U.S. Financials? Yes!

Before you start throwing daggers my way for the headline, let me point out that’s exactly what appeared in the subject line of an email containing UBS strategist Julian Emanuel’s new report on the industry. He explains why he’s excited about the financial sector:

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In conversations with investors, skepticism remains high while interest in the Group remains low; however we see a number of positives converging that could prove to be a significant tailwind for Financials over the next twelve months.

UBS’ view of the US in 2015 is one of continued equity market strength (Year End 2015 S&P 500 Price Target of 2,225), bolstered by a solid economy (GDP growth forecast 2.9%) and likely rising interest rates, with the Fed expected to begin the rate normalizing campaign in mid-2015, leading to a year end 10 year Bond yield of 3.5%. The economic strength (job creation in excess of 200k/mo. since January, continued house price recovery) of the past several quarters has boosted consumer confidence, which is highly correlated to Financial share performance, to post-Crisis highs. Two key underpinnings of the 2015 Outlook are higher volatility and a continuation of robust M&A activity. As evidenced by recent earnings results – US Financials grew 3Q 2014 earnings by 9.1% and revenues by 5.6% – a strong issuance and corporate deal-making environment combined with market volatility catalyzing higher trading volumes creates a near “perfect storm” for Financials. And if the rate hike cycle of 2004-06 is a guide, Financials will be able to weather Fed policy normalization and further yield curve flattening from still relatively steep levels.

Financials are certainly having a good day today. The Financial Select Sector SPDR (XLF) has gained 0.7% to $24.25 at 12:24 p.m., while Citigroup (C) has risen 1% to $54.03, JPMorgan Chase (JPM) has advanced 0.8% to $60.62 and Bank of America (BAC) is up 0.9% at $17.16.

 

Jobs Data, GM Drama, ECB Rates, and Last Week's Stock Market Winners and Losers

Before you start dropping the big bucks on Cali Chrome this weekend, check out what sent stocks to fresh highs this past week. The top headline worth writing home to Mom about was the 217,000 new jobs added in May -- which finally brings total payrolls up to the level where they were before the financial crisis. That solid number helped send the Dow Jones Industrial Average (DJINDICES: ^DJI  ) (DJINDICES: ^DJI  ) (DJINDICES: ^DJI  ) (DJINDICES: ^DJI  ) (DJINDICES: ^DJI  )  up 88 points Friday. Mazel Tov.   1. The stock market winner ... It's wedding season -- and that means a good amount of open bars that will be featuring young people ordering uncreative "Jack and Cokes." That's more good news for Brown-Forman (NYSE: BF-B  ) (NYSE: BF-B  ) (NYSE: BF-B  ) , a big-time liquor distributor.

Brown-Forman was on investors' top shelves last week after an earnings report worth pouring some Scotch to -- the company announced that net sales globally rose 6% over last year. And it's Jack Daniels that's driving the push as sales of the whiskey increased 8% across planet earth.

It's not just that America has refound its taste for whiskey on the heels of the craft brew trend. Its flavored whiskeys, in particular, that are what BF wants to capitalize on. BF's "Tennessee Honey" brand of Jack doubled sales in its first year, with total sales rising 36% in the last year. Next, BF plans to introduced "Tennessee Fire" to add a cinnamon spice to its flavored whiskey lineup (and compete with Fireball Whisky).  
2. ... And the stock market loser We used to love munching Krispy Kreme (NYSE: KKD  ) (NYSE: KKD  ) (NYSE: KKD  ) doughnuts after Pee-Wee hockey games -- but ever since the company over-expanded in the early 2000s and fell in 2004, the stock has been trying to claw its way back.

And while 2013 was solid for the glazed-doughnut king, the first quarter of 2014 wasn't as tasty. The company reported earnings last week, indicating an unimpressive $121.6 million in revenue for the first three months of the year -- less than 1% more in revenue during the first quarter of last year.

Like the big-box retailers Target and Wal-Mart, Krispy Kreme execs are taking the easy way out -- they're blaming winter weather. But the notable issue for investors was that sales declined globally by 4.5%. And while sales at the company's franchises rose by 4.5% since last year, sales at company-owned stores dropped 1.5%, and as a result, Krispy Kreme lowered its sales projections for the rest of the year.
3. GM announced firings for recall drama
Tires and heads are rolling at General Motors (NYSE: GM  ) , where the recently anointed CEO blamed predecessors for the company's recent recall drama. Investors continue to punish the stock, as GM admitted it covered up the mechanical glitch nearly a decade ago, resulting in over a dozen road deaths. Now GM's fired many of those responsible and plans to refocus on building multiple lines of uninspiring-looking cars. 

4. The ECB dropped interest rates to negative levels How low can you go? Apparently pretty low if you're in Europe. The European Central Bank announced that it's lowering interest rates to negative levels -- instead of paying interest to banks holding cash, it's going to start charging them if they don't put the money to work jump-starting European economies struggling with unemployment. Wall Street applauded the stimulus news with big gains and croissant-binging competitions.    As originally published on MarketSnacks.com

Your credit card may soon be completely worthless
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You won't miss those annoying political ads. Stations will miss the money

NEW YORK (CNNMoney) Attention viewers in Grand Rapids, Des Moines and Augusta: it's almost safe to turn on the TV again.

Election day means the end of another bruising period of political advertising -- ads that are detested by the audience but much appreciated by the TV stations that run them.

