After Hours Summary: PSTG +13%, EPAY +8.5%, ADSK +2% following earnings/guidance, JMU +15% on P2P update/stake news... GME -8%, SPLK -7%, ULTA -2% following earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: PSTG +13.3%, EPAY +8.5% (also announces $60 mln stock repurchase program), QURE +3.2%, ADSK +2%,
Companies trading higher in after hours in reaction to news: DVD +18.1% (very thinly traded, Dover Motorsports to sell its Nashville Superspeedway facility to an entity owned by Panattoni Development), JMU +15.1% (Wowo states that its business scale does not include P2P financing and P2P internet lending service and announces Xiao Nan Guo Restaurants will acquire 9.82% stake at $6.00/share), LEI +10.6% (Lucas Energy enters into agreement with its senior lender, plans to use the funds to participate in the drilling and completion of certain Eagle Ford wells under a joint operating agreement with Lonestar Resources), WCIC +6.1% (light volume, to join S&P SmallCap 600), NLS +5.3% (to join S&P SmallCap 600), KGC +4.6% (ticking higher, announces operational updates at Bald Mountain, Tasiast and Maricunga), WNR +2.3% (light volume - CEO disclosed purchase of 100K shares), MPWR +0.9% (ticking higher - to join S&P MidCap 400), FRGI +0.8% (Fiesta Restaurant CEO Tim Taft to retire at year-end; Board to reevaluate strategic plan and appoints committee to seek successor and provide transition oversight), IP +0.8% (ticking higher, confirms it has communicated with its customers a price increase of $50 per short ton on all containerboard products, effective with shipments on October 1)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: TLND -17.5%, GME -8%, ULTR -7.9%, SPLK -6.6%, ULTA -2%, UEPS -1.7%, ZAYO -0.8%, BRCD -0.4%
Companies trading lower in after hours in reaction to news: SYNA -4.5% (light volume - files to delay Form 10-K citing matters arising late in the year end reporting process), VNDA -1.2% (modestly pulling back after 20% intraday move higher on patent news)
Closing Market Summary: Stocks Tick Lower Ahead of Jackson Hole SymposiumThe stock market ended a choppy session on a modestly lower note as investors maintained a cautious posture ahead of tomorrow's speech from Federal Reserve Chair Janet Yellen. The Dow Jones Industrial Average (-0.2%) finished behind the S&P 500 (-0.1%) and the Nasdaq Composite (-0.1%).
The benchmark index traversed a narrow ten-point trading range as equity indices continued to languish below recently-established record highs. The Thursday affair was hallmarked by thin trading conditions, a hodgepodge of earning results, and deviating sector leadership from the heavily-weighted technology (+0.1%), financial (+0.3%), consumer discretionary (-0.4%), and health care (-0.8%) sectors.
Equities began the session on a lower note as global markets tilted to the downside. European bourses underperformed following a weaker-than-expected reading of Germany's IFO Business Climate survey for August. However, relatively light volume and the potential market-moving nature of Chair Yellen's Friday remarks also likely contributed to increased volatility in overseas markets.
The major U.S. indices stumbled at the start of the session as disappointing quarterly results and/or guidance from the likes of Dollar Tree (DLTR 85.50, -9.43), Dollar General (DG 75.61, -16.18), and Signet Jewelers (SIG 83.44, -12.06) weighed on investor sentiment. Early morning Fed speak may have also dampened risk appetite after a few officials talked up the potential of a rate hike in the near term.
The S&P 500 (-0.1%) briefly fell to the 2170/2171 price level before reversing back towards its flat line. However, the broader market was unable to maintain its footing near those levels and slipped back towards its low in the final hour. The benchmark index finished in the bottom of today's trading range, but five sectors still ended in the green. The telecom services (+0.4%) and materials (+0.5%) sectors settled in front of the pack while consumer staples (-0.4%), consumer discretionary (-0.4%) and health care (-0.8%) underperformed.
