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  • Today - Thursday, July 30, 2015

  • 3:31 AM
    • Shell (RDS.A, RDS.B) is bracing for a "prolonged downturn," the company declared as it reported a sharp fall in Q2 profit and said it would cut 6,500 jobs and full-year capex to $30B.
    • Quarterly profit on a current cost-of-supplies basis dropped to $3.4B from $5.1B a year earlier, meeting analyst expectations.
    • Shell has still acted boldly despite a slump in crude prices. In April it signed a $70B deal to acquire BG Group, and is pressing ahead with expensive plans to drill in the Arctic.
    | 2 Comments
  • Wednesday, July 29, 2015

  • 4:25 PM
     
    • Stocks notched their second straight advance, adding to early gains after the Fed offered few clues on the timing of the next interest rates hike.
    • The S&P 500 rose 0.7% to extend its weekly gain to 1.4%, as the index overtook its 100- (2,095) and 50-day MAs (2,100), while the Nasdaq (+0.4%) struggled to keep pace with the broader market.
    • The industrial sector added 1.2% with transport stocks fueling the move after C.H. Robinson beat bottom-line estimates; the Nasdaq was pressured by biotechs (-1.4%) despite better than expected earnings from Gilead Sciences.
    • The energy sector (+1.3%) enjoyed strength thanks to an intraday rally in Nymex crude oil, which ended up 1.7% to $48.77/bbl; also of note, Anadarko Petroleum soared 4.7% after beating earnings expectations.
    • Investor participation was ahead of average, with more than 850M shares changing hands at the NYSE floor.
    • Treasury prices fell but moved off their lows after the FOMC policy statement called for more improvement in the labor market before raising rates; the 10-year yield ended higher by 3 bps to 2.28%.
    | 1 Comment
  • 2:11 PM
    • As expected, the FOMC left rates unchanged, but didn't commit itself one way or the other to any action in September. This could be interpreted dovishly as one might suppose today's statement would begin to lay the groundwork for a September hike were that the Fed's intention.
    • The Dow (DIA +0.5%), S&P 500 (SPY +0.5%), and Nasdaq 100 (QQQ +0.1%) all added a few points in the immediate aftermath of the 2 ET statement, but have returned to levels seen before the news.
    • Treasurys continue to take on water, with the 10-year yield up five basis points on the session to 2.30%. TLT -0.6%, TBT +1.2%
    • Fed Funds futures are pricing in about a 1-in-3 chance of a 25 basis points move in September.
    | 8 Comments
  • 2:03 PM
     
    • In a unanimous decision the FOMC leaves in place the 0-0.25% target range for the Fed Funds rate.
    • Policymakers continue to see an improving economy and labor situation, suggesting the possibility of a hike at the next meeting (mid-September) is on the table (as is the chance of no action).
    • FOMC Statement
    | 16 Comments
  • 10:01 AM
     
    | Comment!
  • 9:25 AM
    • Level 3 Communications (NYSE:LVLT) is 1.7% lower premarket after Q2 revenues missed expectations slightly despite growing nearly 30% from the prior year, boosted by its Tw telecom acquisition.
    • Adjusted net income of $150M led to a basic EPS of $0.42 excluding refinancing losses, which beat consensus. The debt-extinguishment charges led the company to a GAAP loss, ending six straight quarters of profit.
    • In constant currency, core network services revenue grew 5%, paced by 7% growth in North America, and 6% growth in Latin America helped mitigate a 3% decline in EMEA.
    • Revenue breakout: Core network services, $1.94B (up 2.9% on pro forma basis); wholesale voice and other, $120M (down 16.7%).
    • Capex was $317M; free cash flow was $102M, up from the prior year's $62M (pro forma).
    • The company reiterated its full-year outlook for Adjusted EBITDA growth of 14-17% and free cash flow of $600M-$650M. It's lowering its expected interest expense, to $650M on a GAAP basis for the year (down from $660M) and net cash interest expense of $640M (down from $645M).
    • Conference call to come at 10 a.m. ET.
    • Press Release
    | Comment!
  • 7:15 AM
    • The FOMC ends its two-day meeting today, and the policy statement will be released at 2 ET. A rate hike isn't expected, but perhaps markets will get an idea about whether the committee is leaning towards a move in September, or if recent global jitters and collapsing commodity prices have delayed action another three months.
    • Stock index futures are higher by 0.2% across the board.
    • Shanghai bounced 3.4% overnight and Europe is mixed.
    • The 10-year Treasury yield is up two basis points to 2.27%, gold is down $1 per ounce to $1,096, and oil is off $0.29 per barrel to $47.69.
    • ETFs: SPY, QQQ, DIA, SH, SSO, SDS, VOO, IVV, UPRO, PSQ, SPXU, TQQQ, SPXL, RSP, QID, SQQQ, QLD, DOG, DXD, RWL, UDOW, EPS, SDOW, DDM, VFINX, BXUB, QQEW, QQQE, SPLX, SFLA, BXUC, QQXT, SPUU, UDPIX, OTPIX, RYARX
    | 11 Comments
  • 4:11 AM
    | 11 Comments
  • Tuesday, July 28, 2015

  • 6:30 PM
    • CBS is setting a milestone for Super Bowl 50: It will livestream all national ads during the game along with the television broadcast.
    • Advertisers previously were able to buy ads separately for the livestream, but the purchases will be bundled as one for this year's game.
    • The move means ad costs should surpass the $4.5M that NBC drew for a 30-second spot in this year's game. Sources say that CBS is selling spots currently in the $4.6M-$4.7M range and has only 20-25 spots left for sale.
    • In February, CEO Les Moonves had praise for NBC's presentation of this year's game: "It's the one day of the year we root for them. ... We have Super Bowl 50 and our ad rates, which are going to begin north of $5M for a 30-second television spot, are based on their great ratings."
    | Comment!
  • 5:55 PM
    • About 24 hours after the WSJ reported on the move, Procter & Gamble (NYSE:PG) announces David S. Taylor will be the company's next CEO, effective Nov. 1.
    • A.G. Lafley will remain executive chairman. He'll "provide advice and counsel to the CEO and P&G leadership on Company and business strategies, portfolio choices, and organization decisions."
    • FQ4 results arrive Thursday morning.
    | 4 Comments
  • 5:47 PM
    • Sprint (NYSE:S) closed today up 6.8% on heavier-than-average daily share volume, as buyers took advantage of yesterday's 52-week low.
    • Today's move up cuts what were substantial losses for the shares over the past week -- now to -13.8% over the past five days.
    • Yesterday, Strategy Analytics analyst Roger Lanctot pointed a finger at Sprint, as a famously (and frighteningly) hacked Jeep vehicle ran on Sprint's Velocity telematics platform. Lanctot suggested Fiat Chrysler was taking the fall for security that should have been implemented by Sprint at the network level.
    • In a statement, Sprint says: "This matter was related to software in certain vehicles equipped with 8.4-inch touchscreens and not to Sprint, the carrier providing connectivity to the touchscreens ... At the automaker's direction, we provided assistance by developing and implementing a network-level measure to prevent unauthorized remote network access to the software in the touchscreens."
    • A blog post from Sprint Chief Network Officer John Saw noted that "Sprint’s network is built to support an open Internet for its customers, developers and device manufacturers. By 'open' we mean that we do not block lawful Internet traffic or protocols. We do not restrict access to applications and content, nor do we prioritize one content provider’s traffic over another."
    • The question for investors going forward is who will end up forced to shoulder more responsibility for security in an area as new as vehicle telematics -- and how much happens at the network level vs. the device level. Fiat Chrysler is implementing the fix via USB device rather than any over-the-air update.
    • "We think Sprint's legal exposure is very low in the incidents," writes Elevation analyst Stephen Sweeney, "and not many investors were ascribing much value at all to begin with for Sprint's telematics business."
    | 10 Comments
  • 5:42 PM
    • "Simply put, the product remains too difficult to use," says CFO Anthony Noto on Twitter's (NYSE:TWTR) earnings call, echoing a frequent complaint. He adds sustained user growth shouldn't be expected until Twitter can (in his view) reach the mass market, and that this will take a "considerable" amount of time. (live blog)
    • Also: 1) Noto states direct response ad formats such as app install ads (a culprit behind the soft guidance Twitter provided in April) make up 25% of ad revenue. 2) Jack Dorsey says Twitter has no update regarding its CEO search. 3) While global MAUs rose by 8M Q/Q to 316M, U.S. MAUs were flat at 66M. The U.S. still accounted for 64% of revenue in Q2. 4) Much time was spent discussing Project Lightning (due this fall), which will let users follow streams centered around specific events.
    • Up initially following its Q2 beat and strong full-year sales guidance, Twitter has now fallen to $33.96 AH.
    • Prior Twitter coverage
    • Seven weeks ago: Early Twitter investor Sacca calls for major overhaul of service
    • Update: Also mentioned by Noto. Twitter's ratio of daily active users (DAUs) to MAUs, a proxy for user engagement, has fallen. The ratio is currently at 44%, below Facebook's 66%.
    • Update 2 (7:48PM ET): Twitter is now down 11.8% AH.
    | 135 Comments
  • 4:25 PM
     
