Fed Chair Yellen: Raising interest rates at March meeting would probably be appropriate if economy evolves as expected - comments in Chicago
- "At our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate."
- Risks to growth have receded; developments since mid-2016 support view that Fed is on track to reach goals
- FOMC sees risks to the outlook as roughly balanced
- No evidence the Fed has fallen behind the curve
- Gradual accommodation removal likely still appropriate
- Reiterates monetary policy cannot be and is not on a preset course.
- With labor market conditions now in the vicinity of our maximum employment objective, the Committee considers it appropriate to move toward a neutral policy stance.
Fed Chair Yellen: Fed members have decided to be patient and wait to see what happens with Trump administration policy plans - Q&A
- Central bankers do understand there are linkages between countries
- There's not all that much the Fed can do to affect labor force growth
Reuters - EPA expected to reopen vehicle emissions decision: source - http://reut.rs/2mQ10aM
The U.S. Environmental Protection Agency is expected to announce next week it would reopen a review of 2022-2025 vehicle emissions requirements after automakers urged the Trump administration to reverse a decision under former President Barack Obama, a source said on Friday.
Last week, trade groups representing General Motors Co (GM.N), Toyota Motor Corp (7203.T), Volkswagen AG (VOWG_p.DE), Ford Motor Co (F.N), Honda Motor Co (7267.T) and others formally asked new EPA Administrator Scott Pruitt to withdraw an Obama administration decision to lock in vehicle emission rules through 2025.
A person briefed on the matter who had seen the draft order restarting the review said it was expected to be unveiled next week. The source was not authorized to discuss contents of the order publicly.
The EPA notice is expected to say that the agency plans to work in tandem with the U.S. Transportation Department to set consistent standards for corporate average fuel efficiency and emissions limits, the source said.
A White House spokeswoman and an EPA spokesman declined to comment.
The EPA had until April 2018 to decide whether the 2022-2025 standards were feasible under a "midterm review" but in November moved up its decision to Jan. 13, just before Obama left office.
The auto group requests follow a separate letter to President Donald Trump earlier this month from the chief executives of GM, Ford Motor Co and Fiat Chrysler Automobiles NV (FCAU.N) (FCHA.MI), along with the top North American executives at Toyota, VW, Honda, Hyundai Motor Co (005380.KS), Nissan Motor Co Ltd (7201.T) and others urging Trump to revisit the decision.
GM CEO Mary Barra told reporters on Tuesday that automakers were "looking to actually have the midterm review." She said the review needs to look "at all the different dynamics that are occurring."
Automakers say the rules impose significant costs and are out of step with consumer preferences. Environmentalists say the rules save drivers fuel costs and should not be changed.
In 2011, Obama announced an agreement with automakers to raise fuel efficiency standards to a fleet average of 54.5 miles per gallon by 2025. This, the administration said, would save motorists $1.7 trillion in fuel costs over the life of the vehicles but cost the auto industry about $200 billion over 13 years.
In July, EPA said because Americans were buying fewer cars and more SUVs and trucks, it now estimated the fleet will average 50.8 mpg to 52.6 mpg in 2025.
Earlier Friday, eight environmental organizations urged Pruitt not to reopen the issue. These included the Sierra Club, Union of Concerned Scientists, League of Conservation Voters and Natural Resources Defense Council.
"EPA should stay the course and look to the future, to protect our climate and the workers developing clean car technologies," council President Rhea Suh said in a statement.
This week's biggest % gainers/losers
This week's top 20 % gainers
- Healthcare: LJPC (34.51 +73.68%), NLNK (20.48 +44.43%), BCRX (7.63 +38.89%), KITE (72.64 +38.1%), FOLD (7.74 +29.87%), KND (9.8 +28.95%), NOVN(6.4 +25.49%), ATRA (17.05 +23.55%), NDRM (28.95 +23.45%), IONS (54.72 +22.71%), EPZM (14.85 +22.22%), FMI (28.2 +22.08%), AVXS (66.56 +20.8%)
- Materials: GCP (33 +25%)
- Industrials: BLDR (15.19 +24.06%)
- Consumer Discretionary: NTRI (48.95 +28.31%), IBP (49.65 +21.1%), BID (48.2 +20.23%)
- Energy: NVGS (14.2 +32.71%), ECR (2.62 +21.86%)
- Healthcare: IPXL (7.95 -43.42%), PTCT (9.82 -25.42%), MEDP (28.89 -19.99%), VRX (13.06 -19.28%), MNKD (2.12 -17.53%)
- Materials: EXK (3.31 -28.04%)
- Industrials: BW (10.49 -37.03%), ESND (15.09 -30.62%), ICFI (41.15 -20.02%)
- Consumer Discretionary: FRGI (19.85 -24.67%), ETSY (10.21 -19.73%)
- Information Technology: PANW (115.55 -24.48%), NTNX (22.82 -23.47%), SSTK (42.25 -18.17%), PSTG (9.51 -17.73%)
- Financials: DFIN (21.15 -19.27%)
- Energy: SDRL (1.25 -36.87%), SDLP (3.76 -24.95%), CIE (0.59 -21.68%)
- Consumer Staples: OME (19.2 -25.15%)
Uber used secret tool to deceive authorities: report
For years, Uber has reportedly used a secret tool to deceive authorities in cities where its service was banned.
The New York Times, citing sources, said Friday that Uber had a tool called Greyball, that collected data identifying “customers’’ who were actually officials looking to catch the ride-share service violating local laws.
Asked about the existence of Greyball, Uber told the Times, “This program denies ride requests to fraudulent users who are violating our terms of service — whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers.”
A current Uber employee familiar with the program confirmed to Reuters that Uber had used antifraud techniques to hunt for suspected undercover law enforcement and regulators. The person said Greyball had not been used in the United States in more than a year.
The Times said Uber used the methods to evade authorities in cities including Boston, Paris and Las Vegas, and in countries including Australia, China, Italy and South Korea.
By Olivia Oran | MARCH 3
Goldman Sachs Group Inc plans to move its risk management team into an independent unit, people familiar with the matter said, a move that is largely symbolic but signals its growing importance.
Headed by Chief Risk Officer Craig Broderick, the group will be carved out from the finance division, where risk managers have long sat alongside accountants, technologists and those responsible for managing Goldman's idle cash.
The Wall Street bank is in the process of creating the separate unit, and changes will take effect over the next few months.
Sources spoke on the condition of anonymity because they were not authorized to publicly discuss internal matters. Goldman spokeswoman Tiffany Galvin declined to comment.
Goldman Sachs prides itself on the independence and power of its risk management staff. The bank's risk managers are known for questioning business decisions. That has been true since before the 2008 financial crisis at Goldman, but it has not been uniformly true for other big banks.
Goldman's new structure will not change much about the way risk managers operate, but will offer the operation new prominence, sources said.
Broderick, who joined Goldman in 1985, will maintain his responsibilities. The firm-wide risk committee, which is co-chaired by Broderick and Goldman's finance chief, will also stay the same.
Phil Venables, the bank's chief information risk officer, will move into the division to a new role that includes handling operational risk. He previously sat within the technology division.
Like other big banks, Goldman is increasingly under threat from hackers and technology glitches, and Venables' move into the risk division reflects the importance of protecting against such attacks, sources said.
Closing Market Summary: Averages Eke Out Gains on FridayThe major averages finished Friday's session near their unchanged marks as investors digested the latest remarks from Fed Chair Janet Yellen. The Nasdaq (+0.2%) outperformed while the S&P 500 (+0.1%) finished with a slim gain. The Dow closed the day unchanged.
According to the Fed funds futures market, it appears that a March rate hike is on after Fed Chair Yellen said nothing to upset that notion on Friday afternoon. Ms. Yellen expressed her belief that a March rate hike is indeed appropriate as long as the economy evolves as expected. The CME Fed Watch Tool now assigns an implied probability of 81.9% to a March rate hike, up slightly from yesterday's 77.5%.
The U.S. dollar retreated in the wake of Ms. Yellen's comments, nearly doubling its earlier loss. The U.S. Dollar Index (101.35, -0.81) finished Friday lower by 0.8%.
Conversely, Treasuries climbed back towards their flat lines after holding losses going into Ms. Yellen's speech. The benchmark 10-yr yield finished one basis point higher at 2.48% while the 2-yr yield closed two basis points lower at 1.29%.
The financial sector (+0.4%) profited from the steepening of the Treasury yield curve, closing the day with the health care sector (+0.4%) at the top of the leaderboard. The biotechnology industry had a hand in the health care group's positive performance, evidenced by the 0.9% increase in the iShares Nasdaq Biotechnology ETF (IBB 302.49, +2.70).
Conversely, consumer staples closed Friday near the bottom of the leaderboard following Costco's (COST 170.26, -7.72) most recent earnings report. The wholesale retailer tumbled 4.3% after reporting worse than expected earnings per share results after Thursday's close.
Costco's performance also negatively influenced retailers, evidenced by the 1.4% decline in the SPDR S&P 500 Retail ETF (XRT 42.72, -0.62). The consumer discretionary sector, which comprises many retailers, also underperformed, closing lower by 0.2%.
Crude oil finished the day 1.4% higher at $53.33/bbl, but the energy group (-0.4%) still had trouble keeping pace with the broader market.
Also of note, Snap (SNAP 27.09, +2.61) followed up Thursday's IPO with a 10.7% spike in Friday's session. The social media company had an IPO price of $17.00 per share, but opened for trading late on Thursday morning at $24.00 per share.
Today's lone economic report was February ISM Services:
- The ISM Services Index for February increased to 57.6 while the consensus expected reading of 56.5. The prior month's reading was left unchanged at 56.5.
Monday's lone economic report, January Factory Orders (consensus 1.0%), will cross the wires at 10:00 ET.
- Nasdaq Composite +9.1% YTD
- S&P 500 +6.4% YTD
- Dow Jones Industrial Average +6.3% YTD
- Russell 2000 +2.7% YTD
*DEUTSCHE BANK SAYS IT'S CONSIDERING EU8 BILLION CAPITAL RAISE
AMD paring recent gains following Ryzen launch (AMD)
Advanced Micro Devices (AMD -6%) is extending yesterday's sell-off after some tepid reviews for its new Ryzen CPU chips that hit the market this week.
AMD's new Ryzen CPUs are finally a formidable competitor to Intel's (INTC) after many years of being a clear laggard in the space. The chips are roughly half the price and the specifications are comparable to that of Intel's.
A big problem for the stock right now is that there was a ton of hype coming in to the release. We have seen a classic sell the news reaction following the product launch, but some disappointment regarding the performance of the chips among the gaming community is exacerbating the move.
What's more, Intel (INTC) is likely to come out with a new set of chips in short order that once again shows they are the leader in the space. AMD won't have any answer for a while.
AMD is the #2 player in the graphics processing units (GPU) space behind NVIDIA (NVDA) and #2 in the central processing units (CPU) space behind Intel.
Despite the recent sell-off, AMD is still in a rather strong longer term uptrend. The stock has had a huge run as GPUs continue to do well in gaming. Meanwhile, GPU demand has picked up as they enable machine/deep learning capabilities that are all the rage in 2017.
AMD trades at ~54x enterprise value over EBITDA but that number comes down to 41x on fiscal 2018 estimates. NVIDIA trades at 21x EV/EBITDA and chip behemoth Intel (INTC) trades at 7.3x EV/EBITDA.
The stock is attempting to hold support at the $13 level today after giving up the $14 level rather easily yesterday afternoon.