Ralph Lauren prelim Q3 $1.86 vs $1.64 Capital IQ Consensus Estimate; revs $1.67 bln vs $1.71 bln Capital IQ Consensus Estimate
Reuters - Trump's dollar paradox promises roller-coaster ride for currencies
If visibility and predictability are two foundations upon which stable financial markets are built, comments from the White House this week on the U.S. dollar suggest investors should brace for increased foreign exchange volatility.
President Donald Trump and his top trade adviser waded into the debate over the currency's strength and the damage they say it is doing to U.S. competitiveness, drawing rebuffs from Germany and Japan and casting doubt over the strength of global cooperation on foreign exchange policy.
On the one hand, this should come as little surprise. A key pillar of Trump's election campaign was to reinvigorate U.S. manufacturing and bring back what he sees as lost jobs. A weaker dollar would be instrumental to achieving that goal.
But his desire to boost U.S. economic growth - via tax cuts, increased spending and encouraging U.S. firms to repatriate billions of dollars of cash held overseas - is consistent with higher interest rates and a stronger dollar.
For global policymakers, the verbal volleys from Washington sharpen the focus on the Group of 20 leading nations' commitment to "abstain from competitive devaluations and not set exchange targets for competitive reasons".
But for investors, increased volatility looks on the cards.
"If the administration is talking the dollar down but pursuing policies that will push it the other way, then that's a recipe for uncertainty, if not volatility," said Joseph Gagnon, senior fellow at the Peterson Institute for International Economics in Washington and former official at the Federal Reserve.
"I see a tension between policies that will push the dollar up, and their desire for it to weaken. You could say it's a paradox, or incoherent. And it could end up in a bit of a mess," he said.
ROLLER COASTER
Trump and his top trade adviser, Peter Navarro, this week criticized Germany, Japan and China, saying the three key U.S. trading partners were engaged in devaluing their currencies to the harm of U.S. companies and consumers. German Chancellor Angela Merkel and Prime Minister Shinzo Abe rejected the claims.
But the verbal intervention from the White House appears to be working. The dollar hit its lowest since the week after the U.S. presidential election - its index value against a basket of currencies falling to 99.35 .DXY and the euro rising above $1.08 EUR= for the first time in almost two months.
Implied volatility measured by one-month euro/dollar options EUR1MO=, a gauge of the expected trading range over the period, has fallen back to historically low levels as the euro has moved further away from parity with the dollar.
But Trump's election win gave a glimpse of the potential volatility his policies might induce. One-month euro/dollar implied volatility posted its third biggest monthly rise on record in November, only behind September and October 2008 in the white heat of the global financial crisis.
Analysis last year by Hyun Song Shin at the Basel-based Bank for International Settlements shows that the dollar had supplanted the VIX index .VIX, a measure of implied volatility on Wall Street, as the variable most associated with investor banks' appetite for risk-taking.
The dollar's surge over the previous three years was potentially destabilizing for the global financial system, given that dollar borrowing from non-U.S. institutions firms and households outside the United States is almost $10 trillion.
But while a weaker dollar helps ease global financial conditions, increases global lending and contributes to market stability, as Shin's research suggests, mixed signals on Washington's position on the world's pre-eminent currency may not.
"The dollar might jump around on these sorts of comments but it won't go down for weeks and months just because of them," said Steve Barrow, head of G10 strategy at Standard Bank in London, adding that the dollar is in for a " roller coaster" ride.
"If all that mattered was policymakers comments about their currencies we'd all have been selling the Swiss franc in recent years – and lost our shirts," he said, noting the franc's record rise when the Swiss National Bank unexpectedly scrapped its peg to the euro two years ago.
Early premarket gappers
Gapping up: MJN +26.6%, ESIO +10.4%, ETRM +9.1%, CBL +8.9%, PULM +7.2%, CACI +5.5%, M+5.3%, IVAC +5.3%, WFT +5.2%, ETN +5.2%, HMY +5%, BRKS +4.3%, LCI +4.3%, ACLS +4.2%,MT +4.1%, STM +4%, AG +3.9%, COST +3.8%, GFI +3.7%, MTL +3.7%, ALL +3.7%, TSCO +3.6%,QGEN +3.3%, HL +3.2%, CAVM +3.1%, PRXL +3.1%, SSRI +3%, CDNS +3%, NOK +2.8%, X+2.7%, DLPH +2.7%, PM +2.7%, DRYS +2.6%, SLW +2.6%, ABX +2.4%, NEM +2.4%, PAAS +2.4%,ING +2.4%, GDX +2.3%, FSM +2.2%, VRX +2.2%, GOLD +2.1%, BDX +2.1%, AA +2%, ZUMZ +2%,AFG +1.5%, GG +1.4%, FB +1.4%, IDXX +1.4%, MRK +1.4%, EXTR +1.3%, MKSI +1%, KMT +0.9%
Gapping down: VNR -65.6%, AVIR -19.5%, SFLY -19.4%, CVEO -19.2%, EGOV -16.7%, MLNX-14.2%, CBAY -12%, MNKD -11.4%, CRUS -10.5%, FBP -8%, NVO -7.7%, QRVO -7.3%, MTW -6.7%,SDRL -5.6%, LM -4.7%, BBD -4.3%, DB -4.1%, XEL -4%, CORI -3.8%, SYMC -3.8%, KEX -3.8%, AZN-3.3%, CS -2.4%, HOLX -2%, CSTM -1.8%, TEVA -1.7%, AMD -1.3%, RIO -1.2%, LYG -1.2%, MDU-1.2%, EL -1.2%, MET -1.1%, AGNC -1.1%, VOD -1.1%, CFX -1.1%, EW -1%
Gapping down: VNR -65.6%, AVIR -19.5%, SFLY -19.4%, CVEO -19.2%, EGOV -16.7%, MLNX-14.2%, CBAY -12%, MNKD -11.4%, CRUS -10.5%, FBP -8%, NVO -7.7%, QRVO -7.3%, MTW -6.7%,SDRL -5.6%, LM -4.7%, BBD -4.3%, DB -4.1%, XEL -4%, CORI -3.8%, SYMC -3.8%, KEX -3.8%, AZN-3.3%, CS -2.4%, HOLX -2%, CSTM -1.8%, TEVA -1.7%, AMD -1.3%, RIO -1.2%, LYG -1.2%, MDU-1.2%, EL -1.2%, MET -1.1%, AGNC -1.1%, VOD -1.1%, CFX -1.1%, EW -1%
New iPhone 8 Leak Reveals Apple's Boring Breakthrough - http://bit.ly/2k35ICm
Opinions expressed by Forbes Contributors are their own.
This year's flagship smartphone from Apple is expected to introduce a number of new technologies. The 10th anniversary iPhone model will likely see a new design and new features announced in September. The biggest visual change will be a curved screen that uses OLED technology for the first time in an iPhone. There's just one problem with this. The iPhone 8's competition will have the same screen technology, and in some cases will have put it on sale five months before Apple.
Although Apple's iPhone stands out from a crowded field of smartphones in part down to the exclusive use of iOS as the software platform, much of the technology that the mobile OS leverages can be found "off the shelf" in the supply chains. Memory chips, I/O devices, accelerometers, camera hardware, antennae and many more elements are common across the world's smartphones.
Apple is in a strong position in terms of processors as it designs its own chips, but these still require fabrication in the same factories the handle the order books of rival manufacturers.
And then there is the display, Apple is expected to move to an OLED display for this year's flagship release. OLED offers a number of advantages over Apple's current use of LCD, such as brighter and vivid colors, better contrasts and blacks and reduced power usage. No doubt Apple will wax lyrical about the new screen come the expected launch in September, but as highlighted by DisplayMate's Dr Raymond Soneira, the iPhone's screen will be familiar to many in the industry.
Because of the volume of screens required by Apple, the expectation is that Apple will use one of the existing suppliers of OLED technology to outfit the tens of millions of handsets it will be hoping to sell. Which means that the iPhone 8's underlying visual technology is going to be rather familiar to the competition. Along with Apple, both the Galaxy S8 and Google's follow-up to the Pixel are expected to share the same components from Samsung Display. The presumptively titled Pixel 2 will likely arrive the month after the iPhone 8, but the Galaxy S8 with its curved OLED screen should be on sale in April this year, nearly five months before the iPhone 8.
Japan is putting together a package of plans for Japanese companies to invest in infrastructure and job-creation projects in the United States for Abe to take to the Feb. 10 meeting with Trump in Washington.
Another idea is to offer to increase liquid natural gas (LNG) imports from the United States, a source in the ruling coalition told Reuters.
Another option, if Abe determines that Trump is most concerned about the trade gap, is to increase imports of U.S. shale oil or gas on top of the investment package, according to a top executive at a major Japanese corporation who is close to Abe.
Japanese officials have been scrambling to respond to Trump's scattershot comments since he took office.
He has threatened to impose a tax on car imports from Mexico, criticized Japan's trade gap with the United States and most recently accused Japan, along with China and Germany, of devaluing their currencies to the detriment of U.S. companies.
"(Abe) wants to know what's the most important thing for Trump," said the executive, who declined to be identified.
"If it is the trade surplus that Trump cares the most about, for instance, then we could come up with a few possible solutions," including importing more U.S. shale oil or gas.
Abe's approach toward Trump would be "not accommodating, not opposing", he said.
Utilities would be resistant to buying more U.S. shale gas because they have already committed to buying large amounts and Japan's demand for energy is falling, an executive at a Japanese gas importer told Reuters on condition of anonymity.
Japan is the world's biggest buyer of the gas cooled to liquid form for transport on ships and takes in nearly a third of global shipments.
Once seen as a panacea for Japan's energy crisis after the Fukushima nuclear disaster in 2011 led to the shutdown of most reactors in the country, U.S. shale gas is now just one of many options for Japan to meet its needs.
Japan took in its first shipment of shale gas in liquid form this month and more shipments are likely to come as more export terminals start shipments this year and next.
The Yomiuri newspaper said on Thursday Abe's growth and jobs initiative would include a plan for Japan and the United States to jointly develop a $450 billion "infrastructure market", into which the Japanese government and companies would invest $150 billion over 10 years.
Saudi Aramco likely to list on multiple exchanges at same time: minister
Saudi Aramco is likely to list its shares simultaneously on more than one exchange but this is still under evaluation, Energy Minister Khalid al-Falih said on Thursday.
Asked by reporters if Aramco would list first on the Saudi bourse and then on another exchange abroad, Falih said: "It will probably be done concurrently, but we have not announced. We are evaluating. All our options are open."
The planned listing next year of up to 5 percent of Aramco, expected to be the world's biggest initial public offer of shares, is a centerpiece of the Saudi government's plan to diversify the economy beyond oil.
It’s official: Facebook wants to be your next TV
Mark Zuckerberg says he wants people to come to Facebook to watch “episodic content.” (And yes, Facebook is a media company.)
Facebook has long wanted to compete with TV for ad dollars — it boasted TV-sized audiences and liked to talk about people using Facebook alongside their favorite show or the big game.
Now Facebook is saying, out loud, that it doesn’t just want to compete with TV. It wants to be your TV.
On the company’s Q4 earnings call Wednesday, CEO Mark Zuckerberg talked about his vision for Facebook video. Zuckerberg wants people to think of Facebook when they have the thought “I want to watch video content now,” which sounds exactly like what you might use television or Netflix or HBO for today.
Here’s how Zuckerberg described his vision for Facebook’s video tab, a relatively new, video-only feed inside the core Facebook app:
“The goal that we have for the product experience is to make it so that when people want to watch videos or want to keep up to date with what’s going on with their favorite show, or what’s going on with a public figure that they want to follow, that they can come to Facebook and go to a place knowing that that’s going to show them all the content that they’re interested in. That’s a pretty different intent than why people come to Facebook today. ... The experience is designed to deliver on that promise — [that] you want to watch videos, you want to keep up with the content that you watch episodically week over week. This is going to be the place where you go to do that.”
