Here's your complete preview of this week's big economic events

Here's your complete preview of this week's big economic events

The global stock markets got rocked on Friday.

The 279-point sell-off in the Dow dropped the index's 2015 gain to 0%.

The economic calendar is light this week. But earnings season kicks into high gear with big companies including IBM, Morgan Stanley, Halliburton, Facebook, Coca-Cola, Google, and Microsoft announcing their quarterly financial results.

Here's your Monday Scouting Report:

Top Stories

• 
  


• What caused the sell-off? Friday's global market sell-off began long before the US markets actually opened. JonesTrading's Dave Lutz identified three destabilizing headlines: reports that some banks were being forced to dump Greek bonds, the tightening of trading restrictions in China, and a massive outage in Bloomberg terminals.
  
  
  
  
  
  
  
  The consumer price index report suggested inflation was firming and the University of Michigan consumer sentiment index suggested confidence was picking up. According to Intercontinental Exchange's Charlie Brown, traders said this was hawkish for monetary policy, "fanning the 'rate increase earlier' flames again."
  
  
  
  
  
  
  
  No one seemed to be able to pinpoint the cause of Friday's plunge. Rather, it seemed to be a confluence of things market watchers had been warning about. Add to everything that valuations are well above average and the market continues to be near an all-time high, and the volatility becomes less surprising.


• 
  

Economic Calendar

• 
  


• Existing Home Sales (Wed): Economists estimate the pace of sales climbed 3.1% in March to an annualized rate of 5.03 million units. From Bank of America Merrill Lynch: "This will add to the 1.2% gain in February to partly offset the sharp drop of 4.9% in January. Smoothing through, however, sales will still likely be down for Q1. The trajectory looks more promising given the notable improvement in pending home sales, which track signed contracts. Moreover, mortgage purchase applications have been heading modestly higher, likely reflecting the low rate environment. Inventory of existing homes have remained low, leaving supply to fall to only 4.6 months. We expect this to start to turn higher with the spring selling season."


• 
  


• Initial Jobless Claims (Thurs): Economists estimate initial claims slipped to 290,000 from 294,000 a week ago. "Claims have been below 300k for six consecutive weeks and continue to point to solid improvement in labor market performance," Nomura economists said.


• 
  


• Markit US Manufacturing PMI (Thurs): Economists estimate this manufacturing index slipped to 55.6 in April from 55.7 in March. From UBS's Sam Coffin: "Despite weakening in export orders, the Markit PMI has maintained momentum in early 2015. We forecast little change in April. Two regional surveys—the Empire State and Philadelphia Fed measures—have suggested no."


• 
  


• New Home Sales (Thurs): Economists estimate the pace of sales fell 5.4% in March to an annualized rate of 510,000 units. From Bank of America Merrill Lynch: "Single family starts and permits have been sluggish, which indicate weaker demand for new construction homes."


• 
  


• Kansas City Fed Manufacturing Activity (Thurs): Economists estimate this regional activity index climbed to -2 in April from -4.0 in March.


• 
  


• Durable Good Orders (Thurs): Economists estimate orders climbed 0.6% in March. Excluding transportation equipment, orders are estimated to have climbed by 0.3%. Nondefense capital goods orders excluding aircraft, or core capex, is estimated to have increased by 0.3%. From BNP Paribas: "While Boeing aircraft orders were firm during the month, manufacturing sentiment generally has been quite weak as of late, suggesting that ex- aircraft orders were likely soft."


• 
  

Market Commentary

There's no shortage of reasons to be nervous about the stock market. Among other things, Bank of America Merrill Lynch's Savita Subramanian warns that the bullish benefits of easy monetary policy like quantitative easing (QE) are waning.

Here's Subramanian: "Don’t bank on global QE to keep this going. We see signs of QE fatigue. Since 2010, each subsequent policy response has seen diminishing returns in risky stocks, so global easing may not be enough. In the US, the Fed is expected to tighten this year, and fiscal stimulus has been replaced by a culture of fiscal austerity. Low quality valuations should compress further in our view and eventually trade at a discount to high quality stocks, which we expect to re-rate considerably. Cash-rich, self-funded companies should be relative winners as liquidity conditions normalize."

For more insight about the middle market, visit mid-marketpulse.com.

Join the conversation about this story »

NOW WATCH: How to invest like Warren Buffett

by Sam Ro via Business Insider

via Blogger http://ift.tt/1G9CZ53

April 19, 2015 at 09:04PM

The Apple Watch has kneecapped Google and is now dominating the entire smartwatch industry (AAPL, GOOG)

The Apple Watch has kneecapped Google and is now dominating the entire smartwatch industry (AAPL, GOOG)

The Apple Watch is on fire: KGI Securities analyst Ming-Chi Kuo estimates that Apple's debut smartwatch has sold more than 2.3 million units since preorders opened, MacRumors reports.

The device doesn't actually start making its way to customers until April 24 at the earliest, but Kuo believes that more than 2 million people globally have coughed up to get their hands on the device.

Apple hasn't released any sales data on Apple Watch sales, and it most likely won't until the company's quarterly earnings report. But this 2.3 million figure echoes what others have estimated — the research company Slice believes there were about 1 million US preorders on launch day, for example.

Ming-Chi Kuo has a good track record on Apple: He was spot on with his predictions about the iPhone 5S, for example.

If Kuo's figures are correct, Apple has — in a stroke — cornered the entire smartwatch market.

Google has lost the one thing it had going for it

The Apple Watch's strong sales are bad news for Google and its Android Wear smartwatch operating system OS. According to Canalys, devices using Android Wear sold 720,000 units in 2014. Slice's figures suggested Apple was able to easily breeze past this figure in a single day. In doing so, Apple took away Google's one historical advantage, which Business Insider explained in a previous story:

The iPhone has always — with some truth — been considered the "rich man's phone." Apple customers tend to be better off than Android users and spend more on apps and in-app purchases. Accordingly, ad rates on iOS, Apple's operating system, are higher than on Google's OS.

This means that iOS is, at least on paper, the more lucrative platform to develop for. But many developers still choose to go "Android first." Why? Because what Android customers lack in purchasing power (on average), they make up for in sheer numbers. In 2014, Android manufacturers shipped a staggering 1 billion smartphones. That's a milestone that will take Apple years to reach — in the same period, despite having the most profitable quarter of any company ever, the Cupertino company had (relatively) paltry sales of 192.7 million.

This truly massive reach is what makes Android such a compelling platform for developers.

But now, the opposite is true — Apple has the bigger platform (by a massive margin), while Google is the underdog. But unlike Apple, Google doesn't have the wealthy user base to encourage developers to prioritise developing for its OS. (We don't yet have demographics on Apple Watch customers, so we don't know for sure that they are (on average) wealthier. But given the high price point of the Apple Watch — topping out at $17,000/£13,500 — it is a fairly reasonable assumption to make.)

Apple has undercut every rival

Of course, there are other players in the wearables space. Google has never managed to achieve the same dominance in smartwatches as it has in smartphones, and one significant player is the crowdfunded Pebble, which sold 1 million units in the period between its 2013 launch and the end of 2014.

Apple has easily bested this, too, and is now one of the biggest players in the smartwatch space. According to Canalys, 4.6 million "smart wearable bands" were sold in 2014, and many of these are fitness trackers that can't really be considered "smartwatches." But in any case, Apple has managed 50% of this in less than a week.

This strong push is immediately going to make Apple's Watch OS an extremely attractive platform for developers looking to move into wearables, especially when coupled with the purchasing power of Apple consumers. And as this app ecosystem develops, it will make the Apple Watch even more attractive compared with other smartwatches, consolidating Apple's position further still.

Here's the relevant part of the research note from Kuo at KGI Securities, courtesy of MacRumors (emphasis ours):

We estimate production of Apple Watch around 2.3mn units in March-May. Mass production of Apple Watch began in March and will likely reach 2.3mn by end of May. Considering that most consumers who preordered will not get the device until June, we estimate global preorders of over 2.3mn units, with Apple Watch Sport, Apple Watch and Apple Watch Edition representing a respective order allocation of 85%, 15% and less than 1%.

Join the conversation about this story »

NOW WATCH: Flashback: Here's how Tim Cook unveiled the Apple Watch

by Rob Price via Business Insider

via Blogger http://ift.tt/1G9CZ4V

April 19, 2015 at 09:04PM

Greece will not cross 'red lines' on debt talks: deputy PM

Greece will not cross 'red lines' on debt talks: deputy PM

Athens (AFP) - Greece's deputy prime minister Ioannis Dragasakis said Sunday that Athens would stand firm on its red lines in negotiations with its creditors for billions in aid, despite escalating fears that the country could soon be forced to default.

In an interview published Sunday in the weekly To Vima, Dragasakis said: "There is no way we would cross red lines that we have set."

Dragasakis also refused to rule out the possibility of new elections or a referendum if talks with its creditors remained deadlocked.

Those options exist "in the backs of our minds... in the event of an impasse," he said.

Greece's creditors -- the European Union, European Central Bank and the International Monetary Fund -- are waiting for Athens to submit an acceptable programme of reforms it would undertake in exchange for 7.2 billion euros ($7.8 billion) in bailout funds.

Both sides are seeking to do a deal before eurozone finance ministers meet on April 24.

But ECB chief Mario Draghi and IMF head Christine Lagarde said Saturday that Greece has so far failed to provide enough information on how its planned reforms would impact its finances.

"More work, much more work is needed now, and it's urgent," said Draghi.

Join the conversation about this story »

by via Business Insider

via Blogger http://ift.tt/1OuVaRH

April 19, 2015 at 09:04PM

Business Insider

Business Insider

The global stock markets got rocked on Friday.

The 279-point sell-off in the Dow dropped the index's 2015 gain to 0%.

The economic calendar is light this week. But earnings season kicks into high gear with big companies including IBM, Morgan Stanley, Halliburton, Facebook, Coca-Cola, Google, and Microsoft announcing their quarterly financial results.

Here's your Monday Scouting Report:

Top Stories

• 
  


• What caused the sell-off? Friday's global market sell-off began long before the US markets actually opened. JonesTrading's Dave Lutz identified three destabilizing headlines: reports that some banks were being forced to dump Greek bonds, the tightening of trading restrictions in China, and a massive outage in Bloomberg terminals.
  
  
  
  
  
  
  
  The consumer price index report suggested inflation was firming and the University of Michigan consumer sentiment index suggested confidence was picking up. According to Intercontinental Exchange's Charlie Brown, traders said this was hawkish for monetary policy, "fanning the 'rate increase earlier' flames again."
  
  
  
  
  
  
  
  No one seemed to be able to pinpoint the cause of Friday's plunge. Rather, it seemed to be a confluence of things market watchers had been warning about. Add to everything that valuations are well above average and the market continues to be near an all-time high, and the volatility becomes less surprising.


• 
  

Economic Calendar

• 
  


• Existing Home Sales (Wed): Economists estimate the pace of sales climbed 3.1% in March to an annualized rate of 5.03 million units. From Bank of America Merrill Lynch: "This will add to the 1.2% gain in February to partly offset the sharp drop of 4.9% in January. Smoothing through, however, sales will still likely be down for Q1. The trajectory looks more promising given the notable improvement in pending home sales, which track signed contracts. Moreover, mortgage purchase applications have been heading modestly higher, likely reflecting the low rate environment. Inventory of existing homes have remained low, leaving supply to fall to only 4.6 months. We expect this to start to turn higher with the spring selling season."


• 
  


• Initial Jobless Claims (Thurs): Economists estimate initial claims slipped to 290,000 from 294,000 a week ago. "Claims have been below 300k for six consecutive weeks and continue to point to solid improvement in labor market performance," Nomura economists said.


• 
  


• Markit US Manufacturing PMI (Thurs): Economists estimate this manufacturing index slipped to 55.6 in April from 55.7 in March. From UBS's Sam Coffin: "Despite weakening in export orders, the Markit PMI has maintained momentum in early 2015. We forecast little change in April. Two regional surveys—the Empire State and Philadelphia Fed measures—have suggested no."


• 
  


• New Home Sales (Thurs): Economists estimate the pace of sales fell 5.4% in March to an annualized rate of 510,000 units. From Bank of America Merrill Lynch: "Single family starts and permits have been sluggish, which indicate weaker demand for new construction homes."


• 
  


• Kansas City Fed Manufacturing Activity (Thurs): Economists estimate this regional activity index climbed to -2 in April from -4.0 in March.


• 
  


• Durable Good Orders (Thurs): Economists estimate orders climbed 0.6% in March. Excluding transportation equipment, orders are estimated to have climbed by 0.3%. Nondefense capital goods orders excluding aircraft, or core capex, is estimated to have increased by 0.3%. From BNP Paribas: "While Boeing aircraft orders were firm during the month, manufacturing sentiment generally has been quite weak as of late, suggesting that ex- aircraft orders were likely soft."


• 
  

Market Commentary

There's no shortage of reasons to be nervous about the stock market. Among other things, Bank of America Merrill Lynch's Savita Subramanian warns that the bullish benefits of easy monetary policy like quantitative easing (QE) are waning.

Here's Subramanian: "Don’t bank on global QE to keep this going. We see signs of QE fatigue. Since 2010, each subsequent policy response has seen diminishing returns in risky stocks, so global easing may not be enough. In the US, the Fed is expected to tighten this year, and fiscal stimulus has been replaced by a culture of fiscal austerity. Low quality valuations should compress further in our view and eventually trade at a discount to high quality stocks, which we expect to re-rate considerably. Cash-rich, self-funded companies should be relative winners as liquidity conditions normalize."

For more insight about the middle market, visit mid-marketpulse.com.

Join the conversation about this story »

NOW WATCH: How to invest like Warren Buffett

via Blogger http://ift.tt/1G9CYOl

April 19, 2015 at 09:04PM

Business Insider

Business Insider

The Apple Watch is on fire: KGI Securities analyst Ming-Chi Kuo estimates that Apple's debut smartwatch has sold more than 2.3 million units since preorders opened, MacRumors reports.

The device doesn't actually start making its way to customers until April 24 at the earliest, but Kuo believes that more than 2 million people globally have coughed up to get their hands on the device.

Apple hasn't released any sales data on Apple Watch sales, and it most likely won't until the company's quarterly earnings report. But this 2.3 million figure echoes what others have estimated — the research company Slice believes there were about 1 million US preorders on launch day, for example.

Ming-Chi Kuo has a good track record on Apple: He was spot on with his predictions about the iPhone 5S, for example.

If Kuo's figures are correct, Apple has — in a stroke — cornered the entire smartwatch market.

Google has lost the one thing it had going for it

The Apple Watch's strong sales are bad news for Google and its Android Wear smartwatch operating system OS. According to Canalys, devices using Android Wear sold 720,000 units in 2014. Slice's figures suggested Apple was able to easily breeze past this figure in a single day. In doing so, Apple took away Google's one historical advantage, which Business Insider explained in a previous story:

The iPhone has always — with some truth — been considered the "rich man's phone." Apple customers tend to be better off than Android users and spend more on apps and in-app purchases. Accordingly, ad rates on iOS, Apple's operating system, are higher than on Google's OS.

This means that iOS is, at least on paper, the more lucrative platform to develop for. But many developers still choose to go "Android first." Why? Because what Android customers lack in purchasing power (on average), they make up for in sheer numbers. In 2014, Android manufacturers shipped a staggering 1 billion smartphones. That's a milestone that will take Apple years to reach — in the same period, despite having the most profitable quarter of any company ever, the Cupertino company had (relatively) paltry sales of 192.7 million.

This truly massive reach is what makes Android such a compelling platform for developers.

But now, the opposite is true — Apple has the bigger platform (by a massive margin), while Google is the underdog. But unlike Apple, Google doesn't have the wealthy user base to encourage developers to prioritise developing for its OS. (We don't yet have demographics on Apple Watch customers, so we don't know for sure that they are (on average) wealthier. But given the high price point of the Apple Watch — topping out at $17,000/£13,500 — it is a fairly reasonable assumption to make.)

Apple has undercut every rival

Of course, there are other players in the wearables space. Google has never managed to achieve the same dominance in smartwatches as it has in smartphones, and one significant player is the crowdfunded Pebble, which sold 1 million units in the period between its 2013 launch and the end of 2014.

Apple has easily bested this, too, and is now one of the biggest players in the smartwatch space. According to Canalys, 4.6 million "smart wearable bands" were sold in 2014, and many of these are fitness trackers that can't really be considered "smartwatches." But in any case, Apple has managed 50% of this in less than a week.

This strong push is immediately going to make Apple's Watch OS an extremely attractive platform for developers looking to move into wearables, especially when coupled with the purchasing power of Apple consumers. And as this app ecosystem develops, it will make the Apple Watch even more attractive compared with other smartwatches, consolidating Apple's position further still.

Here's the relevant part of the research note from Kuo at KGI Securities, courtesy of MacRumors (emphasis ours):

We estimate production of Apple Watch around 2.3mn units in March-May. Mass production of Apple Watch began in March and will likely reach 2.3mn by end of May. Considering that most consumers who preordered will not get the device until June, we estimate global preorders of over 2.3mn units, with Apple Watch Sport, Apple Watch and Apple Watch Edition representing a respective order allocation of 85%, 15% and less than 1%.

Join the conversation about this story »

NOW WATCH: Flashback: Here's how Tim Cook unveiled the Apple Watch

via Blogger http://ift.tt/1OuVcch

April 19, 2015 at 09:04PM