fomc - What We're Reading - StockBuz2024-03-29T09:05:18Zhttp://stockbuz.ning.com/articles/feed/tag/fomcEconomists Expect Fed to Start Shrinking Balance Sheet This Yearhttp://stockbuz.ning.com/articles/economists-expect-fed-to-start-shrinking-balance-sheet-this-year2017-04-14T16:03:58.000Z2017-04-14T16:03:58.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>Most economists surveyed by The Wall Street Journal expected Federal Reserve officials to begin winding down their $4.5 trillion <a href="https://www.wsj.com/articles/the-feds-bond-portfolio-is-growing-up-and-that-means-less-support-for-the-economy-1486031403" class="icon none">portfolio of bonds</a> and other assets this year.</p>
<p>Nearly 70% of business and academic economists polled in recent days expected the Fed will begin allowing the portfolio, also called the <a href="https://www.wsj.com/articles/federal-reserve-readies-plan-for-balance-sheet-1491000013" class="icon none">balance sheet</a>, to shrink by allowing securities to mature without reinvesting the proceeds at some point in 2017. Of the economists who expected a shift in the Fed’s balance sheet strategy this year, the majority predicted the process would begin in December.</p>
<p>In last month’s survey, just 22.2% of economists expected the Fed to begin <a href="https://www.wsj.com/articles/fed-grapples-with-massive-portfolio-1485717712" class="icon none">shrinking its portfolio</a> this year. Fewer than a quarter of economists in the latest poll expected the Fed to wait until the first quarter of next year to start to whittle down its portfolio, compared to a third last month.</p>
<p>In recent weeks, Fed officials have said they are discussing plans to start gradually reducing the large bondholdings the central bank accumulated during and after the financial crisis through asset-purchase programs aimed at lowering long-term interest rates and boosting economic growth.</p>
<p>The Fed wants to shrink the balance sheet to an undetermined size now that the economy is growing moderately, although officials haven’t decided exactly how to do it or when to start.</p>
<p>The central bank currently reinvests the proceeds from its maturing assets, and could decide to taper the pace of those reinvestments over several months or cease them altogether.</p>
<p>Fed Chairwoman Janet Yellen and other senior officials have stressed that they want the process to be gradual and predictable.</p>
<p>“Expect the Fed to announce tapering strategy details at the December meeting with reinvestments beginning to decline in January 2018,” Deutsche Bank Chief U.S. Economist Joseph LaVorgna said in the latest WSJ survey.</p>
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<div class="wsj-article-caption" itemprop="caption"><a href="https://si.wsj.net/public/resources/images/OG-AM538_FEDSUR_FON_20170412154958.png" target="_blank"><img src="https://si.wsj.net/public/resources/images/OG-AM538_FEDSUR_FON_20170412154958.png?width=450" class="align-full" width="450" /></a><span class="wsj-article-caption-content">When Will the Fed Act? / Expectations for the next interest-rate increase in June have soared since the Fed last raised rates in March</span> <span class="wsj-article-credit" itemprop="creator"> Source: WSJ Survey of Economists</span></div>
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<p>Some of the business and academic economists polled this month said they view shrinking the balance sheet as complementary to tightening monetary policy through gradual increases in the Fed’s benchmark short-term interest rate, the federal-funds rate, since shrinking the balance sheet would likely cause long-term rates to rise.</p>
<p>Scott Anderson at Bank of the West said he expects the Fed to raise the fed-funds rate in June and September and then pause rate increases “for a while as they start to scale back their balance sheet.”</p>
<p>Gregory Daco of Oxford Economics expected the Fed to hold off on raising rates in the final quarter of this year once it begins addressing the balance sheet. “The Fed is eager to mop up excessive liquidity,” he said.</p>
<p>On interest rates, most economists surveyed expected the Fed to hold short-term interest rates steady at its May 2-3 policy meeting, and next raise them in June.</p>
