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Stock market today, April 22, 2014: Investors seem confident that the economy is picking up as warmer weather takes hold...
But problems continue within the housing sector, where sales and construction forecasts were recently slashed by Freddie Mac and Fannie Mae. Existing home sales are expected to remain flat when they are reported this morning.
Here are the five stories you need to know to make your Tuesday profitable.
Five Biggest Stories in the Stock Market Today, April 22, 2014
- Price Increase Set: Video streaming service Netflix Inc. (Nasdaq: NFLX) announced plans to hike its monthly subscription rates on new customers by up to $2 a month. The new revenue will enable the company to improve network infrastructure and expand its offerings of TV shows and films. The company also made headlines on Monday by criticizing the proposed merger of Comcast Corp. (Nasdaq: CMCSA) and Time Warner Cable Inc. (NYSE: TWC). Netflix calls the deal anti-competitive and bad for the industry. Comcast will likely respond after it reports earnings today.
- A Breakdown: Bill Ackman is taking activist investing to a new level. Teaming up with healthcare company Valeant Pharmaceuticals Intl. Inc. (NYES: VRX), they are planning to purchase Allergan Inc. (NYSE: AGN), the manufacturer of Botox, for nearly $50 billion. Shares of Allergan jumped 6% during yesterday's trading session, and 17% in afterhours. Valent jumped another 11% in afterhours trading.
- A Massive Lawsuit: After the passage of the Commodity Futures Modernization Act (CFMA) in 2000, investment banks rushed into trading physical commodities. Now, they're running for the exits. On Monday, another prominent bank announced plans to exit commodities due to low profitability and new regulations making it harder for banks to trade. Barclays PLC (NYSE: BCS) announced it will exit the commodities markets. This exit trend follows a number of similar decisions from U.S. banks. JPMorgan Chase & Co. (NYSE: JPM) plans to sell its physical commodities business for $3.5 billion. Morgan Stanley (NYSE: MS) will sell its oil trading desk to Rosneft. And Deutsche Bank (NYSE: DB) announced in December it would cut 200 jobs and stop trading agricultural, base metals, and coal and iron ore.
- An End to the Recall: The U.S. National Highway Traffic Safety Administration officially closed its four-year probe into power steering problems at General Motors Co. (NYSE: GM). The probe explored the 335,000 recalled Saturn Ions, which were part of an unrelated recall of defective ignition switches. The company has now recalled 2.6 million automobiles and faced charges that it didn't act quickly enough over public safety concerns. At least 13 deaths have been linked to the company's problems with ignition switches.
- Exxon on the Hot Seat: The U.S. Supreme Court declined to review a ruling against Exxon Mobil Corp. (NYSE: XOM). The case orders Exxon to pay $105 million in damages after it was revealed the company had polluted New York City's groundwater supply with a toxic gasoline additive. Due to the court's decision not to hear the case, the official ruling from the U.S. Circuit Court of Appeals will remain intact. The original Federal jury decision awarded the city the full amount all the way back in 2009.
Note: The Fed's 2014 taper means volatility ahead. So we've outlined how to find profits in a volatile market - like triple-digit gains in just days - if you start with this strategy...
U.S. Economic Calendar April 22, 2014
- ICSC-Goldman Store Sales at 7:45 a.m.
- Redbook at 8:55 a.m.
- FHFA House Price Index at 9 a.m.
- Existing Home Sales at 10 a.m.
- Richmond Fed Manufacturing Index at 10 a.m.
- 4-Week Bill Auction at 11:30 a.m.
- 2-Yr Note Auction at 1 p.m.
Key Companies Reporting Earnings April 22, 2014
- Consensus earnings per share for Comcast Corp. (Nasdaq: CMCSA) is $0.64.
- Consensus earnings per share for McDonald's Corp. (NYSE: MCD) is $1.23.
- Consensus earnings per share for Illinois Tool Works Inc. (NYSE: ITW) is $0.98.
- Consensus earnings per share for The Travelers Companies Inc. (NYSE: TRV) is $2.13.
- Consensus earnings per share for Canadian Pacific Railway Ltd. (NYSE: CP) is $1.39.
- Consensus earnings per share for AT&T Inc. (NYSE: T) is $0.70.
- Consensus earnings per share for Xerox Corp. (NYSE: XRX) is $0.24.
- Consensus earnings per share for Yum! Brands Inc. (NYSE: YUM) is $0.85.
- Consensus earnings per share for ProLogis Inc. (NYSE: PLD) is $0.42.
- Consensus earnings per share for Omnicom Group Inc. (NYSE: OMC) is $0.79.
- Consensus earnings per share for Simon Property Group Inc. (NYSE: SPG) is $2.24.
- Consensus earnings per share for Lockheed Martin Corp. (NYSE: LMT) is $2.52.
- Consensus earnings per share for Bank Of New York Mellon Corp. (NYSE: BK) is $0.54.
- Consensus earnings per share for United Technologies Corp. (NYSE: UTX) is $1.27.
Our Chief Investment Strategist Keith Fitz-Gerald saw this "earnings beat" coming and put readers out in front of it. And it's perfect for the type of market we're in now...
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.