“@BurgerKing – In the great hot dog war, there can only be one weiner.” — The official Twitter account of 7-Eleven, which is declaring war on Burger King after BK began selling hot dogs on its menu yesterday. It’s the battle of cheap 7-Eleven hot dogs vs. also-cheap Burger King hot dogs: which side are you on?
- As oil goes, so goes the markets: U.S. stocks erased Monday’s gains yesterday after oil prices plunged, causing the energy sector and financial sector (which has lent significant sums to the oil industry) to plummet
Alternatives to Watch
- Why did oil fall so much? Mainly due to Saudi Arabia, which stated that production cuts were out of the question, while Iran was quoted as saying that freezing output was “laughable”
- Scandal-ridden Valeant Pharmaceuticals finally had a positive day, gaining 9% after announcing that its profits would need to be restated…but would actually end up higher than before
- Shares of JPMorgan fell 4% after announcing it would need to set $600 million aside for losses sustained from plummeting oil prices and bad loans it extended to those companies
Time for a Shopping Spree
As revenues continue to decline from print advertising, Time Inc. is on the hunt for ways to increase its digital presence. And they seem interested in doing so through buying businesses that are so 2000’s: first, it was MySpace earlier this month…and now perhaps Yahoo? Analysts see potential for a Reverse Morris Trust transaction, which is fancy financial lingo for a tax-free deal involving a merger with a spun-off division. In case you were curious, Yahoo CEO Marissa Mayer would not remain at Yahoo if this deal went through.
Paramount Out of the Nest
Viacom announced yesterday that it’s formally selling a stake in Paramount Pictures, which it fully owns. Paramount has been suffering over the last five years, even employing the controversial strategy of making fewer movies to save money. This, combined with shareholder pressure to jumpstart Viacom’s stock price, has compelled the company to explore some serious strategic moves (like pushing Paramount out of the nest). A few companies have already expressed interest in Paramount, which has just now ramped up movie production in anticipation of a turnaround.
Macy’s Earnings Don’t (Completely) Disappoint
An unseasonably warm winter hit retailers hard this holiday season, and Macy’s was no exception: the retailer’s Q4 earnings were released yesterday, yielding mixed results across the board. Macy’s net income and all-important same store sales declined, but the company’s overall sales weren’t as low as predicted (for the first time in a year), so there’s still something to celebrate. Shares jumped 3.1% following the report, a much-needed boost for the battered department store.
Home Depot Nails It
Home Depot crushed fourth quarter earnings, with sales rising nearly 10%. Despite macroeconomic headwinds (like an appreciating U.S. dollar), the home improvement giant stood strong among its peers. Some key factors contributed to the solid earnings, such as better outdoor product sales due to a milder winter. The housing market also continued to expand, and demand for big-ticket items like roofing and kitchen appliances increased as a result. Overall, It looks like smooth sailing for Home Depot moving forward.
- Now your morning commute can be narrated by Morgan Freeman
- Tribune Publishing replaces CEO Jack Griffin with associate Dearborn
- Mars recalls chocolate in 55 countries
- Court orders Johnson & Johnson to pay $72 million
- Monday: Fitbit (-), Allergan (+) Earnings
- Tuesday: Macy’s (+), Office Depot (-), Papa John’s (+), Home Depot (+), DreamWorks (+), First Solar (+) Earnings; Existing Home Sales (+); Consumer Confidence (-); S&P Case-Shiller Home Price Index (+)
- Wednesday: Hewlett-Packard, Target, Chesapeake Energy, Dollar Tree, Etsy Earnings; New Home Sales
- Thursday: Best Buy, Domino’s, Gap, Baidu, Weight Watchers, Campbell Soup, Herbalife, Kohl’s, SeaWorld Earnings; Durable Goods Orders; Weekly Jobless Claims
- Friday: U.S. Q4 GDP (2nd Estimate); Foot Locker, JC Penney Earnings; Personal Income and Outlays
THE CONSUMERS HAVE SPOKEN
Turns out you don’t have to spend an arm and a leg to get a great car. Consumer Reports has just released its top car brands, and not just the fancy names got rave reviews. Here’s the good, the bad and the affordable:
- The top spots this year went to Volkswagen’s Audi (despite VW’s emissions scandal) and Fuji Heavy Industries’ Subaru. In fact, Consumer Reports gave all of Fuji’s brands top marks—not bad.
- Hot on VW and Fuji’s tracks were Lexus, Porsche and BMW. Also faring well were non-luxury brands Mazda and Toyota, in a nod to high quality and affordability.
- Finishing dead last was Fiat: it was named worst overall brand, and shares of Fiat-Chrysler fell nearly 3% yesterday to add insult to injury.
INTERVIEW QUESTION OF THE DAY
Which direction is the bus traveling: left or right? (Hint: American children correctly answered this question significantly more often than adults)
BUSINESS TERM OF THE DAY
Covered Call — A covered call is an options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset in an attempt to generate increased income from the asset. This is often employed when an investor has a short-term neutral view on the asset and for this reason holds the asset long and simultaneously has a short position via the option to generate income from the option premium.
FOOD FOR THOUGHT
37: did you know that Leonardo DiCaprio, who is favored to win an Oscar this year, has appeared in 37 films and has yet to win an Oscar?
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