Tag: stock market

Funds targeting U.S. investment-grade corporate credits snapped 37 straight weeks of inflows for the period ending Sep. 6, according to data-provider Lipper. U.S., investment-grade corporate funds saw net outflows of $43 million in the most recent week, ending an eight-month period that saw those funds attract $641 million. The impressive run comes amid U.S. corporations releasing a torrent of new supply in the low interest-rate environment, with more than $1 trillion worth of debt issued this year. Analysts suggested that debt investors could be taking the opportunity to take risk off the table this week by selling assets amid stretched valuations and growing geopolitical fears, including potential conflict in the Korean Peninsula. Spreads for investment-grade bonds against equivalent Treasurys, a gauge of how much yield investors demand for buying riskier corporate credits versus so-called safe assets, currently resides slightly above historical lows at around 1.5 percentage points, according to Bank of America Merrill Lynch. “Hurricane Irma, global central bank policies, US fiscal discussions, and geopolitical risks weighed on investors’ conscience,” wrote Jody Lurie, director of fixed income strategy for Janney Montgomery Scott.

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The House of Representatives passed legislation Friday extending the U.S. debt limit and government funding through Dec. 8. The bill, already approved by the Senate, now goes to President Donald Trump for signature. It also contains $15.25 billion in disaster aid to help with recovery efforts after Hurricane Harvey, and anticipated damage from Hurricane Irma, which is now bearing down on Florida. Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney pressed Republicans to vote for the deal on Friday, but 90 voted against it. House conservatives were reportedly angry the debt-limit extension wasn’t coupled with spending cuts.

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Analysts at UBS lowered their 2017 and 2018 earnings estimates for Walt Disney Co. , also dropping the 12-month price target to $122 from $126 on Friday after Disney Chief Executive Bob Iger told investors that the company’s earnings growth would be stagnant. During a Bank of America media, communications and entertainment conference on Thursday, Iger told those in attendance that 2017 earnings would be roughly in line with the prior year’s earnings, lowering expectations from previous guidance of modest growth. Disney shares took a 5% slide during intraday trading on Thursday following Iger’s comments. The lower earnings expectations, Iger said, are due, in part, to expenses tied to Disney’s BAMTech investment for its stand alone streaming service and impacts Disney parks are seeing from Hurricane Irma. Lead UBS analyst Doug Mitchelson also mentioned in a note to investors lower ratings at Disney’s ABC network and tough content and licensing comparisons. “Many investors are questioning how Disney’s valuation can expand while estimates are coming down due to investments in the future,” Mitchelson wrote, noting the irony as investors have demanded media companies stop licensing content and build streaming platforms of their own. “This is compounded by the uncertainty as to the pace of decline of the pay TV bundle and the impacts of video fragmentation. As Disney officially starts its streaming shift, Mitchelson said it’s critical that ESPN demonstrate pricing power, that cable losses are shored up by virtual multichannel video programming distributors, that content and the parks business continues executing, and that Disney displays cost discipline. Disney shares have declined nearly 7% in the year to date, while the S&P 500 index is up 10% and the Dow Jones Industrial Average is up more than 10%.

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The Dow Jones Industrial Average on Friday was garnering a early morning lift from shares of Goldman Sachs, helping the benchmark reverse opening losses. Goldman Sachs Group Inc.’s stock was contributing a roughly 20-point rise to the price-weighted Dow. Goldman’s shares were up $3.07, or 1.4%, leading blue-chip advancers. Goldman is attempting to pare what has been its worst weekly loss since the week ended July 21, according to FactSet data, as financial stocks have been battered by lowered expectations for interest-rate hikes and shrinking bond yields, with the 10-year Treasury note around 2.06%, holding around its lowest levels since November. Those factors can undercut a bank’s business model. A popular way to wager on the financial sector, the Financial Select Sector SPDR ETF , was facing its worst weekly decline, down 2.7%, since the period ended March 24. Goldman is one of the most influential components in the price-weighted Dow by dint of its $219 share price. In other benchmarks, the S&P 500 index was off 0.1% at 2,463, while the Nasdaq Composite Index was down 0.2% at 6,382.

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Chili’s, the Brinker International Inc. restaurant chain, said Friday that it is cutting its menu by 40% in order to focus on its core menu items: burgers, ribs and fajitas. The company said it started in 1975 with 25 menu items, a list grew to 125 by January 2017 as the chain has followed consumer trends. The 75-item menu will be available nationwide on September 18. Brinker shares are up 1.8% in Friday trading, but down 38.6% for the year so far. The S&P 500 index is up 10.1% for 2017 so far.

