Dow dropped 110, decliners over advancers 5-4 & NAZ slid back 16. The MLP index was even in the 203s & the REIT index rose 2+ to 430, another record. Junk bond funds fluctuated & Treasuries were sold along with stocks. Oil crawled higher in the 51s & gold added 8 to 1580.
AMJ (Alerian MLP Index tracking fund)
Equities fell as the number of new coronavirus cases reported in China surged amid the use of a new reporting method. The early selling has dropped all 3 major US averages from yesterday's record highs. China said that the number of people infected by the coronavirus jumped by more than 15K to at least 59,804. The death toll climbed by 254 to 1367. Commodities were mixed with West Texas Intermediate crude oil down 0.7% at $51.05 a barrel & gold up 0.3% at $1577 an ounce. Treasuries were little changed with the yield on the 10-year note holding near 1.59%. In Europe, Britain's FTSE paces the decline, down 1.2%, while Germany's DAX & France's CAC were lower by 0.6% & 0.8% respectively. Markets fell across Asia with China's Shanghai Composite falling 0.7%, Hong Kong's Hang Seng slid 0.3% & Japan's Nikkei was off a tad.
Japanese Prime Minister Shinzo Abe said that the cabinet will decide tomorrow to spend ¥10.3B from the country’s budget to respond to the coronavirus reported. Steps to tackle the outbreak will total ¥15.3B, he added after a meeting of a task force. The coronavirus is causing travel demand to slump across the whole Asia-Pacific region, with the region seeing a 10.5% slowdown in outbound travel bookings for Mar & Apr (excluding trips to & from China & Hong Kong). As of Feb 9, the setback looks likely to be most marked in northeast Asia, where outbound bookings for Mar & Apr, are 17.1% behind where they were at the equivalent moment last year. Global oil demand is now expected to see its first quarterly contraction in over a decade, according to the International Energy Agency (IEA), as the new coronavirus & widespread shutdown of China’s economy hits demand for crude. Demand is now expected to fall 435K barrels a day in Q1, down from the same period a year ago, & marking the first quarterly contraction in more than 10 years, the IEA said. China said it confirmed 15,152 new cases & 254 additional deaths. Those figures include the ones reported earlier by Hubei province under its new diagnosis methodology. That brings the country's total death toll to 1367 as the number of people infected hit 59,804, according to the gov. The Shanghai Health Commission said that the methodology for diagnosing coronavirus has not been changed in any Chinese provinces or municipalities except for Hubei. Health workers in Hubei province began using a new method to diagnose the virus this week. Previously, infections were only allowed to be confirmed with nucleic acid tests, which can take days to process, but Hubei province is now using CT scans which can diagnose the virus more quickly.
China confirms 15,152 new coronavirus cases, 254 additional deaths
Meeting expectations wasn’t good enough for Cisco (CSCO), a Dow stock, as the company continued to reference a “pause” in customer spending due to macroeconomic uncertainties. CEO Chuck Robbins toldd investors that customers were “still fully planning on moving forward” but also that they were “just a little cautious and trying to see what’s going on.” The company still managed to slightly beat projections for its Dec qtr. Shares were lower, a day after closing at a 5-month high, though CSCO found some defenders in the analyst community. The stock fell 3.17.
If you would like to learn more about CSCO, click on this link:
club.ino.com/trend/analysis/stock/CSCO?a_aid=CD3289&a_bid=6ae5b6f7
Pepsico, a Dividend Aristocrat, reported quarterly earnings & revenue that topped expectations after strong performances by its North American beverage & snack divisions. In 2020, PEP expects 4% organic revenue growth & 7% EPS growth after stripping out currency fluctuations. The company is forecasting adjusted EPS of $5.88 for the year, shy of the analysts' forecast of $5.95. The beverage and snack giant cited foreign currency as an expected headwind for 2020. “The world is certainly a volatile place, lots of events going on in a lot of areas of the world, even as noted a bit with some of the news this morning,” CFO Hugh Johnston said. “That said, we take the fact that we have, and we always try to plan for at least some level of volatility as a part of developing our expectations for the year, because most years will have some volatility.” The company reported fiscal 4th-qtr EPS of $1.26, down from $4.83 a year earlier. Excluding items, EPS was $1.45, topping the $1.44 forecast. Net sales rose nearly 6% to $20.64B, beating expectations of $20.27B. Organic revenue, which excludes the impact of acquisitions & divestitures & currency, rose 4.3% during the qtr. Johnston said that PEP closed all of its Chinese plants “for a short period of time” in response to the coronavirus outbreak & all but one have reopened. China represents about 2% of its business. To drive organic sales, PEP has been spending more on advertising & marketing, giving a boost to legacy brands like Gatorade & newer portfolio additions like Bubly. The company said it would increase its div by 7% to $4.09 from $3.82 effective in Jun. The stock declined 71¢.
If you would like to learn more about PEP, click on this link:
club.ino.com/trend/analysis/stock/PEP?a_aid=CD3289&a_bid=6ae5b6f7
PepsiCo earnings top estimates, but 2020 outlook below Wall Street expectations
While profit taking has to be expected for stocks, selling is also being being driven by new coronavirus cases. The Volatility Index (VIX) is back over 14, but remains not far off last years' lows. In addition to buying stocks, some investors are hedging by buying gold which is not far from its multi year highs. The Dow topping 30K may be put on hold for awhile.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 51.64 | +0.47 | +0.9% |
| GC=F | Gold | 1,576.00 | +4.40 | +0.3% |
Equities fell as the number of new coronavirus cases reported in China surged amid the use of a new reporting method. The early selling has dropped all 3 major US averages from yesterday's record highs. China said that the number of people infected by the coronavirus jumped by more than 15K to at least 59,804. The death toll climbed by 254 to 1367. Commodities were mixed with West Texas Intermediate crude oil down 0.7% at $51.05 a barrel & gold up 0.3% at $1577 an ounce. Treasuries were little changed with the yield on the 10-year note holding near 1.59%. In Europe, Britain's FTSE paces the decline, down 1.2%, while Germany's DAX & France's CAC were lower by 0.6% & 0.8% respectively. Markets fell across Asia with China's Shanghai Composite falling 0.7%, Hong Kong's Hang Seng slid 0.3% & Japan's Nikkei was off a tad.
Stocks drop as China reports more than 15,000 new coronavirus cases
Japanese Prime Minister Shinzo Abe said that the cabinet will decide tomorrow to spend ¥10.3B from the country’s budget to respond to the coronavirus reported. Steps to tackle the outbreak will total ¥15.3B, he added after a meeting of a task force. The coronavirus is causing travel demand to slump across the whole Asia-Pacific region, with the region seeing a 10.5% slowdown in outbound travel bookings for Mar & Apr (excluding trips to & from China & Hong Kong). As of Feb 9, the setback looks likely to be most marked in northeast Asia, where outbound bookings for Mar & Apr, are 17.1% behind where they were at the equivalent moment last year. Global oil demand is now expected to see its first quarterly contraction in over a decade, according to the International Energy Agency (IEA), as the new coronavirus & widespread shutdown of China’s economy hits demand for crude. Demand is now expected to fall 435K barrels a day in Q1, down from the same period a year ago, & marking the first quarterly contraction in more than 10 years, the IEA said. China said it confirmed 15,152 new cases & 254 additional deaths. Those figures include the ones reported earlier by Hubei province under its new diagnosis methodology. That brings the country's total death toll to 1367 as the number of people infected hit 59,804, according to the gov. The Shanghai Health Commission said that the methodology for diagnosing coronavirus has not been changed in any Chinese provinces or municipalities except for Hubei. Health workers in Hubei province began using a new method to diagnose the virus this week. Previously, infections were only allowed to be confirmed with nucleic acid tests, which can take days to process, but Hubei province is now using CT scans which can diagnose the virus more quickly.
China confirms 15,152 new coronavirus cases, 254 additional deaths
Meeting expectations wasn’t good enough for Cisco (CSCO), a Dow stock, as the company continued to reference a “pause” in customer spending due to macroeconomic uncertainties. CEO Chuck Robbins toldd investors that customers were “still fully planning on moving forward” but also that they were “just a little cautious and trying to see what’s going on.” The company still managed to slightly beat projections for its Dec qtr. Shares were lower, a day after closing at a 5-month high, though CSCO found some defenders in the analyst community. The stock fell 3.17.
If you would like to learn more about CSCO, click on this link:
club.ino.com/trend/analysis/stock/CSCO?a_aid=CD3289&a_bid=6ae5b6f7
Cisco stock takes a dive after earnings but analyst says ‘there’s nothing wrong here’
Pepsico, a Dividend Aristocrat, reported quarterly earnings & revenue that topped expectations after strong performances by its North American beverage & snack divisions. In 2020, PEP expects 4% organic revenue growth & 7% EPS growth after stripping out currency fluctuations. The company is forecasting adjusted EPS of $5.88 for the year, shy of the analysts' forecast of $5.95. The beverage and snack giant cited foreign currency as an expected headwind for 2020. “The world is certainly a volatile place, lots of events going on in a lot of areas of the world, even as noted a bit with some of the news this morning,” CFO Hugh Johnston said. “That said, we take the fact that we have, and we always try to plan for at least some level of volatility as a part of developing our expectations for the year, because most years will have some volatility.” The company reported fiscal 4th-qtr EPS of $1.26, down from $4.83 a year earlier. Excluding items, EPS was $1.45, topping the $1.44 forecast. Net sales rose nearly 6% to $20.64B, beating expectations of $20.27B. Organic revenue, which excludes the impact of acquisitions & divestitures & currency, rose 4.3% during the qtr. Johnston said that PEP closed all of its Chinese plants “for a short period of time” in response to the coronavirus outbreak & all but one have reopened. China represents about 2% of its business. To drive organic sales, PEP has been spending more on advertising & marketing, giving a boost to legacy brands like Gatorade & newer portfolio additions like Bubly. The company said it would increase its div by 7% to $4.09 from $3.82 effective in Jun. The stock declined 71¢.
If you would like to learn more about PEP, click on this link:
club.ino.com/trend/analysis/stock/PEP?a_aid=CD3289&a_bid=6ae5b6f7
PepsiCo earnings top estimates, but 2020 outlook below Wall Street expectations
While profit taking has to be expected for stocks, selling is also being being driven by new coronavirus cases. The Volatility Index (VIX) is back over 14, but remains not far off last years' lows. In addition to buying stocks, some investors are hedging by buying gold which is not far from its multi year highs. The Dow topping 30K may be put on hold for awhile.
Dow Jones Industrials
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