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Wall St. edges up as U.S. Fed meeting is in focus

02/07/2019

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By Sinead Carew (Reuters) - U.S. stocks were slightly higher on Tuesday, helped by gains in financial, technology and telecom stocks, but indexes traded in a narrow range as investors stayed away from making major bets ahead of the Federal Reserve's policy meeting.

 

The U.S. central bank, which begins its two-day meeting on Tuesday, is widely expected to announce on Wednesday that it will begin paring its bond holdings, with reductions likely to start in the coming months.

While a September interest rate increase is not expected, investors will closely watch Fed Chair Janet Yellen's views on inflation, as they look for clues on whether or not the Fed will raise rates in December.

"There's one school of thought that rates will go up because there's some inflation coming from a very tight labor market and storms that will create very tight demand," said Rick Meckler president of LibertyView Capital Management in Jersey City, New Jersey, regarding Tuesday's boost to bank stocks, which benefit from higher rates.

Six of the 11 major S&P sectors were higher, with the financial sector's 1-percent gain providing the biggest boost and the biggest percentage gain was the telecom services sector's (SPLRCL) roughly 2 percent jump due to mergers and acquisitions speculation. Technology (SPLRCT) rose 0.5 percent. "In a market that gets fairly fully priced, you tend to get more sector rotation," Meckler said.

At 2:59 p.m. ET, the Dow Jones Industrial Average (DJI) rose 41.46 points, or 0.19 percent, to 22,372.81, the S&P 500 (SPX) gained 2.52 points, or 0.10 percent, to 2,506.39 and the Nasdaq Composite (IXIC) added 4.49 points, or 0.07 percent, to 6,459.13.

"People are in wait-and-see mode. The expectations are that rates will remain unchanged and they (the Fed) will start balance sheet unwinding. But there's always a possibility of surprise. I think that's why investors are cautious," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.

The biggest U.S. telephone operators, Verizon (N:VZ) and AT&T (N:T) rose more than 2 percent, helping to lift the S&P. Shares of smaller wireless carrier T-Mobile (O:TMUS) rose 5.3 percent and Sprint (N:S) jumped 8.1 percent, following a report they were in active merger talks.

The healthcare index (SPXHC) was one of the biggest laggards amid declines in insurers such as United Health (N:UNH), which fell 1.9 percent due to the latest efforts in Washington to overhaul Obamacare.

Best Buy (N:BBY) fell 7.4 percent after the No.1 U.S. electronics retailer forecast 2021 adjusted earnings well below Wall Street estimates. The stock was one of the biggest drags on the consumer discretionary index (SPLRCD). Tesla (O:TSLA) fell 2.4 percent after Jefferies started coverage of the electric car maker's stock with "underperform".

Advancing issues outnumbered declining ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favored advancers.

Cryptos – Bitcoin Comes Under Pressure as Recovery Halted

25-06-2019

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Bitcoin remained at session lows on Tuesday, as the digital currency eased below $3,900, forfeiting its recent post-China-ban gains.

 


On the U.S.-based Bitfinex exchange, bitcoin fell to $3899.1, down $185.3, or 4.54%. Bitcoin is more than 25% below its recent peak of $4,969 with a market cap of $66.37 billion.

Bitcoin gave up some of its gains from the prior session as traders appeared to take profit from the recent rally which saw the digital currency rebound from one its worst crashes in its nine-year history in the wake of China’s latest crackdown on cryptocurrency activity.

All Bitcoin exchanges in Beijing and Shanghai were ordered to submit plans for winding down their operations by 20 September.

Bitcoin has pared some of the losses following its crash as investors downplayed the significance of the China ‘ban’ on global bitcoin trading activity. The Chinese bitcoin exchange market only accounted for approximately 10-13% of global bitcoin trading activity so far this year.

In the aftermath of the ban, Japan has become the largest Bitcoin exchange market with 50.75% of the global Bitcoin exchange market.

Bitcoin Cash rose 2.53% to $500, while Ethereum lost 4.62% to $283.08.

T-Mobile US explores takeover of Sprint: source

20-06-2019

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(Reuters) - U.S. wireless carrier T-Mobile US Inc (O:TMUS) is exploring taking over rival Sprint Corp (N:S) in an all-stock deal, after SoftBank Group Corp (T:9984) offered to give up its majority ownership of Sprint, a person familiar with the matter said.

 

 

The latest negotiations come after Reuters reported earlier this year that Japan's SoftBank was prepared to give up control of Sprint to clinch a merger with T-Mobile, and only retain a minority stake in the combined company.

Sprint and T-Mobile, which is controlled by Germany's Deutsche Telekom AG (DE:DTEGn), are still weeks away from an agreement, and have not settled on a share exchange ratio or even started performing due diligence on each other, the source added.

The companies have agreed, however, that John Legere, T-Mobile's outspoken chief executive, would run the combined company should there be a deal, according to the source, who asked not to be identified discussing confidential negotiations.

Both Sprint and T-Mobile did not immediately respond to requests for comment.

Sprint's shares rose 8.2 percent, while T-Mobile's shares were up nearly 5.3 percent after CNBC first reported on the progress of the talks.

Despite potential antitrust risks, investors have long expected a deal between T-Mobile and Sprint, the third- and fourth-largest U.S. wireless service providers, hoping for cost cuts and other synergies.

T-Mobile has been gaining share from larger U.S. competitors AT&T Inc (N:T) and Verizon Communications Inc (N:VZ) in a saturated U.S. wireless market, through network improvements and lower prices.

