Friday, January 20, 2017 - Dow Jones & Company

Friday, January 20, 2017

On Tap

8:30 a.m. U.S. Weekly Export Sales Corn (Metric Tons) (previous 755K), Soybeans (Metric Tons) (previous 292K), Wheat (Metric Tons) (previous 391K)

11:30 a.m. Trump sworn in as U.S. president, replacing Obama

Recent Analyst Ratings Actions

Aarons Cut to Market Perform From Strong Buy by Raymond James

AK Steel Cut to Sell From Neutral by Citigroup

Basic Energy Services Raised to Buy From Hold by Deutsche Bank

Bloomin' Brands Cut to Neutral From Buy by Goldman Sachs

Brixmor Property Group Raised to Buy From Hold by SunTrust Robinson Humphrey

Century Aluminum Cut to Hold From Buy by Standpoint Research

Cerner Cut to Equal-Weight From Overweight by Barclays

Coca-Cola Cut to Market Perform From Outperform by Wells Fargo

Commercial Metals Cut to Neutral From Buy by Citigroup

Corporate Office Ppties Cut to Hold From Buy by SunTrust Robinson Humphrey

Covanta Holding Cut to EqualWeight From Overweight by Barclays

SNAPSHOT

U.S. stock futures mixed; dollar weakens; 10-year Treasury yield 2.504%; Nymex $52.77; gold $1199.20

Watch for: President-elect Trump's inauguration; Fed's Harker and Williams to speak; earnings from General Electric and Procter & Gamble

OPENING CALL

Stocks wavered Friday while bond yields rose ahead of President-elect Donald Trump's inauguration as investors parsed Chinese growth figures and fresh comments on U.S. interest rates.

The Stoxx Europe 600 dipped 0.1% in morning trading, led lower by the real-estate and health care sectors.

The moves followed a downbeat session on Wall Street, where the Dow Jones Industrial Average erased its yearly gains in its fifth consecutive session of losses. Futures pointed to a 12 point-opening loss for the blue-chip index on Friday and a 0.1% rise for the S&P 500.

Mr. Trump is scheduled to deliver an inaugural address later Friday as he is sworn in as the 45th U.S. president. Although few market participants expect the speech itself to spark volatility, some are hoping clarity from Mr. Trump on the new administration's policy priorities will help reignite a stalled postelection rally that had been fueled by hopes for reduced regulation and taxation.

"We've got many generalities and not many specifics as far as policies," said Jon Adams, investment strategist at BMO Global Asset Management.

New details or a timeline on taxation and infrastructure spending plans would be supportive of a further move higher for stocks, he said, while possible changes to immigration and trade policy changes pose risks to the market, he said.

EQUITIES

International Business Machines recorded its 19th consecutive quarter of declining revenue, as it continued to try to offset declines in older businesses with sales in newer ones that are growing rapidly.

Fourth-quarter revenue at the Armonk, N.Y., computing giant slid 1% from the yearearlier period to $21.8 billion. Net profit edged up nearly 1% to $4.5 billion, though that still left profit 11% lower for the full year, at $11.9 billion.

Like other older companies that sell information technology to corporate buyers, IBM is struggling to cope with the move to cloud computing.

Chinese consortium led by China Oceanwide Holdings Group reached a deal to buy International Data Group, the data and marketing company that also runs venturecapital firm IDG Ventures.

Friday, January 20, 2017

CSX Corp Raised to Equal-Weight From Underweight by Morgan Stanley

CSX Corp Raised to Sector Outperform From Sector Perform by Scotiabank

Cummins Raised to Buy From Neutral by Longbow Research

Dean Foods Cut to Market Perform From Outperform by Bernstein

Devon Energy Raised to Neutral From Sell by UBS

Edison International Raised to Buy From Hold by Evercore ISI Group

EP Energy Cut to Sell From Neutral by UBS

Exxon Mobil Cut to Sell From Neutral by UBS

First NBC Bank Raised to Market Perform From Underperform by FBR Capital

First Potomac Realty Cut to Hold From Buy by SunTrust Robinson Humphrey

Genuine Parts Raised to Neutral From Sell by Goldman Sachs

GNC Holdings Cut to Sell From Neutral by Goldman Sachs

Hilton Grand Vacations Raised to Buy From Neutral by Goldman Sachs

Hilton Worldwide Raised to Outperform From Market Perform by Bernstein

Host Hotels & Resorts Cut to Sell From Neutral by Goldman Sachs

HP Raised to Buy From Neutral by UBS

Kate Spade Cut to Neutral From Buy by Bank of America

On Thursday, The Wall Street Journal reported that China Oceanwide was nearing a deal that could be announced in the coming days, the people said. The Oceanwide consortium is paying less than $1 billion for International Data Group, one of the people said at the time.

International Data Group is the publisher of several prominent industry publications including Computerworld magazine.

A $1 billion financing deal with two Chinese firms promises Viacom's struggling Paramount Pictures some much-needed funds and a foothold in the world's secondlargest box-office market.

Shanghai Film Group and Huahua Media will invest in all Paramount movies over the three-year agreement, the companies said Thursday. The companies will finance at least 25% of every Paramount movie and maintain an office on the Paramount lot.

Whole Foods Market plans to bring its lower-priced store chain, 365 by Whole Foods Market, to Brooklyn's Fort Greene neighborhood.

The first 365 store in the tri-state area will sit at the base of 300 Ashland Place, a new 35-story tower next to the Brooklyn Academy of Music and not far from the Barclays Center, the company said.

The upscale residential building, developed by Two Trees Management, offered a spot close to numerous public transportation options and cultural venues, according to Whole Foods. It is in a neighborhood that has undergone a residential building boom in recent years.

