“Quiet prices for crude over the next year or two are the absolute nirvana for stock prices and the economy in general” — Commodities watcher Dennis Gartman, who knows just what stock prices like. During an interview, he said he believes current crude oil prices are about to hit their prime for consumers and producers—nothin’ wrong with that.
MARKET SNAPSHOT
Big Picture
- Before you get all excited, U.S. stocks did pretty much nothing yesterday. Enjoy it while you can—with the Federal Reserve’s interest rate announcement right around the corner, volatility could return soon
Alternatives to Watch
- The dollar fell sharply against the yen after investors piled into Japan’s currency following the Bank of Japan’s policy announcement (more on that in a sec)
Market Movers
- Fan favorite Apple rose 2% after reported March iPhone demand defied expectations (in a good way)
- Children’s nutrition specialist Mead Johnson (yes, there’s a company for everything nowadays) jumped 11% after big European food players Danone and Nestle became interested in acquiring the company
- More fallout from the oil plummet: Linn Energy tanked 30% after announcing it would skip a series of $60 million interest payments and warning that bankruptcy may be “unavoidable”—those are two words you never want to hear together
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WORLD MACRO
Not To Be a Downer, but…
…Japan still isn’t doing so well. Not helping: the country is struggling to meet its target inflation of 2% and a future interest rate hike by the U.S. Fed could stunt Japan’s own growth prospects (sorry not sorry). It’s no surprise, then, that Japan’s central bank decided yesterday to keep on keeping on with negative interest rates—the economic cure-all these days (unless you’ve got a better idea). Plus, thanks to the depressing lack of progress, the Bank of Japan also downgraded its outlook on future exports and production.
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CORPORATE PRIMER
Valeant Understands the Meaning of Low
Lesson number one: things can always get worse. That’s exactly what happened with Valeant, the pharmaceutical company that just discovered a new rock bottom. Yesterday, Valeant slashed 2016 revenue predictions and announced that a delay in filing its annual report (previous rock bottom) could lead to a debt default (the rockier rock bottom). For some context, all of this bad news follows a rough 2015 during which Valeant came under fire for its predatory pricing tactics and accounting practices. By the looks of Valeant’s stock, investors have had more than enough of the company, and shares plummeted a monstrous 50% yesterday alone. Sound like things can’t get worse? Don’t forget about lesson number one.
I Look Amazing In This New Purchase
Making an online purchase by snapping a selfie—far-fetched, or so fetch? Believe it, people—Amazon is working to patent technology that would allow online shoppers to pay for purchases via selfie. Brace for the kicker: selfies are potentially more secure than conventional payment methods that require passwords (plus, they’re a solid excuse to practice your duck face). MasterCard has also tested this technology, but at the moment, it’s looking like Amazon might snatch up the patent first.
GM’s Journey from A to B
With the fierce competition and breakneck pace of innovation in the automotive industry these days, it ain’t easy to be GM. In an effort to get in on the growing ride-hailing trend, General Motors has teamed up with Lyft to start a short-term car rental program to supply potential Lyft drivers with qualifying cars (GM cars, that is). Cool, makes sense—but that’s not the whole story: reading between the lines, this is another step GM is taking to propel into the future. Yep, we’re talking about self-driving cars here: GM expects the new division to evolve into a fully self-driving vehicle network. It’s a huge transition for one of the biggest companies in the world, and there’s only one way to do it: baby steps.
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OTHER STORIES
- Sony buys Michael Jackson’s stake in lucrative music catalog
- Volkswagen investors file $3.6 billion lawsuit
- Yum Brands to open its first Taco Bell outlet in China this year
- UberEATS standalone food delivery app launches in its first U.S. cities
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ECONOMIC CALENDAR
- Monday: 3D Systems (+) Earnings
- Tuesday: Oracle (+) Earnings; Fed FOMC Meeting Begins; Retail Sales (-); Producer Price Index (+/-)
- Wednesday: FedEx, Progressive Earnings; Fed FOMC Meeting Ends; Consumer Price Index; Industrial Production; Housing Starts
- Thursday: Adobe, Aeropostale Earnings; Job Openings and Labor Turnover Survey; Weekly Jobless Claims
- Friday: Tiffany & Company Earnings; Consumer Sentiment
MONEY MADNESS
March Madness is finally upon us, America. In other words, fill out your bracket and put your money on the table, because it’s gambling season. There’s no shortage of predictions for the 68-team tournament, and there’s no shortage of cash flow—but for real, exactly how much money are we talking here?
- The NCAA basketball tournament surpasses even the Super Bowl in gambling terms. Americans will bet $9.2 billion (only $262 million in legal wagers, but who’s counting) on brackets in 2016, according to the American Gambling Association.
- Americans will fill out over 60 million brackets, which is more than the number of votes President Obama received in the 2012 election.
- In total, corporations lose around $1.9 billion due to unproductive workers during March Madness.
- So, what are your odds at a perfect bracket? A mere one in 9.2 quintillion. It’s easier to win back-to-back Mega Millions lotteries, buying one ticket each time. Good luck!
INTERVIEW QUESTION OF THE DAY
Why do private equity firms use leverage when buying a company? (Answer)
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BUSINESS TERM OF THE DAY
Par Yield Curve — A par yield curve is a graph of the yields on hypothetical Treasury securities with prices at par. On the par yield curve, the coupon rate will equal the yield-to-maturity of the security, which is why the Treasury bond will trade at par.
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FOOD FOR THOUGHT
Did you know that although Nike represents a majority of the teams currently in the NCAA tournament, Adidas is the one beating Nike in stock performance since last November?
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