In Portfolioticker today
Today at the stock market
“U.S. stocks plunged on Thursday in another dramatic trading session, confirming a correction for the market that has thrown its nearly 9-year bull run off course. The bottom of this recent slide remained elusive for investors, who have been whipsawed this week by huge swings that have shaken a market that had only climbed steadily for months.
With Thursday’s drops, the benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10% from 26 Jan 2018 record highs. The S&P 500 slumped 3.8% on Thursday, while the Dow dropped 4.2% as losses accelerated late in the trading day. The S&P 500 last confirmed a correction in Jan 2016, when it fell 13.3% amid concerns about a slump in oil prices.
- The S&P 500 index fell 100.66 points, or 3.75%, to 2,581.
- The Dow Jones Industrial Average fell 1,032.89 points, or 4.15%, to 23,860.46.
- The Nasdaq Composite index fell 274.83 points, or 3.9%, to 6,777.16.
- The Cboe Volatility Index (VIX) rose 5.73 to 33.46 on Thursday, about 3 times the average level of the past year.
- About 10.5 billion shares changed hands in U.S. exchanges, well above the 8.2 billion daily average over the last 20 sessions.
- Declining issues outnumbered advancing ones on the NYSE by an 8.26-to-1 ratio; on Nasdaq, a 5.58-to-1 ratio favored decliners.
- The S&P 500 posted no new 52-week highs and 32 new lows; the Nasdaq Composite recorded 24 new highs and 113 new lows.
The S&P closed below the intraday low it had hit on Tuesday, a key level traders had been watching.
“The dust hasn’t settled yet, and I think both buyers and sellers are trying to figure out what this market really wants to do. I would think that this continues to happen for the next few trading sessions for everything to kind of get flushed out,” said Jonathan Corpina, senior managing partner for Meridian Equity Partners in New York.
The retreat in equities had been long awaited by investors as the market climbed steadily to record high after record high with few bumps.
The sharp selloff in recent days was kicked off by concerns over rising inflation and bond yields, sparked by Friday’s Jan 2018 U.S. jobs report (200,000 new jobs created), with investors pointing to additional pressure from the violent unwinding of trades linked to bets on volatility staying low.
The number of Americans filing for unemployment benefits unexpectedly fell last week, dropping to its lowest in nearly 45 years as the labor market tightened further, bolstering expectations of faster wage growth this year.
Equities for years have looked relatively attractive compared to the low yields offered by bonds, but the rise in Treasury yields has diminished the lure of stocks, especially with stock valuations at historically expensive levels.
Earlier on Thursday, the 10-year U.S. Treasury note yield rose as high as 2.884%, nearing Monday’s four-year peak of 2.885%, after the Bank of England said interest rates probably needed to rise sooner than previously expected.
“What we’re seeing today is continued concerns around interest rates going higher, around valuations in the stock market,” said Chris Zaccarelli, chief investment officer with Independent Advisor Alliance in Charlotte, North Carolina.
All 11 major S&P sectors finished lower, with financials and technology the worst performing groups. All 30 components of the blue-chip Dow finished negative.
Investors are weighing whether the sharp swings this week are the start of a deeper correction or just a temporary bump in the prolonged bull market. For the year to date, the S&P 500 is now down 3.5%.
The percentage of U.S. individual investors expecting a decline in stock prices has hit a 3-month high, according to the American Association of Individual Investors’ weekly sentiment survey.
In earnings news, Twitter rose 12.2% after the social media company delivered its first quarterly profit and an unexpected return to revenue growth. Immediately after reporting Twitter had risen more than 26% to around $34, before being caught up in today’s market selloff.” Reuters
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
|Index||Ticker||Today||Change||31 Dec 17||YTD|
|S&P 500||SPX (INX)||2,581.00||-3.76%||2,673.61||-3.47%|
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 17||YTD|
Portfolio stock prices
|Stock||Ticker||Today||Change||31 Dec 17||YTD|
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The Bloomberg Dollar Spot Index (DXY) rose 0.1%.
The EUR fell 0.2% to USD 1.2244.
Britain’s GBP rose 0.2% to USD 1.3905, the first advance in a week.
japan’s JPY rose 0.4% to 108.85 per USD.
The yield on 10-year Treasuries fell less than one basis point to 2.83%.
Germany’s 10-year yield rose 2 basis points to 0.76%.
Britain’s 10-year yield rose 7 basis points to 1.617%, the biggest rise in5 weeks.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
“The United Arab Emirates, a model Persian Gulf petro-state where endless billions from crude exports feed a giant sovereign wealth fund, isn’t the most obvious customer for Texan oil.
