Markets

Stocks making the biggest move premarket: FDS, INFO, P, EVHC, SBUX & more

Check out the companies making headlines before the bell: FactSet – FactSet missed estimates by a penny a share, with adjusted quarterly profit of $2.20 per share. Revenue also came in below forecasts. The financial information provider expects full-year adjusted earnings of $9.45 to $9.65 per share, compared to a consensus estimate of $9.61 a share. IHS Markit – The financial and economic information provider reported adjusted quarterly profit of 58 cents per share, 3 cents a share above estimates. Revenue also topped Street forecasts, however the company’s full-year earnings outlook of an adjusted $2.25 to $2.27 was slightly below the consensus forecast of $2.28 a share. Pandora – An analyst report from Wedbush said the proposed stock swap takeover of the streaming music service by...

US, Iran clash comes to UN, as Rouhani says he has no plans to meet with Trump

With oil bubbling higher, the United Nations this week could provide the next catalyst for prices, with both President Donald Trump and Iranian President Hassan Rouhani each speaking about U.S. sanctions on Iran. Trump and Rouhani appear separately at the UN General Assembly in New York Tuesday, against the backdrop of already rising oil prices. Trump speaks Tuesday morning and also chairs the UN Security Council Wednesday, where he is expected to also speak about Iran. Rouhani told NBC News Monday he has no plans to meet with Trump. “There is no such program for a meeting,” Rouhani said in an exclusive interview with “NBC Nightly News” anchor Lester Holt. He added conditions were not ripe for talks and said the U.S. has made threats against his country. On Monday, ...

US, Iran clash comes to UN, helping push oil higher

With oil bubbling higher, the United Nations provide the next catalyst for prices, with both President Donald Trump and Iranian President Hassan Rouhani each speaking about U.S. sanctions on Iran. Trump and Rouhani appear separately at the UN General Assembly in New York Tuesday, against the backdrop of already rising oil prices. Trump speaks Tuesday morning and also chairs the UN Security Council Wednesday, where he is expected to also speak about Iran. Rouhani told NBC News Monday he has no plans to meet with Trump. “There is no such program for a meeting,” Rouhani said in an exclusive interview with “NBC Nightly News” anchor Lester Holt. He added conditions were not ripe for talks and said the U.S. has made threats against his country. Oi. prices were higher with...

Navarro: China engages in so many ‘egregious practices,’ it’s tougher to get a trade deal

Coming to trade deal with China could be significantly tougher than it was with Mexico, according to one of President Trump’s top advisors. “They’ve engaged in so many egregious practices that it’s far more difficult to make a deal with China than it is with Mexico,” Peter Navarro, director of the National Trade Council at the White House, said on CNBC’s “Closing Bell” Monday. The former economics professor and author of “The Coming China Wars,” is one of the president’s top advisors, and has been notoriously hawkish on trade. Navarro said the goal now is “balanced trade” that should lead to “a global economy that will prosper for next 50 years.” The latest round of tariffs between the U.S. and China ...

Walmart is going to use blockchain to stop the spread of E. coli and other diseases in lettuce

Grocery giants Walmart and Sam’s Club are requiring their lettuce suppliers to get on the blockchain bandwagon. Those providing leafy green vegetables to the grocery chains will need to upload data about their foods to blockchain within a year, the companies said in letters to suppliers Monday. The companies highlighted an E. coli in romaine lettuce that recently affected more than 200 people, and Salmonella in products like eggs and breakfast cereal. Using blockchain and storing the information digitally, a supplier could theoretically see which farms are infected, and quickly stop the supply to restaurants and consumers. “Walmart believes the current one-step up and one-step back model of food traceability is outdated for the 21st Century and that by, working together, we can...

Political Calculations on Soda Tax Concludes: No Externalities Internalized

Finally, Ironman at Political Calculations understands what an externality is. Instead of this: If a deadweight loss exists, it represents the amount of economic activity that has been directly lost because of the imposition of the tax, which tells us the degree to which the city’s economy may have shrunk as a result. He now writes: …many claim that such a [soda] tax would fix what in economics is called a “negative externality”, which in this case, represents higher costs to public health systems for treating conditions such as obesity and diabetes, where sweetened beverages are targeted by soda tax advocates for their contributions to the problems they proclaim because of their popularity and their sugary calorie content. I am thankful for small blessings. Regarding the Philadelphia soda...

