Netflix adds 7 million subscribers, stock hits new high
Netflix is quickly closing in on the 100 million mark for total subscribers. …read more
Source: Netflix adds 7 million subscribers, stock hits new high
Archive for the ‘Uncategorized’ Category
Trump’s (Not So) Invisible Hand
By Tyler Durden
Via ConvergEx's Nicholas Colas,
Want to know why US stocks feel so fragile? Perhaps we can blame Wall Street analysts. Even after two months of market buzz about lower taxes, infrastructure spending and less regulation juicing investor expectations for better earnings growth, they refuse to bump their revenue or earnings estimates for 2017.
Our monthly look at revenue expectations for the companies of the Dow shows Street analysts still cutting their numbers for Q1 – Q3 of 2017. About the only bright spot: they do expect revenue growth of 4.0% this year. As far as earnings expectations go, there is still no change to “Bottom up” earnings expectations for the S&P 500 of $133/share. That’s right where it’s been since before the election. Nearer term, analysts are still cutting their earnings expectations for Q1 2017. Now, markets are often happy to discount changes in Street expectations before they occur. Current valuations of 17x – high by historical standards – may be a ceiling on equity prices until both buyside and sellside have more confidence in incremental earnings growth. Next week – Trump’s first days in office – will be important in building that case. First impressions matter, after all…
With just three days to go before the inauguration, we still don’t know very much about what will come after January 20th. That uncertainty is creating the churn we’re seeing in capital markets. After the year end 2016 run-up for risk assets, everything seems to have hit a wall. On the other side of the barrier: a new administration that has made a lot of promises and will, naturally, want to start delivering just as soon as the clock strikes noon on Friday.
The largest unknown is just how President Elect Trump will prioritize and then negotiate the various pieces of his agenda. And since Mr. Trump has no track record in government and a very unconventional approach to communicating his thoughts, investors have less information and more questions about the incoming administration than any prior transition. It’s only a mild stretch to say that “Nobody knows nothing”, at least for a few more days.
Over the years we have written about two off beat personality indicators – digit ratios and birth order – and at this point we might as well toss those into the analytical bucket and see what they might tell us about Donald Trump and how he will adapt to his new job as the 45th President of the United States.
Here is some color on each:
Digit ratio is the relative length of a person’s second (pointer) to fourth (ring) finger. Feel free to look at your own hand right now. Is your ring finger longer than your pointer, or vice versa? (Men tend to have longer ring fingers than pointers, and women the opposite, but many other factors play a role.)
Researchers have spent years looking at this ratio in the context of …read more
Source: Trump’s (Not So) Invisible Hand
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Netflix Soars Despite Slashing Domestic Subscriber Outlook & Record Cash-Burn
By Tyler Durden
Forget the negative cash-flow, forget the ongoing and rising cost of content, and forget the fact that Netflix slashed its domestic subscriber growth expectations; buy-the-f##king-record-high because earnings and revenues met expectations but international subscriber growth soared.
Summary:
- *NETFLIX 4Q INTL NET STREAMING ADDS 5.12M, EST. 3.78M
- *NETFLIX SEES 1Q INTL NET STREAMING ADDS 3.7M, EST. 3.5M
- Q4 EPS (GAAP): $0.15, to Wall Street forecasts of $0.13, which were inline with Netflix guidance of $0.13.
- Q4 Revenue: $2.48 billion, to Wall Street estimates of $2.47 billion, up 36% year-over-year.
And then there's this…
Slashing domestic subscriber growth expectations…
- *NETFLIX SEES 1Q DOMESTIC NET STREAMING ADDS 1.5M, EST. 1.72M
And the only chart that really matters…
Record Cash burn…
Q4 free cash flow totaled -$639 million vs. -$276 million last Q4 and -$506 million in Q3’16. The sequential increase was largely due to the timing of content payments, including our growing slate of self-produced originals. Producing more owned content creates some lumpiness in our working capital needs. We expect our FCF to be around -$2 billion in 2017 vs. -$1.7 billion in 2016, with FCF loss improving sequentially in Q1’17.
And it's set to get worse…
- *NETFLIX SEES FCF AROUND -$2B IN 2017
Source: Netflix Soars Despite Slashing Domestic Subscriber Outlook & Record Cash-Burn
China Housing Bubble Finally Pops: First Slowdown After 19 Months Of Acceleration
By Tyler Durden
After several months of slowing price growth across China’s housing market, if mostly in the lower-tiered cities, China’s National Bureau of Statistics reported that average mothly property prices growth in December continued to slow from November across the 70 cities tracked by the NBS, and this time impacted even the formerly untouchable, “Tier 1” cities.
Housing prices in the primary market increased 0.4% month-over-month after seasonal adjustment (weighted by population) in December, lower than the growth rate in November. Out of 70 cities monitored, 61 saw housing prices increase in December from the previous month, the same number as November.
However it is on an annual, population-weighted basis, where we got the first confirmation that the latest Chinese housing bubble has finally popped, as housing prices across the 70 cities were up 12.7% Y/Y, below the 12.9% annual growth rate in November. This was the first moderation in year-over-year housing price growth after 19 months of continued acceleration.
Looking at city-level data, house price inflation decelerated across all city tiers. In tier-1 cities, December price growth was 0.5% month-over-month after seasonal adjustment, slightly lower than 0.6% in November. Tier 2/3/4 cities saw housing price growth of 0.5%, 0.4% and 0.4% respectively in December, all lower than the growth rates in November.
Goldman notes that it expects the housing market to continue cooling down this year, thus adding a headwind to activity growth, and also becoming a headwind to the recent surge in Chinese PPI, which in turn has led a brief impules of exported inflation around the globe. If and when Chinese housing overshoots to the downside, look forward to the next deflationary wave emanating from China to once again spoil the central bankers’ reflationary party.
Finally, a more practical question: now that the Chinese housing bubble has finally hit its inflection point and is headed downward, prompting the momentum chasers to flee, the question is whether the Chinese stock market is about to become the bubble choice du jour, as happened in mid to late 2014 and early 2015, when the bursting of the home bubble once again pushed all the housing speculators into the stock market with scary, if entertaining, consequences. It may not be a bade idea to buy some deep out of the money calls on the Shenzhen composite, as that is the place where the most degenerate of Chinese gamblers eventually congregate to every time the housing bubble bursts, only to be reincarnated two years down the line.
Source: China Housing Bubble Finally Pops: First Slowdown After 19 Months Of Acceleration
Beige Book Notes Minimum Wage Increases, Warns Of Building Margin Pressures
By Tyler Durden
The Fed’s latest beige book, perhaps the most boring report released by the Federal Reserve, found 10 of the 12 Fed districts growing at the now ubiquitous “modest or moderate pace” with Cleveland growing only slightly and New York reporting little change for the fourth period in a row. However, despite stagnant growth, margin pressures are building as input prices are rising faster than final goods prices.
The good news for US workers is that according to the Fed, labor market conditions remained tight in the majority of the districts. Employment growth ranged from slight to moderate and most Districts indicated that wages increased modestly. A couple of Districts mentioned layoffs, but even in those Districts, as in other regions, most responding firms were said to have added employment, on net. District reports cited widespread difficulties in finding workers for skilled positions; several also noted problems recruiting for less-killed jobs. Wages in some Districts were pushed up a bit by increases in the states’ minimum wages and most Districts said wage pressures had increased. The Boston, Philadelphia, Cleveland and Atlanta Fed districts reported further tightening in their labor markets over the period, with wage pressures likely to rise and the pace of hiring to hold steady or increase.
Manufacturing activity appeared to be robust at the end of 2016 into the new year.
“Manufacturers in most Districts reported increased sales with several citing turnaround versus earlier in 2016,” the Beige Book said. However, manufacturing activity in Cleveland remained steady due to a seasonal decline in new orders. On the other hand, manufacturers in Cleveland reported a break in layoffs.”
Software and IT services firms in Boston reported watching the resurging dollar to see if it affects their clients’ interests in the manufacturing sector. Dallas, St. Louis and San Francisco manufacturing sectors echoed these concerns, though the Boston Fed reported foreign investment in commercial real estate in the district unaffected by an appreciating dollar.
The bad news is that any increase in wages is being offset by rising prices as pricing pressures intensified somewhat since the last report. Eight out of twelve Districts saw modest price increases and the remainder experienced slight increases, or flat prices in the case of the Atlanta District. Increases in input costs were more widespread than increases in final goods prices. Cost increases were reported for coal, natural gas, and selected building and manufacturing materials. Retailers’ selling prices were mixed, but on balance were flat or down amidst competitive discounting. Prices of most agricultural commodities stayed flat at very low levels. Home prices were stable or up modestly. Businesses in several districts reportedly expect further modest increases in input costs and selling prices in 2017.
And while the number of mentions of “uncertain” declined from 15 in November, to only 6 in Januar, concerns remains over policy changes in the incoming administration.
The Fed also said most districts said non-auto retail sales expanded, but that several districts noted holiday sales were disappointing. New York, Cleveland, Minneapolis, and Dallas …read more
Source: Beige Book Notes Minimum Wage Increases, Warns Of Building Margin Pressures
Oil Market Discussion (Video)
By EconMatters
By EconMatters
We discuss the Macro and Micro outlook for the Oil Market, and everything in between in this latest market video. Oil is being propped up on forward looking fundamentals right now, it very easily could be much lower based upon current inventory levels.
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Source: Oil Market Discussion (Video)
CIA Releases 13 Million Pages Of Declassified Documents: Include Psychic Experiments, UFO Research
By Tyler Durden
The Central Intelligence Agency has published nearly 13 million pages of declassified files online, documents which previously were physically accessible only from four computer terminals at the National Archives in College Park, Maryland.
The record include info on Nazi war crimes, the Cuban Missile Crisis, UFO sightings, human telepathy (“Project Stargate”) and much more. The release has been a long time coming: Bill Clinton first ordered all documents at least 25 years old with “historical value” to be declassified in 1995. The agency complied, however anyone who wanted access had to trek all the way to the US National Archives in Washington DC to get a peak.
In 2014, a nonprofit journalism organization called MuckRock filed a Freedom of Information Act (FOIA) lawsuit pressing the CIA to post all of its documents online, but the agency said it would take up to six years to scan everything according to engadget. At the same time, journalist Mike Best crowd-funded more than $15,000 to visit the archives to print out and then publicly upload the records, one by one, to apply pressure to the CIA. “By printing out and scanning the documents at CIA expense, I was able to begin making them freely available to the public and to give the agency a financial incentive to simply put the database online,” Best wrote in a blog post.
“Access to this historically significant collection is no longer limited by geography,” said Joseph Lambert, the CIA’s information management director in a press release. The agency was aiming to publish the documents by the end of 2017, but finished the work ahead of schedule.
“We’ve been working on this for a very long time and this is one of the things I wanted to make sure got done before I left. Now you can access it from the comfort of your own home,” said outgoing CIA director of information Lambert. The agency continues to review documents for declassification, so the treasure trove has not been unearthed in full, and there’s definitely more to follow.
* * *
The online records, shed light on the agency’s activities throughout the Vietnam, Korean and Cold War conflicts; they also includes documents relating to UFO sightings and psychic experiments from the Stargate program, which has long been of interest to conspiracy theorists. The archives also cover events from the 1940s the 1990s (each year, a new batch are declassified) and include details about the flight of war criminals from Nazi Germany, the quarter-mile Berlin tunnel built to tap Soviet telephone lines, internal intelligence bulletins and memos from former CIA directors, UFO reports and more.
The released trove also includes the papers of Henry Kissinger, who served as secretary of state under presidents Richard Nixon and Gerald Ford, as well as several hundred thousand pages of intelligence analysis and science research and development.
Among the more unusual records are documents from the Stargate Project, which dealt with psychic powers and extrasensory perception. Those …read more
Source: CIA Releases 13 Million Pages Of Declassified Documents: Include Psychic Experiments, UFO Research
Trump’s fight to slash taxes on $50M golf course
Trump is suing a small New York town over the tax assessment that was done on his golf course. It claims his course is worth $15.1 million, he says it’s only worth $1.5 million. …read more
Source: Trump’s fight to slash taxes on $50M golf course
Trump’s fight to slash the taxes on his $50M golf course
Trump is suing a small New York town over the tax assessment that was done on his golf course. It claims his course is worth $15.1 million, he says it’s only worth $1.5 million. …read more
Source: Trump’s fight to slash the taxes on his $50M golf course
Goldman Beats, Profits Surge As Trading Revenues Jump; Average Banker Comp Hits $338,600
By Tyler Durden
Unlike the other big banks, Goldman’s earnings release is a breeze: since the bank has virtually no balance sheet to use as a source of income (or loss), it is all about the income statement. And it was here that for yet another quarter, Goldman surprised to the upside, reporting Q4 Revenues of $8.17BN, higher than the $7.76BN estimated, translating to EPS of $5.08, also above the $4.73 estimate, and nearly 4 times the $1.27 reported a year ago.
Like other banks, Goldman benefited from a big pick-up in trading activity during the period, as investors reset portfolios in anticipation of an interest-rate increase from the US Federal Reserve, and as the election of Donald Trump spurred big bets on stocks that stood to benefit. Net revenues from the institutional client services division were up 25% from a year earlier to $3.6bn, led by a 78% jump in revenues from the fixed-income, currencies and commodities unit.
“After a challenging first half, the firm performed well for the remainder of the year as the operating environment improved,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “We continued to manage our expenses carefully and we enter the new year with industry leading positions across our businesses, as well as strong capital and liquidity.”
Broken down by key operating group, most segments reported numbers that beat expectations with the exception of Equities sales and trading, which came in at $1.59BN, fractionally below the $1.61BN expected.
Other segments performed better in Q4:
- FICC sales & trading revenue was $2.00bn, well above the estimate of $1.59bn
- Investment banking revenue of $1.49bn beating estimates of $1.47bn.
- Investment and Lending, formerly known as prop, reported $1.48bn in revenue, higher than a year ago.
- OVerall trading revenue of $3.60billion was also better than the estiamte $3.28b.
The full breakdown of Goldman’s various revenue segments is shown in the chart below:
Other metrics:
- 4Q return on avg. equity 11.4%
- 4Q Basel III common equity Tier 1 ratio 13.1%
- Assets under management $1.38t
In a notable variance from the other banks, Goldman’s Q4 compensation expenses, while declining from $3.2 billion to $2.45 billion, came in modestly higher than the expected $2.31 billion, as Lloyd Blankfein decided to reward his team for a job well done. Or the team that’s left at least: total Goldman staff decreased 7% during 2016, with the firm closing the year with 34,400 workers. As the following chart shows, the average accrued banker compensation rose to $338,576, the highest since Q4 of last year.
Source: Goldman Beats, Profits Surge As Trading Revenues Jump; Average Banker Comp Hits $338,600