<p><a href="https://www.wsj.com/articles/fed-raises-interest-rates-remains-on-track-to-keep-tightening-1489600935" class="icon none">Fed officials raised the fed-funds rate</a> last month by a quarter percentage point to a range between 0.75% and 1% and penciled in two more moves this year.</p>
<p>Nearly 80% of the economists surveyed expected the Fed will raise rates at its June 13-14 policy meeting, up from nearly 70% in last month’s survey. Just two out of 61 economists polled in April expected the next rate increase in July, 10 expected it in September and only one predicted officials will hold off until December to next raise rates.</p>
<p>While most economists forecast the next rate rise in June, they were divided over when the Fed will move after that. More than half, 55.7%, expected the central bank to increase interest rates to a range of 1.25% to 1.5% in September. Just under a third, 31.1%, expected the third rate increase of 2017 in December.</p>
<p>Economists saw just an average 14% probability of a rate increase in May.</p>
<p>The Wall Street Journal surveyed 61 economists from April 7 to 11, but not everyone answered every question.</p>
<p>Courtesy of <a href="https://www.wsj.com/articles/wsj-survey-most-economists-expect-fed-to-start-shrinking-balance-sheet-this-year-1492092000?mod=e2twe" target="_blank">WSJ</a></p>
</div>Is The Fed About To Experience A Repeat Of 2016?http://stockbuz.ning.com/articles/is-the-fed-about-to-experience-a-repeat-of-20162016-12-28T23:49:58.000Z2016-12-28T23:49:58.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><div class="entry-body">
<p>In the most recent Summary of Economic Projections, Fed officials penciled in three 25bp rate hikes for 2017. The reality, however, could be very different. We all remember how “four” became “one” in 2016. The median dots are neither a promise nor an official forecast. As 2016 progressed, forecasts associated with a lower path of SEP “dots” evolved as the consensus view of policymakers. Will the same happen this year? I don’t think so; it is hard to see the Fed on pause for another twelve months.</p>
<p>As a starting point, I think it best to assume the US economy is near full-employment. But the US economy was near full-employment at this time last year as well. I think the key difference between then and now is that then the after-effect of the oil price slide and dollar surge placed a drag on the US economy sufficient to ease hiring pressure. At the same time, labor force participation perked up, setting the stage for a flat unemployment rate for most of the year. Inflationary pressures eased as well; the January inflation pop proved to be short-lived:</p>
<p><a class="asset-img-link" href="http://economistsview.typepad.com/.a/6a00d83451b33869e201b8d24ae9a9970c-popup" style="display: inline;"><img alt="PCE1116" class="asset asset-image at-xid-6a00d83451b33869e201b8d24ae9a9970c img-responsive" src="http://economistsview.typepad.com/.a/6a00d83451b33869e201b8d24ae9a9970c-500wi" style="display: block; margin-left: auto; margin-right: auto;" title="PCE1116" /></a>In effect, the US economy settled into a nice little equilibrium in 2016 that obviated the need for additional rate hikes. To expect a repeat scenario in 2017, one would need to assume that the US economy does not pick up speed and threaten that equilibrium by pushing past full employment.</p>
<p>Evidence, however, piles up suggesting that the slowdown of the past year is drawing to a close. ISM manufacturing and nonmanufacturing surveys are stronger, temporary help employment is heading up again, new manufacturing orders for nondefence, nonair capital goods have flattened out, and the broader inventory overhang is easing:</p>
<p><a class="asset-img-link" href="http://economistsview.typepad.com/.a/6a00d83451b33869e201bb09641387970d-popup" style="display: inline;"><img alt="ISRATIO1216" class="asset asset-image at-xid-6a00d83451b33869e201bb09641387970d img-responsive" src="http://economistsview.typepad.com/.a/6a00d83451b33869e201bb09641387970d-500wi" style="display: block; margin-left: auto; margin-right: auto;" title="ISRATIO1216" /></a>All of this occurs in the context of an unemployment rate that suddenly dipped toward the lower end of the Fed’s estimates of the natural rate of unemployment. And if the demographic forces reassert themselves, there is likely to be further downward pressure on the unemployment rate – job growth is well above estimates necessary to hold unemployment constant.</p>
<p>But would a total of 75bp of hikes be necessary to hold inflation in check? That depends in part the sensitivity of inflation to greater resource utilization. <a href="http://www.wsj.com/articles/trump-isnt-likely-to-rescue-the-global-economyor-wreck-it-either-1479317018">Greg Ip of the Wall Street Journal</a> noted last week:</p>
<blockquote>
<p>Unlike in 2009, this fiscal stimulus will be hitting when the economy is close to full employment with far less spare capacity. Yet it’s premature to assume inflation will therefore jump. In the last decade inflation, excluding swings due to energy, has proven surprisingly inertial, barely moving in response to high unemployment. The same is likely true if unemployment drops further below its “natural” level.</p>
</blockquote>
<p>It is true that inflation is fairly inertial, although some policymakers will dismiss the lack of response to high unemployment as a consequence of downward nominal wage rigidity. Moreover, others will claim the reason for inertial inflation is that the Fed has properly responds to weak or strong economic conditions to hold inflation and, importantly, inflation expectations, in check. In other words, you won’t see inflation if the Fed acts preemptively.</p>
<p>Still, the broader point remains true that while further declines in unemployment will pressure the Fed to hiking rates more aggressively, low inflation like seen in November will temper that response.</p>
<p>In addition, policy going forward depends on the relative tightness of financial markets in general, and the dollar in particular. And the dollar has been on a tear in recent weeks:</p>
<p><a class="asset-img-link" href="http://economistsview.typepad.com/.a/6a00d83451b33869e201b7c8c123ef970b-pi" style="display: inline;"><img alt="Dollar1216" class="asset asset-image at-xid-6a00d83451b33869e201b7c8c123ef970b img-responsive" src="http://economistsview.typepad.com/.a/6a00d83451b33869e201b7c8c123ef970b-500wi" style="display: block; margin-left: auto; margin-right: auto;" title="Dollar1216" /></a>The dollar serves as a break on the US economy. If activity expands as I anticipate, and the economy is near full employment as I believe, then some demand will be offshored as the rising dollar prompts the trade deficit to widen. Consequently, the Fed needs to be wary of feedback effects from the dollar as they tighten policy.</p>
<p>Bottom Line: The economic situation on the ground is very different from December of last year. Whereas the decision to raise rates at that time looked ill-advised, this latest action appears more appropriate given the likely medium-term path of the US economy. Assuming the US economy is near full employment, that path likely contains enough upward pressure on activity to justify more than one more rate increase in 2017. Three I think is more likely than one. That said, the change in administrations and the path of fiscal policy creates uncertainties in both directions.</p>
<p>Courtesy of <a href="http://economistsview.typepad.com/timduy/2016/12/is-the-fed-about-experience-a-repeat-of-2016.html" target="_blank">EconomistsView</a></p>
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</div>Bank EPS Lifted Ahead Of The Fed Rate Hikehttp://stockbuz.ning.com/articles/bank-eps-lifted-ahead-of-the-fed-rate-hike2016-12-17T17:36:34.000Z2016-12-17T17:36:34.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;">The S&P 500 Financials sector has been a focus sector for the markets in recent weeks. This past week, the Federal Reserve Board increased the target range for the federal funds rate. Earnings for banks and other companies in the Financials sector are particularly sensitive to higher interest rates. In addition, this sector has recorded the largest increase in value (+22.2%) of all 11 sectors in the S&P 500 since the start of the fourth quarter (September 30). Given these developments, have analysts been increasing their 2017 EPS estimates for banks and other companies in the S&P 500 Financials sector over the past few months?</p>
<p class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;"><img src="http://insight.factset.com/hs-fs/hubfs/December%202016/12.16.16_EI/SP500%20Financials%20%25%20of%20Cos%20with%20Increase%20in%202017%20Mean%20EPS.png?t=1481913305012&width=1024&name=SP500%20Financials%20%25%20of%20Cos%20with%20Increase%20in%202017%20Mean%20EPS.png" title="SP500 Financials % of Cos with Increase in 2017 Mean EPS.png" style="width: 1024px;" width="1024" /></p>
<p class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;">The answer is yes. In terms of EPS estimate revisions, 38 of the 63 companies (60%) in the S&P 500 Financials sector have seen an increase in their mean EPS estimate for 2017 since September 30. At the sub-industry level, the three subindustries that have the largest percentages of companies that have recorded an increase in their mean EPS estimate for 2017 (since September 30) are all bank-related subindustries: Regional Banks, Investment Banking & Brokerage, and Diversified Banks.</p>
<h2 class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;">Sub-Industry Outlook</h2>
<p class="BodyCopy">Eleven of the 11 companies (100%) in the Regional Banks sub-industry have seen an increase in their mean EPS estimate for 2017 since September 30, led by Huntington Bancshares (to 0.94 from 0.88), Citizens Financial Group (to $2.18 from $2.06), and Regions Financial (to $0.95 from $0.90).</p>
<p class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;">Four of the four companies (100%) in the Investment Banking & Brokerage subindustry have seen an increase in their mean EPS estimate for 2017 since September 30, led by Morgan Stanley (to $3.18 from $2.97) and Goldman Sachs (to 18.02 from 16.88).</p>
<p class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;">Five of the six companies (83%) in the Diversified Banks subindustry have seen an increase in their mean EPS estimate for 2017 since September 30, led by Comerica (to 3.84 from 3.37) and Bank of America (to 1.64 from $1.54).</p>
<p class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;">Download the <a href="http://insight.factset.com/cs/c/?cta_guid=b994622e-6b82-4c98-ad34-76c848088314&placement_guid=31d0f488-5c02-4193-b93b-f1708067f4fa&portal_id=1803721&redirect_url=APefjpFFO0X0pbwOTdrMeszJfbthlrQ_JzR9-sp1Iu_WotCKkP4FrRGIXMoQSqGO8x8bbAiaJEoyBHpnPylugweb1lwWcSsS_HqthkGr09-jN4HhZjW5awff-V7IL-oPfSd2cqlNKR1nVfsiLT910lcTJI_QttWQAYzAgIC3znPpJ8X58LIVEBHlm1UIEcBm6OzHADrdPV-7k-6iBMQy2QSW0RlkyM7trMG4AnbWtBKlL2rwuMzH7vEOwb1HL3kIyhdSPq1Y4Bzz55jriHUkZACQmKNHmSbHpw&hsutk=fd64e519a94425954e19cd66760c20e4&utm_referrer=http%3A%2F%2Finsight.factset.com%2Fearningsinsight_12.16.16&canon=http%3A%2F%2Finsight.factset.com%2Fearningsinsight_12.16.16&__hstc=226296197.fd64e519a94425954e19cd66760c20e4.1481389566411.1481987949204.1481988638920.5&__hssc=226296197.1.1481988638920&__hsfp=2003710796" target="_blank">latest insight.</a></p>
<p class="BodyCopy" style="text-align: justify; text-justify: inter-ideograph;">Courtesy of <a href="http://insight.factset.com/earningsinsight_12.16.16" target="_blank">Factset</a></p>
</div>Remembering The Impetus Of Irrational Exuberancehttp://stockbuz.ning.com/articles/remembering-the-impetus-of-irrational-exuberance2016-10-22T18:45:50.000Z2016-10-22T18:45:50.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><a href="http://storage.ning.com/topology/rest/1.0/file/get/1291328?profile=original" target="_self"><img src="http://storage.ning.com/topology/rest/1.0/file/get/1291328?profile=original" style="padding: 10px;" class="align-left" width="231" height="179"></a>In December of 1996, Greenspan was clearly beginning to worry about the economic fallout of a bursting asset bubble. Back then he had a front row seat and, in fact, a strong hand in creating the dotcom bubble, whether he admits it or not. He was so worried about the consequences of “irrational exuberance” that he declared these concerns “must be an integral part of the development of monetary policy.” And this was before he had even witnessed any of the actual economic consequences we have now lived with for two decades. Clearly, his worries were well founded but he wasn’t quite worried enough.</p>
<p>The financial well-being of entire generations has been permanently damaged. Think of the Baby Boomers whose retirement dreams turned to nightmares through two stock market crashes in less than a decade. Think of the Generation Xers whose dreams were shattered by the housing bubble and the mortgage crisis. As a group these latter folks, even though they are now entering their peak earnings years, are flat broke almost a decade after it all began. And the major media outlets wonder openly why the average American has next to nothing in savings. He was explicitly encouraged by the single most powerful institution on the planet to put his savings into great peril, time and again.</p>
<p><a href="https://i1.wp.com/www.thefelderreport.com/wp-content/uploads/2016/10/Screen-Shot-2016-10-20-at-1.22.18-PM.png?ssl=1"><img class="alignright wp-image-11095" src="https://i1.wp.com/www.thefelderreport.com/wp-content/uploads/2016/10/Screen-Shot-2016-10-20-at-1.22.18-PM.png?resize=602%2C350&ssl=1" alt="screen-shot-2016-10-20-at-1-22-18-pm" width="602" height="350"></a>Now I should be clear that over the decade following this famous speech, while he remained Fed Chairman, he did nothing to incorporate these prescient concerns into Fed policy. Just the opposite. After the dotcom bubble burst he engineered the housing bubble to try to ameliorate the damage done by the first. It’s one thing to worry about the risks of financial bubbles you have a hand in creating; it’s something else to actually do something about them. So while we can admire his foresight we should not honor it by overlooking his cowardice in failing to do anything about it.</p>
<p>Since then, and with the benefit of witnessing the actual fallout of these epic busts, many at the Fed (and even more outside of it) have openly discussed this dilemma of directly addressing asset bubbles. Eric Rosengren, head of the Fed Bank of Boston, became the latest to openly echo Greenspan’s concerns regarding “irrational exuberance” in the financial markets. Robert Shiller won a Nobel Prize for work in this very area. Still, nothing has been done to actually address these massive economic risks. After 20 years and two bursting bubbles whose effects are still plaguing the economy it’s still nothing more than sporadic public hand wringing by the people with the power to do something about it.</p>
<p>In recent years the Fed has only doubled down on these policies by directly pursuing a “wealth effect.” Rather than give a boost to the broad economy, however, these central bankers have only accomplished an even greater and more pervasive financial asset perversion. Stocks, bonds and real estate have all become as overvalued as we have ever seen any one of them individually in this country. The end result of all of this money printing and interest rate manipulation is the worst economic expansion since the Great Depression and the greatest wealth inequality since that period, as well.</p>
<p>Someday, possibly soon, the public will finally decide it’s had enough of the escalating boom bust cycles the Fed has exacerbated, if not directly engineered, over the past couple of decades. Falling confidence in these technocrats and the resulting rising populism will serve as a clarion call for a new brand of Fed Chairman with the courage to finally address the glaring danger asset bubbles pose to financial stability and the long-term economic health of our nation. She will be the 21st century’s version of Paul Volcker. Rather than breaking the back of inflation in the traditional sense, she will break the cycle of unwarranted asset inflation at the direction of the Fed and all of its deleterious consequences. At least I hope it’s not irrational to believe so.</p>
<p>Courtesy of <a href="https://www.thefelderreport.com/2016/10/20/remembering-the-impetus-of-irrational-exuberance-as-we-approach-its-20th-anniversary/" target="_blank">TheFelderReport</a></p></div>DealBook Conference: Druckenmiller On Bubbles, The Fed And Morehttp://stockbuz.ning.com/articles/dealbook-conference-druckenmiller-on-bubbles-the-fed-and-more2015-11-04T20:30:19.000Z2015-11-04T20:30:19.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><iframe src="https://www.youtube.com/embed/l0YjPekmccs" allowfullscreen="" frameborder="0" height="360" width="640"></iframe></p>
</div>The Bulls Push Backhttp://stockbuz.ning.com/articles/the-bulls-push-back2014-09-16T18:18:02.000Z2014-09-16T18:18:02.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290937?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1290937?profile=RESIZE_320x320" width="315"></a>Just when the (last few remaining) bears were enjoying some market wide liquidation, China apparently launched some stealth QE of their own reversing AUD/JPY and sending markets plowing over weak bears. From Bloomberg:</p>
<ul>
<li><strong>CHINA’S PBOC STARTS 500B YUAN SLF TODAY, SINA.COM SAYS</strong></li>
<li><strong>PBOC PROVIDES 500B YUAN LIQUIDITY TO CHINA’S TOP 5 BANKS: SINA</strong></li>
<li><strong>PBOC PROVIDES 100B YUAN TO EACH BANK TODAY, TOMORROW WITH DURATION OF 3 MONTHS: SINA</strong></li>
</ul>
<p>According to Government Sachs</p>
<blockquote>
<p><span class="field-content">"This amount is roughly the same as a 50 bps cut to RRR for the whole banking system on a static basis. </span> <span class="field-content">Still, such an easing would be consistent with our expectation that (1) monetary policy will loosened amid the drastic slowdown in activity growth and falling inflation, and (2) full scale RRR and interest rate cuts are unlikely because they would be viewed as aggressive stimulus."</span></p>
</blockquote>
<p>Toss in a little hint dropping from t<span class="field-content">he Wall Street Journal's Fed-whisperer Jon Hilsenrath that that the "considerable period" language will likely remain in the FOMC decision... and the plunge in the dollar increased (although one would think the greenback would rally on this news normally).</span></p>
<p><span class="field-content">SPX triggered cover stops above yesterdays high and the bears appear trapped however one should note that small caps ($RUT) continue to lag. A concern where risk appetite is concerned. I must keep in mind however that September is end of quarter and end of fiscal year for most funds draws near. After the massive five year run up, wouldn't you too be taking some profits? </span></p>
<p><span class="field-content">All eyes on the BoE minutes and FOMC tomorrow. Then Scotland's vote Thursday and of course, the much heralded Alibaba ($BABA) IPO unveiling on Friday. Of course SPX rebalancing Friday after the close will continue to pressure as funds <em>shuffle</em> their deck throughout the week and it'll also be quadruple witching option expiration. Great stuff. Have your BABA money ready? Bring me the volatility!</span></p>
<p></p></div>S&P500 And Past FOMC Meetingshttp://stockbuz.ning.com/articles/s-p500-and-past-fomc-meetings2014-04-30T17:26:05.000Z2014-04-30T17:26:05.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><img src="https://pbs.twimg.com/media/BmfEp31CIAIgTN-.jpg" alt="Embedded image permalink" height="398" width="569" /></p>
</div>Hump Day Readshttp://stockbuz.ning.com/articles/hump-day-reads-12014-04-30T11:58:08.000Z2014-04-30T11:58:08.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><ul>
<li><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290598?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1290598?profile=original" width="174"></a>ADP, GDP and FOMC all in one day. While no one is truly expecting any change from the FOMC (taper) plan, one never knows.</li>
<li>Lackluster forward guidance seems to be the recent earnings mantra (no surprise).</li>
<li>Bulls need a follow through to the upside today</li>
<li>TWTR beat however issued disappointing outlook. This may be the "show me" stock for 2014 where disbelievers will have to be proven it's potential vs. $FB. The good news: you'll be able to buy it cheaper. The company's second quarter revenue forecast was $270M-$280M against consensus of $272.9M. Twitter's (<a target="_blank" href="http://email.seekingalpha.com:80/track?type=click&mailingid=20140430&messageid=wall_street_breakfast&databaseid=&serial=wall_street_breakfastO20140430O.274074da4a0e5fff8b7aabd4fb6bb78d.1398854280&emailid=mrsbuz1%40aol.com&userid=304377&extra=&&&3000&&&http://seekingalpha.com/symbol/twtr?source=email_wsb&ifp=0" title="Twitter, Inc." style="color: #024999; text-decoration: none;">TWTR</a>) adjusted EBITDA guidance of $25M-$30M was lower than Q1's $37M result. In Q1, monthly active users rose 6% sequentially and 25% Y/Y to 255M, roughly inline with expectations. Timeline views rose 6% sequentially, and just 15% Y/Y to 157B. Ad sales rose 125% Y/Y to $226M amid a barrage of new ad products.</li>
</ul></div>