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Stock drift lower as earnings kick off, Delta, JPM soar

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Markets moves on Wall Street were muted Tuesday, with U.S. stocks holding near record highs as investors looked to an onslaught of corporate earnings and economic data later in the week.

11:15 a.m. ET: Tame CPI masks surging health inflation

Rising health care costs, by year

December’s relatively muted inflation data hid some pockets of inflation — notably in health care. As JPMorgan economist Daniel Silver points out:

Medical care inflation also had another strong month in the CPI report, rising 0.6% in December, and included a record-large 2.1% surge in prescription drug prices. The medical care CPI increased 4.6% oya in December, but inflation has been much softer in the related PCE price measures (generally less than 2% in recent years through November), and this difference has contributed to core CPI inflation outpacing core PCE inflation lately.

Year over year, changes in prescription drug prices

10:54 a.m. ET: Investors cheer ‘King Dimon’ after JPM’s big Q4

IMAGE DISTRIBUTED FOR JPMORGAN CHASE & CO. – Jamie Dimon, Chairman and CEO, JPMorgan Chase, discusses Future of Work at JPMorgan Chase event on Monday, March 18, 2019 in New York. (Adam Hunger/AP Images for JPMorgan Chase & Co. )

JPMorgan’s (JPM) stock is up 2%, testing session highs after a blowout fourth quarter capped a record year for the bank — boosted by big gains in fixed income (FICC) trading and consumer credit.

Noting that JPM “kicked off earnings season with a bang,” OANDA’s senior market analyst Edward Moya applauded the leadership of CEO Jamie Dimon (Wall Street’s longest-serving bank chief):

“JP Morgan posted a stunning FICC trading gain, over a billion dollars higher than analysts’ expectation.  First quarter guidance was strong regarding net interest income and shares for the largest US bank were sharply higher.  JP Morgan remains best of breed in banking and Dimon should feel like the king of FICC trading.”

10:45 a.m. ET: More bad news for Boeing

FILE – In this Monday, Dec. 16, 2019 file photo, a Boeing worker walks in view of a 737 MAX jet in Renton, Wash. Shares of Boeing fell before the opening bell on a report that the company may cut production of its troubled 737 MAX or even end production all together. (AP Photo/Elaine Thompson)

The embattled aerospace giant posted its worst annual net orders in decades on Tuesday, as the 737 MAX fiasco drove plane deliveries to their lowest in 11 years.

Allowing for cancellations and changes to earlier orders, Chicago-based Boeing said it had received just 54 new orders for planes in 2019 and delivered less than half as many as a year earlier. As a result, it lost the top spot to Airbus, its European rival, for the first time in eight years.

10:43 a.m. ET: Microsoft stock unfazed after Amazon files lawsuit challenging Pentagon contract

A court filing Monday showed Amazon (AMZN) was seeking to temporarily block Microsoft (MSFT) from working on a $10 billion cloud contract the Department of Defense awarded the computer software company last year.

Amazon was previously seen as a front-runner to land to contract, and claimed it lost out on the Joint Enterprise Defense Infrastructure Cloud (JEDI) contract due to improper political interference from President Donald Trump.

The temporary restraining order would prevent Microsoft from working as part of the contract until a federal court issues a decision on the JEDI deal on February 11.

10:21 a.m. ET: Beyond Meat shares jump nearly 10%

Shares of Beyond Meat (BYND) were up by almost 10% about an hour into Tuesday’s session, extending gains from pre-market trading after reports the plant-based meat substitute-maker was considering expanding into China.

Xinhua, China’s state-run news outlet, reported that Beyond was considering tapping the mainland China market this year, citing an interview with the company’s executive chairman Seth Goldman on the sidelines of Retail’s Big Show 2020.

Trading was halted for Beyond’s stock a few minutes before 10 a.m. ET due to heightened volatility, but resumed shortly thereafter.

The high-flying, newly public company saw its stock surge to as high as $239.71 a share last year and are now trading around $125 apiece. The stock is up more than 60% for the 2020 calendar year to date.

9:35 a.m. ET: Stocks tick lower around market open

The three major indices opened slightly to the downside Tuesday morning as corporate earnings results began rolling in.

JPMorgan led advances in the 30-stock Dow after posting record revenue and net income in the fourth quarter.

Here were the main moves in markets, as of 9:35 a.m. ET:

  • S&P 500 (^GSPC): -0.13% or -4.24 points to 3,283.89

  • Dow (^DJI): +0.02% or +7.2 points to 28,914.25

  • Nasdaq (^IXIC): -0.11% or -10.39 points to 9,262.19

  • Crude oil (CL=F): +0.67% or +$0.39 to $58.47 a barrel

  • Gold (GC=F): -0.44% or -6.8 to 1,543.80 per ounce

8:30 a.m. ET: Inflation tame in December

Consumer prices rose by a modest 0.2% in December, Labor Department data showed on Tuesday, moderating slightly from the prior month and half the pace of October’s jump. The data should comfort the Federal Reserve as it looks to keep rates on hold to encourage growth.

Excluding volatile food and energy prices, CPI rose 0.1% month on month, or slightly below expectations for a 0.2% increase. But over last year, this core measure of underlying price changes matched expectations, rising 2.3%.

8:30 a.m. ET: A tale of two banks: Wells Fargo and Citigroup

JPMorgan’s record Q4 sets the tone for Tuesday’s trading, Wells Fargo (WFC) and Citigroup (C) brought up the rear — with starkly different results. Citi saw profits surge 15% during the waning months of 2019 as credit and an eye-popping 49% spike in fixed-income trading activity bolstered the bottom line. Yet Wells Fargo suffered a startling 55% profit slump, hurt by the hangover of low rates and regulatory scandals.

WFC’s stock swooned by over 2%, while Citi’s edged higher in pre-market action.

7:50 a.m. ET: Delta profits from Boeing’s 737 MAX woes

An airport worker guides a Delta Air Lines Airbus A319-100 plane on the tarmac at LAX in Los Angeles, California, U.S., January 6, 2020. REUTERS/Lucy Nicholson

At least one beneficiary has emerged from Boeing’s ongoing mess with its flagship plane. Airline giant Delta (DAL) posted fourth quarter profits that beat Wall Street’s estimates — citing an influx of customers that fled rivals because of canceled flights stemming from the 737 MAX’s grounding. The stock surged over 4% in pre-market action from Monday’s close.

7:45 a.m. ET: JPMorgan shares rise after big Q4 earnings beat

Shares of JPMorgan Chase (JPM) jumped more than 1.5% in early trading after the largest U.S. bank by assets reported much stronger than expected fourth-quarter results.

Here were the key figures versus the expectations, according to analysts polled by Bloomberg.

CEO Jamie Dimon highlighted a more constructive geopolitical and macroeconomic backdrop as helping buoy the bank to record revenue and net income in the fourth quarter.

“While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year,” Dimon said in a statement. “The U.S. consumer continues to be in a strong position and we see the benefits of this across our consumer businesses.”

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7:36 a.m. ET: Stock futures hug the flatline as earnings kick off

U.S. stocks futures drifted Tuesday morning as investors digested an early set of corporate earnings results, mostly from major financial institutions.

Contracts on the S&P 500 hovered near Monday’s record levels, boosted by optimism surrounding U.S.-China relations after the Trump administration dropped China from a watchlist for currency manipulation.

Here were the main moves during the pre-market session, as of 7:36 a.m. ET:

  • S&P futures (ES=F): 3,288.75, down 1 point or 0.03%

  • Dow futures (YM=F): 28,892, up 21 points or 0.07%

  • Nasdaq futures (NQ=F): 9,081.25, down 7 points or 0.08%

  • Crude oil (CL=F): $58.45 per barrel, up $0.37 or 0.64%

  • Gold (GC=F): $1,543.20 per ounce, down $7.40 or 0.48%

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 8, 2020. REUTERS/Brendan McDermid

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Tories ask police to investigate prime minister over WE Charity deal

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The opposition Conservatives are calling for a criminal investigation into Prime Minister Justin Trudeau and his ties to the WE Charity after the federal government tasked the organization with administering a $900-million sole-sourced contract.

The call comes a day after CBC News and Canadaland reported that, despite initial claims, WE had financial dealings with some of Trudeau’s family members, most notably his mother Margaret and brother Alexandre.

WE and its affiliates paid out some $300,000 in speaking fees to the two through the Speakers’ Spotlight Bureau over the last four years.

CTV News also reported that the prime minister’s wife, Sophie Grégoire Trudeau, received $1,500 for participating in a WE event in 2012, before Trudeau became leader of the Liberal Party. She currently hosts a podcast for the charity.

The prime minister isn’t the only member of cabinet with personal ties to WE. CBC News reported Friday that Finance Minister Bill Morneau’s daughter also works for the charity, as a paid employee of the charity’s travel department since 2019.

Neither Trudeau nor Morneau recused themselves from cabinet’s discussion on the student grants program.

Federal Conflict of Interest and Ethics Commissioner Mario Dion announced last Friday that he was investigating Trudeau over the choice of WE to run the grants program.

Conservative finance critic Pierre Poilievre is asking the police to probe Prime Minister Justin Trudeau and his ties to the WE Charity. (Sean Kilpatrick/The Canadian Press)

But Conservative finance critic Pierre Poilievre said a probe by the ethics commissioner alone is insufficient, given the new revelations about payments to Trudeau family members before Ottawa awarded WE the contract to administer the the Canada Student Service Grant (CSSG).

“It’s not just a conflict of interest. It’s much more serious than that. We have a prime minister that has used his powers to get a benefit out of an organization related to himself and his family,” he said in French.

Poilievre cited Section 121 of the Criminal Code as a potential avenue for the police.

That section, titled “frauds on the government,” says it’s an offence for someone to give an elected official or any member of their family “a loan, reward, advantage or benefit of any kind as consideration for co-operation, assistance, exercise of influence or an act or omission in connection with the transaction of business with or any matter of business relating to the government.”

“We’re asking the relevant authorities if this could apply,” Poilievre said.

