Week of Jan 6 2017 Weekly Recap & The Week Ahead
“It’s what you learn after you know it all that counts.” — Earl Weaver
1. OPEC Starts Oil Production Cuts — the official start of the deal agreed by OPEC and non-OPEC member countries in November begin in Jan. 1, 2017 to reduce production by almost 1.8M barrels per day. Officials from Oman and Kuwait told local media they’re cutting oil production in January, fulfilling pledges that they and 22 other producers made on Dec. 10.
2. Ford Details EV Plans, Cancels Mexico Plant Project — by canceling plans to build a new $1.6B plant in Mexico, Ford (NYSE:F) said it will invest $700M in Michigan instead. Michigan plant will create 700 new U.S. jobs. CEO Mark Fields said the investment is a “vote of confidence” in the pro-business environment being created by Donald Trump, but stressed Ford didn’t cut a special deal with the President-elect. The automaker was a frequent target of Trump’s election campaign for its “south of the border” manufacturing and payment of low tariffs.
3. Retail Names Warnings Of Weak Christmas Sales from Macy’s and Kohl’s — the retail sector is on watch after Macy’s (NYSE:M) and Kohl’s (NYSE:KSS) cut earnings estimates due to weak holiday sales. Macy’s also added details on its previous announcement to close 100 stores, saying the moves will result in 10K job cuts and a $575M reduction in 2017 sales. Department store names Nordstrom (NYSE:JWN), J.C. Penney (NYSE:JCP), Dillard’s (NYSE:DDS) and Sears Holdings (NASDAQ:SHLD) are all lower premarket, while Coach (NYSE:COH), Michael Kors (NYSE:KORS), Kate Spade (NYSE:KATE), Target (NYSE:TGT) and Ross Stores (NASDAQ:ROST) could also see selling pressure.
4. China’s Central Bank Lifted the Exchange Rate Against the USD — China’s central bank lifted the exchange rate against the greenback by the most since 2005, stepping up efforts to support the currency amid concerns over capital outflows from the world’s second-largest economy. The PBOC set the official midpoint for the yuan at 6.8668 per dollar prior to the market opening, 639 pips or 0.9% firmer.
The week ahead — Economic data from Econoday.com: