Académique Documents
Professionnel Documents
Culture Documents
Index
Up/Down
Last
DJ Industrials
-247.02
1.42%
17,169
S&P 500
-26.06
1.29%
1,995
Nasdaq
-48.17
1.03%
4,635
Russell 2000
-24.88
2.09%
1,165
Economic Data
The U.S. economy slowed a bit more than expected in Q4 after expanding at the fastest pace in
eleven years for Q3, as GDP grew at a 2.6% annual clip (below est. 3%), which was below the
5.0% pace recorded in the prior period (was 1st estimate for Q4). Personal consumption came in
at 4.3% vs. est. 4% (Q3 ended 3.2%), while Core PCE was in-line at 1.1% (vs. 1.4% end Q3)
The Q4 Employment Cost Index (ECI) rose 0.6% QoQ (in-line with consensus) and vs. 0.7% prior;
Employment Benefits 0.6% vs. 0.6% prior and Employment Wages 0.5% vs. 0.8% prior
Jan Chicago PMI was reported at 59.4, ahead of estimate for 57.5, and above last months 58.8
reading; (below the recent high of 64.3 in August)
University of Michigan Sentiment reported at 98.1 (vs. 98.2 in the preliminary estimate) and the
index was 93.6 last month; expectations index rose to 91.0 vs. 86.4 last month
Commodities
Oil prices explode higher the final hour of the day; oil posted biggest gain since 2012, surging
$3.71, or 8.3% to $48.24 per barrel (but still posted its 7th consecutive monthly loss), on no one
specific story, other than an apparent squeeze in the commodity complex. Overall though, the
outlook still remains bleak in regards to demand (much bigger inventory builds this week
confirmed that). OPEC continues to hold steady its position not to cut production; note the U.S.
the weekly rig count fell another -90 to 1,543, most since 1987 (note several co.s announced
massive cap-ex cuts this week due to decline oil prices). With late surge, WTI crude finished up
6% for the week (but still down 9% for month); Brent futures closed higher by $3.86, or 7.86% to
settle at $52.99 per barrel; Natural gas prices fell over 2%
Note there were reports by CNN that in what could be an attempt to capture the city in northern
Iraq, or to divert Kurdish troops fighting the militants elsewhere, ISIS has launched an attack on
the center of Kirkuk maybe best explanation to the late day surge in oil
Gold prices gained $23.90, or 1.9% to settle at $1,278.50 an ounce (follows a 2.4% decline
Thursday), as the commodity complex saw a big squeeze late day, after an aggressive pullback
yesterday for most segments. Silver prices were up over 2% (after falling 7% yesterday)
Currencies
The dollar index (DXY) ended little changed after spending most of the day slightly higher holding
11-year high levels. The euro dropped back under the 1.13 level against the dollar, while the yen
showed some late day strength. Fairly limited movement considering the economic data
Bond Market
Treasury markets surge after another round of weaker economic data reports, as GDP for Q4
came in lower than expected; even hawkish comments from a few Fed members (indicating a
June rate hike is reasonable) failed to generate selling in bonds; the yield on the 10-yr drops to
1.66^%, while the 30-yr yield resumes decline to fresh low 2.24%; the German 30-yr bund yield
dropped to record low of 0.99%, while the German 10-year bund falls to record low 0.327%.
Overall, the 10-yr yield on pace for 50 bps drop in January (biggest since Aug 2011), and a 50 bps
drop for the 30-yr yield (biggest since August 2011)
Macro
Up/Down
Last
WTI Crude
3.71
48.24
Brent
3.86
52.99
Gold
23.90
1,278.50
EUR/USD
-0.0012
1.1308
JPY/USD
-0.88
117.40
10-Year Note
-0.09
1.661%
Financials
Credit cards jump on better earnings from V and MA; V announces a 4 for 1 stock split after Q4
EPS and revs top consensus, while MA EPS beats by a nickel as consumer spending picked up
(revenue climbed 14% in Q4 to $2.42B)
Canadian Banks; Barclays downgraded shares of BMO, RY and TD to Underweight saying the
slowing domestic banking market will limit earnings growth
Insurance; CB declined today despite eps beat, a buyback announcement and written premiums
rose 5% to $1.3B (profit did drop 1.9% on investment income); PFG
Asset managers; LM Q3 EPS beat by 1c and announced $1B stock buyback; BEN shares dipped
after Q1 EPS missed by 2c on weaker revs (Net outflows $3.5B vs. outflows $100M QoQ);
investment advisor/asset manager earnings have been mixed at best this quarter
Mortgage services; saga continues for this group, with shares of AAMC fall following some
cautious comments by JP Morgan (NSM, OCN, WAL, HLSS, ASPS have been very volatile)
Healthcare
Biotech movers; BIIB surges after guiding 2015 profit $16.60-$17, well above consensus of $16.35
after solid quarterly results; ICPT shares leap after its OCA got breakthrough designation for the
treatment of nonalcoholic steatohepatitis (NASH) with liver fibrosis; in therapeutics, ONCE
opened at $45.10 after 7M share IPO priced at $23.00
Pharma; sector was generally weaker, though LLY advanced after earnings (warned of forex hit
due to stronger dollar in guidance); ABBV Q4 eps beat, but said sales of its new hepatitis C drug
(Viekira Pak), would be slower than investors and analysts previously projected (said would take
until end of 2015 to reach $3B in annual sales); MRK, JNJ, PFE were lower
Dental stocks slip after ALGN guides Q1 EPS 29c-32c below est. 45c (XRAY, SIRO move)
Healthcare IT firm CPSI falls as Q4 missed and guided year EPS/revs below consensus
Other earnings movers: gained on earnings CPHD; decliners: IDXX falls on forecast cut;
Industrials & Materials
Transport index broadly lower; group led by weakness in airlines early today as UAL, DAL, AAL fall
(note HA big drop on earnings/pricing pressure); though weakness across the board early as
nearly all Dow Transport components trading lower
Machinery/trucking; MTW earnings mixed, but said to split into two companies; PCAR fell after
Q4 revs fell short of consensus (CMI, NAV leveraged)
Metals & Mining; cement maker CX downgraded by one analyst; RS downgraded at Bank
America; gold miners with nice bounce today as gold partially recovers from 2.4% decline
yesterday (NEM, ABX, GG, KGC rise)
Industrial; MOG/A lowered its full-year eps forecast; TXT upgraded at Bank America on valuation;
IR Q4 beats, but guides Q1 and year below views; ADES fell as KPMG resigns as accounting firm
E&C stocks; CBI declined after saying contractor delays will slow completion of new nuclear
reactors in Ga. by 18 months
Forest & Paper stocks; it has been a busy week of earnings for this group, with WY rising on
mixed results today (EPS beat/revs miss) as sees Q1 wood product earnings significantly higher
QoQ (have seen earnings from PCL, PCH this week)
Shippers/tankers; Baltic Dry Index Falls 3.8% to 608 Points in London (index is down 95% from alltime record high in 2008) fell 5% today to 632, as per CNBC
Want a free trial to The Hammerstone Report 4x Daily ? Sign-up for a trial today at
www.thehammerstonereport.com
***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Inc. (the Report) provides information and data and does NOT provide any individual investment advice or money management
assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment
decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The
Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. The Report is prepared for
general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity