Month: August 2017

Dow closes above 22,000 for the first time after Apple jumps on earnings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Dow Jones industrial average notched another milestone on Wednesday, breaking above 22,000 for the first time.

The 30-stock index rose 52.32 points to close at 22,16.24 with a boost from Apple’s stock, which surged 4.73 percent after posting quarterly results that blew expectations out of the water.

The company reported earnings per share of USD 1.67 on revenue of $45.4 billion. Analysts polled by Reuters expected earnings per share of USD 1.57 on revenue of USD 44.89 billion.

Drexel Hamilton analyst Brian White said in a note he sees more upside for the stock moving forward. He said: “[W]e believe investors will now feel more confident in owning the stock for the upcoming iPhone 8 cycle that is expected to begin this fall, while also benefitting from the company’s capital distribution initiative, attractive valuation and potential new innovations.”

If White’s assessment is correct, that could mean further gains for the Dow as well. Entering Wednesday’s session, Apple’s stock was the sixth-largest in terms of price. The Dow is a price-weighted index.

It took the Dow just 107 trading days to surge to 22,000 from 21,000. Boeing shares have had the biggest points impact on the price-weighted Dow, contributing 380.29 points since March 1, followed by McDonald’s and UnitedHealth Group with 171.14 and 166.35 points, respectively.

The Nasdaq composite closed flat at 6,362.65 while the S&P 500 advanced 1.22 points to close at 2,477.57.

“We’ve come a long way in a very short period of time,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. “I think people are now focusing on the macro news, especially on the jobs report.”

The three major indexes have notched record highs this year largely in part because of strong quarterly results.

“It’s been a remarkable run as equity markets continue to defy expectations,” said Mark Heppenstall, CIO at Penn Mutual Asset Management. “I’d say [the market] is going up for the right reason, which is earnings. That’s supportive of valuations.”

For calendar second quarter, 72 percent of the S&P companies that had reported as of Wednesday morning beat bottom-line expectations and 68 percent on the top line, according to data from Thomson Reuters I/B/E/S.

“We’re seeing a lot of divergence in familiar places,” said Anthony Conroy, president at Abel Noser. “Usually with those Apple earnings the market would be surging.”

Wall Street also set its sights on key economic data. Private US companies added 178,000 jobs last month, according to a report from ADP and Moody’s Analytics. But economist polled by Reuters expected an increase of 185,000 jobs.

“[A]t least according to ADP, job growth still remains good and certainly better than what the BLS has said. The BLS estimate for the private sector is 180k on Friday,” said Peter Boockvar, chief market analyst at The Lindsey Group, in a note.

“Either way, job growth north of 150k is still enough to put continued downward pull on the unemployment rate and Friday’s estimate is for a one tenth decline to 4.3% which would match the lowest level since 2001 and more reason for [quantitative tightening] to start in September,” Boockvar said.

Investors have been keeping a close eye on US economic data as they look for clues on when the Federal Reserve will further tighten monetary policy. Wall Street is largely expecting the Fed to hold off on raising interest rates again until at least December, but is expecting the central bank to start rolling off its massive balance sheet next month.

US Treasury yields traded mixed on Wednesday, with the benchmark 10-year yield near 2.266 percent and the two-year yield around 1.359 percent.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Investors who bet on Trump boom are bailing, says global investment guru Mark Mobius

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Investors expecting an economic boom under President Donald Trump are now bailing and taking their cash overseas, global investment guru Mark Mobius told CNBC on Tuesday.

“As it turns out, I think money is probably now retreating the U.S., taking some of the profits out of the U.S.,” the executive chairman of Templeton Emerging Markets Group said on “Squawk on the Street.”

“The U.S. market is still doing as well … but generally speaking, I think people are taking some profits and putting it into the overseas markets, including emerging markets,” said Mobius, as some of Trump’s legislative priorities — such as getting rid of Obamacare and reforming the U.S. tax code — have yet to get off the ground.

Mobius spoke as the Dow Jones industrial average hit another intraday record high Tuesday morning, taking aim at the 22,000 level for the first time ever. The Dow is coming off its strongest monthly performance since February, having risen 2.54 percent. The S&P 500 and Nasdaq were also higher Tuesday after three straight down sessions.

The Dow, S&P 500 and Nasdaq have notched recent record highs with investors shrugging off the turmoil in Washington and geopolitical tensions — focusing instead on a generally strong earnings season. Since Election Day, the Dow has gained nearly 20 percent as of Monday’s close; the S&P 500 has risen 15.5 percent; and the Nasdaq has advanced 22.2 percent.

Regarding emerging markets, “we’re [also] really on a tear,” Mobius said. “Since the beginning of last year, emerging markets are outperforming. It looks like we’re going to continue to outperform going forward.”

Mobius attributes that outperformance in part to currencies getting stronger against the U.S. dollar and emerging market groups China and India growing at “6, 7, 8 percent, which is incredible, considering the size of those countries.” A popular emerging markets exchange-traded fund, the EEM, has gained more than 25 percent year to date.

“We’re in a pretty sweet spot at this stage in the game,” he said, but cautioned some emerging market currencies are getting weaker.

Elsewhere overseas, Mobius said he’s still investing in some Russian companies despite additional proposed sanctions by Congress but acknowledged it will be difficult going forward if sanctions continue.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SIT seeks better coordination among govt depts to check black money

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Special Investigation Team (SIT) on black money has decided to tighten the loose ends. The SIT has sought better coordination among all concerned departments to curb generation of illicit money.

CNBC-TV18 has learnt from sources that the SIT has called for better synergy between Department of Revenue Intelligence (DRI), Reserve Bank of India (RBI), banks and the government, on the exchange of information related to export and import data. They have also called for improved coordination to curb fraud and bogus import-export transactions and keeping a tab on trade-based money laundering.

The government has made it clear that money laundering and generation of black money from indirect taxes and customs need to be plugged.

The government believes that foreign remittances have been misused by exporters and individuals to generate black money.

SIT has also asked the government to set up dedicated courts in various states to fast-track fraud and economic offence cases, which have been stuck in the lower courts for a long time.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow