TheChek News Flow

Advanced Micro releases update on AMD Processor Security 1/11/2018 (12.14   +0.18)

• The public disclosure on January 3rd that multiple research teams had discovered security issues related to how modern microprocessors handle speculative execution has brought to the forefront the constant vigilance needed to protect and secure data. These threats seek to circumvent the microprocessor architecture controls that preserve secure data.
• Google Project Zero (GPZ) Variant 1 (Bounds Check Bypass or Spectre) is applicable to AMD processors. "We believe this threat can be contained with an operating system (OS) patch and we have been working with OS providers to address this issue."
• GPZ Variant 2 (Branch Target Injection or Spectre) is applicable to AMD processors. "While we believe that AMD's processor architectures make it difficult to exploit Variant 2, we continue to work closely with the industry on this threat. We have defined additional steps through a combination of processor microcode updates and OS patches that we will make available to AMD customers and partners to further mitigate the threat."
• "There have also been questions about GPU architectures. AMD Radeon GPU architectures do not use speculative execution and thus are not susceptible to these threats. We will provide further updates as appropriate on this site as AMD and the industry continue our collaborative work to develop mitigation solutions to protect users

Advanced Micro under pressure -- indicates it does have chip vulnerabilities

Previously spokesperson said that its chips are not at risk from security flaw

Closing Market Summary: Investors Buy the Dip Ahead of Q4 Earnings

Stocks rallied to new records on Thursday as investors geared up for the fourth quarter earnings season, which will begin on Friday.

The small-cap Russell 2000 set the pace, jumping 1.7% to 1585.63. The Nasdaq Composite climbed 0.8% to 7211.78, the Dow Jones Industrial Average increased 0.8% to 25574.73, and the S&P 500 rose 0.7% to 2767.56. All four indices finished at new all-time highs.

'Buy the dip' was the name of the game on Thursday; the major stock indices opened with modest gains after registering slim losses in the prior session. Wednesday's downtick marked the first losses of the year for both the S&P 500 and the Nasdaq and just the second for the Dow.

Buying picked up throughout Thursday's session, especially in the final minutes, leaving the major indices at their session highs. Eight of eleven sectors advanced with the energy (+2.0%), consumer discretionary (+1.6%), industrials (+1.3%), and materials (+1.3%) groups being the top performers.

The energy sector was up as much as 2.4% thanks to a crude oil rally, which saw West Texas Intermediate crude futures jump 1.9% to $64.35 per barrel--their best level since December 2014. However, energy shares trimmed gains in the afternoon when WTI crude gave back much of its advance, settling higher by just 0.4% at $63.79 per barrel.

Meanwhile, in the industrial sector, heavyweights like Boeing (BA 328.12, +7.86) and Caterpillar (CAT 169.20, +3.33) climbed to new record highs, adding 2.5% and 2.0%, respectively. Transports also outperformed, pushing the Dow Jones Transportation Average (+2.3%) to a new record.

Within the DJTA, Delta Air Lines (DAL 58.52, +2.66) showed particular strength, adding 4.8%, after reporting better-than-expected earnings and revenues for the fourth quarter and raising its profit guidance for 2018. DAL shares finished at a new all-time high.

Retailers set the pace in the consumer discretionary sector, sending the SPDR S&P Retail ETF (XRT 47.28, +1.14) higher by 2.5%. Retailers picked up steam following news that Wal-Mart (WMT 100.02, +0.35) will be closing a series of Sam's Club stores. Costco (COST 189.38, +3.96), Sam's Club's main rival, added 2.1%.

Wal-Mart also made headlines after announcing that it will raise wages for hourly employees, expand maternity and parental leave benefits, and provide one-time cash bonuses of up to $1,000. The world's largest retailer said the recent tax overhaul fueled its decision.

On the downside, the consumer staples (-0.1%), utilities (-0.4%), and real estate (-0.7%) sectors declined on Thursday, extending their year-to-date losses to 0.4%, 4.0%, and 4.6%, respectively. For comparison, the S&P 500 has added 3.5% year to date.

In the bond market, U.S. Treasuries rallied in a curve-flattening trade that pushed the benchmark 10-yr yield lower by two basis points to 2.53% and left the 2-yr yield flat at 1.96%. Chinese officials denied the Wednesday report that China may slow or halt its purchases of U.S. Treasuries.

Elsewhere, the major European stock indices finished Thursday mixed after the European Central Bank released the minutes from its last meeting, which noted that the ECB could begin preparing investors for the end of its bond-buying program early this year. The euro jumped following the minutes, climbing 0.7% against the U.S. dollar to 1.2032.

In Asia, equity indices finished mostly higher, but reports that the South Korean government is seeking to ban all cryptocurrency trading weighed on Bitcoin, which tumbled 7.2% to $13,451.

Reviewing Thursday's economic data, which included the Producer Price Index for December, the weekly Initial Claims report, and the Treasury Budget for December:

• Producer prices declined 0.1% in December (consensus +0.2%) and core producer prices also decreased 0.1% (consensus +0.2%). Year-over-year, producer prices are up 2.6% (down from 3.1% in November) and core producer prices have risen 2.3% (down from 2.4% in November).
  • The key takeaway from the report is that there was a deceleration in the Producer Price Index, which will temper concerns about potential pass-through effects to the consumer and perhaps quell some of the budding inflation concerns that have contributed to some of the weakness in longer-dated Treasury securities to begin the year.
• The latest weekly initial jobless claims count totaled 261,000, while the Consensus expected a reading of 248,000. Today's tally was above the unrevised prior week count of 250,000. As for continuing claims, they declined to 1.867 million from a revised count of 1.902 million (from 1.914 million).
  • Initial claims have picked up the last few weeks, yet the streak below 300,000 has stretched to 149 straight weeks, serving as a reminder that labor market conditions continue to be favorable.
• The Treasury Budget for December showed a deficit of $23.2 billion (consensus -$47.5 billion) versus a deficit of $27.3 billion for December 2016.
  • The Treasury Budget data is not seasonally adjusted, so the December deficit cannot be compared to the $138.5 billion deficit registered in November.

On Friday, investors will receive the Consumer Price Index for December (consensus +0.2%) at 8:30 AM ET, Retail Sales for December (Consensus +0.4%) also at 8:30 AM ET, and Business Inventories for November (Consensus +0.3%) at 10:00 AM ET.

JPMorgan Chase (JPM 110.84, +0.59) and Wells Fargo (WFC 63.01, -0.11) will report earnings on Friday morning, unofficially marking the start of the Q4 earnings season.

• Nasdaq Composite: +4.5% YTD
• S&P 500: +3.5% YTD
• Dow Jones Industrial Average: +3.5% YTD
• Russell 2000: +3.3% YTD