    • Stocks ended their five-day losing streak with a relief rally sparked by better than expected earnings report and a relatively muted drop in Chinese equities.
    • “The concern after yesterday was would we see another rout taking place in China,” said UBS chief investment strategist Mike Ryan, and analysts say the Chinese government is taking extraordinary steps to support the market and may not be finished.
    • All 10 S&P sectors posted gains, with some of the recent weak sisters leading the market higher; energy surged 2.9% after sliding 4.3% over the past five days, helped by BP and its Q2 results that included better than expected revenue; Nymex crude oil rose 1.3% to $47.98/bbl, providing added support.
    • Materials (+2.1%) also turned in a strong showing, with steelmakers lifted by AK Steel in reaction to a bottom-line beat and filing anti-dumping petitions against several countries.
    • Today's participation was ahead of recent averages, as more than 900M shares changed hands at the NYSE floor.
    • Treasury prices fell as demand for haven assets waned; the 10-year yield rose 2 bps to 2.25%.
    • Investors now look ahead to tomorrow’s Fed statement after a two-day meeting, seeking clues on the timing of an interest rate hike that some expect as early as September.
    | 2 Comments
  • 4:08 PM
    • Twitter (NYSE:TWTR): Q2 EPS of $0.07 beats by $0.03.
    • Revenue of $502.4M (+60.9% Y/Y) beats by $21.12M.
    • Expects Q3 revenue of $545M-$560M vs. a $555.8M consensus.
    • Expects 2015 revenue of $2.2B-$2.27B, favorable to a $2.2B consensus.
    • Shares +6.5% AH.
    • Press Release (.pdf)
    • Update (5:19PM ET): Twitter is now down 3.5% AH.
    | 47 Comments
  • 12:16 PM
    • Intel (INTC +1.5%) and Micron (MU +3.7%) proclaim their jointly-developed 3D XPoint (pronounced "3D crosspoint") non-volatile memory technology delivers speeds up to 1,000 times faster than NAND flash (also non-volatile), and is 10x denser than DRAM (much faster than NAND, but volatile and less dense).
    • The NAND JV partners declare 3D XPoint "significantly reduces latencies, allowing much more data to be stored close to the processor and accessed at speeds previously impossible for non-volatile storage." Unique materials and a cross point array structure are said to make 3D XPoint possible.
    • Major write endurance improvements are also promised relative to NAND. The first product will be a 128Gb (16GB) chip.
    • Intel/Micron are sharing additional at a San Francisco event (webcast). Shares of both companies are higher amid a 0.6% gain for the Nasdaq.
    • Update: More details from Fortune. 3D XPoint samples are expected by year's end, and commercial shipments are set for 2016.
    • Update 2: During the Q&A session for the announcement, the cost for 3D XPoint is said to be "somewhere between" that of NAND and DRAM. Intel/Micron affirm their commitment to 3D NAND, while noting its high densities.
    • Update 3: Both Intel and Micron plan to make 3D XPoint products. Micron CEO Mark Durcan claims he doesn't know of any comparable rival products on the way, and predicts 3D XPoint will be used for both storage (like NAND) and main memory (like DRAM).
    • Four months ago: Intel, Micron launch 3D NAND line, promise cost/capacity edge
    | 160 Comments
  • 12:04 PM
    • Reporting an earnings clunker last week, Caterpillar (CAT +3.2%) promised to buy back a whopping $1.5B in stock in Q3, and today announces an accelerated stock repurchase program with Citibank for that amount.
    • The $1.5B buyback would bring repurchases for the year up to $2B. At today's stock price, $1.5B is good for about 19M shares or roughly 3.2% of the float.
    • After this deal, more than $5B of the company's $10B buyback authorization will remain.
    • Source: Press Release
    • Previously: Caterpillar -3.5% as revenues miss, guidance cut due to dollar (July 23)
    | 7 Comments
  • 10:00 AM
     
    • July Consumer Confidence: 90.9 vs. 99.6 consensus; 99.8 (revised) in June.
    • The present situation index at 107.4 from 110.3 in June.
    • The expectations index declined sharply to 79.9 from 92.8 in June.
    | 9 Comments
  • 8:52 AM
    • State Street (NYSE:STT) files plans for the Financial Services Select Sector SPDR Fund (XLFS) and the Real Estate Select Sector SPDR Fund (XLRE). They would be the first additions to the Select Sector SPDRs since the family of nine launched in 1998. No expense ratios are yet available, but the current Select Sector SPDRs cost 15 basis points.
    • The move comes following last year's changes in the Global Industry Classification Standard used by S&P Dow Jones Indices and MSCI in which real estate will be broken out from the financial sector.
    • The current nine SPDRs have nearly $100B in assets, and the Financial Select Sector SPDR (NYSEARCA:XLF) is by far the largest with $21B.
    • XLF's fate? It could be converted into one of the new funds with a new name, index, and ticker, or it could continue to operate as usual.
    • Source: ETF.com
    | Comment!
  • 7:29 AM
    • Net income of $940M vs. $1.07B in the same quarter a year ago. Excluding special items, operating earnings were $1.18 a share, down from $1.17 per share, the prior year.
    • Net sales fell 11.5% to $8.6B, due to negative currency impacts, low crop prices and weakness in chemicals.
    • Agricultural sales tumbled 11% to $3.22B, while operating profit in the segment fell to $778M vs. $836M a year ago.
    • In connection with its recent Chemours spin-off, DuPont's (NYSE:DD) board has authorized the purchase of $2B of common stock by Dec. 31, 2015, with the remainder to be purchased by Dec. 31, 2016.
    • The company also lowered its 2015 operating earnings forecast from $4.00 to $3.10 per share (excluding $0.80 per share from Performance Chemicals), citing weak demand for crop protection and lower volumes.
    • DD -1.6% premarket
    • Q2 results
    | 10 Comments
  • 7:12 AM
    | 10 Comments
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