Investment Managers Securities Analysts

Bermuda & Cayman

North America Stock Markets

North American Stock Markets

Source: Bloomberg
Major US indices registered losses amid concerns around trade policy, hawkish comments from the Fed, and the prospects of aggressive regulation of social media.

North American Markets

• On January 4 the Dow Jones industrial average, which includes some of the biggest US blue chip stocks, closed above 25,000 for the first time, extending a bull market that began in 2009. The 30-stock index peaked at 25,105.96 and closed the day at 25,075.13.

• On January 26 the Wall Street Journal reported that casino industry legend Steve Wynn, the founder and chairman of Wynn Resorts Ltd., sexually harassed numerous women over many years. Steve Wynn denied the allegations. While Wynn Resorts is based in Las Vegas, the company generates more than 70 percent of its business in the Chinese gambling market of Macau. Upon the allegations, Macau’s Gaming Inspection & Coordination Bureau talked with Wynn management and wanted to make sure major shareholders, directors, and key employees meet suitable qualifications. Wynn’s shares tumbled 19.4 percent in the two trading days following the allegations. On February 6 Steve Wynn resigned as chairman and CEO of Wynn Resorts.

• On January 29 soda maker Dr Pepper Snapple Group, Inc. announced the company will be acquired by Keurig Green Mountain, Inc. (owned by Luxembourg-based privately held conglomerate JAB Holding Company) to form a drinks company with brands like Green Mountain Coffee, 7UP, Snapple, and Sunkist. The two companies expect $600 million in cost-savings and see opportunities to expand the business such as by selling coffee in bottles and in vending machines. Further, Dr Pepper’s direct-to-store delivery model will be complemented by Keurig’s online presence and relationships with major supermarket chains. Dr Pepper’s shares jumped 22.4 percent on the day.

• On February 5 Wells Fargo & Company, America’s third-biggest bank by assets, was slapped with unprecedented legal sanctions by the Federal Reserve on the back of the lender’s pattern of consumer abuses and compliance lapses. Until Wells Fargo addresses shortcomings in areas including internal oversight, the bank can’t take any action that would boost total assets beyond their level at the end of 2017 without the Fed’s permission – this will literally prevent Wells Fargo from expanding at all for the foreseeable future. As markets digested the news, Wells Fargo dropped 9.2 percent.

• On February 27, Inc. acquired Ring, a home security startup, for $1 billion. Amazon’s Artificial Intelligence-focused venture capital fund invested in Ring a few years back, noting compatibility between Amazon’s home assistant Alexa and Ring’s front door cameras. The move follows Amazon’s acquisition of ‘Blink’ in December, another smart camera monitoring company. Amazon declined 0.7 percent on the day of the announcement.

• On March 1 US President Donald Trump announced he would slap tariffs on imports of steel and aluminum into the US. The automotive industry accounts for 26 percent of total steel demand in the US, and auto companies gave notice that higher metal costs would be bad for their bottom lines. Steel stocks rose 3.3 percent on the day while automobile and machinery stocks fell 3.3 percent and 2.7 percent, respectively.

• On March 6 Target Corporation reported Fourth Quarter 2017 earnings. The retailer reported growing sales but a profit slightly below Wall Street’s expectations. Target lowered prices over the holiday season to attract more customers by selling more goods at lower margins. That specific approach had some success, with online sales increasing by 29 percent and in-store traffic up three percent in the quarter versus a year ago. Target also said the company is planning to roll out same-day shipping, redesign stores, and integrate technology into consumers’ shopping experience. Target’s share price fell 4.5 percent on the day of the announcement.

• On March 19 Bloomberg reported the Federal Trade Commission was investigating whether the use of personal data from 50 million Facebook users by Cambridge Analytica violated a consent decree the tech company signed with the agency in 2011. Facebook maintained the mishandling of data was the result of abuse on the part of Cambridge Analytica and app developer Aleksandr Kogan. Further, Facebook said the company “respected the privacy settings that people had in place.” Facebook, Inc.’s shares fell 6.8 percent on the day.