>>> Fed Minutes Key Excerpts

Fed Minutes Key Excerpts

  • Asset price movements as well as changes in the expected path for U.S. monetary policy beyond December appeared to be driven largely by expectations of more expansionary fiscal policy in the aftermath of U.S. elections.
  • The staff's forecast for real GDP growth over the next several years was slightly higher, on balance, largely reflecting the effects of the staff's provisional assumption that fiscal policy would be more expansionary in the coming years. These effects were substantially counterbalanced by the restraint from the higher assumed paths for longer-term interest rates and the foreign exchange value of the dollar.
  • Several participants pointed out that, depending on the mix of tax, spending, regulatory, and other possible policy changes, economic growth might turn out to be faster or slower than they currently anticipated. However, almost all also indicated that the upside risks to their forecasts for economic growth had increased as a result of prospects for more expansionary fiscal policies in coming years.
  • Many participants underscored the need to continue to weigh other risks and uncertainties attending the economic outlook. In that regard, several noted upside risks to U.S. economic activity from the potential for better-than-expected economic growth abroad or an acceleration of domestic business investment. Among the downside risks cited were the possibility of additional appreciation of the foreign exchange value of the dollar, financial vulnerabilities in some foreign economies, and the proximity of the federal funds rate to the effective lower bound. Several participants also commented on the uncertainty about the outlook for productivity growth or about the potential effects of tight labor markets on labor supply and inflation.
  • Members agreed that there was heightened uncertainty about possible changes in fiscal and other economic policies as well as their effects. However, members also agreed that near-term risks to the economic outlook appeared roughly balanced. Some members saw, with gradual adjustments of the stance of monetary policy, only modest risk of a scenario in which an undershooting of the longer-run normal rate of unemployment would create a sharp acceleration in prices.
  • However, several others pointed out that a further rise in the dollar might continue to hold down inflation. Participants generally agreed that they should continue to closely monitor inflation indicators and global economic and financial developments.

>>> FOMC Minutes.


  • Summary of Economic Projections

In conjunction with the Federal Open Market Committee (FOMC) meeting held on December 13-14, 2016, meeting participants submitted their projections of the most likely outcomes for real output growth, the unemployment rate, and inflation for each year from 2016 to 2019 and over the longer run.1 Each participant's projection was based on information available at the time of the meeting, together with his or her assessment of appropriate monetary policy, including a path for the federal funds rate and its longer-run value, and assumptions about other factors likely to affect economic outcomes. The longer-run projections represent each participant's assessment of the value to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy. "Appropriate monetary policy" is defined as the future path of policy that each participant deems most likely to foster outcomes for economic activity and inflation that best satisfy his or her individual interpretation of the Federal Reserve's objectives of maximum employment and stable prices.
Most FOMC participants expected that, under appropriate monetary policy, growth in real gross domestic product (GDP) would pick up a bit next year and run at or slightly above their individual estimates of its longer-run rate through 2019. Almost all participants projected that the unemployment rate would run below their estimates of its longer-run normal level in 2017 and remain below that level through 2019. All participants projected that inflation, as measured by the four-quarter percentage change in the price index for personal consumption expenditures (PCE), would increase over the next two years, and several expected inflation to slightly exceed the Committee's 2 percent objective in 2018 or 2019. Table 1 and figure 1 provide summary statistics for the projections.

>>> BMW Group, Intel and Mobileye to have autonomous test vehicles on the roads

BMW Group, Intel and Mobileye to have autonomous test vehicles on the roads by H2'17 

