Market Overview

The Market In 5 Minutes: Earnings, Trump And Dow20k

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The Market In 5 Minutes: Earnings, Trump And Dow20k
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Macro Focus

Futures for the Dow Jones Industrial Average climbed 32 points to 20,036.00, while the Standard & Poor’s 500 index futures rose 0.75 points to 2,295.00. Futures for the Nasdaq 100 index gained 10 points to 5,156.50.

Oil prices traded higher as Brent crude futures gained 0.67 percent to trade at $55.45 per barrel, while US WTI crude futures also rose 0.45 percent to trade at $52.99 a barrel.

Initial Jobless Claims for Jan 20 259.0K vs 247.0K consensus estimate. Continuing Claims for Jan 13 2.10M vs 2.04M consensus estimate.

  • The Markit Services PMI for January will be released at 9:45 a.m. ET.
  • Data on new home sales for December will be released at 10:00 a.m. ET.
  • The index of leading economic indicators for December is schedule for release at 10:00 a.m. ET.
  • The Energy Information Administration’s weekly report on natural gas stocks is schedule for release at 10:30 a.m. ET.
  • The Kansas City Fed manufacturing index for January is schedule for release at 11:00 a.m. ET.
  • The Treasury is set to auction 7-year notes at 1:00 p.m. ET.
  • Data on money supply for the recent week will be released at 4:30 p.m. ET.

BZ News Desk Focus

  • Ford (NYSE: F) Reports Q4 EPS $0.30 vs. $0.31 Est., Q4 Rev. $38.7B vs. $35.2B Est.
  • Qualcomm (NASDAQ: QCOM) Reports Q1 Adj. EPS $1.19 vs $1.18 Est., Sales $5.99B vs $6.12B Est.
  • eBay (NASDAQ: EBAY) Reports Q4 Adj. EPS $0.54, Sales $2.4B, Inline
  • Western Digital (NASDAQ: WDC) Reports Q2 Adj. EPS $2.30 vs $2.13 Est., Sales $4.9B vs $4.76B Est.
  • Bristol-Myers (NYSE: BMY) Reports Q4 Adj. EPS $0.63 vs $0.67 Est., Sales $5.2B vs $5.13B Est.
  • Comcast (NASDAQ: CMCSA) Reports Q4 Adj. EPS $0.89 vs $0.87 Est., Sales $21B vs $20.6B Est.

Sell-Side Themes

Citi initiated coverage on several insurance names, with MetLife (NYSE: MET) the only stock getting a Sell rating.

Sell-Side's Most Noteworthy Calls

  • Wells Fargo downgraded Johnson & Johnson (NYSE: JNJ) to Market Perform.
  • MKM Partners downgraded Mattel (NASDAQ: MAT) to Neutral.
  • Oppenheimer upgrades Estee Lauder (NYSE: EL) to Outperform.
  • Citi upgraded International Paper (NYSE: IP) to Buy.

Deal Talk

Johnson & Johnson (NYSE: JNJ) and Actelion (OTC: ALIOF) announced they have entered into a definitive transaction agreement under which Johnson & Johnson will launch an all-cash tender offer in Switzerland to acquire all of the outstanding shares of Actelion for $280 per share. Actelion will spin out its drug discovery operations and early-stage clinical development assets.

Bayer's (OTC: BAYRY) $66 billion acquisition of Monsanto (NYSE: MON) will likely not get past European regulators if they stop Dow Chemical (NYSE: DOW) and DuPont (NYSE: DD) from merging, a dealmaker close to the situation told the New York Post. Dow and DuPont said this week it would take three months longer than their previous guidance to complete their tie-up, as they work through regulatory issues. They expect the deal to close by the end of June.

Alere (NYSE: ALR) confirmed that the European Commission has granted clearance for Abbott Laboratories (NYSE: ABT) acquisition of Alere. Alere CEO Namal Nawana remains "confident that the merger will close according to the terms of the agreement." An Abbott spokesperson told Benzinga the company continues to gain regulatory approvals for the Alere acquisition, "but Alere clearly is not the company we agreed to buy and look forward to showing why that constitutes a material adverse event in court."

In The News

CVS Health (NYSE: CVS) and Express Scripts (NASDAQ: ESRX) spiked down Wednesday on fears that President Donald Trump may target pharmacy benefit managers (PBMs) for their role in inflating drug prices. Responding to numerous inbound calls, a note from Height Securities detailed certain scenarios out of D.C. and speculated two motives for federal action.

Discussion of the border wall typically triggered some of the loudest cheers during Trump’s stump speeches throughout the campaign season. Critics have blasted Trump’s border wall plan as economically infeasible, but Trump has insisted that Mexico will pay for the construction of the wall.

Blogosphere

Dow 20,000 Is No Vote of Confidence: "There’s always a fuss when the Dow reaches a nice, new, big, round number, as it did on Wednesday. The excitement is almost always overblown -- the market is more than the Dow Jones Industrial Average, the economy is more than the market, etc. -- and this particular milestone comes with the potential for additional misinterpretation: Dow 20,000 does not necessarily amount to a vote of confidence in President Donald Trump's ability to deliver economic growth."

Influence, Temptation, And Persuasion: "We are so easily influenced that it’s no wonder why marketing is one of the biggest businesses in the world. eMarketer estimates that in 2016, total media global advertising would hit $542,550,000,000, which is just about equal to the combined revenue of Amazon, Apple, and Berkshire (over the last 12 months). Investors, naturally, are a large piece of that pie; A 2013 study by the Consumer Financial Protection Bureau showed that financial service companies spent $17 billion in marketing."

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