Dow inched up 4, decliners slightly ahead of advancers & NAZ gained 38. The MLP index gave back 1+ to 301. Junk bond funds were higher.& Treasuries rose, taking the yield on the 10 year bond down to 2.62%. Oil climbed to the 64s & gold added 4 to 1336.
AMJ (Alerian MLP Index tracking fund)
Stocks fluctuated as investors assessed earnings & fresh tariffs, while Treasuries rose with the $ after the Bank of Japan signaled it'll maintain stimulus. The S&P 500 was mixed after touching an all-time high as investors digested the impact of the tariff's announced by the Trump administration after the close yesterday. Earnings have helped buoy optimism. Of the 68 firms in benchmark that have reported so far, 82% have topped earnings estimates. European shares rose after gains in Asia. The 10-year Treasury yield fell the most in nearly a month after BOJ Governor Haruhiko Kuroda said the central bank isn't ready to consider curbing its monetary stimulus. The $ found strength after the comments, only to erase gains. Investors will closely watch how markets respond to Trump's import tariffs. The positive impact from his signing of a temporary spending bill that ended a 3-day partial gov shutdown appears to have faded, perhaps because the deal simply delayed tough decisions for a few weeks. Meanwhile, the stream of company results continues. The MSCI Emerging Markets Index advanced for an 8th day, helped by stronger oil prices. West Texas crude futures hit $64 a barrel, buoyed by forecasts for a record run of declines in US crude stockpiles.
After his first year, Pres Trump has finally delivered the type of trade blow his political base has been craving. Trump slapped tariffs on imported solar panels & washing machines in his first major move to level a global playing field he says is tilted against American companies. The decision came 2 days after the one-year anniversary of his inauguration as he prepares to travel to the World Economic Forum in Davos, Switzerland, where his “America First” stance is likely to be at odds with the global business & political elite. The key now is whether the shift from protectionist rhetoric to hard action will disrupt the broadest global recovery since the world was pulling out of the financial crisis. The initial verdict from markets: probably not. Much will depend on how China responds. While officials in Beijing voiced displeasure, saying the tariffs were a “misuse” of trade measures, their response was restrained, for now. But there's a list of things the world's 2nd-largest economy can do if the US ratchets up the pressure further. 11 Pacific nations led by Japan agreed on the text of their own trade accord & are aiming to sign the deal in Mar, Singapore's trade ministry said. The Trans-Pacific Partnership doesn't include China however & Trump pulled the US out of the talks shortly after taking office last year. There are also still several key files remaining on the pres's desk that could lead to further tension between the 2 big economies. Trump has about 3 months to decide whether to impose tariffs on imported steel & aluminum, while his top trade official is probing China's intellectual-property practices. US negotiators are hunkered down in Montreal this week with their Canadian & Mexican counterparts, trying to fashion an update to the North American Free Trade Agreement. A tough line there could suggest yesterday's actions are just the start. In Europe, govs are following the Trump administration's moves closely. Germany, which has been the subject of Trump criticism for its trade surplus with the US, is seeking talks with the administration on the tariffs, said acting Finance Minister Peter Altmaier. “Our position is that the fewer the tariffs, the less protectionism, the better it is for the people in our countries,” Altmaier said.
Trump Pulls His Punches in First Foray Into Long-Pledged Tariffs
Johnson & Johnson, a Dow stock & Dividend Aristocrat, is promising to spend more on research in the health-care sector after changes to the US tax system. For now, the company isn't providing many details on how it may use the extra money from lower tax rates. “We’re going to look at all of our opportunities but it’s going to be a significant increase," CFO Dominic Caruso said. “We’re now up to the most significant R&D spending we’ve done in our history and we expect to expand on that going forward.” JNJ provided a 2018 profit forecast that was higher than anticipated, joining companies that are seeing benefits from the tax overhaul passed in law late last year. The conglomerate, whose businesses include prescription medicines, medical devices & consumer brands such as Johnson's baby care, makes almost ½ of its revenue outside of the US & also benefited from the weaker $ in the past year. EPS this year will be $8-8.20, excluding some items, JNJ said, higher than the $7.86 estimate. Revenue is projected to be $80.6-81.4B, in line with estimates. Q4 results topped estimates. EPS was $1.74 excluding some items, above the anticipated $1.72. On a net basis, JNJ had a quarterly loss of $10.7B after taking a one-time charge of $13.6B related to accounting changes caused by tax legislation, to bring back to the US years of aggregated foreign earnings. At the end of 2016 that amounted to $66B, according to the most recent annual report. There were some disappointments in the pharmaceuticals business, the biggest division. Sales of blockbuster arthritis treatment Remicade, now facing competition from cheaper versions, came in lower than anticipated. The decline was offset by sales in newer drugs such as psoriasis drug Stelara. For about a year, the company has been reviewing strategic options for its diabetes-care business, which could include a sale, partnerships or joint ventures. The company said the diabetes devices have been hit by price declines for several years in the market & it's difficult to fund future innovation. Today, a Chinese firm said it approached JNJ about proposed sale. The stock fell 3.38.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
The big conference in Davos Switzerland has started & it generally brings a lot of hot air. This time Trump is going & he should bring a lot of drama on the future of global trade. Even with earnings getting much of the headlines, his comments can move markets. Gov workers have returned to work (or whatever they call it), but nothing has been solved & both sides lhave shown no interest in budging from their demands. In a couple of weeks we will have to go thru this drama again, another negative for stocks. But the averages are at, or essentially at, record levels, so traders' thoughts are largely positive.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 64.15 | +0.58 | +0.9% |
| GC=F | Gold | 1,333.00 | +1.10 | +0.1% |
Stocks fluctuated as investors assessed earnings & fresh tariffs, while Treasuries rose with the $ after the Bank of Japan signaled it'll maintain stimulus. The S&P 500 was mixed after touching an all-time high as investors digested the impact of the tariff's announced by the Trump administration after the close yesterday. Earnings have helped buoy optimism. Of the 68 firms in benchmark that have reported so far, 82% have topped earnings estimates. European shares rose after gains in Asia. The 10-year Treasury yield fell the most in nearly a month after BOJ Governor Haruhiko Kuroda said the central bank isn't ready to consider curbing its monetary stimulus. The $ found strength after the comments, only to erase gains. Investors will closely watch how markets respond to Trump's import tariffs. The positive impact from his signing of a temporary spending bill that ended a 3-day partial gov shutdown appears to have faded, perhaps because the deal simply delayed tough decisions for a few weeks. Meanwhile, the stream of company results continues. The MSCI Emerging Markets Index advanced for an 8th day, helped by stronger oil prices. West Texas crude futures hit $64 a barrel, buoyed by forecasts for a record run of declines in US crude stockpiles.