The countercyclical health care sector (-0.8%) ended its day at the bottom of the leaderboard as biotechnology underperformed. In the group, Mylan Labs (MYL 42.85, -0.30) finished lower by 0.7% as participants weighed fresh criticisms of the drug maker. Mylan surrendered a 4.5% gain as recently-announced initiatives to lower the cost of its EpiPen device were deemed insufficient. Separately, St. Jude Medical (STJ 77.82, -4.06) declined 5.0% after Muddy Waters Capital issued bearish commentary on the name and disclosed a short position in the stock. The firm cited potential cyber security vulnerabilities for its negative view on St. Jude.
Retail names underperformed in the consumer discretionary space (-0.3%) as disappointing results and guidance from Dollar Tree (DLTR 85.50, -9.43), Dollar General (DG 75.61, -16.18), and Signet Jewelers (SIG 83.44, -12.06) overshadowed positive reports from Tiffany & Co (TIF 73.28, +4.41) and Guess? (GES 18.20, +3.30). The broader SPDR S&P Retail ETF (XRT 45.36, -0.26) ended lower by 0.6%, extending its week-to-date loss to 1.3%.
In the technology space (+0.1%), the high-beta chipmakers outperformed, evidenced by the 0.4% gain in the PHLX Semiconductor Index. In the group, Micron (MU 16.20, +0.69) jumped 4.5% after Nomura increased its price target on the stock to $20 from $16. In the broader sector, Salesforce.com (CRM 80.16, +2.34) gained 3.0% amid takeover rumors. The broader sector gained 0.1%, extending is month-to-date advance to 1.8%.
Treasuries ended on a lower note as yields rose through the curve. The yield on the benchmark 10-yr note finished higher by one basis point (1.58%) while the yield on the 2-yr note finished at 0.79% (+2 bps).
Today's participation was below the recent average as fewer than 697 million shares changed hands at the NYSE floor.
Today's economic data included weekly initial claims and Durable Goods Orders for July:
- Initial jobless claims for the week ending August 20 slipped to 261,000 (consensus 265,000) from the prior week's unrevised reading of 262,000.
- Continuing claims for the week ending August 13 were 2.145 million, down 30,000 from the prior week's unrevised reading.
- Durable goods orders increased 4.4% in July (consensus +3.5%) on the back of a 10.5% increase in transportation equipment orders, which was fueled by an 89.9% increase in nondefense aircraft and parts orders.
- Orders for the manufacturing sector have picked up again after declining in both May and June.
- Excluding transportation, orders were up 1.5% (consensus +0.4%), paced by gains in nearly all categories.
Tomorrow's economic data will include the second estimate of Q2 GDP (consensus 1.1%) and July International Trade in Goods, which will each cross the wires at 8:30 ET. Separately, the final reading of the University of Michigan Consumer Sentiment Survey for August (consensus 90.6) will be released at 9:45 ET.
- Russell 2000 +9.0% YTD
- S&P 500 +6.3% YTD
- Dow Jones +5.9% YTD
- Nasdaq Composite +4.1% YTD
The state prosecutor’s office in the city of Stuttgart has obtained a large data cache that apparently details how a department at Bosch cooperated with Volkswagen as early as 2005 to develop the cheat software.
“The department which the data comes from knew since 2005 that it was cheat software,” an insider told WirtschaftsWoche. “The data details which tricks were programmed when and by whom since 2005 and who knew.”
According to WirtschaftsWoche sources, the data also reveals that the emissions scandal goes far beyond the well-known attempts by Volkswagen to cheat nitrogen oxide tests of diesel cars.
“It’s about other pollutants such as soot particulate and it’s also about gas engines,” an insider said.
Prosecutors obtained the data cache in 2011 from a former Bosch employee who was under investigation. The former employee had copied 1.3 terabytes of data, equivalent to 1,800 CDs, from Bosch between 2009 and 2011 and had tried to sell the information to automobile enthusiasts.
The data is now being looked at in a new light by prosecutors who launched an investigation into Bosch at the end of 2015, months after Volkswagen admitted it had manipulated software in 11 million cars worldwide to cheat emissions tests.
“We are reviewing to what extent the evidence secured at that time is relevant for our ongoing investigation against Bosch,” confirmed a spokesperson for the state prosecutor’s office.
The data apparently contains information on strictly confidential engine control programs, emissions measurements and the email communications of entire departments.
The data includes information about many Volkswagen models such as the Passat, Golf and Tiguan as well as models from Seat, Skoda and Bentley. A large portion of the data concerns Audi and is marked “confidential.”
{STJ US Equity GIP <GO>}
The foremost shale gas region in the US is bucking the energy market doldrums, with production this month approaching a new record.
Natural gas output from the Marcellus and Utica shales of the US north-east is averaging 22.63bn cubic feet per day in August, according to Platts Analytics. That is up 2 per cent from July and the most since February’s all-time high of 22.78bn cu ft/d.
The reversal is defying expectations of a steady production decline as the commodities slump forces energy companies to curtail drilling. The north-east in the past several years emerged as what Credit Suisse called “the key growth engine” of US gas production, helping put the country on the global energy map as agas exporter.
“Right now we’re actually seeing higher production than in the past few months,” said Eric Brooks, energy analyst at Platts Analytics, a unit of S&P Global Platts. “It was the exact opposite of what everyone was anticipating.”
The US government forecast that combined gas output from the two shale areas lying beneath Ohio, Pennsylvania and West Virginia would decline until at least September.
But producers have managed to maintain volumes by tapping inventories of drilled but uncompleted wells and burrowing deeper, longer wells that yield more gas. Even though the number of drilling rigs has declined, new production per rig now averages about 11.4m cubic feet of gas in the Marcellus, an 18 per cent improvement from a year ago, according to Energy Information Administration figures.
Chesapeake Energy, a leading gas producer, raised production guidance “driven primarily by gas volume increases” in the Marcellus and another shale region, it recently told investors. Cabot Oil & Gas, a big Marcellus producer, said its output would remain roughly flat between the second and third quarter of 2016, while competitor Range Resources eyed a slight rise in production.
Production has been robust despite regional prices that are exceptionally soft. Intercontinental Exchange indices show gas at the Dominion South trading hub in Pennsylvania sold for $1.2757 per million British thermal units this month, less than half the price for benchmark gas in Louisiana, as producers, merchants and utilities jockey over a limited pipeline system.
Gas marketers typically inject excess supply into reservoirs in summertime for withdrawal during the winter heating season.
Mr Brooks said the recent surge of supply may reflect a push to sell gas before storage operators begin to ration space in their reservoirs.
Even though the region’s gas prices have been low, producers also remember last winter — typically the period of peak demand — when the Dominion South market sank to as little as $0.50 per mBtu.
“Time and again, the producers have proven how nimble they are and how willing they are to produce in a low-price environment,” Mr Brooks said.
WhatsApp plans to let businesses on to its service before the end of the year
WhatsApp will finally take a step to becoming a platform after the Facebook-owned company revealed it will begin to integrate businesses services into its app before the end of this year.
The company first announced plans to connect its userbase — which stands at more than one billion — with businesses back in January, and it today it updated its terms of service in preparation for testing with selected users “in the months ahead.”
What kind of dialogue will WhatsApp facilitate between users and businesses?
The aim is to keep things useful, such as flight notifications, receipts or delivery tracking, although marketing messages are mentioned in the newest version of the company’s T&Cs:
We will explore ways for you and businesses to communicate with each other using WhatsApp, such as through order, transaction, and appointment information, delivery and shipping notifications, product and service updates, and marketing. For example, you may receive flight status information for upcoming travel, a receipt for something you purchased, or a notification when a delivery will be made. Messages you may receive containing marketing could include an offer for something that might interest you. We do not want you to have a spammy experience; as with all of your messages, you can manage these communications, and we will honor the choices you make.
The move is a very notable one given that WhatsApp has always taken a very aggressive ‘no spam’ approach to its business. “Marketing” messages and “an offer for something that might interest you” could fall into the category of spam if not done right, context is key here.
Back in 2012, CEO and co-founder Jan Koum threw shade a number of rival messaging companies which he claimed were “selling” ads to their users:
No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they’ll see tomorrow. We know people go to sleep excited about who they chatted with that day (and disappointed about who they didn’t). We want WhatsApp to be the product that keeps you awake… and that you reach for in the morning. No one jumps up from a nap and runs to see an advertisement.Advertising isn’t just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought. At every company that sells ads, a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data, upgrading the servers that hold all the data and making sure it’s all being logged and collated and sliced and packaged and shipped out… And at the end of the day the result of it all is a slightly different advertising banner in your browser or on your mobile screen.
The irony here is that many of those in Koum’s firing line — WeChat, Line, and Kakao — weren’t pushing ads. They opted to make money by connecting businesses with users via “official accounts” that companies could pay to rent and promote. As we wrote before, the ability to reach users directly is a potentially a very powerful new tool — and it remains opt-in for uses. Actual banner ads are few and far between in the messaging space because they ruin the user experience and look alien inside chat, which is a highly personal and curated space.
It isn’t exactly clear whether WhatsApp’s ‘business communication’ push will be like official accounts, the company didn’t go into detail on the format. What it did say, however, is that it will begin sharing data, and in particular, users’ phone numbers, with Facebook — the company that acquired WhatsApp for a fee that ultimately rose to $22 million — which is a key way it hopes to make messages relevant and not spammy.
That’s quite a big admission, although WhatsApp users will be able to opt out of sharing their information with Facebook.
For those who go with the default, this is how your data will be put to work:
As part of the Facebook family of companies, WhatsApp receives information from, and shares information with, this family of companies. We may use the information we receive from them, and they may use the information we share with them, to help operate, provide, improve, understand, customize, support, and market our Services and their offerings. This includes helping improve infrastructure and delivery systems, understanding how our Services or theirs are used, securing systems, and fighting spam, abuse, or infringement activities. Facebook and the other companies in the Facebook family also may use information from us to improve your experiences within their services such as making product suggestions (for example, of friends or connections, or of interesting content) and showing relevant offers and ads. However, your WhatsApp messages will not be shared onto Facebook for others to see. In fact, Facebook will not use your WhatsApp messages for any purpose other than to assist us in operating and providing our Services.
These are major concessions for WhatsApp, but they are fairly inevitable. Facebook spent a lot of money acquiring the company, and while I believe that it wants to build rival chat app Messenger into the more feature-rich ‘WeChat-style’ chat/mobile portal service, it has a duty to monetize WhatsApp. Indeed, Mark Zuckerberg himself once said that monetization begins when a service reaches one billion users, so here we are.
There is a tendency to view this plan as negative, particularly given that other WhatsApp updates have added useful features to the service — such as encrypted communication and voice calls. On the positive side, the WhatsApp service will retain its focus on simplicity and usability, so don’t expect there to be many distractions from the existing messaging interface you see now.
But, of course, we don’t know for sure just yet.
WhatsApp has been fairly vague with its plans for now, so we’ll have to wait until it begins field testing business communications to learn more. Other apps have pioneered the business communications model for many years, but a colossal base of over one billion monthly users means this move promises to be the most impactful feature launch seen in the messaging space to date.
After a failed attempt to go social with Ping in 2010, Apple may have a renewed sense of excitement over the social space, according to a report from Bloomberg.
Sources told Bloomberg that Apple is working on a video recording/editing app that would be similar in functionality to Snapchat, though there’s no mention of disappearing or self-destructing content in the report. Instead, the app is supposed to be easy to use with one hand for video recording, and users will be able to swipe between various filters or add drawings.
The main goal is that users will be able to create and edit videos within a minute.
One of the filters is said to be an Instagram-sized square, instead of the native rectangle on the iPhone, though Apple’s camera software already has that functionality built in. So…?
The ultimate hope is that people would use the app, which is being built by the same folks who built iMovie and Final Cut Pro, to create the content to share with other social networks.
Bloomberg reports that Apple is not clear-cut on when (or even if) this app will launch, or whether or not it will live as part of iOS or as its own standalone app.
For the first time in a long time, Apple’s iPhone isn’t shattering sales expectations quarter after quarter, so an enhanced focus on services business makes sense. However, you’d expect Apple to double down on existing, and potentially quite lucrative, businesses like Apple Pay, Music, and iTunes rather than diving into social, where so much land has already been claimed in the name of Facebook and Snapchat.
Then again, this report could be about a content creation app that complements social networks, as opposed to being its own full-fledged social network like the now-deceased Google Plus.
Or… this report could be about nothing. Apple is highly secretive, and it wouldn’t be the first time someone floated a rumor that never came to be.
We’ll have to wait, likely much longer than we’ll be waiting to see the next iPhone, to find out the truth.