- BMW Group, Intel and Mobileye today announced that a fleet of approximately 40 autonomous BMW vehicles will be on the roads by the second half of 2017, demonstrating the significant advancements made by the three companies towards fully autonomous driving. Revealing this at a podium discussion held during a joint press conference at CES, the companies further explained that the BMW 7 Series will employ cutting-edge Intel and Mobileye technologies during global trials starting in the U.S. and Europe- Mobileye contributes its proprietary EyeQ5 high-performance computer vision processor offering automotive-grade functional safety and low-power performance. The EyeQ5 is responsible for processing and interpretation of input from the 360-degree surround view vision sensors as well as localization. EyeQ5, in combination with Intel CPU and FPGA technologies, forms the Central Computing Platform to be integrated into each autonomous vehicle.- Mobileye will further collaborate with the BMW Group to develop the sensor fusion solution, creating a full model of the environment surrounding the vehicle, using input from vision, radar, and lidar sensors. As well as establishing a driving policy, including Mobileyes reinforcement learning algorithms used to endow the vehicle system with the artificial intelligence required to safely negotiate complex driving situations.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • DLR -0.5%, ( sees FY17 funds from operations of $5.90-6.10 vs $6.02 Capital IQ Consensus Estimate; FY16 $5.65-5.75 vs. $5.69 consensus)
Other news:
  • AGRX -62.4% (announces 'positive' top-line results from its Phase 3 SECURE clinical trial of Twirla; plans to resubmit its NDA for Twirla in the first half of 2017 on the basis of the SECURE results)
  • ACUR -10.7% (announces they are exploring a full range of financing and strategic alternatives, including a possible sale of the company)
  • ARR -3% (announces January 2017 dividend rate per common share of $0.19 vs $0.22/share prior month)
  • CLVS -2.7% (prices / upsizes public offering of 5 mln shares of common stock at $41/ per share)
  • TSLA -1% (Misses Q4 delivery targets on production delays related to new autopilot hardware; net orders set new record)
  • SFR +-0.5% (commences a private offering of $250 million aggregate principal amount of convertible senior notes due 2022)
Analyst comments:
  • COG -2.2% (downgraded to Underperform at BofA/Merrill)
  • STM -2.2% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • VRX -1.4% (target lowered to $11 from $16 at Piper Jaffray)
  • OSK -1.2% (downgraded to Hold from Buy at Deutsche Bank)
  • DNKN -1.1% (downgraded to Underperform from Hold at Jefferies )
  • SWN -1.1% (downgraded to Underperform at BofA/Merrill)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: N/A
M&A news:
  • REXX +4.5% (Antero (AR) will acquire the company's Ohio Utica assets in the Warrior South Area for net proceeds at closing of approx. $30.0 mln)
  • NVLS +4.3% (initiated a process to explore and review a range of strategic alternatives)
Select metals/mining stocks trading higher:
  • MUX +1.9%, SBGL +1.6%, GFI +1.5%, SLV +1%, NEM +0.9%, GDX +0.9%, ABX +0.8%
Other news:
  • CBAY +41.6% (Kowa Pharmaceuticals America announces agreement with CymaBay Therapeutics to license gout compound)
  • BLPH +24.1% (receives confirmation of the FDA's acceptance of all modifications proposed by the co to its Phase 3 program for INOpulse )
  • OCUL +9% (announces additional successful results for Phase 3 clinical trial of Dextenza)
  • ECA +5% (anticipates production growth from its core four assets from 4Q16 to 4Q17 will be in the upper range of, or exceed, its previously indicated growth plan of 15-20% Y/Y)
  • SHAK +4.6% (to Join S&P SmallCap 600)
  • NVLS +4.3% (initiated a process to explore and review a range of strategic alternatives)
  • KOPN +3.5% (continued strength)
  • DEPO +3.2% (continued strength)
  • XRX +3% (continued strength)
  • RYAAY +2.2% (reports Dec traffic rose 20% YoY)
  • FOLD +1.4% (announced that the National Institute for Health and Care Excellence Highly Specialised Technologies Evaluation Committee has issued a positive final evaluation determination for reimbursed patient access to Galafold)
  • CC +1.2% (to join S&P MidCap 400),
Analyst comments:
  • GBT +6.6% (initiated with a Overweight at JP Morgan),
  • CS +3.7% (upgraded to Overweight from Equal Weight at Barclays)
  • STZ +2.8% (upgraded to Buy from Underperform at BofA/Merrill )
  • RDS.A +1% (upgraded to Outperform at RBC Capital Mkts)
  • MO +0.9% (upgraded to Buy from Neutral at BofA/Merrill)
  • PIR +0.7% (initiated with a Buy at Loop Capital)
  • A +0.7% (upgraded to Overweight at Barclays)