The Market In 5 Minutes: All Eyes On The Fed

Macro Focus

Futures for the Dow Jones Industrial Average gained 2 points to 19,860.00, while the Standard & Poor’s 500 index futures rose 0.75 points to 2,268.50. Futures for the Nasdaq 100 index rose 3 points to 4,940.50.

Oil prices traded lower as Brent crude futures dropped 1.27 percent to trade at $55.01 per barrel, while US WTI crude futures also fell 1.35 percent to trade at $53.21 a barrel.

USA PPI (MoM) for Nov 0.40% vs 0.10% consensus estimate. The prior reading was 0.00%.

USA Retail Sales (MoM) for Nov 0.10% vs 0.30% consensus estimate. The prior reading was 0.80%.

Data on industrial production for November will be released at 9:15 a.m. ET.
Data on business inventories for October will be released at 10:00 a.m. ET.
The Energy Information Administration’s weekly report on petroleum inventories is schedule for release at 10:30 a.m. ET.
The Federal Open Market Committee will announce its policy decision at 2:00 p.m. ET.
The Fed Chair Janet Yellen will hold a press conference at 2:30 p.m. ET.

BZ News Desk Focus

ABM Industries ABM Reports Q4 EPS $0.51 vs. Est. $0.50, Rev. $1.32B vs. Est. $1.33B
Joy Global JOY Q4 EPS $0.17 vs $0.17 Est, Revenue $656.6M vs $666.9M Est
Nordson NDSN Reports Q4 GAAP EPS $1.31, Including $0.08/Share Charge Related to One-Time Items, Sales $509M vs $482M Est.
LendingTree TREE Sees FY16 Sales $370M-$375M vs $379.9M Est., Adj. EBITDA $64M-$66M

A 13D filing that Bill Ackman’s Pershing Square submitted with the SEC showed a marked reduction in the firm’s exposure to Valeant VRX. Pershing, which was the largest institutional shareholder of record in the company as of the end of the third quarter of 2016, disclosed after Tuesday's close that Pershing Square and Pershing Square II had respectively sold 3,359,178 shares and 117,512 shares of high-cost-basis Common Stock, seeking to “generate a tax loss in 2016 for their investors.”

Sell-Side Themes

Nomura initiated coverage on a few lodging names, notably putting Buy ratings on Xenia Hotels XHR and RLJ Lodging RLJ.

Sell-Side's Most Noteworthy Calls

JPMorgan downgraded Qualcomm QCOM to Neutral.
Argus downgraded Marathon Oil MRO to Hold.
Piper Jaffray upgraded Kroger KR to Neutral.
Evercore upgraded NVIDIA NVDA to Buy.

Deal Talk

Shares of Hertz Global HTZ rose sharply on unconfirmed market chatter that shareholder Carl Icahn is seeking to acquire all shares of the car rental company. Ichan is said to have discussed a bid for Hertz with other parties. After Tuesday's close, Hertz reported in an 8K filing that Kathryn Marinello would become CEO effective January 3, 2017. Icahn told Reuters that Marinello was "the right person to lead Hertz forward.

French drug giant Sanofi SNY is in talks for a deal with Actelion Pharmaceuticals, people familiar with the matter told Wall Street Journal. Actelion confirmed Johnson & Johnson JNJ has withdrawn from discussions and is engaged in discussions with another party regarding a possible strategic transaction.

In The News

The Federal Reserve is likely to raise rates—the only increase this year and just the second since June 2006—and it also will release economic projections for the first time since the U.S. election. Given the likelihood of steadily-rising interest rates, investors are now shifting their attention which investments are best-positioned for the imminent tightening. Here are three ETFs to consider.

Wells Fargo WFC traded down after the company failed to deal with alleged “deficiencies” in its plan to manage its bankruptcy without recurring to a taxpayer bailout – a plan known as “living will.” Regulators have imposed penalties on the company, including the prohibition to establish international bank units. The bank will also be barred from purchasing any non-bank subsidiaries.

President-elect Donald Trump’s promise to eliminate regulations on U.S. businesses will likely take years to fulfill given the complex steps involved in reversing them and political and legal challenges from Democratic lawmakers and state attorneys general. Trump has said his administration will take aim at regulations across industries, and he will be backed by congressional Republicans eager to undo some of the more controversial Obama administration initiatives. Big targets include power-plant regulations and...

Blogosphere

Beware: "In fact, the ONLY 3 PERIODS of extended unified Republican governments going back to 1900 ALL DIRECTLY led to banking crises…Arguably the 3 worst in US History."

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