Today - Thursday, December 12, 2013
2:43 PMEarly excitement over Tesla's 3rd-gen platform
- A tidbit from a German publication's interview with Tesla Motors chief designer Franz von Holzhausen (TSLA +3.3%) has crossed the pond to create a little stir.
- The exec says the mass-market Model E, also referred to as the 3rd-gen platform, might be ready to be unveiled at the 2015 Detroit Auto Show which comes in only 13 months.
- Details are sketchy, but many Tesla projections have the Model E becoming a factor in 2016.
2:34 PMMexico's Congress approves energy bill allowing foreign investment in oil
- Mexico's Congress approves the landmark energy bill allowing foreign investment in oil, ending the government's 75-year monopoly on crude production.
- Under the new law, Mexico will offer profit-sharing and production-sharing contracts and licenses to foreign firms, but will maintain ownership of the oil while allowing the firms to book reserves, a crucial concern for oil companies that depend on reserves for valuation and borrowing.
- The measure still needs approval from 17 of Mexico’s 31 state governments before becoming law, and there's plenty of opposition.
- ETFs: UNG, USO, OIL, UCO, GAZ, UGAZ, SCO, BOIL, DBO, DTO, BNO, DGAZ, UNL, CRUD, KOLD, USL, NAGS, DBE, GASZ, RJN, DNO, SZO, OILZ, UWTI, DWTI, OLO, DCNG, UOIL, JJE, RGRE, ONG, DOIL, OLEM, TWTI, UBN
2:18 PMVolkswagen hopes to regain traction in the U.S.
- Volkswagen (VLKAY) names Michael Horn to head up its operations in the U.S.
- Sales in the U.S. for Volkswagen have fallen 5.2% this year through November as it continues to see competing models from GM and Ford take market share. The automaker also missed an opportunity to make a mark in the SUV segment.
12:19 PMU.S. should lift domestic oil export restrictions, Exxon says
- Exxon's (XOM) annual energy outlook this year has a stark message: We are entering an era of abundance, and it’s time the U.S. started exporting oil.
- "We are not dealing with an era of scarcity" as was the case during the 1973 Arab oil embargo when the U.S. imposed restrictions on exporting domestic oil; "we need to rethink the regulatory scheme and the statutory scheme on the books."
- XOM is increasingly optimistic about how much oil can be recovered with today’s technology, predicting 65% of the world’s crude will be untapped by 2040.
- XOM forecasts global demand for gas will rise by 65% by 2040, with natural gas on track to supply 25% of global energy requirements; demand for coal will rise until 2025, but coal’s share of the global energy mix will fall from 25% today to below 20%.
11:58 AMFortum to sell Finnish power distribution grid for $3.5B
- Finnish utility Fortum (FOJCY, FOJCF]]) agrees to sell its local power distribution grid to a group of institutional investors led by First State Investments and Borealis Infrastructure for €2.55B ($3.5B).
- The deal is the latest in a series of regulated grid sales made by large energy firms wanting to cut debt and focus on their power generation businesses instead, while highlighting the rising popularity of established infrastructure assets for pension funds and other institutional investors seeking safe returns in a low interest rate world.
11:36 AMNissan bets on the Philippines| Comment!
8:20 AMPeugeot sinks in Paris trading while GM watches
- Shares of Peugeot (PEUGF) crumble in Paris trading after the automaker warns of more write-downs and hints again it may need another capital raise.
- General Motors (GM) is scaling back its plans with Peugeot, but still has part of its European fortunes tied to the French automobile brand through partnerships and a 7% ownership stake.
7:04 AMForecast: Global airline profits set to rise
- The IATA expects global airlines to post profits of $12.9B this year to represent a margin of 1.8% of revenue. Last year, the industry saw a profit margin of 1.1%.
- Profits are expected to soar to $19.7B in 2014 which reps a healthier margin of 2.6%.
- Though global traffic trends are mixed, business travel has been a boon in key markets.
- Related stocks: AAL, UAL, DAL, RYAAY, CPCAY, SINGY, CEA, ZNH, CPA, GOL, LFL, DLAKF, AIDIF, QUBSF, JBLU, RJET, SAVE, ALK, HA, AIRYY, MLYAF, AFLYY.
5:38 AMWorld stocks fall on taper concerns
- Global equities are lower as anxiety about Fed tapering cranks up again, especially with Congress set to pass a budget deal.
- Markets are expected to scrutinize retail-sales and weekly jobless data, which are due out this morning, for clues as to what the Fed might do when it meets next week.
- "The jury is still out as to whether the announcement to start the tapering of QE will be made then," says Patrick Latchford of Monex Capital Markets. "Arguably it's the uncertainty that's eating into markets right now."
- Japan -1.1%, Hong Kong -0.5%, China -0.1%, India -1.2%.
- EU Stoxx 50 -0.4%, London -0.6%, Paris -0.2%, Frankfurt -0.5%, Milan -0.65%, Madrid -0.4%.
- U.S. stock futures: Dow -0.1%. S&P, Nasdaq flat-to-lower.
5:07 AMEurozone industrial output surprisingly falls
- The eurozone's recovery continues to remain shaky, with industrial production dropping 1.1% in October after falling 0.2% in September and missing consensus for a rise of 0.3%.
- On year, output increased 0.2%, as in September, but came in well below forecasts of 1.1%. (PR)
- The euro is -0.1% at $1.377.
- ETFs: FXE, VGK, EUO, FEZ, ERO, EU, EPV, IEV, EZU, DRR, HEDJ, FEU, EUFX, UPV, ULE, FEP, ADRU, URR, FEEU, DBEU, FIEU
4:53 AMItalian PM gains in strength, pledge reform
- Italian Prime Minister Enrico Letta comfortably won a confidence vote in parliament yesterday, underscoring the government's new found stability following the chaos caused by the process to expel former PM Silvio Berlusconi after his conviction for tax fraud in the summer.
- Letta pledged a sweeping package of reforms whose aim would be to cut debt, bring down rampant unemployment and otherwise revive Italy's moribund economy. Measures would include lowering taxes and proposals to attract foreign investment.
- Meanwhile, Italy's CPI dropped 0.3% on month in November, as in October, and came in above consensus of -0.4%.
- On year inflation, inflation +0.7% vs +0.7% and +0.6%.
- The FTSE MIB is -0.2% and the euro is -0.1% at $1.3771. (PR)
- ETFs: EWI, ITLY, ITLT
2:44 AMHouse seen approving budget deal
- The House is today expected to pass a bipartisan but narrow two-year budget deal that Congressional leaders reached earlier this week despite opposition from right-wing groups, with even some of the more conservative Republicans lining up behind the agreement.
- However, the GOP-controlled Rules Committee didn't let Democrats include an amendment to extend federal unemployment benefits that are set to expire on December 28.
- Should the chamber approve the deal, the Senate is seen passing it next week.
2:32 AMAustralian unemployment rate inches higher
- As expected, Australia's jobless rate edged up to 5.8% in November from 5.7% in October as more people entered the labor force.
- However, the number of people in work rose by 21,000 - the largest increase in seven months - after a fall of 700 and topped consensus of 10,000.
- The number of full-time jobs increased by 15,500 following a drop of 31,100, while that for part-time positions grew 5,500 vs +28,900.
- The S&P/ASX 200 is -0.7%, while the AUD-USD is -0.3%. (PR)
- ETFs: FXA, EWA, AUD, AUSE, CROC, KROO, EWAS, GDAY, FAUS
Wednesday, December 11, 2013
2:59 PMIndustrials and homebuilders lead market decline
- The two worst-performing sectors on a down day are industrials (XLI -1.4%) and homebuilders (XHB -1.5%), (ITB -1.9%).
- Industrials are taking a hit after Joy Global (JOY -6.3%) missed earnings estimates and provided disappointing guidance. "With a limited number of projects that can book in time to help 2014, we continue to see both the need and opportunity to lower the cost base in our business," says the company. Caterpillar (CAT -1.2%).
- Homebuilders continue to digest Toll Brothers' (TOL -1.8%) "leveling in demand" comments from yesterday's earnings results - in the 19 weeks since August 1, business has been flat vs. last year, and in the first 5 weeks of FQ1 (beginning Nov. 1) business has also been flat from 2012 (though Hurricane Sandy makes a tricky comparison).