FOREX

The dollar fell before Donald Trump's inauguration as U.S. president later in the day, with investors concerned he will focus on protectionist policies, or again mention a too-strong dollar. Conversely, talk of infrastructure spending would cause the dollar and stocks to rebound.

"Investors are dumping dollars ahead of the inauguration as they worry about the new president's trade and currency policies," says Kathy Lien, Managing Director of FX Strategy at BK Asset Management. "If he focuses on fiscal stimulus, the dollar will rise, if he talks trade restrictions and penalties, we could see another roller coaster ride with steep drops for the greenback."

BONDS

The 10-year U.S. Treasury yield rose Friday to 2.504% from 2.461% Thursday, when expectations for higher U.S. rates after a speech by Federal Reserve Chairwoman Janet Yellen sent it to its biggest daily jump of the year. 10-year German bund yields rose to 0.335% from 0.301%.

In a speech Thursday, Ms. Yellen signaled a gradual course for interest rate rises, noting she doesn't see the U.S. economy at risk of overheating and doesn't expect growth to pick up much soon.

Friday, January 20, 2017

Life Storage Cut to Hold From Buy by SunTrust Robinson Humphrey

National Oilwell Varco Raised to Buy From Hold by Societe Generale

Netflix Raised to Neutral From Underperform by Macquarie

NetScout Systems Cut to Sector Perform From Outperform by RBC Capital

Newpark Cut to Market Perform From Outperform by Cowen & Co.

Paccar Raised to Neutral From Underperform by Longbow Research

Panera Bread Raised to Buy From Neutral by Goldman Sachs

Patterson-UTI Cut to Market Perform From Outperform by Cowen & Co.

Penn Real Estate Cut to Hold From Buy by SunTrust Robinson Humphrey

Regency Centers Raised to Buy From Hold by SunTrust Robinson Humphrey

Royal Caribbean Cut to Sell From Neutral by Goldman Sachs

RPC Inc Cut to Market Perform From Outperform by Cowen & Co.

Simon Property Cut to Hold From Buy by SunTrust Robinson Humphrey

Sprouts Farmers Market Cut to Neutral From Buy by Goldman Sachs

SW Energy Raised to Neutral From Sell by UBS

Target Cut to Sell From Neutral by Goldman Sachs

COMMODITIES

Crude futures gained traction, driven by a weaker U.S. dollar and signs of the market tightening after major oil producers agreed to cut output.

Brent crude, the global oil benchmark, rose 1.2% to $54.80 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 1.3% at $52.77 a barrel.

Even though OPEC's deal only went into effect this month, the International Energy Agency said production has slowed, declining by 320,000 barrels a day to 33.09 million barrels in December, and is likely to fall more steeply this month.

The IEA, OPEC and the U.S.'s Energy Information Administration all expect steady demand growth in 2017, along with rising non-OPEC output as producers respond to higher prices. The entities vary on when they see oil stocks contracting, which analysts believe is the key to prices moving much higher.

IEA data showed oil storage in industrialized nations of the Organization for Economic Cooperation and Development fell in November.

"Despite non-OPEC production being on the rise, the increase in global oil demand will make sure that global oil inventories will start depleting from the beginning of this year," said brokerage PVM, adding that this differs from the views of OPEC and EIA, who broadly expect global oil stocks to rise in the first half of 2017.

Rising oil prices in the wake of an output cut risks prompting more U.S. shale producers to return to the oil patches. Seen as the marginal producer, higher U.S. output could easily wipe out OPEC's efforts to remove surplus barrels.

Gold was trading lower at $1,199.20 in London.

Other Top Stories Of The Day

Trump's Arrival in D.C. Starts Clock on Agenda

When Donald Trump is sworn in as the 45th president of the U.S. on Friday, it will mark the climax of a decadelong political uprising in a nation still hurting from the 2008 recession and frustrated by a gridlocked government.

The Trump Factor in Job Pledges: Analyzing the Numbers

A dozen major companies have touted the creation of about 130,000 U.S. jobs since Donald Trump was elected president, vowing to keep jobs in America. How many of those come from Mr. Trump's pressure and how many were already planned is harder to determine.

Friday, January 20, 2017

Tesla Motors Raised to Overweight From Equal-Weight by Morgan Stanley

UDR Inc Raised to Buy From Hold by SunTrust Robinson Humphrey

United Therapeutics Cut to Hold From Buy by Standpoint Research

US Steel Cut to Neutral From Buy by Citigroup

Verizon Raised to Buy From Neutral by HSBC

Vitamin Shoppe Cut to Sell From Neutral by Goldman Sachs

Welltower Cut to Hold From Buy by SunTrust Robinson Humphrey

U.K.'s May Meets With Wall Street Bank Chiefs

U.K. Prime Minister Theresa May met with the chief executives of several Wall Street banks, following further warnings by lenders that they would shift jobs out of London to continental Europe after Brexit.

China Leans on Old Stimulus Playbook to Hit 6.7% Growth

China used a surge of easy credit and state spending to eke out a 6.7% rise in economic growth for 2016, the weakest rate in a generation.

BOJ Deputy Gov Nakaso: Will Watch Trump Policy Carefully

Bank of Japan Deputy Gov. Hiroshi Nakaso said Friday he would "carefully monitor and follow" Donald Trump's economic policies, signaling Tokyo's high interest hours before the president-elect's inauguration.

Today In Canada

Earnings scheduled

Avalon Advanced Materials Q1 2017 Results

Economic Indicators (all times ET)

Retail trade 8.30am CPI 8.30am

Stocks to watch

none

Calendar items (all times ET)

Bank of Canada weekly financial statistics 2pm

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