-Recession Levels? In the ongoing saga that is the labor market recovery, the United States took another step forward; after initial claims for unemployment benefits fell to 324,000 in the week ended April 27 — the lowest level reported in the past five years. Claims dropped to 323,000 last week — another five-year low. Since reaching an all-time high of 670,000 claims in March of 2009, these figures seem to indicated that layoffs are back to pre-recession levels and that employers are confident enough in current economic conditions to hold onto workers… (Read more.)
Fed’s Lacker: “Too Big to Fail” Banks Need to Go: Speaking at a conference, in Richmond, Virginia, President of the Federal Reserve Bank of Richmond Jeffery Lacker called for a comprehensive end to “too big to fail.” In his remarks from April 9, Mr. Lacker sought to tackle the issue of weaning major financial institutions from government dependency, speaking of mutual expectations by creditors and lawmakers which “creates fragility” and “induces interventions.” (Read more.)
Are Oil and Apparel to Blame for the Wholesale Drop? The Commerce Department reported Thursday that wholesale inventories rose 0.4 percent in March, which was exactly on-trend and not much of a surprise. What was surprising about the data was the 1.6 percent plunge in sales, and this mismatch drove the stock-to-sales ratio in the wholesale sector from 1.19 in February to a recovery high of 1.21… (Read more.)
Here’s your Cheat Sheet to today’s top stock stories
Facebook (NASDAQ:FB) is reportedly in advanced talks with Israeli mobile-satellite navigation startup Waze about a possible acquisition valued between $800 million and $1 billion. There has been on official word from the companies on the situation, but Israeli business daily Calcalist reported the possible buyout on Wednesday. Waze and Facebook partnered on a project in October of 2012, giving the deal some precedence.
Tesla Motors (NASDAQ:TSLA) stock closed the day up 24.4 percent after the electric-vehicle maker reported first-quarter results that beat estimates. Revenue climbed 1762.78 percent on the year to $562 million (not a typo, the company just hardly made any money in the year-ago period), and beat the average estimate of $492 million. Adjusted earnings increased from -$0.76 per share in the year-ago period to $0.12 per share, beating the average estimate of $0.04 per share… (Read more.)
Groupon (NASDAQ:GRPN) closed the day up 11.45 percent. The beleaguered daily-deals site posted first-quarter earnings that beat expectations. Revenue climbed 7.53 percent on the year to $601.4 million, which compares to the average estimate of $588.92 million. Adjusted earnings increased 50 percent on the year to $0.03 per share, meeting the average estimate… (Read more.)
Green Mountain Coffee Roasters (NASDAQ:GMCR) closed the day up 27.8 percent after reporting earnings. Revenue rose 13.5 percent to $1 billion, barely missing the average estimate of $1.02 billion. Adjusted earnings climbed 45 percent to $0.93 per share, beating the average estimate of $0.73 per share.
Seagate Technology (NASDAQ:STX) is apparently the hot stock to short right now. Shares fell 4.7 percent following comments by infamous short seller Jim Chanos made at this year’s Sohn Investment Conference. Chanos reportedly said that the company and the industry in which it operates — hard disk manufacturing / data-storage devices — is in trouble… (Read more.)
Barnes & Noble (NYSE:BKS) closed the day up 24.25 percent following reports that Microsoft (NASDAQ:MSFT) may be interested in buying the company’s Nook division for $1 billion. Analysts are reportedly divided over whether or not the deal actually makes sense.
U.S. stocks advanced on Friday, pushed upward by increasing investor optimism in the United States economy, which is showing signs of strength due to the central bank’s monetary stimulus. Stocks retreated Thursday after the Federal Reserve Bank of Philadelphia President Charles Plosser said he favors scaling back the central bank’s bond purchases as early as the next Federal Open Market Committee meeting, but the Standard & Poor’s 500 Index rose for a third straight day Friday.
|DJIA: +0.24% to 15,118.50||S&P 500: +0.43% to 1,633.70||NASDAQ: +0.80% to 3,436.58|
|Gold: -$21.40 to $1,447.20 per ounce||Oil: -$0.42 to $95.97 per ounce||U.S. 10-Year: +0.086 to 1.897%|
“We are now more than four years beyond the most intense phase of the financial crisis, but its legacy remains,” began Federal Reserve Chairman Ben Bernanke’s speech at the 49th Annual Conference on Bank Structure and Competition sponsored by the Federal Reserve Bank of Chicago. That legacy is the lingering and stubbornly high unemployment rate and a financial system that — despite experiencing a significant recovery over the past four years — continues to struggle with the economic and legal ramifications of the crisis.
Central bankers are increasingly being asked to take on the role of Superman for the world’s economy. Amid fewer and fewer available options, their ability to ward off economic woes is under strain. Yet they are pressing on, as rates worldwide continue to be lowered, and as inflation around the globe is rather dormant, the impetus is to keep monetary policy lax. South Korea cut rates yesterday, marking the 511th global reduction in rates since July 2007. Similarly, the Reserve Bank of Australia cut rates to 2.75 percent, while countries including Japan and the US continued to press on with bond buybacks, expanding their monetary supply.
The United States federal government began a high-profile crackdown on secret offshore financial accounts in 2009, but despite this mandate, the average sentence in prosecuted cases has been about half as long as in other types of tax cases, according to a comparison of Internal Revenue Service data compiled by former U.S. Justice Department lawyer Jack Townsend. From his statistics, it seems that U.S. courts are dispensing much more lenient punishments to tax evaders hiding money offshore than to other tax cheats.
Here’s your Cheat Sheet to today’s top stock stories
The Golden State is not happy with JPMorgan Chase (NYSE:JPM). On Thursday, the state’s top law enforcement official accused the nation’s largest bank of practicing dubious law processes that would enable them to sue tens of thousands of California consumers and collect overdue credit card debt from them. California’s state attorney general, Kamala D. Harris, contends that, from January 2008 to April 2011, JPMorgan filed thousands of lawsuits each month to collect outstanding credit card debt.
During a week in which Bank of America (NYSE:BAC) held an uneventful shareholder meeting and saw a suit over mortgages significantly narrowed, the company got more good news on lingering litigation over its Merrill Lynch acquisition. Much like it avoided trouble with the government after settling with plaintiffs out of court over AIG (NYSE:AIG), BofA could be off the hook with respect to its purchase of Merrill Lynch.
It might be an iPhone and Android neighborhood, but Nokia (NYSE:NOK) is letting everyone know it’s building a big house at the end of the block. The Finland-based phone manufacturer has teamed up with Verizon (NYSE:VZ) to deliver a high-end Lumia at a low-end price when picking up a two-year wireless contract.
Although he praised Apple’s (NASDAQ:AAPL) many positive attributes, Greenlight Capital’s (NASDAQ:GLRE) David Einhorn still found the Cupertino-based tech company was one of the fund’s “biggest losers.” Einhorn pointed out in Greenlight’s first quarter 2013 letter to investors via ValueWalk that Apple shares decreased from $532 to $443 during the quarter. His current concern with Apple is the company’s “disappointing earnings and a diminished forecast.” Einhorn notes that Apple’s expected 2014 earnings per share was $64 in July 2012. Now its 2014 EPS is at $44.
AT&T Inc. (NYSE:T) is launching a new attack in the prepaid battle, introducing its latest brand, Aio Wireless. The hope is that the addition of a new prepaid venture will help AT&T revive its success, competing with larger carrier, Verizon Wireless (NYSE:VZ), who has been making significant gains in the contract industry, and smaller carriers, T-Mobile US Inc. (DT) and Sprint Nextel (NYSE:S), who have seen growth in prepaid customers, The Wall Street Journal reports.
The world’s biggest hamburger chain is rolling back one of their biggest hamburgers, the Angus Third Pounder. Customers’ waistlines did not help draw the phase-out, but rather, their wallets did. McDonald’s Corp. (NYSE:MCD) announced Thursday that it would be removing Angus burgers from its U.S. menus, as reported by Reuters. The drop of the $4 sandwich, originally introduced in 2009, does not come as a surprise. With last summer’s drought and U.S. beef prices hitting an all-time high, McDonald’s has had to develop strategies to combat these rising costs.