Stocks Mixed as Treasury Yields, Dollar Decline: Markets Wrap
After his first year, Pres Trump has finally delivered the type of trade blow his political base has been craving. Trump slapped tariffs on imported solar panels & washing machines in his first major move to level a global playing field he says is tilted against American companies. The decision came 2 days after the one-year anniversary of his inauguration as he prepares to travel to the World Economic Forum in Davos, Switzerland, where his “America First” stance is likely to be at odds with the global business & political elite. The key now is whether the shift from protectionist rhetoric to hard action will disrupt the broadest global recovery since the world was pulling out of the financial crisis. The initial verdict from markets: probably not. Much will depend on how China responds. While officials in Beijing voiced displeasure, saying the tariffs were a “misuse” of trade measures, their response was restrained, for now. But there's a list of things the world's 2nd-largest economy can do if the US ratchets up the pressure further. 11 Pacific nations led by Japan agreed on the text of their own trade accord & are aiming to sign the deal in Mar, Singapore's trade ministry said. The Trans-Pacific Partnership doesn't include China however & Trump pulled the US out of the talks shortly after taking office last year. There are also still several key files remaining on the pres's desk that could lead to further tension between the 2 big economies. Trump has about 3 months to decide whether to impose tariffs on imported steel & aluminum, while his top trade official is probing China's intellectual-property practices. US negotiators are hunkered down in Montreal this week with their Canadian & Mexican counterparts, trying to fashion an update to the North American Free Trade Agreement. A tough line there could suggest yesterday's actions are just the start. In Europe, govs are following the Trump administration's moves closely. Germany, which has been the subject of Trump criticism for its trade surplus with the US, is seeking talks with the administration on the tariffs, said acting Finance Minister Peter Altmaier. “Our position is that the fewer the tariffs, the less protectionism, the better it is for the people in our countries,” Altmaier said.
Trump Pulls His Punches in First Foray Into Long-Pledged Tariffs
Johnson & Johnson, a Dow stock & Dividend Aristocrat, is promising to spend more on research in the health-care sector after changes to the US tax system. For now, the company isn't providing many details on how it may use the extra money from lower tax rates. “We’re going to look at all of our opportunities but it’s going to be a significant increase," CFO Dominic Caruso said. “We’re now up to the most significant R&D spending we’ve done in our history and we expect to expand on that going forward.” JNJ provided a 2018 profit forecast that was higher than anticipated, joining companies that are seeing benefits from the tax overhaul passed in law late last year. The conglomerate, whose businesses include prescription medicines, medical devices & consumer brands such as Johnson's baby care, makes almost ½ of its revenue outside of the US & also benefited from the weaker $ in the past year. EPS this year will be $8-8.20, excluding some items, JNJ said, higher than the $7.86 estimate. Revenue is projected to be $80.6-81.4B, in line with estimates. Q4 results topped estimates. EPS was $1.74 excluding some items, above the anticipated $1.72. On a net basis, JNJ had a quarterly loss of $10.7B after taking a one-time charge of $13.6B related to accounting changes caused by tax legislation, to bring back to the US years of aggregated foreign earnings. At the end of 2016 that amounted to $66B, according to the most recent annual report. There were some disappointments in the pharmaceuticals business, the biggest division. Sales of blockbuster arthritis treatment Remicade, now facing competition from cheaper versions, came in lower than anticipated. The decline was offset by sales in newer drugs such as psoriasis drug Stelara. For about a year, the company has been reviewing strategic options for its diabetes-care business, which could include a sale, partnerships or joint ventures. The company said the diabetes devices have been hit by price declines for several years in the market & it's difficult to fund future innovation. Today, a Chinese firm said it approached JNJ about proposed sale. The stock fell 3.38.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
J&J Promises ‘Significant’ R&D Spending After Tax Reform
The big conference in Davos Switzerland has started & it generally brings a lot of hot air. This time Trump is going & he should bring a lot of drama on the future of global trade. Even with earnings getting much of the headlines, his comments can move markets. Gov workers have returned to work (or whatever they call it), but nothing has been solved & both sides lhave shown no interest in budging from their demands. In a couple of weeks we will have to go thru this drama again, another negative for stocks. But the averages are at, or essentially at, record levels, so traders' thoughts are largely positive.
Dow Jones Industrials
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