Monday, April 20, 2015

Markets leap ahead on China stimulus

Dow jumped 208 (off the highs), advancers over decliners better than 2-1 & NAZ added 62.  Gains in the PM were trimmed for the MLP index, closing up 1+ to the 444s, & the REIT index rose fractionally in the 329s.  Junk bond funds inched higher & Treasuries lost ground.  Oil is back in the high 57s & gold remained below 1200.

AMJ (Alerian MLP Index tracking fund)

3 Stocks You Should Own Right Now - Click Here!

CLK15.NYM....Crude Oil May 15....56.06 Up ...0.32 (0.6%)

Live 24 hours gold chart [Kitco Inc.]

Halliburton adjusted diluted EPS of 49¢ for Q1 beat the estimate of 37¢.  However, on a GAAP-basis, the oilfield services company reported a net loss per share of 76¢ primarily due to a non-cash, after tax charge of $823M that reflected the continuing turmoil in the oil and gas industry.  Revenue was $7.1B, a 4.1% decline year over year.  The Completion & Production segment revenue stood at $4.2B, while the Drilling & Evaluation segment clocked $2.8B.  Both segments witnessed a 4% decline in revenue from last year.  Operating profits, however, declined more steeply with the C&P segment with a substantial 30% decline to $462M, while the smaller D&E segment decreased 23% to $306M.  North America, 50% of revenue, led the profit decline.  The Completion & Production division saw operating income fall by 48% while Drilling & Evaluation segment fell 71%.  It reflects that the company's costs & expenses have increased despite the downturn.  The suppliers don't seem to have shouldered the costs while the company has been forced to renegotiate pricing terms with its customers.  The 21% fall in North American land rig count has resulted in a 54% decline in operating income while North American operating margins fell 755 basis points to 7.9% from 15.4% last year.  The bright spot has been the Latin American market which saw a 10% increase in revenue & a 22% surge in operating income, primarily due to improved activity & profitability in Venezuela.  But a devaluation in the currency saw HAL record a $199M additional charge.  Additionally, Brazil & Mexico continued to disappoint due to reduced testing & fluid services.  The Middle East had a 13.4% increase in revenue & a 33% increase in operating income.  Operating margins thus soared to 19.2% from 16.4% a year ago.  The Europe, CIS & African market disappointed.  The company also recorded a special charge of $1.2B pre-tax ($823M after-tax) related to "asset write-offs, inventory writedowns, impairments of intangible assets and severance costs."  The stock rose 96¢.  If you would like to learn more about HAL, click on this link:

Halliburton Swings To Loss As Oil Industry Downturn Weighs

Halliburton (HAL)

Morgan Stanley reported its most profitable qtr since the financial crisis, boosted by higher revenue from trading bonds & equities.  The bank's trading business, like those of its main rivals, got a boost after the Swiss central bank scrapped a cap on the franc, the ECB announced its quantitative easing program & the Federal Reserve took steps toward tightening monetary policy.  It capped a mostly strong qtr with a 60% rise in net profit.  "We did not dial up risk to generate these earnings," CEO James Gorman said he described as the bank's "strongest quarter in many years."  MS is focusing less on bond markets & more on managing money for the rich as a way to free up capital & meet stricter regulatory rules imposed since the financial crisis.  EPS rose to $1.18 from 74¢ a year earlier.  The bank achieved an adjusted average return-on-equity of 10.1%, above the 10% minimum set by Gorman as the bank focuses more on returns than revenue.  Excluding items, EPS was $1.14.  Adjusted EPS worked out to 85¢, above 78¢ expected.  Net revenue excluding items rose 10.3% to $9.78B, beating the estimate of $9.2B.  Revenue from wealth management rose 6.2% to $3.83B & pre-tax income from the business rose 24.6% to $855M.  Adjusted revenue from equities sales & trading rose 1/3 to $2.27B.  Excluding special items, revenue from trading fixed-income securities & currencies (FIC) rose 15% to $1.90B, the highest in 3 years.  The wealth unit's contribution to revenue jumped to nearly 45% last year from less than 20% in 2006.  The stock went up 21¢.  If you would like to learn more about MS, click on this link:

Morgan Stanley Reveals Highest Profit Since '08 Crisis

Morgan Stanley (MS)

General Electric, a Dow stock, is in early-stage talks with Wells Fargo (WFC) about selling its entire $74B US commercial lending & leasing (CLL) portfolio to the bank.  Other parties may also hold talks with GE about buying the portfolio, according to a leaker.  GE is also exploring selling the US CLL portfolio piecemeal & could decide to break the business up.  The talks underscored GE's urgency in looking to dismantle its GE Capital business & free itself from the financial regulatory pressures that come with it.  GE stock lost 23¢.  If you would like to learn more about GE, click on this link:

GE in Talks to Sell $74B Portfolio to Wells Fargo

General Electric (GE)

The advance today was pared in the PM, the Dow finished 60 below its high.  Stocks ignored the glum news on Greece being unable to refinance its debt.  The central gov is Greece in getting desperate.  The economic news from China will not get better over the short term.  It takes time for the new money to work its way into the economy.  US GDP Q1 data will be released in 8 days & that is not expected to be encouraging.  Dow managed to hold above 18K, around where it has been for months (see below)

Dow Jones Industrials

No comments: