Wed 18 Oct 2017


watch Nightly Business Report. watch Bloomberg Tech. watch PBS NewsHour.
watch ABC Lateline: Artificial Intelligence. Also: Drone Technology: watch 2014 watch 2016

In Portfolioticker today

read_this Hey Jarvis, how did we go today?

  • Today at the stock market Opinion
  • The portfolio today Opinion
  • News
  • flag_japan Japan Update
  • flag_china China Update
  • Today at the stock market

    bull/bearThe Dow Jones Industrial Average closed above 23,000 for the first time on Wednesday, driven by a jump in IBM after it hinted at a return to revenue growth.

    The Dow hit 22,000 on 2 Aug 2017, only 54 trading days earlier and roughly half the time it took the index to move from 21,000 to 22,000. This marks the fourth time this year the Dow has reached a 1,000-point milestone. Solid earnings, stronger economic growth and hopes that President Donald Trump may be able to make progress on tax cuts have helped the market rally this year. The S&P 500 and Nasdaq also hit record closing highs.

    • The S&P 500 index rose 1.9 points, or 0.07%, to 2,561.26
    • The Dow Jones Industrial Average rose 160.16 points, or 0.7%, to end at 23,157.6
    • The Nasdaq Composite index added 0.56 point, or 0.01%, to 6,624.22.
    • Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored advancers.
    • About 5.6 billion shares changed hands on U.S. exchanges, below the 5.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

    “Retail investors continue to pour into the marketplace, and with each headline about a new record, and especially round numbers like that, people tend to feel like they’re missing out and you kind of suck more people into the market. Ultimately, the only way you’re going to top is by getting everybody all in. And we’re getting close.” said Ian Winer, head of equities at Wedbush Securities in Los Angeles.

    Investors globally pulled $33.7 billion from U.S. equity funds during Q3/2017, according to Thomson Reuters’ Lipper research unit. The funds are on course to post net outflows for the full year.

    Shares of IBM, which beat expectations on revenue, jumped 8.9% and accounted for about 90 points of the day’s 160 point-gain in the blue-chip index. “Today the catalyst is clearly IBM … which appears to have turned the corner. It gave the Dow the boost to stay over 23,000,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. The Dow had briefly surpassed the all-time peak on Tuesday but closed just shy of it.

    After the bell, shares of eBay fell 4% following its results.

    The financial index jumped 0.6%, led by bank stocks recovering from recent post-earnings losses. Bullish calls by brokerages helped to support the bank shares.

    Bank shares had run up ahead of recent results, which resulted in some selling following the news, Krosby said.

    Investors await news on Trump’s decision on the Federal Reserve chair position. The White House said Wednesday Trump will announce his decision in the “coming days.”Reuters

    Market indices

    Market indices
    ^ Market indices today (mouseover for 12 month view) Chart: Google Finance

    Index Ticker Today Change 31 Dec 16 YTD
    S&P 500 SPX (INX) 2,561.26 +0.07% 2,238.83 +14.4%
    DJIA INDU 23,157.60 +0.69% 19,762.60 +17.17%
    NASDAQ IXIC 6,624.22 +0.00% 5,383.12 +23.05%

    Portfolio Indices

    USD and AUD denominated indices over the past 52 weeks (Chart: Bunting)
    ^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting

    Index values

    Index Currency Today Change 31 Dec 16 YTD
    USD-denominated Index USD 2.876 -0.38% 2.105 +36.66%
    Valuation Rate USD/AUD 0.78968 +0.02% 0.72663 +8.67%
    AUD-denominated Index AUD 3.645 -0.40% 2.895 +25.91%

    Portfolio stock prices

    :-) Alphabet Class A shares closed on a record high of $1,012.74 – up 0.17% on yesterday’s record of $1,011.00.
    :-) Alphabet Class C shares closed on a record high of $992.81 – up 0.06% on yesterday’s record of $992.18.
    :-) Alphabet Class A+C shares closed on a record high of $2,005.55 – beating yesterday’s record of $2,003.18.
    :-) VMware closed on a record $116.60 – up 0.87% on yesterday’s record of $115.60.

    Stock Ticker Today Change 31 Dec 16 YTD
    Alphabet A GOOGL $1012.74 +0.17% $792.45 +27.79%
    Alphabet C GOOG $992.81 +0.06% $771.82 +28.63%
    Apple AAPL $159.76 -0.44% $115.82 +37.93%
    Amazon AMZN $997.00 -1.20% $749.87 +32.95%
    Ebay EBAY $37.97 +1.28% $29.69 +27.88%
    Facebook FB $176.03 -0.05% $115.05 +53.00%
    PayPal PYPL $67.26 +0.88% $39.47 +70.4%
    Twitter TWTR $18.02 -1.42% $16.30 +10.55%
    Visa V $107.80 +0.24% $78.02 +38.16%
    VMware VMW $116.60 +0.87% $78.73 +48.10%

    FX: USD/AUD

    USD

    DXY movements
    ^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

    The Bloomberg Dollar Spot Index (DXY) was little changed.
    The EUR rose 0.2% to USD1.1794.
    Britain’s GBP rose 0.1% to USD 1.3198.
    Japan’s JPY fell 0.6% to 112.92 per USD.
    Bloomberg

    AUD

    AUD movements
    ^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com

    Oil and Gas Futures

    Futures prices

    Prices are as at 15:49 EDT

    • NYMEX West Texas Intermediate (WTI): $52.00/barrel +0.23% Chart
    • ICE (London) Brent North Sea Crude: $58.17/barrel +0.50% Chart
    • NYMEX Natural gas futures: $2.87/MMBTU -3.07% Chart

    Ebay: Q3/2017 Earnings and Outlook

    Press Release Extract [ebay]

    Ebay delivered gross merchandise volume (GMV) for the quarter ended September 30, 2017 of $21.7 billion, increasing 8% on an as-reported basis and 7% on a foreign exchange (FX) neutral basis. Revenue for the quarter was $2.4 billion, up 9% on an as-reported basis and 8% on an FX-Neutral basis.

    During the quarter, eBay delivered GAAP net income from continuing operations of $523 million, or $0.48 per diluted share, and Non-GAAP net income from continuing operations of $514 million, or $0.48 per diluted share. The company generated $877 million of operating cash flow and $720 million of free cash flow from continuing operations while also repurchasing $907 million of its common stock in the quarter.

    “In Q3, we drove acceleration across all three of our platforms, delivering strong top and bottom line financial results and our fastest volume growth in over three years,” said Devin Wenig, President and CEO of eBay Inc. “Our customers are responding to the significant product enhancements we have been making, and this is reflected in our results.”

    Underlying total eBay Inc. performance, the Marketplace platforms delivered $20.5 billion of GMV and $1.9 billion of revenue. Marketplace GMV was up 9% on an as-reported basis and 7% on an FX-Neutral basis, driven by acceleration in the U.S. and Europe, which led to revenue growth of 8% on an as-reported basis and 7% on an FX-Neutral basis. StubHub drove GMV of $1.2 billion, up 2%, and revenue of $275 million, up 5%, driven by continued growth in its international business. Classifieds growth accelerated in the quarter with revenue of $235 million, up 19% on an as-reported basis and 13% on an FX-Neutral basis, driven primarily by strength in Germany.

    In the third quarter, eBay added nearly two million active buyers across its platforms, for a total of 168 million global active buyers. This figure has been adjusted to exclude domestic active buyers in India following the sale of eBay’s India business to Flipkart. Marketplace continued to enhance user experiences with product changes including grouped listings, simplified selling flows and eBay Authenticate. eBay activated its brand platform with campaigns across the U.S., U.K. and Australia during the quarter and was once again recognized in Interbrand’s Best Global Brands report. StubHub continued to strengthen its partnership with Major League Baseball and is now integrated with all 30 teams. Additionally, the company will now serve as the official secondary ticketing partner to the T-Mobile Arena, Las Vegas’ newest sports and entertainment venue.