Facebook has said publicly in the past that it plans to pay for for high-quality video content. It’s currently in the market to license TV-style shows. Yesterday The Wall Street Journal reported that it has a Facebook video app in the works for Apple TV and other TV boxes.
But Zuckerberg has never been quite this blunt about the company’s video ambitions. The idea of episodic content, stuff that gets people to come back week after week, seems like a key priority.
Zuckerberg said that Facebook needs to figure out a business model to entice video makers to create stuff for the social network, and specifically mentioned mid-roll ads, which the company is starting to test, as Facebook’s plan moving forward.
“That is going to enable the kind of content that’s going to take this to the next level,” he said. “A lot of the best episodic content is professionally created, and those folks need to make a good amount of money in order to support their business model.”
And even though Facebook has never admitted that it’s a traditional media company, paying creators for content sure makes Facebook sound like a traditional media company.
Marsh McLennan beats by $0.06, misses on revs
- Reports Q4 (Dec) earnings of $0.89 per share, $0.06 better than the Capital IQ Consensus of $0.83; revenues rose 0.8% year/year to $3.36 bln vs the $3.46 bln Capital IQ Consensus.
ConocoPhillips beats by $0.17; sees FY17 production +0-2%
- Reports Q4 (Dec) loss of $0.26 per share, $0.17 better than the Capital IQ Consensus of ($0.43). Adjusted earnings were improved compared with fourth-quarter 2015 primarily due to higher realized prices and lower exploration expense. The company's total realized price was $32.93 per barrel of oil equivalent (BOE), compared with $28.54 per BOE in the fourth quarter of 2015, reflecting higher average realized prices across all commodities.
- For the quarter, cash provided by operating activities was $1.44 billion.
- Production excluding Libya for the fourth quarter of 2016 was 1,587 thousand barrels of oil equivalent per day (MBOED), a decrease of 12 MBOED compared with the same period a year ago. The decrease was the result of normal field decline and dispositions, partly offset by new production from major projects and development programs, improved well performance, and lower downtime. Excluding the net impact from dispositions of 70 MBOED and reduced downtime of 13 MBOED, production increased 45 MBOED, or 3 percent. For the quarter, strong operational performance continued across the portfolio.
- Full-year 2017 production is expected to be 1,540 to 1,570 MBOED. This results in flat to 2 percent growth compared with full-year 2016 production, excluding Libya, of 1,540 MBOED when adjusted for 2016 dispositions of 27 MBOED.
- Q1 production is expected to be 1,540 to 1,580 MBOED. Production guidance for 2017 excludes Libya and the impact of future dispositions. Guidance for production and operating expenses is $6.1 billion, which results in adjusted operating cost guidance of $6.0 billion.
- The company's 2017 guidance for capital expenditures is $5.0 billion; corporate segment net expense is $1.3 billion or $1.2 billion adjusted corporate segment net expense; depreciation, depletion and amortization is $8.0 billion; and exploration dry hole and leasehold impairment expense is $0.2 billion.
Generali shares jump on talk Intesa bid could come soon
Shares in Generali (GASI.MI) rose more than 4 percent on Thursday, with traders cited market talk a bid for the insurer from Italy's biggest retail bank Intesa Sanpaolo (ISP.MI) was round the corner.
One of the traders said there were rumors that Intesa Sanpaolo was readying a cash and paper deal valuing Generali at 17 euros per share.
A spokesman for Intesa Sanpaolo categorically denied that a possible bid for Italy's biggest insurer was on the agenda of board meetings scheduled for Thursday and Friday.
At 1001 GMT Generali shares were up 4.4 percent at 15.3 euros.
Intesa said last week it was examining a possible tie-up with Generali in what would be one of Europe's biggest deals of this kind.