Yet, in a trade that illustrates how the rise of the American shale industry is upending energy markets across the globe, the U.A.E. bought oil directly from the U.S. in Dec 2017, according to data from the federal government. A tanker sailed from Houston and arrived in the Persian Gulf in jan 2018.
The cargo of American condensate, a type of very light crude oil, was preferred to regional grades because its superior quality made more suitable for the U.A.E’s processing plants, a person with knowledge of the matter said, asking not to be identified discussing a commercially sensitive matter.
“As a member of OPEC and a large crude producer, I would imagine they would be very self-sufficient in their own crude supply,” said Andy Lipow, president of Lipow Oil Associates LLC. The purchases of U.S. oil aren’t likely to continue, given the U.A.E.’s own supply, Lipow said.
The end of a ban on U.S. exports in 2015 coupled with the explosive growth of shale production, has changed the flow of petroleum around the world. Shipments from U.S. ports have increased from a little more than 100,000 barrels a day in 2013 to 1.53 million in Nov 2017, traveling as far as China and the U.K.
The U.S. exported about 700,000 barrels of light domestic crude in December to the U.A.E., the Census Bureau reported Tuesday. While Energy Information Administration data show it’s the fourth-largest OPEC producer’s first cargo of U.S. oil, Adnoc said in Jul 2017 it purchased condensate from the U.S. for September delivery. Although it exports more than two million barrels/day, the Middle Eastern country typically imports extra-light condensate to process in a unit known as a splitter.
With rising crude exports and already booming overseas sales of refined petroleum products such as gasoline, the U.S. net oil imports have plunged to below 3 million barrels/day, the lowest since data available starting 45 years ago, compared with more than 12 million barrels/day in 2006. The U.S. could become a net petroleum exporter by 2029, the EIA said this week.
U.A.E. crude production was 2.85 million barrels a day in Jan 2018, according to data compiled by Bloomberg. Output has declined from 3.07 million at the end of 2016 as OPEC and allies cut production to reduce a global glut and prop up prices.
The cargo was shipped from Enterprise Products Partners LP’s Houston terminal on the tanker Seoul Spirit, which arrived 31 Jan 2018 at the Port of Ruwais in Abu Dhabi, according to ship tracking data compiled by Bloomberg.
Until last year, the U.A.E. relied on Qatar for its condensate supply. But the two countries are embroiled in a political dispute, and the U.A.E. decided in Jun 2017 to ban all petroleum ships from Qatar.” Bloomberg
Prices are as at 15:47 ET
- NYMEX West Texas Intermediate (WTI): $60.32/barrel -2.38% Chart
- ICE (London) Brent North Sea Crude: $64.19/barrel -2.01% Chart
- NYMEX Natural gas futures: $2.69/MMBTU -0.41% Chart
Twitter December 2017 Quarter Earnings Report
Press Release Extract [twtr]
- Q4 was a strong finish to the year with total revenue increasing 2% year-over-year, and owned-and-operated (O&O) advertising revenue increasing 7% year-over-year, reflecting better-than- expected growth across all major products and geographies.
- We achieved GAAP profitability for the first time and delivered our highest ever GAAP net income, adjusted EBITDA, and adjusted EBITDA margins in Q4. GAAP net income in Q4 reached $91 million with adjusted EBITDA of $308 million. GAAP net margins in Q4 reached 12% and adjusted EBITDA margins reached 42%, achieving our long-term target range of 40-45% for the first time.
- We launched new features to help people discover and talk about what’s happening on Twitter, including making it easier to thread Tweets and expanding the character limit to 280 characters for more people around the world.
We achieved the following results for fiscal year 2017 and Q4:
- 2017 revenue totaled $2.4 billion, a decrease of 3% year-over-year. Excluding the full year $82 million year-over-year impact from the deprecated TellApart product, revenue was approximately flat year- over-year.
- 2017 GAAP net loss of $108 million, net margin of (4%) versus (18%) in 2016, and diluted EPS of ($0.15).
- 2017 non-GAAP net income of $329 million, an increase of 24% year- over year; non-GAAP net margin of 13% and non-GAAP diluted EPS of $0.44, an increase of 19% year-over-year.
- 2017 adjusted EBITDA of $863 million, up 15% year-over-year, representing an adjusted EBITDA margin of 35%, versus 30% in 2016.
