PDF Tuesday, January 05, 2016

Tuesday, January 05, 2016

On Tap

7:45 a.m. 01/02 The Retail Economist/Goldman Sachs Weekly Chain Store Sales Index Chain Store Sales, W/W% (previous 1.6%), Chain Store Sales, M/M% (previous +1.3%)

8:55 a.m. 01/02 Johnson Redbook Retail Sales Index Ret Sales Mo-to-Date, M/M% (previous -0.5%), Y/Y% (previous +2.0%), Latest Wk, Y/Y% (previous +2.5%)

9:45 a.m. Dec ISM-NY Report on Business US ISM-NY Business Index (previous 60.7)

4:00 p.m. Dec Domestic Auto Industry Sales Auto Sales Annualized (expected 17.9M)

4:30 p.m. 01/01 API Weekly Statistical Bulletin Crude Stocks, Net Chg (Bbls) (previous +2.9M), Gasoline Stocks, Net Chg (Bbls) (previous +0.5M), Distillate Stocks, Net Chg (Bbls) (previous +2.081M), Refinery Runs

Recent Analyst Ratings Actions

There are no analyst ratings changes.

OPENING CALL

Stock futures were deep in the red again Tuesday, as China's markets appeared to steady following state intervention.

The Shanghai Composite Index closed down 0.3% after Chinese officials outlined a raft of measures to calm investors' nerves.

Stocks in Europe were flat in early trade, with the Stoxx Europe 600 index erasing opening gains.

Chinese authorities acted on several fronts to calm investors Tuesday. The stock market regulator said that it would release guidelines about large-scale selling of shares ahead of a ban on selling by large stakeholders that is expected to expire on Friday.

Meanwhile, China's central bank injected 130 billion yuan ($19.9 billion) in shortterm funds into the country's financial system, according to a statement from the People's Bank of China. It also intervened in the foreign exchange market to support a weakening currency, according to two people familiar with the matter.

Mainland Chinese stocks were again volatile on Tuesday, falling as much as 3.2% and rising as much as 1% in early trading.

EQUITIES

Smith & Wesson on Monday raised its revenue and adjusted profit projections for the current quarter and fiscal year amid a strong start to gun-show season promising strong sales.

Smith & Wesson said it now expected sales for the quarter ended Jan. 31 between $175 million and $180 million with adjusted earnings between 39 cents and 41 cents on a per share basis.

Previously, the company had expected sales between $150 million and $155 million, with adjusted earnings in a range of 27 cents and 29 cents.

Faraday Future stole a page from the Tesla Motors handbook, unveiling an ampedup "concept" electric car in Las Vegas in front of hundreds of media and other guests attending the Consumer Electronics Show.

The four-motor sports car with potential to zip from 0-60 miles an hour in under three seconds isn't likely to be the car that the company actually produces next year, executives say, but it is supposed to show what the fledgling company with significant Chinese financing can do.

Nick Sampson, the chief vehicle architect for Faraday, said in an interview ahead of the event that the modular architecture can be easily altered and includes a new battery-pack design that uses "strings" of batteries that can be added or subtracted, like a brick from a candy bar. That will allow for many sizes and electric range offerings from the company.

Activision Blizzard acquired Major League Gaming, a well-known producer and broadcaster of videogame competitions, as it works to build a new "e-sports" division.

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Activision Blizzard, which makes blockbusters such as "Call of Duty" and "Destiny," said it paid $46 million in cash late last month to buy the majority of Major League Gaming's assets.

While the deal is small by Wall Street standards, it gives Activision Blizzard a boost into the business of streaming live e-sports matches online.

Alphabet paid $380 million to acquire startup Bebop Technologies, founded by Alphabet director and executive Diane Greene, according to a securities filing Monday.

The filing said Alphabet, parent of Internet giant Google, offered $380 million of its shares on Dec. 17 in connection with the acquisition.

Ms. Greene, a well-known Silicon Valley entrepreneur, received Alphabet stock valued at $148 million in the deal, according to the filing.

FOREX

The euro was down 0.3% against the dollar at $1.0794 in Europe. The dollar was down 0.1% against the yen at Y119.2660.

In Asia, China's yuan closed largely flat against the dollar at CNY6.5199, compared with Monday's close of CNY6.5190.

The move came after China's central bank intervened in the foreign exchange market to prop up the weakening yuan, as Beijing adopted a broad suite of measures to stem a selloff.

BONDS

In early European trade, the yield on the 10-year government bond was 2.232%, compared with 2.245% in late afternoon trade in New York on Monday.

The risk aversion comes as global investors continue to grapple with a muddy global growth outlook, punctuated by tepid demand for goods, sluggish economic growth in many large developing nations and the prospect of further interest-rate increases by the Federal Reserve following its first increase in December since 2006.

Some investors said the selloff Monday in riskier markets might not stay for long. They see weaker prices in stocks and other riskier assets provide a buying opportunity, and that Treasury bonds aren't attractive at these low yield levels.

"We do not think this is the beginning of the end," said Luca Paolini at Pictet Asset Management, which has $150 billion in assets under management.

The Fed could see fit to raise interest rates three to five times this year, given economic data remain on the current path, San Francisco Federal Reserve Bank President John Williams said Monday. old??

Many fund managers are positioned for Treasury bond yields to rise in 2016. Goldman Sachs Group expects the 10-year Treasury yield to rise to 3% at the end of 2016.

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Traders say long-term Treasury yields would have a swifter increase in 2016 if the global growth outlook brightens or U.S. inflation, especially wage growth, flares up.

COMMODITIES

In commodities, Brent crude oil was down 0.8% at $36.93 a barrel in Europe, while Nymex fell 0.05% to $36.74, as concerns about an expanding glut of oil weighed on sentiment. Gold was up 0.2% at $1,077.40 a troy ounce.

Other Top Stories Of The Day

Eurozone Inflation Remains Stubbornly Low

Consumer prices in the eurozone rose at an unchanged and sluggish pace in December, a fresh sign that it is proving more difficult for the European Central Bank to boost inflation than policy makers had expected.

PBOC Injects $20 Billion to Calm Nervous Investors

China's central bank injected 130 billion yuan ($19.9 billion) in short-term funds into the country's financial system, according to a statement, in an effort to help calm jittery investors after Monday's sharp stock selloff.

China s Central Bank Steps In to Prop Up Yuan

China's central bank intervened in the foreign-exchange market Tuesday to prop up a weakening yuan, as Beijing adopted a broad suite of measures to stem a selloff in the country's stock market.

Fed s Mester Doesn t See Major Risk to U.S. Economy From China Issues

As the Dow Jones Industrial Average posted a sharp decline Monday, Federal Reserve Bank of Cleveland President Loretta Mester played down the significance of Monday's global stock selloff. OLD??

Tuesday, January 05, 2016

Fed s Williams Sees Possibility of 3 to 5 Rate Increases This Year

The U.S. central bank could see fit to raise interest rates three to five times this year, given economic data remains on the current path, San Francisco Federal Reserve Bank President John Williams said in a CNBC interview.OLD??

White House Aims For Neutral Posture in Saudi-Iran Rift

The Obama administration strove to appear neutral Monday amid open confrontation between its ally Saudi Arabia and its frequent nemesis Iran, a strategy that risked anger from Riyadh as the U.S. tries to navigate the growing crisis in the region.

Soros Fund Management Taps Ted Burdick as Chief Investment Officer

Five months after George Soros's top investor said he was leaving the billionaire's firm, Soros Fund Management LLC tapped Ted Burdick as its new chief investment officer. He becomes the sixth person to handle the job since April 2000, when Stanley Druckenmiller quit to run his own firm.

Today In Canada

Economic Indicators (all times ET)

Industrial and raw material prices for November at 8:30 a.m.

Stocks to watch

Gold producers like Barrick (ABX) and Goldcorp (GG) got a lift Monday from an increase in gold prices

Calendar items (all times ET)

Suncor Energy (SU) conference call at 9:30 a.m. to discuss Canadian Oil Sands (COS.T) takeover offer

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