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Shares of video game makers got a boost Friday, after Goldman Sachs said the sector was entering the “halcyon days of gaming’s digital age.” Analyst Christopher Merwin started coverage of the sector with an attractive rating: “The video game publishers are in the midst of a renaissance, as they transition to more predictable, higher-margin, cash-generative growth stories,” Merwin wrote in a note to clients. “The digital shift could add up to 5 [percentage] points of margin in the next 3 years.” Electronics Arts Inc. was Merwin’s favorite of the sector, as he initiated the stock with a buy rating and price target of $136, and added it to Goldman’s Americas conviction list. He also started Take-Two Interactive Software Inc. at buy with a $118 stock price target, Activision Blizzard Inc. at neutral with a $65 price target and Zynga Inc. at neutral with a $3.90 price target. Shares of Electronic Arts slipped 0.1% in morning trade, while Take-Two edged up 0.1%, Activision eased 0.8% and Zynga gained 1.1%. For context, the S&P 500 ticked down 0.1%.

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The Mexican peso slipped against the U.S. dollar on Friday after the strongest earthquake in a century, measuring 8.1 on the Richter scale, hit Mexico late Thursday. At least 20 people are confirmed to have died due to the quake, and a tsunami warning has been issued for various Central American countries. The dollar strengthened to buy 17.6945 pesos Friday morning, up from 17.6707 late on Thursday in New York. Prior to the natural disaster, the peso experienced some volatility caused by the renegotiation of the North American Free Trade Agreement between the U.S., Canada and Mexico. The renegotiation of terms is thought to hit Mexico the hardest.

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U.S. stocks opened modestly lower on Friday, with the main benchmarks set to wrap up weekly trade with losses, as investors assumed a cautious posture ahead of a Hurricane Irma making landfall in Florida and a potential missile test by North Korea over the weekend. The Dow Jones Industrial Average opened down 0.2% at 21,737, the S&P 500 index slipped 0.2% at 2,459, while Nasdaq Composite Index retreated 0.2% at 6,385. For the week, the Dow was looking at a loss of of about 1.1%, the Nasdaq was set for a 0.8% weekly drop, while the S&P 500 was on track for a weekly decline of about 0.7%. The week’s action has been framed by sharp falls in the U.S. dollar to a its lowest level since around 2015 and the 10-year Treasury note also looking at its lowest yield in 2017 at around 2.06%, compared with 2.10% to start the week. Bond prices and yields move inversely. The slight downdraft this week comes as investors have grappled with the increasing geopolitical threat from North Korea, which could test a ballistic missile on Saturday to commemorate its founding day in 1948, while the most powerful ever Atlantic storm, Hurricane Irma, is headed toward Florida, weeks after Hurricane Harvey wrecked the Houston area. Both hurricanes are expected to have an effect on U.S. growth projections. In corporate news, shares of Equifax Inc. tumbled about 15% after the company late Thursday disclosed that personal data of 143 million Americans, including Social Security numbers, driver’s license numbers and credit card numbers, had been exposed in a cyberattack.

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Shares of gun makers sank in premarket trade Friday, as a disappointing quarterly report from Smith & Wesson parentAmerican Outdoor Brands Corp. cast a pall on the sector. American Outdoor’s stock plummeted 18.2% in premarket trade, putting it on track to open at the lowest level since April 2015, after the company missed fiscal first-quarter profit and sales expectations and cut its second-quarter outlook. The stock was headed for the biggest one-day percentage loss since it plunged 20.5% on Jan. 22, 2008. Wedbush Securities analyst James Hardiman cut his stock price target to $16 from $20. Elsewhere, shares of Sturm Ruger & Co. slid 3.5% ahead of the open and Vista Outdoor Inc.’s stock dropped 1.9%. year to date, shares of American Outdoor had shed 20% , Sturm Ruger had lost 9.5% and Vista Outdoor had tumbled 43% through Thursday, while the S&P 500 had gained 10%.

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Dave & Buster’s Entertainment Inc. said Friday that it can buy back an additional $100 million in company stock. At the end of the second-quarter, the company still had nearly $73 million left from an existing share repurchase program. Dave & Buster’s shares were up 0.8% in Friday premarket trading, but are down 12% for the year so far. The S&P 500 index is up 10.1% for 2017 to date.

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