With Fed set to raise rates again, other central banks sound ready to end the easy money, too

On the eve of the Federal Reserve’s September meeting, Europe’s top central banker delivered a sharp reminder to markets that the world’s central banks are moving away from easy policies. European Central Bank President Mario Draghi said in a speech Monday the “stable profile” of inflation “conceals a slowing contribution from the non-core components of the general index and a relatively vigorous pickup in underlying inflation.” Draghi’s inflation comment was viewed as hawkish, even though he repeated that the ECB does not intend to raise interest rates through next summer. The euro rose, European stocks fell and European bond yields climbed, as traders took the comment to mean that inflation is stronger than expected, and that could mean rat...

Guest Contribution: “Trump Renews Charges of Chinese Currency Manipulation”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate. The US Treasury is due in October to submit its biannual report to Congress on what countries, if any, are manipulating their currencies to gain unfair trade advantage. President Trump has recently resumed the accusations he made during the election campaign that China was manipulating its currency. “I think China’s manipulating their currency, absolutely. And I think the euro is being manipulated also,” he told Reuters. He is apparently pressuring the Treasury directly in its deliberations. What has changed since April? What has changed since the last Tr...

Using Gov. Walker’s Gold Standard QCEW, Has 250K Jobs Been Added?

Maybe. But not as of 2018M01. Figure 1: Wisconsin private nonfarm payroll employment, 000’s s.a. (green) relative to 2011M01 value, Quarterly Census of Employment and Wages private employment (dark blue square) relative to 2011M01, +250K (red line). Source: BLS, author’s calculations. One could seasonally adjust the QCEW series using a standard seasonal adjustment routine. I use X-13 (multiplicative) in EViews to generate a seasonally adjusted QCEW series. This is plotted in an analogous fashion in Figure 2. Figure 2: Wisconsin private nonfarm payroll employment, 000’s s.a. (green) relative to 2011M01 value, Quarterly Census of Employment and Wages private employment, adjusted by X-13 (dark blue) relative to 2011M01, +250K (red line). Source: BLS, author’s calculations. By this measure, wh...

Is California in Recession? (Part IX)

August employment figures are out. Time to re-evaluate this mid-December Political Calculations assertion that California was in recession. Going by these [household survey based labor market] measures, it would appear that recession has arrived in California, which is partially borne out by state level GDP data from the U.S. Bureau of Economic Analysis. [text as accessed on 12/27/2017] The release provides an opportunity to revisit this question (the 2018Q1 state GDP figures are discussed here). It’s (still) unlikely that a recession occurred. Figure 1: Nonfarm payroll employment in US (black), and in California (blue), both in logs, normalized to 2011M01=0. Blue arrow at timing of Political Calculations recession conjecture. Source: BLS and author’s calculations. According to my work wit...

Record high stocks face Fed rate hike, trade tensions in week ahead

The Fed is expected to announce a quarter point rate hike Wednesday, and is likely to signal another hike is coming later in the year. The Fed’s actions are unlikely to rock markets, but the focus will be on what kind of message the Fed sends and how hawkish it sounds on the economy and future rate hikes. As Joseph LaVorgna, the chief economist of the Americas at Natixis, noted, three quarters of the year are already over since the Fed put its 2018 forecast together and GDP has been faster, inflation is at or above target, and there is anecdotal evidence wage pressures are picking up. “They’re not going to do less, they’re going to do more,” he said. “The fact the equity market just hit an all time high is going to offset any concerns when it comes to ta...

Who Could’ve Known “Crash Brexit” Would Be Problematic?

In the aftermath of the Salzburg summit, where the Chequers plan was dismissed by the EU, and PM May demanded “respect”, the pound has plunged. Source: TradingEconomics.com. Deutsche Bank (Harvey, et al., “Deep impact: DB forecasts in a crash Brexit”) yesterday lays out why: In our analysis, we calculate that UK growth will be around 4% cumulatively lower than under our baseline scenario by end-2020. The UK will enter a two year recession, with output shrinking -0.3% and -0.6% in 2019 and 2020 respectively. The main contributers to the fall in demand are household consumption, which shrinks around 6% relative to our baseline, and business investment which is 13% lower than our baseline. Net trade is assumed to add a moderate boost to GDP, as while trade falls substantially, imports fall sl...