Rover's Weekly Market Brief - 1/15/2016

January 15, 2016 |

Indices

Dow Jones: 15,988.08 (-3.2%)

NASDAQ: 4,488.42 (-3.3%)

S&P 500: 1,880.29 (-2.2%)

Commodities

Gold: 1,089.40 (-1.7%)

Copper: 194.35 (-4.0%)

Crude Oil: 29.69 (-10.1%)

Economy

Industrial production fell 0.4% in December compared to the 0.9% decline recorded in November, 2015. Specifically, manufacturing production fell 0.1% as a result of declines in mining (down 0.8%) and utilities (down 2%). The total industry capacity utilization (an index used to gauge sustainable maximum output) fell 0.4% from 76.9 percent to 76.5 percent. Overall, while industrial production rose 4.8% in 2014, it fell 1.5% in 2015.

Crude Oil declined 10.4% this week closing below $30 at $29.59 per barrel. Commercial crude oil inventories (excluding the Strategic Petroleum Reserve) increased by 0.3 million barrels to 482.6 million barrels in the week ended January 8 from 482.3 million the previous week. The national average retail regular gasoline price fell below $2 to $1.996 from $2.028 per gallon the preceding week.

The Producer Price Index for Final Demand (PPI-FD) fell 0.2% in December after increasing 0.3% in November, 2015. The PPI-FD decrease was driven by falling prices for final demand goods (index down 0.7%) as gasoline prices continue to fall but was countered by higher prices for final demand services (index up 0.1%) such as securities brokerage and hospital inpatient care. Overall, the PPI-FD was down 0.4% for the year 2015.

Markets

JP Morgan (NYSE: JPM) reported a 0.4% increase in net revenue for Q4 2015. Net income rose 10.2% whereas EPS increased 10.9% to $1.32 from $1.19 the same quarter last year. Net income declined 59% for the corporate segment, 6% for asset management, and 31% for commercial banking but was offset by a 10% rise for consumer and community banking, and an 80% increase for the corporate and investment bank segment.

Intel (NASDAQ: INTC) revenue for Q4 2015 grew 1.3% but net income fell 1.3% YoY. Diluted earnings per share at $0.74 were unchanged from the same quarter last year. The revenue increase was driven by rising sales from the data center (+5.3%) and internet of things (+5.75%) business segments but weighed down by falling earnings in client computing (-1.24%).

Alcoa (NYSE: AA) recorded a 5.7% decline in total revenue and a 145.2% decrease in net income YoY for Q4 2015. Consequently, diluted EPS fell 171.4% to -$0.15 from $0.21 the same quarter last year. Alumina production fell 7.3% while aluminum production fell 4.4% YoY driven down the fall in alumina and aluminum prices.

IHS Inc. (NYSE: IHS) reported a revenue increase of 2.7% while net income went up 50.5% YoY. The high increase in net income was driven by proceeds from discontinued operations consequently diluted earnings per share for Q4 2015 rose 51.7% to $1.32 from $0.87 the same quarter last year. Revenue from the resources segment is down 9% YoY while transportation and CMS revenues are up 12% and 13% respectively.

Looking Ahead

Looking ahead to next week, the following companies will be releasing their earnings results.

Monday Tuesday Wednesday Thursday Friday
Wipro (WIT) Bank of America (BOA) Goldman Sachs (GS) Verizon (VZ) General Electric (GE)
Del Taco (TACO) Unilever (UN) Kinder Morgan (KMI) Starbucks (SBUX) SAP (SAP)

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