US financial markets continue to recover from a horrible December.
Markets initially fell and then quickly rebounded after the release of the minutes from the last Federal Reserve meeting
CVS Health (CVS) plunged 8%, its worst day since November 2016, after it issued disappointing guidance. New York-listed shares of UBS (UBS) fell 4% after the banks was hit with a $5.1 billion penalty from a French court.
Southwest Airlines (LUV) lost 6% after it said the government shutdown cost the company $60 million. Devon Energy (DVN) jumped 7% on plans to get rid of its non-US oil assets.
There’s a 20% to 25% chance of an economic recession in the United States over the next year, according to S&P Global Ratings.
The ratings firm raised its recession odds on Wednesday from its previous estimate of 15% to 20% in November.
S&P said that four of its 10 leading indicators of near-term growth momentum “weakened” since then. And two of those signals – the S&P 500 and the Federal Reserve’s loan survey – are outright negative.
But the good news is that while recession chances may have climbed, S&P still believes there is a very good chance the current economic expansion becomes the longest in American history. It would only have to continue until July to hit that mark.
And S&P suggested that recession odds could go back down in the coming months thanks to a “significantly more dovish” stance from the Federal Reserve.
Shares of the tech hardware company Garmin (GRMN) surged nearly 17% following the release of its fourth-quarter earnings:
The stock is up 30% year-to-date:
The stock markets aren’t doing much of anything. Investors are bracing for the release of minutes from the Federal Reserve’s January meeting at 2 p.m. ET.
Here’s where they stand:
CVS Health (CVS) is continuing to have a horrible day after announcing it’s in for a rough year ahead. Shares are sliding more than 7%.
Southwest Airlines (LUV) shares are still declining for a variety of reasons. The stock is off more than 5%.
Garmin (GRMN) is up a whopping 16% after beating on earnings.
Devon Energy is transforming itself into a pure-play American oil producer – and Wall Street loves it.
Shares of the Oklahoma-based company spiked 11% on Wednesday after it revealed plans to ditch assets in Canada and the gas-rich Barnett Shale.
Devon (DVN) said the makeover will make the new company a “high-return US oil growth business.” It will be able to grow oil volumes at a “mid-teens” rate and generate free cash flow – at just $46 a barrel.
Devon expects to ditch its Canadian and Barnett Shale assets by the end of 2019, via a sale or spin-off.
US shale strength lifted Devon’s fourth-quarter output above the Street’s view. And Devon also felt confident enough to ramp up its buyback plan by $1 billion and boost the dividend by 13%.
Shares of Southwest (LUV) have lost roughly 6% of their value since last week due to a the airline’s laundry list of problems:
The airline’s stock opened 5% lower, but it’s still up nearly 18% for the year.
Wall Street has yet to awaken from its President’s Day slumber.
US markets opened little changed on Wednesday.
The quiet start comes after US stocks closed narrowly higher on Tuesday.
CVS (CVS) tumbled 8% as its earnings beat was overshadowed by cautious guidance that badly missed expectations. Southwest (LUV) fell 5% after the airline cancelled hundreds of flights due to an “operational emergency.”
Tesla (TSLA) dipped 1% after announcing the exit of its general counsel after just two months on the job. The Elon Musk-run company also disclosed plans to sell more stock to pay for the acquisition of battery maker Maxwell Technologies (MXWL).
Traders will shift their attention at 2 pm ET to the release of the minutes from the most recent Federal Reserve meeting. Wall Street is looking for more insight into what led to the Fed’s abrupt reversal from hawkish to dovish.
Do you think companies run by their founders are better than those with hired guns as CEOs? Then mutual fund giant Fidelity has a new fund for you. It launched the Fidelity Founders Fund Wednesday.
Fidelity fund manager Dan Kelley said he will look for companies with founders as senior managers or board members.
But will the fund invest in controversial founder-led firms like Facebook (FB), Snapchat (SNAP) and Tesla (TSLA)? A Fidelity spokesperson said holdings data won’t be available until April 28. Still, there are plenty of other founder-led firms to choose from – and there’s already an ETF that focuses on them.
The Global X Founder-Run Companies ETF (BOSS), which picks its stocks based on an index of founder-led companies, is up 20% this year. Wayfair (W), TripAdvisor (TRIP) and Jack Dorsey’s Square (SQ) are top holdings.
Tesla’s top lawyer, Dane Butswinkas, is leaving just two months after joining the company.
Butswinkas is departing because he was a poor cultural fit at Tesla, a source familiar with the situation told CNN Business.
In a prior release, the company said Butswinkas would report directly to CEO Elon Musk and “oversee Tesla’s legal and government relations teams.”
Jonathan Chang, Tesla’s vice president of legal, will replace Butswinkas effective immediately.
Tesla (TSLA) shares are sliding nearly 2% in premarket trading and are down 10% for the year.
Shares of CVS Health (CVS) are sliding nearly 9% after it said this year’s forecasts will come in below analysts’ expectations.
CEO Larry Merlo said in a release that it’s “fully aware of the need to address the impact of certain headwinds that are having a disproportionate impact in 2019 compared to prior years.”
In November, CVS completed its $69 billion acquisition of Aetna, the largest health care deal in history. It’s now working to integrate the company and debuting a new design for some of its drug stores.
This post has been updated to reflect its further losses at the opening.
Southwest (LUV) shares are sliding nearly 4% after a one-two punch of bad news.
The airline just said in a regulatory filing that last month’s partial government shutdown would cost it roughly $60 million for the first quarter. That’s well above the company’s previous estimates of between $10 million to $15 million.
The Dallas-based airline also recently declared an “operational emergency.” It was forced to cancel hundreds of flights since late last week because of mechanical problems with its fleet.
The carrier cancelled roughly 4% of its flights yesterday and 10% of its flights are cancelled today, according to FlightAware.
The stock is still up more than 20% year-to-date.
Facebook (FB) and Google (GOOGL) have a tight grip on the online advertising market, but Amazon threatens to chip away at their rivals’ control.
Amazon’s (AMZN) fledgling advertising business will grow more than 50% this year, according to a new report from eMarketer. The firm projects Google’s share will decline by a percentage point, while Facebook’s will stay about the same.
Here are two other things the report said:
Shares in UK supermarket chain Sainsbury’s (JSNSF) have tanked 15% after British regulators voiced skepticism over its merger with Asda, which is owned by Walmart (WMT).
The Competition and Markets Authority said the deal could lead to higher prices and less choice for shoppers.
The watchdog also said it was worried about potential price hikes at gas stations owned by the two chains.
The findings are provisional, and the two companies will now have a chance to respond.
Sainsbury’s said it was “surprised” by the findings, and vowed to continue to fight for the merger, which would result in the country’s largest supermarket chain.
US stock futures are little changed as investors prepare for the release of minutes from the Federal Reserve’s January meeting today at 2 p.m. ET.
The central bank slammed brakes on its plan to raise interest rates twice in 2019 in January, suggesting it could be done with hikes for the time being.
The rapid turn in its strategy led to immediate speculation that the central bank is surrendering to pressure from Wall Street, after fears of an overly aggressive Fed helped send markets plummeting in November and December.
The minutes could give investors a bit more insight into the central bank’s thinking.
Other news we’re watching:
