Even with the U.S. House of Representatives passing a one-month bill to fund the government, there remains speculation regarding a government shutdown, as the Senate must also pass the bill. Many are of the belief that Senate passage is possible at present and there will be much discussion on the subject with only 18 hours to go before the government shuts down should passage prove to fail. The Senate adjourned without a final vote late on Thursday and will reconvene at 11 a.m. Eastern Time on Friday. And the green back is falling in sympathy over the impasse in government. The ICE U.S. Dollar Index, which measures the buck against a basket of six rivals, fell 0.3% to 90.243, trading around the lowest level in three years. The losses for the USD came as yields on U.S. treasuries continued to rise. The yield on the benchmark 10-year note rose 0.7 basis point to 2.6318%, trading at a more than three-year high.
Oil prices fell on Friday following data and projections that suggested U.S. crude output was set to rise over the near-term. West Texas Intermediate crude fell 0.5% to $63.60 a barrel, and Brent crude was down as well. Data from the U.S. Energy Information Administration showed domestic oil output recovered to a rate of 9.75 million barrels a day last week, a figure that offset a larger-than-expected 6.9 million barrel decline in crude inventories.
The economic data calendar is light again today. At 10 a.m., Eastern consumer sentiment for January is slated for release. Please review the economic data from around the globe via Finom Group’s Economic Data tab.
Jefferies is out with a bold call on Kohl’s today. Jefferies analyst Randal Konik raised his price target for Kohl’s (KSS) to $100 from $66 and says the stock could rise at least another 50%. The retailer is “addressing the digital revolution head on” and surpassing peers with more emphasis on proprietary brands, partnering with Amazon.com and rightsizing square footage, Konik says.
Mizuho Securities analyst Abhey Lamba raised his price target on Apple shares to $175 (from $160) due to potential upside to near-term estimates. However, the analyst reiterated a Neutral rating on the stock as he sees limited upside to the stock price from current levels.
“Consensus iPhone ASP assumptions seem very conservative”, Lamba says. “Based on our checks, we see potential upside to unit/ASP estimates for the December quarter despite a greater than normal drop in demand for the latest version of iPhone. Our conversations indicate some softness in iPhone X demand exiting December quarter with a potentially steeper than normal production decline heading into the March quarter, which would impact ASPs as well. However, we see continued conservatism in consensus expectations for the March quarter that might have upside.”
Also on the retail front yesterday, Goldman Sachs gets bullish on Wal-Mart. Goldman Sachs upgrades Wal-Mart to a Buy rating after having the retail beast lined up at Neutral. The stock was also added to the closely watched Conviction Buy list at the investment firm. The Goldman team thinks Wal-Mart will announce a “meaningful” dividend raise this year. GS lifts the price target on Wal-Mart to $117.
Shares of Nike are also on the rise in the pre-market today on news of an analyst upgrade. Wedbush analyst Christopher Svezia upgraded Nike to Outperform from Neutral with a $74 price target. The shares closed yesterday up 30c to $64.11. The brand’s new footwear styles are “notably higher” versus a year ago while comparisons are easing, particularly around key categories like basketball, Svezia tells investors in a research note. His conversations with retailers indicate that Nike has one of the biggest opportunities in 2018 to show improvement.
Looking ahead, Netflix Inc. is scheduled to report fourth-quarter earnings after the bell on Monday. In October, Netflix said it was raising the cost of two of its subscription plans with the lowest tier remaining at $7.99. Analysts at Raymond James said that Netflix has rarely increased prices without experiencing some impact on the business. Analysts’ median estimates call for the firm to report net additions of 1.27 million subscribers in the quarter. That’s down from an estimated 1.35 million additions analysts were expecting at the end of October, but it’s slightly above the 1.25 million subscriber additions guidance offered by Netflix. Netflix is expected to report earnings of $.41, according to FactSet. That would be a more than 173% improvement compared with the same quarter a year ago. Revenue is expected to be $3.28 billion for the quarter, according to FactSet. That would be a 32% improvement compared with the same quarter a year ago. Analysts’ revenue expectations break down to $1.62 billion from domestic streaming, $1.54 billion from international streaming, and $105 million from the company’s domestic DVD business.
European Market News
Across the pond, The Stoxx Europe 600 index rose 0.4% to 400.26 and headed toward a 0.5% weekly increase. Tech stocks in Europe continued to build on recent gains, putting the Stoxx Europe 600 Technology Index FX8, +0.59% on track for a 3% weekly rise. U.K. retail sales dropped sharply in December, with the 1.5% fall nearly double the decline estimated in a poll conducted by The Wall Street Journal. The Office for National Statistics also sales in 2017 rose 1.9%, the slowest rate of annual growth since 2013.
Somebody always has something to say about Bitcoin, so why should we expect anything else from Nobel Prize winning economist Robert Shiller be any different. Shiller was quoted as saying that Bitcoin will likely collapse in a CNBC interview.
“It has no value at all unless there is some common consensus that it has value. Other things like gold would at least have some value if people didn’t see it as an investment,” Shiller told CNBC in an interview ahead of the World Economic Forum in Davos, Switzerland, where he will be speaking next week.
“It reminds me of the Tulip mania in Holland in the 1640s, and so the question is did that collapse? We still pay for tulips even now and sometimes they get expensive. (Bitcoin) might totally collapse and be forgotten and I think that’s a good likely outcome but it could linger on for a good long time, it could be here in 100 years.”
It’s going to be another media packed market day for investors and traders. Stay tuned for Finom Group’s Half-Time show set to air at 11:30 a.m. EST.