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Top Stock Market News For Today January 14, 2022

Stock futures bounce back following Thursday’s losses.
The post Top Stock Market News For Today January 14, 2022 appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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Stock Market Futures Rise Ahead Of Big Banks Kicking Off Earnings Season

Stock market futures are on the rise in early morning trading today. This could signal a potential recovery in stocks after broad-based sell-offs a day prior. In particular, tech stocks underperformed. Evidently, the tech-heavy Nasdaq composite ended the day down by 2.51%. Today, investors are likely eyeing earnings from big banks while they consider the trajectory of the U.S. economy. This alongside existing job market and inflation data would give investors plenty of information to digest now.

For one thing, market analysts have varying takes on how things could go from this point, moving forward. On one hand, WealthWise Financial CEO Loreen Gilbert sees “a wild ride” ahead for markets. She notes, “What we’re seeing right now is a repricing of the markets, given anticipated rate hikes… That’s going to be the catalyst driving down the market.” On the other hand, the likes of Matthew Miskin, John Hancock Investment Management co-chief investment strategist, thinks otherwise. He argues, “As the pandemic comes more under control this year, as the Omicron wave hopefully dissipates, we likely see the supply chain disruptions come off, and then we’re not going to get more fiscal stimulus … That, in our view, does cause inflation to come down over the course of the year.

Regardless, as investors attempt to make sense of the current market conditions, there remains plenty of notable stock market news. As of 5:55 a.m. ET, the Dow, S&P 500, and Nasdaq futures are rising by 0.25%, 0.16%, and 0.02% respectively.

Big Banks’ Earnings Rolling In Today

Going into the current earnings season, most, if not all eyes are currently on the big banks. Before today’s opening bell, we have JPMorgan (NYSE: JPM), Wells Fargo (NYSE: WFC), and Citigroup (NYSE: C) on tap. In theory, the performance of these finance industry titans alongside their peers will likely reflect one key thing. That is, the current state of the overall economic recovery. Therefore, it would be safe to say that today’s earnings could also mark crucial data points for investors to consider now.

Now, the key question on investors’ minds would be, what should we expect from the banks? For starters, analyst estimates for JPMorgan stand as such. In terms of earnings per share (EPS), consensus projections point to earnings of $3.04. This would be a decrease of 19.8% from the same quarter last year. Regarding total revenue, analysts expect a marginal decline of 1.3% year-over-year, adding up to $29.78 billion. More importantly, investors will likely be watching the bank’s net interest margin which could see a solid increase quarter-over-quarter.

Secondly, following JPMorgan is Wells Fargo. As it stands, Wall Street currently expects the bank to report an EPS of $1.00 on revenue of $18.61 billion. This would reflect year-over-year gains of 42.9% and 4% respectively. Thirdly, consensus EPS and revenue for Citigroup currently sit at $1.66 and $16.79 billion respectively. In detail, this represents a year-over-year decline of 20% for EPS and a gain of 1.8% for revenue. Despite the possible deceleration in year-over-year growth for some, banks also have another major tailwind to ride later this year. Namely, this would come in the form of the Fed’s interest rate hikes. Nevertheless, bank stocks are likely on investors’ minds today.

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Block CEO Jack Dorsey Confirms Open Bitcoin Mining Plans

In the tech world, fintech firm Block (NYSE: SQ), formerly known as Square, is looking into the Bitcoin mining business. Notably, confirmation of this news comes directly from founder and CEO Jack Dorsey. According to him, Block is going through with its plans to develop an open Bitcoin mining system. This would affirm the company’s first mention of such plans back in October 2021. Providing more details on the current move is Block general manager for hardware, Thomas Templeton. Via a posting on his Twitter (NYSE: TWTR) account, Templeton revealed that the goal is to make Bitcoin more accessible.

In the larger scheme of things, Block aims to make it “so that anyone, anywhere, can easily purchase a mining rig.” This includes making the overall process of buying, setting up, maintaining, and mining more distributed and efficient as well. As such, all of this would see Block helping address the current limited supply of mining rigs in circulation. In turn, this could further open up crypto mining to the general public.

Or in Dorsey’s words, “The more decentralized this is, the more resilient the Bitcoin network becomes.” Now, the project is currently in the incubation phase within Block’s internal hardware division. Even so, the company seems to be making a significant push in the crypto space. Because of this, I could see SQ stock turning heads in the stock market today.

SQ stock chart
Source: TD Ameritrade TOS

Ford Races Past $100 Billion Market Cap Mark As Tesla Faces Cybertruck Delays

Ford (NYSE: F) is making headlines now as it crossed the $100 billion market cap mark briefly yesterday. F stock gained by as much as 5.35% at its intraday-high. More importantly, Ford could have its ongoing shift towards the electric vehicle (EV) market to thank for this achievement. In essence, F stock hit an all-time high of $25.87 yesterday. The current bump in its shares comes with recent negative news about rival EV player Tesla (NASDAQ: TSLA) production plans.

According to an update on its website, the production of Tesla’s highly anticipated Cybertruck could be postponed. This comes as the reference on its website to a 2022 production date was removed this week. Depending on how you see it, this could play to Ford’s benefit, seeing as the Cybertruck would be Tesla’s first all-electric truck offering. The likes of which would be a likely competitor to Ford’s upcoming electric F-150 Lightning truck. Because of all this, TSLA stock ended the day down by 6.75%. As the dust settles on this front, investors may be looking towards emerging names in the field now. If anything, F stock is already up by over 14% year-to-date.

F stock
Source: TD Ameritrade TOS

[Read More] Best Monthly Dividend Stocks To Buy Now? 5 For Your List

Boston Beer Faces Supply Bottleneck, Cuts Earnings Forecast

The Boston Beer Company (NYSE: SAM) appears to be on the decline now. This comes after news of the company slashing its earnings outlook for the year broke. With post-market losses of over 10%, this is apparent. Overall, the current info is from Boston Beer’s latest filing with the SEC. Diving in, the company sees its full-year earnings figures coming in between a $1 loss per share and $1 EPS.  This is a significant reduction from its previous EPS guidance of $2 to $6 per share.

In fact, consensus estimates were looking at an EPS of $5.69 for the full fiscal year. Furthermore, Boston Beer is also providing an explanation for the revision in guidance. It notes that “the estimated lower shipment growth is primarily a result of more aggressive wholesaler inventory reduction than expected, primarily affecting Truly.” For those uninitiated, Truly is among the company’s flagship hard seltzer offerings. Adding to that, Boston Beer also highlights the ongoing supply chain pressures, primarily, increasing costs. All of which, it believes, will contribute towards lower-than-expected gross margins.

sam stock
Source: TD Ameritrade TOS

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The post Top Stock Market News For Today January 14, 2022 appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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Economics

Oil Could Be The Haven Stocks Traders Need To Shelter From Fed

Oil Could Be The Haven Stocks Traders Need To Shelter From Fed

By Nour Al Ali, Bloomberg Markets Live commentator and analyst

Oil is starting to look like an unlikely haven from the stocks selloff in the run-up to anticipated Fed tightening.

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Oil Could Be The Haven Stocks Traders Need To Shelter From Fed

By Nour Al Ali, Bloomberg Markets Live commentator and analyst

Oil is starting to look like an unlikely haven from the stocks selloff in the run-up to anticipated Fed tightening.

Traders are pricing lower volatility in the commodity than in the Nasdaq and S&P 500. Barometers of market anxiety for both indexes have shot up recently, suggesting trader sentiment is souring. Meanwhile, the CBOE Crude Oil Volatility Index, which measures the market’s expectation of 30-day volatility of crude oil prices applying the VIX methodology to USO options, shows that oil prices are expected to remain relatively muted in comparison.

With a producer cartel to support prices, the outlook for oil is more sanguine, even if the Fed raises rates. The commodity has ample support, with global oil demand expected to reach pre-pandemic levels by the end of this year. The U.S. administration has been pushing oil-producing nations under the OPEC+ cartel to ramp up output, while the group has stuck to a modest production-increase plan and is expected to rubber-stamp another 400k b/d output hike when they meet next week. This means that oil is likely to stay a lot more stable than in recent years.

The relatively low correlation between the asset classes provide diversification benefits. The relationship between the S&P 500 and the global oil benchmark is weak and lacks conviction; it’s even weaker between the Nasdaq 100 and Brent crude contracts. The divergence in price action this week could indicate that stocks have been tumbling in fear of a hawkish Feb, more so than geopolitical risk alone. That would perhaps offer traders an opportunity to seek shelter amid stock volatility in anticipation of the Fed’s next move.

Oil might have tracked the decline in stocks at the beginning of this week, but the commodity is back to its highs now. It’s up close to 15% this year, while the S&P 500 is struggling to reclaim its footing after plunging as much as 10%.

Tyler Durden Wed, 01/26/2022 - 13:45

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Who’s Afraid Of Jerome Powell?

Who’s Afraid Of Jerome Powell?

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

baller (ˈbɔːlə)
n
slang someone, usually a man, who lives in an extravagant and materialistic manner, tending to be something of a socialite

My wife…

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Who's Afraid Of Jerome Powell?

Authored by Tom Luongo via Gold, Goats, 'n Guns blog,

baller (ˈbɔːlə)
n
slang someone, usually a man, who lives in an extravagant and materialistic manner, tending to be something of a socialite

My wife and I got sucked into watching the Dwayne Johnson series Ballers on HBOMax over the weekend. Aside from being hilarious, it struck me how much of a microcosm of our world this seemingly alien world of twentysomething millionaires and rapacious billionaires really is.

When you drill into the details, the world of Ballers really isn’t that far from ours.

For those that don’t know the setup, broke former NFL bad boy Johnson is trying to turn a new leaf “monetizing his friendships” to help NFL players hold onto all that money they are making at an age when they have zero ability to contemplate their own mortality.

One storyline from the first season is especially relevant. A kid with a good heart, Vernon, banking on his next big contract, is out of money having spent it all on being ‘loyal’ to his friends and family, throwing parties, inviting 40 people to a business lunch, etc.

His loyalty is so out of control he has to borrow money from Johnson (who’s broke mind you) to bridge him until the contract comes through. Of course there are complications and hilarity ensues. The typical Hollywood fantasy fare. Nothing groundbreaking, eventually things work out (mostly).

Johnson has to endure a lot to get Vernon to see the truth, put limits on the situation and get Vernon to properly save his money. The pitch is the right one: put it to work and pay everyone for the long term, not just for tomorrow.

Sound familiar?

No, because that’s exactly what we don’t preach in this world of central bank issued easy money. This shouldn’t be a central conflict, it should be a given.

Because this background for this story is playing out at every level of our society, all a consequence of too much money flowing around finding ways to corrupt everything it touches.

Ballers is all about the corruption money brings to those few thousand people in the NFL and their organizations because of the millions of people who spend too much money on a passing fancy, entertainment.

The NFL, like all pro sports, is nothing but a money funnel with a Federal Reserve sized Hoover attached to it. It’s the ultimate corruption of e pluribus unum. From many to one.

Take a little bit from all of us, time and again to help us relieve the stress of the shitty world they’ve built. Give some of it to the rubes who play the game, who blow it on hookers, high end cars, and drugs, while the lion’s share gets sucked right back up into the same oligarch class that created it in the first place.

But it’s no different than you or me, buying shit we don’t need on credit, self-medicating with pro sports, alcohol, video games, day-trading cryptos on Robinhood, yelling at racists on Twitter or my personal favorite, a ridiculous board game collection.

We’re all ballers to one degree or another, spending easy money on distractions rather than facing the reality that the most unsustainable thing about our society is the money which makes it all happen.

And before anyone revokes my libertarian creds, I pass no judgment on this. It’s all voluntary exchange, mostly. At the very least it has the appearance of being voluntary.

That said, here we are waiting to hear from the philosopher kings at the FOMC and the markets are melting down around our ears.

The tantrums that have begun are no different than those pitched by Vernon’s friends over having the barest amount of fiscal discipline imposed on them.

Everywhere I look everyone is saying some version of the same thing, “Hey man, Don’t take the punch bowl away.” They’d say it a lot more colorfully on Ballers, but being white I’m not allowed to use that language.

From Chairman Xi leading off this year’s virtual Davos with a plea not to hike rates to the howls from the Financial press including some Austrians, pleading that he can’t possibly raise rates because it would cause a market meltdown and blow out the Federal budget, Powell is now off everyone’s invite list to party on the yacht.

I get the feeling that some folks would rather be right about their hyperinflation theories rather than actually figuring out what’s really going on.

But the reality is that something has changed and the markets are finally coming to that conclusion.

For months I’ve been arguing that Jerome Powell ignited a firestorm when he raised the Reverse Repo Rate by 0.05%, pulling trillions in base liquidity from overseas markets while handing U.S. banks all the collateral they needed.

It’s created a political firestorm on Capitol Hill who tried to oust him from the Chair and failed. They got three of his fellow hawks, but not the king. He was able to run out the political clock on both Build Back Better and opposition to his reappointment.

But it doesn’t happen if Powell doesn’t have the backing of the people behind him.

And who backs Powell? The New York Fed, that’s who.

That leads you to the conclusion that all is not hunky dory in Oligarchville. That, shock of shocks, narcissists only like each other when they are sucking our lives and souls away. But when they start taking from each other, that’s when the knives come out.

It seems incredible to me that many people won’t consider this idea, that these people don’t like each other, and aren’t willing to hand over their business and their wealth without a fight?

Because that’s what’s implied when everyone jumps up and down and screams at Powell to “Save them!” from deflationary forces.

And he looks down from the Marriner-Eccles building and says, “No.”

It’s time to put it all in order. With ‘Build Back Better’ dead there is no more insane new spending to monetize. There is no reason for the Fed to keep up QE or rates at the zero-bound. Savings is down, money is circulating again. Inflation isn’t transitory.

People want to work. COVID-9/11 is behind us. The anger over losing two years is just getting started but that’s a different wrinkle to this story for another day.

If the Fed isn’t intimidated by the recent weakness in stocks, in truth a healthy correction after a massive run, and raises rates on Wednesday we have our answer as to what Powell and friends are willing to do. Whatever your opinion of it is, it will not be a ‘policy error’ but a clear-eyed understanding that it’s time to rein it in, change the direction of the big boat, and begin living within our means.

If he doesn’t it won’t be the opposite signal. It will simply mean that they’ll take another couple of months to nail down the particulars, namely getting proper control over the O’Biden administration, and begin hiking on schedule per the current expectations in the Eurodollar futures market.

Has anyone looked at the ratings for pro sports? Old media? Hollywood box office receipts? All down. Netflix is getting killed because it’s growth cannot sustain its valuation, much like a lot of the NASDAQ. This is something that should have happened two or three years ago, just like Tesla.

But didn’t because of COVID-19 and the massive wealth transfer the stimulus provided to them during the absence of sanity oceans of money always produces.

That said, these are all unsustainable Ponzi scheme masquerading as viable industries based on cheap money and malinvestment in politically-motivated production.

Now I’m not suggesting for a second that Powell is some kind of saint or anything. He’s no savior sent down to redeem us sinful ballers from our excesses. No sir. He represents the very people that helped create this mess.

But at the same time, they want to remain where they are. They are not willing to hand their power and their money over to another group within the cartel.

They didn’t get where they were putting their money on the table to bail out anyone else.

And they won’t this time.

All I’m doing here is assessing what everyone’s real motivations are and who they answer to. To quote another, far more classic television show“The universe is run by the interweaving of three elements: Energy, matter, and enlightened self-interest.”

And, to me, where’s the enlightened self-interest angle for the NY Boys, represented by Powell, for turning over their business to a bunch of European and Chinese commies?

When you step back and really look at what’s happening, they have already told Europe, China and all those emerging markets currently whining, the post-COVID world you created is your mess now.

This is why I’m convinced the Fed will hike and hike aggressively this year, maybe starting on Wednesday.

There is no deal possible between Wall St., City of London and Europe. In that game, Europe loses. If China wants to play hardball and default on foreign-held property debt, fine. Have fun attracting any capital in the future.

All the fiscal projections of the U.S.’s insolvency are great (and accurate) but I hate to burst anyone’s bubble, literally, but you CAN taper a Ponzi scheme if you’re 1) the biggest Ponzi and 2) control the flow of funds into them.

And if you don’t think Powell and his backers at the NY Fed aren’t willing to sacrifice a few thousand points on the Dow or even a few points of GDP, to restructure the US’s finances for the long term while the Fed hands them all the collateral and liquidity they need to keep playing while everyone else craps out, I do believe you are terminally naïve.

It’s what they call playing hard ball.

There are two ways to reset the monetary system. The first option is printer go brrr and default by switching out the old currency for a new one. The other is collapse the old system by returning risk and rebuilding it after the malinvestment is gone.

Paul Volcker chose the latter to finally establish the Dollar Reserve Standard as the only game in town. Nixon set the process in motion, Volcker closed the deal. It’s what established today’s game.

We are at an inflection point in history, both monetary and geopolitical.

I discussed this in my latest podcast with Alex Krainer and believe the rules of the game have fundamentally changed. The next game will look a lot different than the baller one we’ve been playing.

Those who won’t adjust to that or admit it should be very afraid of what Jerome Powell does next.

*  *  *

Join my Patreon if you hate the game, not the playa.

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Tyler Durden Wed, 01/26/2022 - 12:25

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Boeing Jumps On First Positive Cash Flow Since 2019 Despite Another Huge 787 Charge

Boeing Jumps On First Positive Cash Flow Since 2019 Despite Another Huge 787 Charge

It was another painful quarter for Boeing, which reported revenue and earnings both of which missed expectation amid mounting 787 Dreamliner losses which…

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Boeing Jumps On First Positive Cash Flow Since 2019 Despite Another Huge 787 Charge

It was another painful quarter for Boeing, which reported revenue and earnings both of which missed expectation amid mounting 787 Dreamliner losses which amounted to another $3.5 billion in pre-tax non-cash charge s (focused on actions required to resume deliveries) however a surprise boost in 737 Max output from 19 to 26 per month was welcome news as was the unexpected end of the company's chronic cash burn as Boeing reported its first positive free cash flow since early 2019.

First, this is what Boeing reported for Q4:

  • Revenue $14.79 billion, -3.2% q/q, -3.3% y/y, missing estimates $16.67 billion (Bloomberg Consensus)
  • Core loss per share of ($7.69), on the continued Dreamliner charges, which was an "improvement" from the whopping ($15.25) reported but clearly missed estimates of (0.42).

If the massive Q4 charge was not enough, Boeing now sees 787-Related abnormal costs about $2B, above from the $1BN it had seen previously. The company said that it continues to perform rework on 787 in inventory and is focused on actions required to resume 787 deliveries.

Remarkably, as the following table from Boeing's earnings release shows, pretty much every Y/Y comparison is NM, which should tell you all you need to know about the company's headline financials.

And a prettier rendering:

Looking at revenue we get the following disappointing picture:

  • Commercial Airplanes revenue $4.75 billion, +0.5% y/y, missing estimates $5.50 billion
  • Defense, Space & Security revenue $5.86 billion, -14% y/y, missing estimate $6.85 billion
  • Global Services revenue $4.29 billion, +15% y/y, beating estimate $4.18 billion
  • Boeing Capital operating earnings $7 million, missing the estimate $24.4 million
  • Total commercial planes deliveries 99, +68% y/y, missing the estimate 102.36
  • Backlog $377 billion, +3.9% y/y

Adding insult to injury, the planemaker reported $5.5 billion in total costs to cover rising factory and customer expenses for the Dreamliner. Boeing took write-offs on the KC-46 aerial tanker and the global services division as well. As Bloomberg notes,
the 787 program’s profits have been wiped out as Boeing pays airlines for service they’ve lost because of delivery disruptions. The company hasn’t handed over any Dreamliners since June as it addresses structural imperfections on the roughly 100 aircraft in its system.

“This effort continues to impact our deliveries and our financial results -- but we are fully confident it is the right thing to do,” Calhoun’s memo said. “I view the financial impacts of this work as a long-term investment in a program that has significant runway ahead.”

It wasn't all bad news, however, as Boeing announced it is hiking the output of the 737 to 26 jets a month, up from 19 in October, Chief Executive Officer Dave Calhoun said in a note to employees. That was taken by the market as a sign the planemaker may be turning around its operations after burning through more than $31 billion during a nearly three-year-long slump marked by the Max’s grounding, the Covid-19 pandemic and a spate of quality lapses.

Looking ahead, Boeing said it still expects passenger traffic to return to 2019 levels in 2023 to 2024, and said that commercial recovery is broadening as regional dynamics continue to evolve driven by COVID-19. It also said says increasing 777/777X production rate to 3 per month in 2022.

But the biggest positive surprise was the company's announcement that in Q4, it generated $494 million in fourth-quarter free cash flow, up from a cash burn of over $4.2 billion a year ago; analysts had expected an outflow of about $1 billion.

This was the first positive FCF from Boeing since Q1 2019. It also meant that operating cash flow of $716 million as beat estimates of negative $429.0 million and was far above the negative $4.01 billion reported a year ago.

"2021 was a rebuilding year for us as we overcame hurdles and reached key milestones across our commercial, defense and services portfolios. We increased 737 MAX production and deliveries, and safely returned the 737 MAX to service in nearly all global markets. As the commercial market recovery gained traction, we also generated robust commercial orders, including record freighter sales. Demonstrating progress in our overall recovery, we also returned to generating positive cash flow in the fourth quarter," said David Calhoun, Boeing President and Chief Executive Officer.

"On the 787 program, we're progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications. While this continues to impact our near-term results, it is the right approach to building stability and predictability as demand returns for the long term. Across the enterprise, we remain focused on safety and quality as we deliver for our customers and invest in our people and in our sustainable future."

Also notably, the company which has been flirting with junk status for the past two years, managed to reduce its gross debt load again, even if its net debt remained unchanged as the entire reduction came at the expense of cash on hand.

Boeing shares ignored the latest huge 787 charge and operating loss and instead focused on the positive free cash flow and improvement in 737 MAX output, and rose 2% premarket. The shares gained 1.4% this year through Tuesday, while the Dow Jones Industrial Average dropped 5.6%.

Benchmark called Q4 a “kitchen sink” quarter, and noted that the Max production schedule was progressing, which is the main focus for analysts and investors. 

The company's Q4 investor presentation is below (pdf link)

Tyler Durden Wed, 01/26/2022 - 09:05

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