Sprint, which had earlier approached cable company Charter Communications Inc (O:CHTR) about a potential merger, has now put plans for a bid for Charter on the back burner as it focuses on negotiations with T-Mobile, the source said.

French cable mogul Patrick Drahi's Altice USA Inc (N:ATUS), however, is continuing to work on a potential bid for Charter, another source said. Altice declined to comment while Charter did not respond to a request for comment.

Last month, Sprint's chief executive said an announcement on merger talks should come in the "near future."

SoftBank previously abandoned talks to acquire T-Mobile and merge it with Sprint three years ago, amid opposition from U.S. antitrust regulators. That deal would have put SoftBank in control of the merged company, with Deutsche Telekom becoming a minority shareholder.

Since then, T-Mobile has overtaken Sprint in market capitalization - the company is valued at about $51 billion, while Sprint has a market value of about $34 billion.

Commodities - Gold Prices Flat Despite Trump's Threat to “totally destroy” N.Korea

12-06-2019

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David Ferrigno
Director at Leaf Societa' A Responsabilita' Limitata

Gold prices were flat on Tuesday as President Donald Trump’s threat that America would “totally destroy” North Korea if forced to defend itself or its allies did little to raise safe-haven demand as investors focused on the two-day Federal Open Market Committee which concludes on Wednesday.

 

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange fell by $0.49, or 0.04%, to $1,311.27 a troy ounce.

"If [the US] is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea," President Donald Trump said.

President Trump’s latest threat to North Korea failed to garner much attention as investor focus remained on the two-day Federal Open Market Committee meeting that will conclude Wednesday with a statement on monetary policy.

As well as announce plans to unwind its $4.5 trillion balance sheet, the U.S. central bank is expected to provide market participants with an insight into its thinking on additional rate hikes and the progress of the U.S. economy.

“The Fed is going to make sure that the process would stay as smooth as possible and this would likely push them to hold their gradual approach in hiking the interest rates,” said Naeem Aslam, chief market analyst with ThinkMarkets. “The odds of a December rate hike are standing at 40%, but a hawkish tone by the Fed could strengthen the dollar index,” he said.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. In other precious metal trade, silver futures gained 0.82% to $17.30 a troy ounce while platinum futures lost 0.93% to $952.20. Copper traded flat at $2.97 while natural gas fell by 0.48% to $3.13.

Commodities - Crude Oil Prices Rise Back Toward 5-Month Highs as Focus Shifts to U.S. Stockpile Data, OPEC Meeting

09-06-2019

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Crude oil prices rose back toward the five-month highs seen last week on Tuesday, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to weigh what the impact of recent storm activity was on supply and demand.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT).

Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock gain of around 2.9 million barrels, which would mark the third weekly increase in a row.

U.S. West Texas Intermediate (WTI) crude futures tacked on 20 cents, or around 0.4%, to $50.55 a barrel by 3:17AM ET (0717GMT), not far from a five-month high of $50.88 touched last Thursday. Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., was up 14 cents, or about 0.3%, to $55.62 a barrel. It traded as high as $55.99 intraday last Thursday, a level last seen since April 17. Oil prices settled slightly lower on Monday, after posting a roughly 5% gain last week.

Market players looked ahead to a meeting Friday between the Organization of the Petroleum Exporting Countries and other producers regarding a possible extension of production caps.

OPEC and its allies are discussing extending by more than three months the oil production cuts that expire in March 2018, potentially prolonging them well into the second half of next year, according to people familiar with the matter.

OPEC and other producers, including Russia, have agreed to reduce output by about 1.8 million barrels per day until next March in a bid to reduce global oil inventories and support oil prices. Elsewhere, gasoline futures were little changed at $1.667 a gallon, while natural gas futures held steady at a four-month peak of $3.147 per million British thermal units.

Traders said they were closely eying the path of Hurricane Maria, another top category Atlantic storm that hit the Caribbean islands on Tuesday, to see whether it would knock out refineries or disrupt shipping to and from the huge U.S. market.

Dow rallies to 6th Straight Record Close as Fed Meeting Kicks-off

05-06-2019

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Wall Street rallied to a record close for the sixth-straight session buoyed by a surge in financials as the Federal Open Market Committee got its two-day.

The Dow Jones Industrial Average closed higher at 22375.20. The S&P 500 closed 0.11% higher while the Nasdaq Composite gained 0.10%.

Financials, mostly banks, strong start to the week continued to push the major averages higher amid expectations that the Federal Reserve will reaffirm its outlook that an additional rate hike remains appropriate this year, when it concludes its two-meeting policy meeting on Wednesday.

JPMorgan Chase & Co (NYSE:JPM), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) closed more 0.5% higher. Higher interest rates are seen as boon for banks, boosting net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.

Some analysts remained uncertain, however, as to how markets will react should the Fed announce that it will begin to unwind its $4.5tn balance sheet.

“Any reduction in the Fed balance sheet will be gradual and it is happening on the backdrop of improving economy in the U.S. and globally. But at the same time, we don’t know how the market will react because we have never had this situation before,” Karyn Cavanaugh, senior market strategist at Voya Financial.

The rally in U.S. stocks shrugged off data showing weakness in the housing sector and a fresh threat from Donald Trump to North Korea which did little to raise geopolitical uncertainty.

"If [the US] is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea," President Donald Trump said. The report also highlighted a sharp 5.7% rise in building permits to a rate of 1.3 million units. That was the highest level since January, beating forecasts of a 0.8% decline.