Kantar Media estimates that local stations will collectively rake in $2.6 billion from political ads this year. Stations rely on this revenue, which makes them more valuable to owners, particularly in swing states.

It's enough to make you wonder whether all that money warps media coverage of campaigns. Station owners are the ones benefiting from the status quo, so might their newsrooms be a little less likely to cover proposals to reduce the amount of money in politics?

Consider this: revenue from the ads indirectly supports local newsrooms, but it's not as if stations go on hiring sprees during midterm and presidential election cycles. When I recently asked a political reporter in one big market if the money her station makes from campaign ads gets reinvested into fact-checks of those same ads, she laughed and said, "The answer is a loud no."

The relative dearth of ad fact-checking has been a thorn in the side of reformers for years.

Stations aren't the only beneficiaries of campaign spending. Local purchases of airtime on national cable channels will account for another $600 to $800 million, for a total of at least $3 billion in TV ad spending, according to Kantar. Digital spending increases with every election cycle, but TV remains dominant.

Elizabeth Wilner, the senior vice president of Kantar Media Ad Intelligence, described the relationship between candidates (and outside groups who seek to influence campaigns) and television outlets as a "marriage of convenience."

The best word for the res! ult on the local level is saturation, particularly in markets with a bevy of competitive races. In the final days before election day, WZZM, the ABC affiliate in Grand Rapids, Michigan, ran more political ads than any other single station in the country, according to the Republican research firm Echelon Insights. The total was 1,820, not counting any last-minute changes.

1,820 campaign ads! In one week! Echelon co-founder Patrick Ruffini attributed the high number to "heavy spending in the governor's race, State Supreme Court races," a super PAC effort to oust Republican Congressman Fred Upton, and "numerous local races and ballot initiatives."

The two other top markets, ranked by sheer number of ads in the final week, are Des Moines, Iowa and Augusta, Georgia.

Dale Woods, the general manager of WHO, the NBC affiliate in Des Moines, told me on CNN's "Reliable Sources" that the flood of campaign ads have had "a negative impact on the economy," because traditional local advertisers can barely get their ads in.

But the effect is certainly positive for WHO and the other local broadcasters. And they can expect the ad buys to resume as the 2016 election approaches.

"We'll probably have about a six month reprieve here," Woods said, "before we start the caucus process."

Plug-in minivan among new Chrysler vehicles

The Dodge Grand Caravan will go out of production in 2016, but there will be a new Chrysler Town & Country that will be available in a plug-in hybrid version.

NEW YORK (CNNMoney) A plug-in hybrid minivan is among the new products coming from Chrysler in the next few years, according to presentations given by Fiat Chrysler Autos executives this week.

The presentations, which included glimpses of the company's future product plans, were part of an overview of the automaker's business strategy for the next five years.

It's unusual for an automaker to lay out details of future cars, trucks and SUVs but not for Fiat Chrysler CEO Sergio Marchionne who led the marathon business plan presentation five years ago, too. That one also included fairly detailed product plans.

The plug-in Town & Country minivan will go on sale around 2016, according to Chrysler, and is expected to get about 75 miles per gallon. It will be the first plug-in hybrid minivan sold in the U.S. by any major automaker.

At the same time, the Town & Country's sister-van, the nearly identical Dodge Grand Caravan, will die in 2016. Fiat Chrysler executives have been saying for a long time that having minivans sold by both brands just didn't make sense.

Gallery - Cool cars from the New York Auto Show

The minivan won't be the only plug-in hybrid option in Chrysler's line-up, either. A new Chrysler full-size plug-in hybrid crossover SUV is also coming in 2016. Like the van, it will also be available in a non-hybrid version.

These will be the first hybrids in any Chrysler, Jeep or Dodge line-up since the short-lived Chrysler Aspen and Dodge Durango hybrid SUVs which were only produced for a short time in 2008 before the factory shut down.

In all, the Chrysler brand's product line-up will be doubling, including a new Chrysler 100 compact car and a new mid-size crossover SUV.

Changes are also coming for the Jeep brand. Fiat Chrysler already unveiled the tiny new Jeep Renegade SUV at the New York Auto Show. On the other end of the size spectrum, the Jeep Grand Wagoneer full-size SUV, a name dear to Jeep aficionados, will make a comeback in 2018.

Five years ago, Chrysler Group announced that the SRT performance division would be split off as its own brand. Well, these five year plans aren't written in stone. This time, Marchionne announced that SRT would become a sub-brand under Dodge, making performance-tuned versions of Dodge products.

That also means that today's SRT Vi! per will once again be known as the Dodge Viper.

  Best Viper yet

Dodge will also introduce a high-performance Dart SRT compact car in 2016 and a Journey SRT high-performance crossover SUV in 2018.

Fiat Chrysler's Italian brands are also making their own return to the U.S. Fiat already sells the tiny Fiat 500 and the larger, rounder Fiat 500L here. Coming soon will be the 500X crossover SUV and some sort of "Specialty vehicle" which could be a rumored sports car.

The Alfa Romeo brand, which hasn't sold a significant number of cars here since 1995, will make its U.S. re-introduction soon with the Alfa Romeo 4C sports car unveiled at the New York Auto Show. Higher up on the luxury scale, Maserati's new crossover SUV, the Levante, should go into production next year. The U.S. is expected to be a big market for that vehicle.