Posts by Dean Arrindell
Investors are monitoring reports that Russian troops are in Ukraine. Ukrainian President Petro Poroshenko said "Russian forces have entered Ukraine." Russian officials are denying the claims from Kiev, but the U.S. Ambassador to Organization for Security and Cooperation in Europe calls Russia’s denial “absurd."
The economy grew at a faster pace than previously estimated in the second quarter. GDP grew at a rate of 4.2% in second quarter according to the Commerce Department. That’s higher than the 4.0% originally estimated. Economists predicted today's revision would be 4.0%. The upward revision was due partially to more investment by businesses in buildings and equipment than previously reported.
The number of people who applied for first-time jobless claims dropped slightly last week. The Labor Department said 298,000 people applied for initial jobless claims for the week ending August 23. That’s a dropped of 1,000 from the previous week. Economists predicted that claims would rise to 300,000.
Apple may release bigger iPad; Christine Lagarde under investigation; Nationwide Time Warner Cable outage
Time Warner Cable (TWC) experienced a nationwide outage of its Internet service this morning. The company said a problem occured during routine maintenance and caused the outage at about 4:30 a.m. Eastern. Time Warner Cable said service was largely restored to around 6:00 a.m. The problems affected its Internet and on-demand services. It was announced earlier this week that Time Warner Cable settled with the Federal Communications Commission for $1.1 million over charges it failed to report multiple network outages.
The head of the International Monetary Fund Christine Lagarde is reportedly under formal investigation in connection to a French corruption case. A French court is investigating a 400 million-euro ($531 million) payment to a businessman when Lagarde was the country's finance minister. Lagarde has denied wrongdoing and said she has no intention of resigning over the investigation.
Burger King, Tim Hortons deal is official with Warren Buffett's help; Amazon to buy Twitch; Durable goods orders fly in July
Durable goods orders had their biggest gain on record last month, on the strength on aircraft orders. The Commerce Department said durable goods orders rose 22.6% to $300.1 billion in July. Economists predicted a 5.1% increase last month. Orders for transportation equipment had their biggest jump ever to 74.2%, due in part to $80 billion in orders for Boeing airplanes. Excluding transportation, durable goods were down 0.8% in July.
It's official. Burger King (BKW) is buying Tim Hortons (THI) for about $11 billion, with Warren Buffett's Berkshire Hathaway (BRK-A) kicking in $3 billion of funding. It’s an inversion deal that would have Burger King’s headquarters move from the U.S. to Canada to get a lower corporate tax rate. Inversions have come under criticism from the Obama Administration and some members of Congress.
The S&P 500 (^GSPC) reached 2,000 for the first time in intraday trading. This comes after it closed lower on Friday. The S&P closed at a record high of 1992.37 on Thursday.
Burger King (BKW) is in talks to buy the Canadian-based coffee shop Tim Hortons (THI). The inversion deal would move Burger King's headquarters to Canada to take advantage of a lower tax rate. Burger King isn’t the only firm interested in moving to another country to pay lower taxes. U.S.-based AbbVie (ABBV) acquired the U.K.’s Shire (SHPG), and Medtronic (MDT) agreed to buy Ireland’s Covidien (COV). The Obama Administration has been vocal in its opposition to these deals, calling on companies to engage in "economic patriotism."
Investors will be watching Fed Chair Janet Yellen’s speech this morning at the annual gathering of central bankers in Jackson Hole, Wyoming. They’ll be paying close attention to Yellen’s remarks about the labor market and interest rates, as well as statements from other Fed presidents at the event. European Central Bank president Mario Draghi will also take the podium.
Home Depot (HD) announced the its head of U.S. operations, Craig Menear, will take the reigns as Home Depot's new CEO on November 1st of this year. Menear has been with Home Depot since 1997 and the company said Menear's appointment was part of planned succession. Frank Blake, who has been Home Depot's chairman and CEO since 2007, will remain chairman.
Keurig’s (GMCR) new coffee brewer, Keurig 2.0, will go on sale on Sunday. A major change to the company’s first new version of its coffee brewer is that it can brew more than one cup of coffee.
Family Dollar rejects Dollar General takeover bid; BofA in record settlement with DOJ; Weekly jobless claims fall
Family Dollar (FDO) formally rejected a takeover bid from Dollar General (DG) this morning. Family Dollar said a merger with Dollar General wouldn’t likely be completed because of anti-trust concerns. Family Dollar also affirmed its support to merge with Dollar Tree (DLTR) in a deal worth about $8.5 billion.
The Justice Department announced a settlement with Bank of America (BAC) for the bank to pay $16.65 billion for its role in mortgage-backed securities sold in the run-up to the financial crisis. BofA will pay a penalty of $9.65 billion. An additional $7 billion in aid will go to homeowners and communities. The settlement is the largest in history between a company and the federal government.
Amid the anticipation of the iPhone 6 launch, excitement surrounding Apple (AAPL) has been focused on its stock price. Shares of the company closed Tuesday at a split-adjusted record high of $100.53. The company continues to break records today as it traded in record territory.
Yahoo Finance Editor-in-Chief Aaron Task said that calling Apple stock a great investment would be an understatement. He cited a Wall Street Journal article that said a $10,000 investment in Apple 10 years ago would be worth more than $456,000 today. “This is why people own individual stocks as opposed to mutual fund or ETF of indexes. Because you just don’t get that kind of performance from the broad market,” said Task. “It just doesn’t happen.”
After “being left-for-dead” by some, Task said that Apple turned itself around and revolutionized a couple of different industries. “It’s just a phenomenal performance.”
Investors cautious ahead of Fed minutes; Pay-to-play at the Super Bowl halftime show? Can back-to-school season boost retailers?
The minutes of last month’s Federal Reserve meeting will be released later today. Investors will be keeping a close eye on what the Fed has to say about the labor market. The release comes ahead of Fed Chair Janet Yellen's speech at the Kansas City Fed’s Jackson Hole conference on Friday. The Fed minutes will be released at 2p.m. Eastern today.
A couple of retailers reported earnings indicating they are struggling. Staples (SPLS) beat on both earnings and revenue, but the latter was down nearly 2% compared to a year earlier. The company said sales could fall in the current quarter as it continues to struggle with competition from big box and online retailers. Meanwhile, Target (TGT) lowered its outlook for the year as it reported that it missed earnings estimates by a penny, but beat on revenue by about $30 million.
Ten years ago today, Google (GOOGL) went public, and what a difference a decade makes.
Since its IPO, the company has moved beyond being a search engine. Gmail had just launched the previous April. It bought YouTube in 2006. In Q2 of this year, Google's Android operating system had about 85% of the smartphone operating system market share according to IDC. This year it bought a drone company and debuted a driverless car prototype.
Home Depot nails it; A decade since Google's IPO; Consumer inflation and housing starts rise in July
New home construction rose sharply in July to its highest level in eight months. The Commerce Department said housing starts rose 15.7% to 1.09 million homes, beating economists’ expectations of 963,000. June housing starts were revised up from 893,000 to 945,000.
Lower energy costs canceled out rising food prices in July, pushing inflation only slightly higher. The Labor Department said the Consumer Price Index rose 0.1% last month, which was in line with economists’ expectations. Food prices rose 0.4% last month, but energy prices fell for the first time since March, falling 0.3%.
Home Depot (HD) the world's largest home improvement chain reported earnings of $1.52 a share, beating analysts' estimates by $0.07. Revenue also topped expectations, rising 5.7% percent compared to a year ago thanks to home repairs after the harsh winter. Same-store sales rose 5.8%. The company also raised its full-year earnings outlook.