- CEO Doug Yearley on the earnings call (transcript): "There's just not a lot of action [this time of year]. We still feel like pent-up demand is building, demographics are on our side, affordability is in place, and we are cautiously optimistic about the spring season, which begins the end of January."
- Lennar (LEN -2.3%), D. R. Horton (DHI -3%), KB Home (KBH -3.1%), Hovnanian (HOV -3.3%)
12:08 PMBlackRock: Stay nimble
- "2014 is the year to squeeze more juice out of risk assets. But investors should be ready to discard the fruit when it starts running dry," says BlackRock's Ewen Cameron Watt in the firm's 2014 Investment Outlook. "Beware of traffic jams: easy to get into, hard to get out of."
- Behind the view is the idea central banks (U.S., U.K, Canada, China, to name a few) are poised to begin tightening monetary policy.
- BlackRock doesn't believe stocks are yet in a bubble, but its "risk indicator" - measuring enterprise value against earnings adjusted for volatility - is nearly as high as just before the dotcom bust. "The ratio of the two is the key. High valuations combined with low volatility can make for a lethal mix. This market gauge sounded the alarm well before the Great Financial Crisis."
- Broad large-cap ETFs: PRF, VUG, VTV, SDOG, VV, SCHX, MGK, DEF, SCHG, SCHV, PWV, FLAG, MGV, DOD, JKD, FEX, EQL, IWY, EZY, JKE, PWB, IWX, FTC, JKF, EEH, SPXH, TRSK, SFK, FWDD, PXLC, ALTL, PXLV, GVT, RWG, FNDX, PXLG, IELG
11:55 AMBP says Shah Deniz FID on Trans Atlantic Pipeline expected Dec. 17
- The BP-led (BP +0.6%) Shah Deniz consortium likely will make the financial investment decision on the Trans Adriatic Pipeline on Dec. 17, a BP official says.
- In June, the consortium - which also includes Statoil (STO), Total (TOT) and Azerbaijan state-owned Socar - chose TAP to transport natural gas from Shah Deniz in Azerbaijan via Turkey, Greece, Albania, across the Adriatic Sea and into Europe.
- The final shareholder structure in the planned Trans Anatolia natural gas pipeline also will be made clearer next week; sources have said TOT may not pick up an option to acquire a 5% stake in the pipeline, while STO may take a smaller stake than its option for a 12% holding.
10:15 AMHydrogen fuel cells vs. electric vehicles: Too early to call
- Toyota (TM -0.8%) remains positive on the prospect that falling costs of fuel cell batteries will help it make the segment the future of eco-friendly cars.
- The automaker sees selling 5K-10K units when the FCV Concept goes on sale in 2015.
- In the long-term, Toyota thinks fuel cell vehicles will be competitive on price against zero-emission cars. The automaker targets 2030 as a date mass-production will be in place by.
- What to watch: 2014 could see a ramping up of the rhetoric between Tesla Motors (TSLA -0.5%) and hydrogen fuel cell backers such as Toyota, Hyundai (HYMLF), and Mercedes-Benz (DDAIF). Most automobile industry analysts see the confrontation as really an engineering battle with development too early in the game to accurately predict a winner.
9:02 AMBP, Reliance Industries aim to quadruple gas output in India by 2020
- BP and joint venture partner Reliance Industries (RLNIY) will invest up to $10B to quadruple their natural gas output in India from the current level of ~12M metric cubic meters/day by 2020, the head of BP's Indian unit says.
- Production from India's east coast KG-D6 block, the country's richest gas deposit, has declined from nearly 70M metric cubic meters/day in 2010; the companies have cited geological complexities as the main reason for the output fall.
7:59 AMRio Tinto says no environmental impact from two radioactive spills
- Rio Tinto (RIO) says there is no environmental impact from two separate incidents in which radioactive slurry spilled from its operations in Namibia and Australia.
- Rio experienced a low-grade slurry spill at its Ranger uranium mine in Australia's Northern Territory, just days after a similar incident occurred at its Rossing uranium mine in Namibia.
- The causes of the incidents are under investigation.