Total public debt in the United States has topped $22 trillion for the first time, according to data released today by the Treasury Department.
Talk about a milestone.
The national debt has been rising at an a faster clip since the 2008 financial crisis, when Congress and the Obama administration approved stimulus funding to prop up the economy.
The debt began to level off at the beginning of President Trump’s term. But it jumped again after his 2017 tax cuts took effect.
A dose of good news out of Washington sent Wall Street into party mode on Tuesday.
The powerful rally snapped a four-day losing streak in the stock market.
Investors were boosted by hopes that Congress and the White House have reached a deal to avert a government shutdown.
Trade-sensitive stocks like Caterpillar (CAT) and Boeing (BA) were lifted signs of progress on the US-China trade war. President Donald Trump said he would be willing to stretch his March 1 deadline if it appears the two sides are close to a deal.
Under Armour (UAA) soared 7% as its earnings beat demonstrates turnaround plan is working. Molson Coors (TAP) dropped 9% after restating its 2016 and 2017 results due to “material weakness” in accounting.
Energy stocks advanced as US oil prices closed 1.3% higher to $53.10 a barrel. Crude finished well off session highs.
Altria is borrowing big bucks to help pay for its minority stake in e-cigs company Juul.
According to a filing with the SEC, the Marlboro owner plans to sell bonds to finance its $12.8 billion acquisition of a 35% stake in Juul. Altria (MO) also is making a nearly $2 billion investment to buy a stake in Canadian cannabis company Cronos (CRON).
The Financial Times and Bloomberg both reported that Altria was looking to sell $11.5 billion in bonds to help fund its investments.
Adding that much debt is a risky, but probably necessary, move for Altria as the company faces a steady decline in the use of traditional tobacco cigarettes. Vaping and marijuana are markets that are growing much faster.
According to CNN’s Kevin Liptak, Trump said he expects to meet Chinese President Xi Jinping:
Wall Street on Tuesday cheered a reversal of two trends that had been weighing on investors: US politics and oil.
The Dow jumped more than 300 points Tuesday after politicians in the United States tentatively agreed on a plan to avert another government shutdown. Stocks also got a boost after Saudi Arabia decided to cut oil production.
🥑Chipotle (CMG) is currently trading at its highest level since November 2015:
🌯 Chipotle’s stock has climbed a whopping 140% since last year:
🌮It’s all because of CEO Brian Niccol. In a recent interview with CNN Business, he said the company’s success is due to its emphasis on digital orders, highlighting the company’s real ingredients and introducing new menu items, such as diet-friendly bowls.
As gridlock mounts in Washington, small businesses are getting more worried about the future.
The National Federation of Independent Business’ small business optimism index, which surged after the election of President Donald Trump and reached all-time highs last summer, last month dropped to the lowest level since November of 2016.
The survey was taken in the midst of the 35-day government shutdown. Although hiring and business investment remain strong, half of the decline in the reading came from business owners’ expectations for economic growth in the second half of the year. Most economists expect to see a deceleration as the effects of tax cuts and spending wear off.
Other “soft” measures of consumer and business sentiment have also cooled off markedly in recent months, though the January hit may be temporary if the White House and Congress manage to head off another shutdown before the deadline passes this week.
Also on Tuesday, the Labor Department reported that job openings reached a high of 7.3 million in December, with a particularly large jump in demand for construction workers and accommodation and food service employees.
Since March 2018, there have been more job openings than unemployed people.
The roller coaster ride that oil prices have been on lately isn’t ending anytime soon.
Several factors are driving these swings, according to Francisco Blanch, head of global commodities research at Bank of America Merrill Lynch.
Blanch told First Move anchor Julia Chatterley that it’s a “little bit hard to see how things pan out,” but that he expects prices to increase between 10% to 15% this year from where they are now.
Wall Street is on track to snap its four-day losing streak.
Markets were boosted by the deal in Congress to avert a shutdown and hopes of a trade deal with China.
Energy stocks led the way higher as US and Brent crude oil prices soared 3% after Saudi Arabia pledged to make even deeper production cuts. Hess (HES) and Devon Energy (DVN) jumped nearly 4% apiece.
Electronic Arts (EA) surged 9% on the strength of its new action game Apex Legends. Molson Coors (TAP) slumped 7% after restating 2016 and 2017 results due to “material weakness” in accounting.
Fortwho? Video game maker Electronic Arts continues to wow Wall Street with strong demand for its new action game Apex Legends, a multiplayer battle royale game that the company hopes will compete with the juggernaut that is Fortnite.
Shares of EA soared last week after Vince Zampella, the head of Respawn Entertainment, the EA-owned studio that produced Apex Legends, noted that the game had attracted 10 million players in just three days.
It looks like Apex Legends is not slowing down one bit. Zampella tweeted again after the market closed Monday to point out that the game now has 25 million players.
EA’s stock (EA) was up 8% Tuesday morning and now has surged more than 40% after reporting disappointing results last week. The success of Apex Legends is also going to put more pressure on rivals Take-Two (TTWO) and Activision Blizzard (ATVI), which reports earnings later Tuesday, to come up with their own Fortnite-esque games.
Canadian marijuana company Aurora Cannabis has a good problem – so much demand for its product that the CEO is not sure how to handle it.
“I lose sleep over our ability to supply this global cannabis market,” said Aurora Cannabis (ACB) CEO Terry Booth during a conference call with analysts Monday evening.
Aurora Cannabis reported revenue of $54.2 million in its most recent quarter, a more than 360% increase from a year ago. But the company posted a loss because expenses rose at a faster pace than sales.
Canada legalized recreational marijuana use last October, helping to fuel the surge in demand. But pot prices fell in the quarter, in part because of more competition. Aurora Cannabis said the average selling prices of dried cannabis and cannabis extracts were down more than 20% from a year ago. Shares fell more than 5% in early trading Tuesday on the news.
Chinese shoppers might have lost their appetite for iPhones, but they are still buying luxury bags.
Kering (PPRUF), the owner of brands like Gucci and Yves Saint Laurent, just reported bumper sales driven by strong growth in Asia.
Its revenue increased 26% in 2018 to €13.6 billion ($15.4 billion).
Luxury companies LVMH (LVMHF), L’Oreal (LRLCF) and Hermes (HESAF) have also defied expectations of weaker sales in China caused by a slowdown in the world’s second largest economy.
Concerns were sparked earlier this year when Apple (AAPL) warned that it was selling fewer iPhones in China.
Kering did have some words of warning for investors. The company said the business environment “remains unsettled” because of geopolitical risks, trade policies and fluctuations in exchange rates.
Shares in Kering dropped 3% in Paris after earnings were announced. Helen Brand, an analyst at UBS, said the stock has been trading higher ahead of the earnings in anticipation of strong results.
US stock futures are moving higher after Congressional negotiators said they’d reached an agreement in principle to avoid a partial government shutdown.
The Dow was set to rise 200 points at the open. The S&P 500 and Nasdaq futures were both up 0.8%.
It’s still not clear what will happen next. Negotiators declined to get into details yesterday on the exact parameters of the potential breakthrough, and President Trump has not yet weighed in.
Lawmakers are racing the clock in an effort to find common ground for an agreement on border security that will pass both chambers of Congress and be signed into law by Trump before Friday.
About 25% of funding for the US federal government runs out at the end of the week.
Still ahead this morning: Under Armour (UAA) and Molson Coors Brewing (TAP) will release earnings before the open.
Activision Blizzard (ATVI), Groupon (GRPN) and TripAdvisor (TRIP) are up after the close.
Nissan (NSANF) has slashed its profit and sales forecasts in its first earnings report since the arrest and ouster of Carlos Ghosn, its controversial former leader.
The Japanese carmaker blamed the gloomy outlook on difficulties in the US and Europe, two of its biggest markets.
The company also said that it has booked a charge of 9.2 billion yen ($83 million) related to payments to its former chief.
Nissan has a tough job on its hands to turn things around. After an 8% drop in the first three quarters of its financial year, Nissan’s sales in the US plunged 19% in January.
The company’s stock gained 1.9% in Tokyo earlier today. Its earnings were released after Japanese markets closed.