- Q4 revenue totaled $732 million, an increase of 2% year-over-year, or an increase of 8% when excluding the approximately $40 million year- over-year impact from TellApart in Q4, which was fully deprecated for the entire quarter.
- Advertising revenue totaled $644 million, an increase of 1% year-over-year.
- O&O advertising revenue totaled $593 million, an increase of 7% year-over-year.
- Data licensing and other revenue totaled $87 million, an increase of 10% year-over-year.
- US revenue totaled $406 million, a decrease of 8% year-over-year.
- International revenue totaled $326 million, an increase of 17% year-over-year.
- Total ad engagements were up 75% year-over-year.
- Cost per engagement (CPE) was down 42% year-over-year.
- Q4 GAAP expenses totaled $621 million, a decrease of 28% year-over-year.
- Q4 non-GAAP expenses totaled $511 million, a decrease of 14% year-over-year.
- Q4 GAAP net income of $91 million, representing a GAAP net margin of 12%, and GAAP diluted EPS of $0.12.
- Q4 non-GAAP net income of $141 million and non-GAAP diluted EPS of $0.19.
- Q4 adjusted EBITDA of $308 million, an increase of 43% year-over-year, representing an adjusted EBITDA margin of 42%, our highest adjusted EBITDA margin to date and within our long-term target range of 40-45%.
- Average monthly active usage (MAU) was 330 million for Q4, an increase of 4% year-over-year and flat compared to the previous quarter.
- As expected, MAU was impacted by seasonality and the change to Safari’s third-party app integration, which affected approximately 2 million MAU in Q4 (roughly 1 million in the US and 1 million in international markets), as well as increased information quality efforts, which are our overall efforts to reduce malicious activity on the service, inclusive of spam, malicious automation, and fake accounts.
- Average US MAUs were 68 million for Q4, an increase of 2% year- over-year and a decrease of 1 million quarter-over-quarter, reflecting the impact of the change to Safari’s third-party app integration, as well as seasonality and increased information quality efforts.
- Average international MAUs were 262 million for Q4, an increase of 4% year-over-year and compared to 261 million in the previous quarter.
- Daily active usage (DAU**) grew 12% year-over-year, marking our fifth consecutive quarter of double-digit year-over-year growth.
Q4 was a strong finish to the year with total revenue increasing 2% year-over-year, and owned-and-operated (O&O) advertising revenue increasing 7% year-over-year, reflecting better-than-expected growth across all major products and geographies.
Q4 revenue growth was driven by continued strong engagement growth, improved revenue features, improved ROI, and better sales execution. Twitter continues to help our partners be relevant in the moment at scale. We are capitalizing on this unique value proposition with improved execution by our sales and operating teams and continued improvements to our core ad products.
Total revenue in Q4 was $732 million, reflecting year-over-year growth of 2%, as compared to a decline of 4% in Q3 2017, a decline of 5% in Q2 2017, and a decline of 8% in Q1 2017. Without the approximately $40 million year-over- year impact from TellApart, which was fully deprecated for all of Q4, total Q4 revenue would have grown 8% year-over-year.
Our revenue priorities remain:
- Improving our core ad offerings through better performance and measurement, including ad platform improvements, self-serve measurement studies, and third-party accreditation;
- Tapping into new channels of demand, such as online video, and introducing new ways to buy ads on Twitter, including alpha testing of programmatic buying; and
- Continuing to grow data and enterprise solutions revenue through our new product and channel segmented go-to-market approach.
In Q4, value for advertisers continued to improve and was driven by ongoing engagement growth, improved products, better ad relevance (as measured by clickthrough rates (CTR) and ad engagements), and better pricing. On a year-over-year basis, cost per engagement (CPE) declined by 42% while overall ad engagements increased by 75%. CTR on a year-over-year basis increased across all major ad types as ad relevance continues to improve, helping to drive year-over-year improvements in CPM despite the year-over- year declines in CPE. In Q4, our ads platform team made optimizations to our ad serving logic that resulted in a 26% increase in ad engagement rates and an 18% increase in return for our advertisers.
Total revenue returned to year-over-year growth and totaled $732 million in Q4, up 2% year-over-year and 24% sequentially. Excluding TellApart (which was fully deprecated for the quarter and did not have any revenue in the period), total revenue was up 8% year-over-year and 26% sequentially.
Total US revenue was $406 million, down 8% year-over-year. Total international revenue was $326 million, increasing 17% year-over-year. We saw continued regional strength in Asia Pacific and improvement in some EMEA markets. Japan grew 34% year-over-year and contributed $106 million, or 15% of total revenue.
Total advertising revenue was $644 million, an increase of 1% year-over-year. Key results to note:
- O&O advertising revenue was $593 million, an increase of 7% year- over-year and 30% from the previous quarter. We believe the strong growth in our O&O platform reflects continued sales momentum with advertisers built around increasingly differentiated features and improved ROI.
- Non-O&O advertising revenue was $51 million, a decrease of 40% year- over-year driven by an approximate $40 million-year-over-year decline from TellApart which did not have any revenue in the period.
- By ad format, video continues to be the largest, with growth driven by strength in Video Website Cards, Video App Cards, In-Stream Sponsorships, and In-Stream Video Ads. Other ad formats such as DR website clicks and Mobile App installs also performed well.
- By channel, brand advertisers remain our largest contributor to revenue. Our self-serve channel had a second consecutive quarter of strength, driven by product enhancements and better sales execution.
Data licensing and other revenue totaled $87 million, an increase of 10% year-over-year. Growth was driven by DES, where we continue to benefit from our new tiered product and channel strategy, with a significant number of new enterprise deals signed in Q4.
For Q1, we expect:
- Adjusted EBITDA to be between $185 million and $205 million
- Adjusted EBITDA margin to be between 33% and 34%
- Stock-based compensation expense to be in the range of $100 million to $110 million
For FY 2018, we expect:
- Stock-based compensation expense to be in the range of $350 million to $450 million
- Capital expenditures to be between $375 million and $450 million“
Twitter, “Earnings Report“, 8 Feb 2018 More
US: Unemployment Insurance Weekly Claims Report
Press Release Extract [ser_4]
In the week ending February 3, the advance figure for seasonally adjusted initial claims was 221,000, a decrease of 9,000 from the previous week’s unrevised level of 230,000. The 4-week moving average was 224,500, a decrease of 10,000 from the previous week’s unrevised average of 234,500. This is the lowest level for this average since March 10, 1973 when it was 222,000.
Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending January 27, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 27 was 1,923,000, a decrease of 33,000 from the previous week’s revised level. The previous week’s level was revised up 3,000 from 1,953,000 to 1,956,000. The 4-week moving average was 1,946,000, an increase of 12,500 from the previous week’s revised average. The previous week’s average was revised up by 750 from 1,932,750 to 1,933,500.
The advance number of actual initial claims under state programs, unadjusted, totaled 240,636 in the week ending February 3, a decrease of 27,130 (or -10.1 percent) from the previous week. The seasonal factors had expected a decrease of 16,822 (or -6.3 percent) from the previous week. There were 259,713 initial claims in the comparable week in 2017.
The advance unadjusted insured unemployment rate was 1.6 percent during the week ending January 27, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,305,941, a decrease of 70,297 (or -3.0 percent) from the preceding week. The seasonal factors had expected a decrease of 31,292 (or -1.3 percent) from the previous week. A year earlier the rate was 1.8 percent and the volume was 2,482,809.
The total number of people claiming benefits in all programs for the week ending January 20 was 2,414,099, an increase of 92,411 from the previous week. There were 2,538,269 persons claiming benefits in all programs in the comparable week in 2017.
Initial claims for UI benefits filed by former Federal civilian employees totaled 1,919 in the week ending January 27, an increase of 915 from the prior week. There were 701 initial claims filed by newly discharged veterans, an increase of 75 from the preceding week.
There were 14,166 former Federal civilian employees claiming UI benefits for the week ending January 20, an increase of 2,349 from the previous week. Newly discharged veterans claiming benefits totaled 8,654, an increase of 159 from the prior week.
The highest insured unemployment rates in the week ending January 20 were in the Virgin Islands (15.4), Puerto Rico (4.8), Alaska (4.3), Connecticut (3.0), New Jersey (3.0), Montana (2.9), Rhode Island (2.9), Pennsylvania (2.8), Massachusetts (2.6), and Illinois (2.5).
The largest increases in initial claims for the week ending January 27 were in Missouri (+6,132), Georgia (+3,060), Pennsylvania (+1,586), Texas (+1,482), and North Carolina (+1,237), while the largest decreases were in California (- 2,687), Michigan (-1,949), New Jersey (-1,825), Ohio (-838), and South Carolina (-713).”
Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 8 Feb 2018 More
^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
Stockmarket: Nikkei 225
^ Nikkei 225 movements over the past week Chart: Google Finance
^ CNY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
^ Shanghai CSI300 movements over the past week Chart: Google Finance