    Other Selected Financial and Operational Results

    • Operating margin — GAAP operating margin decreased to 24.0% for the third quarter of 2017, compared to 24.4% for the same period last year. Non-GAAP operating margin decreased to 29.6% in the third quarter of 2017, compared to 29.9% for the same period last year.
    • Taxes — The GAAP effective tax rate for continuing operations for the third quarter of 2017 was 25%, compared to 22% for the third quarter of 2016. The non-GAAP effective tax rate for continuing operations for the third quarter of 2017 was 23%, compared to 22% for the third quarter of 2016.
    • Cash flow — The company generated $877 million of operating cash flow from continuing operations and $720 million of free cash flow from continuing operations during the third quarter of 2017.
    • Stock repurchase program — The company repurchased approximately $907 million of its common stock, or 25 million shares, in the third quarter of 2017. The company’s total repurchase authorization remaining as of September 30, 2017 was $2.6 billion.
    • Cash and cash equivalents and non-equity investments — The company’s cash and cash equivalents and non-equity investments portfolio totaled $11.4 billion as of September 30, 2017.

    Business Outlook

    • Fourth quarter 2017 — The company expects net revenue between $2.58 billion and $2.62 billion, representing FX-Neutral growth of 6% – 8%, with GAAP earnings per diluted share from continuing operations in the range of $0.40 – $0.45 and non-GAAP earnings per diluted share from continuing operations in the range of $0.57 – $0.59.
    • Full year 2017 – The company expects net revenue between $9.53 billion and $9.57 billion, representing Organic FX-Neutral growth of approximately 7%, with GAAP earnings per diluted share from continuing operations in the range of $1.85 – $1.90 and non-GAAP earnings per diluted share from continuing operations in the range of $1.99 – $2.01.

    Ebay Inc, “eBay Inc. Reports Third Quarter 2017 Results“, 18 Oct 2017 More

    Market Reaction

    ebay_20171018

    Bloomberg

    EBay Inc. gave a lackluster profit forecast for the holiday quarter, blunting investor enthusiasm that the online marketplace was solidifying its position in an industry dominated by Amazon.com Inc.Bloomberg

    Reuters

    EBay Inc forecast Q4/2017 adjusted profit that was largely below analysts’ estimates as the company continues to ramp up spending to tweak its e-commerce platforms. The company’s shares fell 4.4% to $36.3 in after-hours trading on Wednesday.

    EBay forecast Q4/2017 adjusted profit of between 57 cents to 59 cents per share. Analysts on average were expecting a profit of 59 cents per share, according to Thomson Reuters I/B/E/S.

    EBay also reported 168 million active buyers in Q3/2017, compared with analysts’ estimate of 171 million, according to data and analytics firm FactSet.

    The company is investing heavily to revamp its platform as it seeks to woo shoppers amid stiff competition from Amazon.com Inc.

    EBay’s net income rose to $523 million, or 48 cents per share, in Q3/2017, from $413 million, or 36 cents per share, in Q3/2016.

    Revenue rose 8.7% to $2.41 billion, edging past analysts’ estimate of $2.37 billion.

    Excluding one-time items, eBay earned 48 cents per share, in line with analysts estimates.Reuters

    flag_usa US: New Residential Construction. Sep 2017

    Press Release Extract [ser_construction]

    Building Permits

    Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,215,000. This is 4.5 percent (±1.6 percent) below the revised August rate of 1,272,000 and is 4.3 percent (±1.7 percent) below the September 2016 rate of 1,270,000. Single-family authorizations in September were at a rate of 819,000; this is 2.4 percent (±1.7 percent) above the revised August figure of 800,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in September.

    us_nrc_20171018

    Housing Starts

    Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,127,000. This is 4.7 percent (±8.1 percent) below the revised August estimate of 1,183,000, but is 6.1 percent (±8.8 percent) above the September 2016 rate of 1,062,000. Single-family housing starts in September were at a rate of 829,000; this is 4.6 percent (±8.5 percent) below the revised August figure of 869,000. The September rate for units in buildings with five units or more was 286,000.

