U.S. stock futures were marginallylower this morning, as investors looked to the latest batch of economic data and earnings. The S&P 500 hit a record high on Friday as investors placed bets on a solid holiday shopping season. The Dow and Nasdaq also ended higher.
The cryptocurrency jumped to an all-time high of $9,682.10 hours after cracking the $9,400 amount on Sunday, based on CoinDesk.
Time (TIME) stock was around 10 percent higher in premarket this morning following media group Meredith (MDP) said it has reached a deal to acquire it for about $2.8 billion. (Reuters)
On the data front, new home sales figures are expected to be released at 10 a.m. ET. At 10:30 a.m. ET, the Dallas Fed’s Texas manufacturing outlook survey will be released. Tech Data (TECD), Tuniu (TOUR) and Thor Industries (THO) are set to release earnings.
- Federal Reserve chair nominee Jerome Powell’s Senate confirmation hearing is scheduled for tomorrow. His views on inflation may now be question No. 1. The Fed’s preferred inflation indicator has shown little sign of a rebound despite falling unemployment. (CNBC)
- The Senate is expected to vote on its own tax reform bill as early as this week. The non-partisan CBO estimates that the Senate Republican’s plan gives substantial tax cuts and benefits to Americans earning more than $100,000 a year. (Washington Post)
- The deputy director of the Consumer Financial Protection Bureau has filed a lawsuit seeking to halt President Donald Trump from approving an official to conduct the watchdog agency on an interim basis. The lawsuit argues that Trump overstepped his legal authority. (Reuters)
- The FBI failed to notify scores of U.S. officials that Russian hackers were trying to break in their own Gmail accounts despite having evidence for at least a year that the targets were in the Kremlin’s crosshairs, The Associated Press has found.
- Sen. Al Franken, trying to salvage his political career amid accusations of groping or inappropriately touching women, says he doesn’t plan to resign but called himself “humiliated and ashamed.” (Reuters)
- Following massive plumes of smoke and volcanic eruptions over the weekend, Indonesian authorities raised their alert for the Mount Agung volcano to the maximum level possible today. Authorities said that the “potential for a larger eruption is imminent.” (CNBC)
- South Korea’s defense ministry said today North Korea violated an armistice agreement with South Korea this month. That happened when North Korean soldiers shot and injured a North Korean soldier since he defected across their boundary. (Reuters)
- North Korea and Syria are growing closer: That is bad news for the US
- Amazon (AMZN) founder and CEO Jeff Bezos reportedly includes a 12-digit fortune. Bezos’s net worth surpassed $100 billion on Friday following the online retail giant’s shares hit a record high on Black Friday, according to a Bloomberg report.
Stock Market Update – Tip
Don’t get swept away by big share buybacks and flashy dividends. Investors should be focusing on firms that are making big bets on their own growth, Goldman Sachs says.
The companies that spend the most on growing their business–through funding and research and development spending–have been outperforming the wider S&P 500 index in recent years, according to Goldman analysts.
The bank’s basket of big capital spenders has returned 56% since the beginning of 2016. That compares to a 25% return for companies that spend the most on buybacks and dividends and a 31% return for the entire S&P index.
Those results come amid a wider shift in the way organizations are opting to spend their cash. After years of tepid business investment, companies are starting to shell out more on things like new technology and equipment. One closely watched proxy for business investment–new orders for nondefense capital goods excluding aircraft–jumped 4.4 percent in the first 10 months of the year.
At exactly the exact same time, companies are cutting back on share repurchases that many have relied on the last few years to juice shareholder returns amid slow economic growth. Companies from the S&P 500 are on pace to spend $500 billion annually on share buybacks, according to data in INTL FCStone, the smallest amount since 2012.
Economists attribute the shift to a pickup in U.S. growth, improving sentiment among investors and businesses, and hopes for monetary stimulus and policy changes in the U.S.
Among the firms that Goldman says are investing the most are General Motors, Amazon.com, and Bristol Myers Squibb. Goldman’s analysts estimate those stocks will each return at least 20% next year, compared to an expected 11% return for the median S&P stock.
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