Enjoy your January 18th hand-crafted Brew!
QUOTE OF THE DAY
“No one would emerge as a winner in a trade war”—Chinese President Xi Jinping, commenting on the prospects of a U.S.-China trade war at the World Economic Forum. Xi’s message was clearly aimed at President-elect Trump, but there’s no telling how The Donald will react.
Market Snapshot
- What goes up must come down—and vice versa—as banks led U.S. markets lower following key earnings reports and Trump’s comments on the U.S. dollar being too strong
A Tale of Two Stocks
…Both crushed earnings, but that didn’t help their stocks. First up is Morgan Stanley (-3.79%), which had a more clutch fourth quarter than Aaron Rodgers, doubling profits and beating analyst expectations after big gains from the bond trading desk. But wait, why were shares down almost 4%? What comes up must come down. MS was already up over 28% since the election, so many analysts believe this performance was already priced in. In other news, healthcare insurance giant UnitedHealth (-0.70%) grew earnings a whopping 56% year over year and cruised past analyst expectations…but also finished the day in the red. UnitedHealth was able to sidestep the Affordable Care Act uncertainty this quarter by adding 2.2 million new members, with a special shout out to the strong performance of its pharmacy benefit management business. Great job, but uncertainty is still uncertainty.
Jobs, Jobs and More Jobs
…General Motors (-0.08%), Walmart (+1.92%) and Hyundai Motor (+1.99%) announce plans for U.S. job creation just days before Trump’s inauguration. Coincidence? We’ll let you decide. To start, GM announced yesterday that it plans to invest at least $1 billion in U.S. plants and create or keep 7,000 jobs over the next few years. Walmart declared that it plans to add 10,000 U.S. jobs in 2017. And if that wasn’t enough for you, Hyundai will invest as much as $3.1 billion in its U.S. facilities and is also thinking about a new plant, which—you guessed it—would also create thousands of jobs. It’s no secret Trump has been critical of companies for producing products outside of the U.S. Whether you agree or disagree that Trump had anything to do with the moves, we can all applaud companies for helping out the good ol’ USA.
Should They Stay or Should They Go?
…They should go, according to British Prime Minister Theresa May. You probably remember all the drama over Brexit last summer, aka the United Kingdom’s vote on whether or not to leave the European Union. Since the U.K. voted in favor of leaving, it’s been unclear how exactly Brexit will affect European markets. In a speech yesterday, May announced that when the U.K. leaves the EU, it will also leave Europe’s single market, which allows the free flow of goods, services and so on throughout EU countries. Basically, leaving the single market paves the way for a complete Brexit, rather than the “soft Brexit” some had hoped for. Despite this controversial plan, May is still aiming for the “freest possible trade,” but we’re thinking that may be easier said than done.
Tiffany Holiday Sales Trumped
…Due to its not-so-convenient location. The world-renowned luxury jeweler announced lower 2016 holiday sales at its Fifth Avenue store, citing “post-election traffic disruptions.” Translation: the Tiffany (-2.48%) flagship shares a southern wall (no pun intended) with Trump Tower, where the very-soon-to-be POTUS has been hosting world leaders and potential cabinet picks. Protests around the perimeter have only added fuel to the fire—high security measures, tons of police and closed off streets have been in place since the November election, along with a media frenzy. Tiffany says sales dropped nearly 14%, and this Midtown location is a critical part of Tiffany’s operations, responsible for over 10% of the company’s sales. Choose your friends wisely, but your locations even more wisely.
Other Stories
- Deutsche Bank to cut 90% of bonuses
- Vine dies Tuesday, reincarnating as a Twitter video app
- New York Times to increase spending on Trump coverage despite budget cuts
- Exxon Mobil doubles its oil and gas holdings in the Permian basin for $5.6 billion
Economic Calendar
- Monday: U.S. Markets Closed (MLK Day)
- Tuesday: Morgan Stanley (+), UnitedHealth (+/-), United Continental (+/-) Earnings
- Wednesday: Netflix, Goldman Sachs, Citigroup, TD Ameritrade Earnings; Consumer Price Index; Industrial Production; Beige Book
- Thursday: IBM, American Express Earnings; Housing Starts; Weekly Jobless Claims; Janet Yellen Speech
- Friday: General Electric, Schlumberger Earnings
Jobs vs. Manhood
Many unemployed men aren’t pursuing careers in fast-growing fields. The trend seems paradoxical and highly unproductive, so what’s the deal? Well, most fast-growing jobs are in the healthcare field, and the gendering of “pink-collar jobs” turns off scores of male applicants. Before the job, though, there are issues with the listings:
- A recent study of 50 million job listings searched for language that encourages gendered responses. Unsurprisingly, listings for the 14 fastest-growing jobs used feminine language, therefore attracting more female than male applicants.
- Jobs as health home aides are projected to grow 38% over the next seven years. In listings for these jobs, common descriptions included: sympathetic, care, fosters, empathy and families. Given the influence of these job listings, it makes sense that 89% of health home aids are women.
- On the other hand, one of the only fast-growing jobs with a male dominated workforce is cartography. Expected to grow 29% by 2024, the study found that common keywords for job postings are: forces, manage, proven, superior and exceptional. At least the macho men have maps. Them and Buster Bluth.
Interview Question of the Day
Fiji (in Melanesia) and American Samoa (in Polynesia) are two islands in the South Pacific Ocean. Fiji is about 970 kilometers (600 miles) west of American Samoa. A small airplane can fly this distance in two hours. When will you arrive in Fiji if you leave American Samoa on a small airplane on Tuesday night at 11:30 PM? (Answer)
Business Term of the Day
Liquidity Provider — An individual or institution that makes markets in a specific asset. This means that they always provide a price where they would buy an asset as well as where they would sell that same asset. By committing to provide liquidity (i.e. always willing to buy and sell the same thing), these traders hope to capture the bid-ask spread (difference between where they’d buy and sell). This makes it easier for investors to buy or sell at the price level of their choice.
Guess what? Our friends over at Flow Traders (a $1.5 billion, Amsterdam-based liquidity provider) are looking for Junior Traders in their New York, Amsterdam and Singapore offices. If you’re interested in trading or working internationally, learn more about them HERE.
Food for Thought
U.S. law generally requires anyone age 70½ or older to begin annual withdrawals from their tax-sheltered retirement accounts (think 401ks and IRAs). So what? Well, the largest generation in U.S. history is up to bat. Yep, some of the 75 million Baby Boomers will have to start pulling retirement money this year, kicking off a mandatory movement of cash that could total hundreds of billions in the coming decade.