Markets

Johnson & Johnson falls on ‘disappointing’ sales outlook

Shares of Johnson & Johnson turned negative as investors reacted to a lackluster sales growth outlook. The company topped Wall Street’s fourth-quarter earnings and revenue expectations with boosts from new cancer drugs and its acquisition of Swiss biotech company Actelion. In its earnings release, the company projected operational revenue growth of 3.5 percent to 4.5 percent. Later, J&J Chief Financial Officer Dominic Caruso clarified the forecast included the benefit of acquisitions and divestitures. Without those, organic growth is expected to be in the range of 2.5 percent to 3.5 percent. J.P. Morgan analyst Mike Weinstein called the guidance “disappointing” in a note to investors, saying it fell below his expectation of 3.5 percent to 4 percent heading into th...

After-hours buzz: NFLX, AMTD & more

Check out the companies making headlines after the bell Monday: Netflix stock soared more than 8 percent in the extended session. The streaming company reported quarterly earnings per share of $0.41 on $3.29 billion in revenue, just exceeding analyst expectations. Netflix also added 1.98 million domestic subscribers, well beating the 1.29 million expected by Wall Street. After the surge in stock value, the tech giant’s market cap exceeded $100 billion for the first time. Shares of TD Ameritrade gained nearly 2 percent after the bell. The brokerage firm reported earnings of $0.52 per share on revenue of $1.26 billion, well beating Wall Street expectations of $0.50 per share on revenue of $1.2 billion. In a statement TD Ameritrade CEO and president Tim Hockey attributed the quarterR...

World Economic Outlook Update: Upwardly Revised Growth, Rising Risks?

The IMF released an update to WEO today: Source: IMF, WEO (January 2018). From the report: Buildup of financial vulnerabilities. If financial conditions remain easy into the medium term, with a protracted period of very low interest rates and low expected volatility in asset prices, vulnerabilities could accumulate as yield-seeking investors increase exposure to lower-rated corporate and sovereign borrowers and less credit-worthy households. As noted in the October 2017 Global Financial Stability Report, the share of companies with low investment-grade ratings in advanced economy bond indices has increased significantly in recent years. Non-financial corporate debt has grown rapidly in some emerging markets, calling for a policy response. The Chinese authorities have made a welcome start b...

Netflix jumps more than 8% after adding more subscribers than expected

Netflix joined the $100 billion club on Monday night. The streaming giant gained far more customers than Wall Street expected during the holiday season, it said Monday, when it reported quarterly earnings that were in line with estimates. Shares of Netflix jumped more than 8 percent after hours, pushing the market capitalization of the company above $100 billion for the first time. After adding 8.33 million subscribers in the fourth quarter — the highest ever — the company expects its winning streak to continue: First-quarter earnings guidance was well above estimates. Netflix is also burning less cash than Wall Street thought, as the international base became profitable. EPS: 41 cents vs. 41 cents per share expected by a Thomson Reuters consensus estimate Revenue: $3.29 billion vs. $3.28 ...

Abercrombie & Fitch boosts guidance, sending shares higher; Martinez to retire as exec chairman

Abercrombie & Fitch shares jumped Monday after the retailer raised its fourth-quarter guidance. The retailer said it expects same-store sales to be up in the high-single digits, compared with the previous outlook of low-single-digit gains. Net sales for the quarter is now expected to increase in the low-teens, compared with the previous guidance of an increase of mid- to high-single digits. Shares of the retailer were up 6.7 percent in early trading Monday following the report. Abercrombie & Fitch also said 78-year-old Arthur Martinez will retire as executive chairman on Feb. 3. Terry Burman, 72, who is chair of the board governance committee, will become nonexecutive chairman.

Social investing, bitcoin and other hot topics at the world’s biggest ETF conference

The Inside ETFs Conference, one of the largest gatherings of investment advisers in the world, begins Monday. Nearly 2,500 participants are expected in Hollywood, Florida, for four days to debate the future of investing in general and dissect the enormous momentum behind exchange-traded funds. Last year was the biggest year ever for ETFs — with the biggest inflows ever (nearly $480 billion) and record assets under management ($3.2 trillion). More importantly, ETFs have stopped being an exclusively retail phenomenon. Pension funds, sovereign wealth funds, insurance companies are not just investing but in some cases founding their own ETF firms. Even insurance firms like Prudential and Hartford now have ETF firms. Most participants believe the main underlying trends will continue in 2018: Mo...

Higher oil prices give Halliburton a better-than-expected fourth quarter

U.S. oilfield services company Halliburton reported a bigger-than-expected fourth-quarter profit after charges and gave an upbeat outlook for 2018, as higher oil prices continue to push U.S. production near record levels. Halliburton delivered an optimistic view for its U.S. and international operations as rising oil prices spur demand for oilfield services. Its results, like those of larger rival Schlumberger on Friday, point toward a broadening oil and gas recovery moving from U.S. onshore to international exploration and production markets. “I am very excited about the way 2018 is shaping up,” said Chief Executive Jeff Miller during the firm’s quarterly earnings call. “North American unconventional activity should be very busy,” he added, referring to growt...

Earnings dominate the week ahead, but interest rates could be a big deal after bond market crushing

A blast of earnings news from companies as diverse as Caterpillar and Netflix could help boost stocks in the coming week, but a bigger story may end up being the quiet move higher in interest rates. There are also a few important economic reports, including Fridays’ durable goods and fourth-quarter GDP. If GDP comes in as forecast, it would be the third quarter in a row of 3 percent growth, a solid and consistent pattern that hasn’t been seen since 2005. As the S&P 500 set a new high Friday, the 10-year Treasury yield also rose above 2.65 percent for the first time since 2014. For the bond market, the sell-off could continue and yields could continue to rise, with the 10-year ready to break out of its longtime range and head toward 2.75 percent or higher. Stock investors wi...

Cramer’s game plan: Watch these stocks as earnings season kicks into high gear

Even with a government shutdown, CNBC’s Jim Cramer expects good things for the next leg of earnings season. “Earnings season is upon us and it is always a guessing game, but this time around the rules have changed,” the “Mad Money” host said. “Rather than worrying about whether companies will beat or miss their forecasts, now we’re guessing how much money those companies will return to you, the shareholders, in the form of dividends and buybacks.” Calling the shutdown news less than meaningful for the market, Cramer said it was unlikely to crush equities. Instead, it will probably push stocks down to buyable levels, he said. “If a shutdown does cause delays in when the IRS sends its tax rebates, we might get a temporary decline in consu...

Stock investors cringe when they see this type of rate jump, but it shouldn’t hurt yet

Rising bond yields do not necessarily mean stocks have to fumble. The breakout in the 10-year Treasury yield early Friday to above 2.63 percent — levels last seen in 2014 — is signaling that rates could keep rising, and at some point make bond market yields more appealing to investors than stocks. But strategists say that’s not happening yet, and several say that won’t happen until the yield starts to either rise very rapidly, or get somewhere over 3 percent, which is the year-end target of some bond pros. But strategists also point to the difficulty predicting how the decoupling of bonds and stocks will work after years of central bank easing that has been good for both stock prices and bond prices. Bond prices move inversely to yields. Now that global growth has improved, and...

Guest Contribution: “Trump’s Tax Cut Will Worsen the US Current Account Deficit”

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. This is an extended version of a column that appeared at Project Syndicate on January 15th. President Trump and the Republicans succeeded last month in passing their big tax cut. It may not have many of the desirable attributes of true tax reform (equity, efficiency, bi-partisanship, revenue-neutrality, or cyclical timing); but it is major legislation, as promised. What about that other major Trump promise, to cut the US trade deficit? The tax cut is virtually certain to raise the budget deficit and in turn to raise – not lower – the current account deficit. Call it the Return of the Infamous Twin Defic...

Stocks making the biggest moves premarket: IBM, AXP, ACOR, LOW, FL, NKE & more

Check out which companies are making headlines before the bell: IBM – IBM broke a long string of revenue declines, chalking up its first gain in 23 quarters. It reported adjusted quarterly profit of $5.18 per share, beating estimates by a penny a share, but the company did warn that a higher tax rate for 2018 would impact its profits. American Express – The company earned an adjusted $1.58 per share for the fourth quarter, beating estimates by 4 cents a share. The financial services giant also saw revenue beat forecasts, however, the company reported its first overall quarterly loss in 25 years stemming from charges related to tax law changes. The company will maintain its quarterly dividend but has suspended share buybacks for the first half of 2018. Acorda Therapeutics – The drugmaker ha...