    Housing Completions

    Privately-owned housing completions in September were at a seasonally adjusted annual rate of 1,109,000. This is 1.1 percent (±12.4 percent) above the revised August estimate of 1,097,000 and is 10.3 percent (±11.9 percent) above the September 2016 rate of 1,005,000. Single-family housing completions in September were at a rate of 781,000; this is 4.6 percent (±11.4 percent) above the revised August rate of 747,000. The September rate for units in buildings with five units or more was 322,000.

    U.S. Census Bureau and the U.S. Department of Housing and Urban Development, “New Residential Construction. Sep 2017“, 18 Oct 2017 (08:30) More

    flag_usa US: Usual Weekly Earnings of Wage and Salary Workers. Q3/2017

    Press Release Extract [ser_bls]

    Median weekly earnings of the nation’s 114.9 million full-time wage and salary workers were $859 in the third quarter of 2017 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported today. This was 3.9 percent higher than a year earlier, compared with a gain of 2.0 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.

    Highlights from the third-quarter data:

    • Median weekly earnings of full-time workers were $859 in the third quarter of 2017. Women had median weekly earnings of $767, or 81.9 percent of the $937 median for men.
    • The women’s-to-men’s earnings ratio varied by race and ethnicity. White women earned 82.0 percent as much as their male counterparts, compared with Black women (88.4 percent), Asian women (78.6 percent), and Hispanic women (85.5 percent).
    • Among the major race and ethnicity groups, median weekly earnings for Black men working at full-time jobs were $744, or 77.1 percent of the median for White men ($965). The difference was less among women, as Black women’s median earnings ($658) were 83.2 percent of those for White women ($791). Overall, median earnings of Hispanics who worked full time ($655) were lower than those of Blacks ($696), Whites ($887), and Asians ($1,010).
    • By age, median weekly earnings were highest for men age 55 to 64, at $1,133. For women, usual weekly earnings were highest for those age 35 to 64: weekly earnings were $857 for women age 35 to 44, $845 for women age 45 to 54, and $873 for women age 55 to 64. Men and women age 16 to 24 had the lowest median weekly earnings, $527 and $500, respectively.
    • Among the major occupational groups, persons employed full time in management, professional, and related occupations had the highest median weekly earnings—$1,411 for men and $1,058 for women. Men and women employed in service jobs earned the least, $610 and $501, respectively.
    • By educational attainment, full-time workers age 25 and over without a high school diploma had median weekly earnings of $522, compared with $714 for high school graduates (no college) and $1,271 for those holding at least a bachelor’s degree. Among college graduates with advanced degrees (professional or master’s degree and above), the highest earning 10 percent of male workers made $3,499 or more per week, compared with $2,765 or more for their female counterparts.
    • Seasonally adjusted median weekly earnings were $868 in the third quarter of 2017, little changed from the previous quarter ($863).

    Bureau of Labor Statistics, “Usual Weekly Earnings of Wage and Salary Workers. Third Quarter 2017“, 9 Oct 2017 More

    flag_japan Japan update

    Currency: USD/JPY

    JPY movements
    ^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

    Stockmarket: Nikkei 225

    N225 movements
    ^ Nikkei N225 movements over the past week Chart: Google Finance

    flag_china China update

    Currency: USD/CNY

    CNY movements
    ^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com

    Stockmarket: CSI300

    CSI300 movements
    ^ Shanghai CSI300 movements over the past week Chart: Google Finance