OIL PLUNGES, TWITTER TANKS: Here’s What You Need To Know

MYLES UDLAND

 NOV. 14, 2014

flickr/IFPRI

Stocks went nowhere, but still made a record high, on Thursday in a session that saw the averages rally early before selling off to trade nearly unchanged. The big story on Thursday was oil, which continued its recent tumble, falling below $75 for the first time since 2011. 

First, the scoreboard:

• Dow: 17,640.2, +28, (+0.1%)
• S&P 500: 2,039, +1, (+0.05%)
• Nasdaq: 4,676.3, +1.1, (+0.02%)

And now, the top stories on Thursday:

1. Crude oil got completely slammed. Again. West Texas Intermediate crude fell more than 3.5% on Thursday to well below $75 a barrel, its lowest level since 2011. WTI crude is now down about 30% from its highs earlier this summer, and in a note to clients economists at Capital Economics wrote that they expect Brent crude prices (which are used as the global benchmark and are currently around $78), to fall to $70 a barrel by 2016, four years earlier than the firm had expected. 

2. The latest report on weekly jobless claims showed claims rose about 12,000 last week to 290,000, though this level is still near 13-year lows. Following the report, Ian Shepherdson at Pantheon Macro said that, “absent any shove from tighter policy, claims can remain close to their current trend for an extended period.” 

3. The BLS also released its latest Job Openings and Labor Turnover Survey, or JOLTS report, which showed there were slightly fewer job openings in September than in August, though job openings are still near multi-year highs. The biggest piece of data from the report, however, was the quits rate, which showed a 2% quit rate from workers in September, up from 1.8% the previous month. The report showed 2.8 million workers left their job during September, which a number of Wall Street economists took as a positive sign for the labor market, with the idea being that workers are more likely to leave their job if they are confident they can find another one. 

4. New York Stock Exchange legend Art Cashin highlighted comments from hedge fund manager Paul Singer in his morning note on Thursday, including Singer’s recent commentary that “There is a current set of delusions that is powerful and dangerous: that monetary debasement can be infinitely pursued without consequences.” The New York Times’ Paul Krugman isn’t so sure. 

5. Warren Buffett is buying batteries. Buffett’s Berkshire Hathaway announced on Thursday that it would acquire the Duracell brand from Procter & Gamble, with P&G getting $4.7 billion worth of its own shares currently held by Berkshire. The deal is expected to close in the second half of next year. 

6. DreamWorks Animation shares gained more than 10% on Thursday after reports from both Deadline.com and The New York Times said the company is in talks with Hasbro regarding a potential deal. But Business Insider’s Kirsten Acuna, highlighting comments from analysts at Sterne Agee, reported that some in the investment community don’t think the deal makes any sense. Hasbro shares fell more than 4% following the news. 

7. Twitter shares fell more than 5% on Thursday, retracing most of their gains from Wednesday, as S&P assigned the company’s debt a ‘BB-’ rating, which is considered “speculative grade” or “junk” by the bond market. 

8. Apple shares gained more than 1% on Thursday, rising to a new all-time high and pushing its market cap to its highest-ever level of $663.2 billion. 

9. Alibaba disclosed that it plans to sell debt to US investors, in a deal that Bloomberg said could be worth $8 billion. 

10. Baker Hughes shares exploded higher late in the day Thursday after a report from The Wall Street Journal said Halliburton is in talks to acquire its oil-field services rival. The report made no mention of a potential price, but shares of Baker Hughes, which were halted for volatility after the news, logged gains of more than 15%. 

STOCKS GO NOWHERE, OIL PLUNGES: Here’s What You Need To Know

Myles Udland

 Nov. 4, 2014

REUTERS/Amit Dave

We got a mixed read on the US manufacturing sector on Monday.

Stocks finished Monday little changed, with the S&P 500 hitting a new all-time intraday high before losing ground late in the day to close.
Crude oil was the big loser on Monday, with prices settling below $79 for the first time since the summer of 2012.
First, the scoreboard:

• Dow: 17,365, -25, (-0.15%)
• S&P 500: 2,018, -0.4, (-0.02%)
• Nasdaq: 4,639, +8, (+0.2%)

And now, the top stories on Monday:

1. Oil crashed. Again. Crude oil prices, which have been near $80 a barrel for the last few weeks or so took another leg lower late in the day on Monday, quickly dropping more than $2 to settle below $79 for the first time since June 2012. The drop in oil came late in the day, but about an hour after reports that Saudi Arabia cut its official price for deliveries. Crude oil, which is down more than 20% this year and is in a bear market, could also have an impact in the bond market. Business Insider’s Sam Ro noted that currently, about 15% of the high-yield, or “junk,” bond market is made up by energy companies. 

2. The pace of auto sales in October rose from the prior month. According to data from Wards Auto, the pace of auto sales climbed to 16.35 million in October, while AutoData statistics said sales came in at a pace of 16.5 million. September’s auto sales came in at an annualized pace of 16.34 million. In a note to clients Jesse Hurwitz of Barclays wrote that October sales were little changed from September, and while they came in “broadly in line” with expectations, sales were below the second quarter average of 16.8 million.

3. In the US, we also got three pieces of economic data. Manufacturing data from Markit Economics showed that manufacturing activity slowed to its slowest past since July, with Markit’s PMI reading coming in at 55.9 against expectations for a reading of 56.2. Meanwhile, the Institute for Supply Management’s manufacturing PMI came in at 59.0, better than the 56.1 that was expected by economists. 

4. Also on the economic data front, construction spending in September fell for a second straight month, dropping 0.4% to an annual rate of $950.9 billion. The report also showed that investment in both public and private projects declined in September. 

5. According to Bank of America Merrill Lynch’s latest Sell Side Indicator survey, Wall Street equity strategists are so bearish on stocks, it might be time to buy. In a note to clients Monday morning, Savita Subramanian and the equity strategy team at BAML wrote that that “we remain encouraged by Wall Street’s ongoing lack of optimism and the fact that strategists are still recommending that investors significantly underweight equities.” When the Sell Indicator has been this low or lower, BAML said, total stock returns have been positive over the next year 96% of the time. 

6. Bill Gross released his latest investment outlook, which talked about the need for not just central banking stimulus, but real fiscal stimulus from the government.