In a letter to RCMP Commissioner Brenda Lucki, Conservative ethics critic Michael Barrett said his party is also concerned about the seven other federal grants and contributions — valued at more than $5 million — that WE has received from Ottawa since 2017.

“I encourage the Royal Canadian Mounted Police to investigate the possibility of criminal offences arising from these disturbing facts.  You and the very able members of the national police force possess the necessary skills, expertise and tools to get to the bottom of this,” Barrett said in the letter.

The initial decision to outsource the student grants program to a third party with ties to the prime minister’s family was criticized by some in the charitable sector and by the opposition Conservatives.

WE decided to pull out of the contract last week, citing the “controversy” over the partnership. WE agreed to give up the $19.5 million it was to be paid to administer the program.

Trudeau had defended the partnership, saying WE was the only group with a nationwide network capable of operating a program of this sort for young people. Other charitable organizations have questioned that assertion.

Innovation Minister Navdeep Bains said today the prime minister wasn’t the one who picked WE to dole out the grants to students.

He said that the recommendation came from bureaucrats working at Employment and Social Development Canada. They selected WE because of its extensive partnerships with other youth organizations, he told reporters.

“Make no mistake — the directions that we take are really based on the non-partisan advice that we get from our public service,” he said. “They made a clear recommendation and we followed that recommendation.”

Conservative Leader Andrew Scheer said the government needs to produce the records that show public servants were behind the original recommendation to work with WE on this program.

He said Liberal parliamentarians should be just as curious as opposition MPs about the prime minister’s handling of this file.

“It’s getting to the point where I’d challenge other Liberal MPs and Liberal cabinet ministers — Did they know that the prime minister was in this position?” Scheer said in an interview with CBC’s Power & Politics. “When cabinet was signing off on this decision, was Mr. Trudeau open and forthright with his colleagues? Did he inform them what he was asking them to agree to?

“How closely do they want to be associated with Justin Trudeau’s ethical behaviour here? We really do need to get to the bottom of this.”

Federal Innovation Minister Navdeep Bains spoke with reporters during an event at GM’s Oshawa facilities on Friday. 1:39

Barrett said it’s “essential” that the police probe the government’s decision to hand such a valuable contract to a “Trudeau and Liberal-friendly firm.”

“Canadians deserve to have a prime minister and a cabinet and a Parliament that they have confidence in,” he said. “It is clear that confidence has been shaken yet again.”

In an interview with Power and Politics, Government House Leader Pablo Rodriguez insisted that federal bureaucrats were the ones who picked WE — and that it wasn’t the only charitable organization the government worked with to roll out pandemic aid. The government also has worked with the United Way and Food Banks Canada, he said.

He said the government is ready to move on with the grants program without WE.

“You have to understand that we’re in a COVID environment where we made decisions day-by-day — sometimes faster than we wanted,” Rodriquez said today. “Sometimes the programs weren’t perfect.”

He also promised that “all documents that can be shared will be shared.”

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Source: CFL submits revised financial request to federal government

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TORONTO — The CFL sent federal Canadian Heritage Minister Steven Guilbeault a revised revised financial request Friday.

A league source said the league is seeking about $42.5 million in aid. In April, the CFL asked the federal government for up to $150 million in the event of a cancelled 2020 season due to the COVID-19 pandemic.

The source added the request is to over cover operating costs and player salaries for a shortened 2020 season and has involved input from the CFL Players’ Association.

The source spoke on the condition of anonymity because neither the government nor CFL have confirmed the request.

“We continue discussions with the federal government including discussions on our possible return to play,” the CFL said in a statement.

The CFL’s initial request of Ottawa consisted of three tiers: It called for $30 million immediately to manage the impact the outbreak has had on league business; additional assistance for an abbreviated regular season; and up to another $120 million in the event of a lost 2020 campaign.

When CFL commissioner Randy Ambrosie spoke to a federal standing committee on finance in May, he was roundly criticized for failing to stipulate where the funds would go and not involving the CFL Players’ Association in the process.

The earliest an abbreviated ’20 season will begin is September but Ambrosie has stated a cancelled campaign also remains possible.

Last month, the CFL and CFLPA began talks at amending the current collective bargaining agreement to allow for an abbreviated season. Prior to negotiations beginning, the league gave the union a memo outlining the conditions it wanted and a completion deadline of July 23.

This report by The Canadian Press was first published July 10, 2020.



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HIMSSCast: The ongoing financial toll of COVID-19 for health systems

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This isn’t a second wave. It’s a first wave that never really went away. That’s what experts are saying about the current COVID-19 resurgence. And just as the virus isn’t going anywhere soon, neither are the financial woes it’s creating for hospitals and health systems.

On this episode of HIMSSCast, host Jonah Comstock welcomes Healthcare Finance News Managing Editor Susan Morse and Associate Editor Jeff Lagasse to talk about the current state of affairs for hospitals.

 

More related to this episode:

Hospitals continue to bear the burden of the COVID-19 surge

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Hospitals see an increase in jobs for first time in two months, BLS reports

Hospitals have received most of the loans from the Paycheck Protection Program

HHS announces billion-dollar push toward experimental COVID-19 vaccine

Telehealth claims increased significantly between April 2019 and 2020, report shows

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