MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Wednesday, May 23
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11:11 AM Disney (DIS -0.8%) CEO Robert Iger says the firm will pull the plug on programming if DirecTV's (DTV -1.0%) commercial-skipping service takes off as he dangles Dancing with the Stars as a potential high-profile casualty. While it's very early in the fight, the question of the survivability of commercial-laced TV programming has to be raised with the coming onslaught of original programming from players such as NetFlix, Amazon, Yahoo, Google, Hulu, and others that go lighter on the ads. [Consumer] Comment!
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11:03 AM Cash-rich Seagate (STX -2.2%) is acquiring French external hard drive/low-end storage vendor LaCie for $186M. Seagate declares the companies' offerings to be "highly complementary" (in spite of moderate overlap), and touts LaCie's ability to bolster its European and Japanese presence. Seagate might also be interested in the potential to boost LaCie's margins by having the company rely on Seagate's hard drives. [Tech, M&A] Comment!
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11:02 AM Express Scripts (ESRX) CEO George Paz tells the WSJ that he would "love to do a deal with Walgreen (WAG)" to revive their contract, which expired a few months ago, "if they're willing to offer rates in line with everybody else." Of the Medco merger, Paz said that while Express Scripts is frugal, Medco "had a different culture with respect to spending money." [Healthcare] Comment!
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11:00 AM On the hour: Dow -1.29%. 10-yr +0.31%. Euro -0.78% vs. dollar. Crude -1.53% to $90.44. Gold -2.26% to $1540.95. Comment!
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11:00 AM Ford (F +1.8%) trades higher after making its celebrated return to investment grade with a boost from Moody's. The action is more than symbolic, as the company now reclaims its iconic blue oval logo, Mustang trademarks, and plant and machinery assets pledged against a $23.5B loan taken out during the recession. [Consumer] Comment!
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10:51 AM Talbots (TLB +7.7%) pops higher as word breaks that the company has extended again its exclusivity agreement with Sycamore Partners, this time to May 24. Shares of TLB are now trading hands at $2.50 a pop - still well-below the $3.05 offer price Sycamore has on the table. [On the Move, Consumer] Comment!
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10:51 AM The American Trucking Association's seasonally adjusted Truck Tonnage Index fell 1.1% in April after increasing a revised 0.6% in March. April’s decrease "matches with an economy that is likely to grow slightly slower in the second quarter than in the first quarter," ATA chief economist Bob Costello says. [U.S. Economy] Comment!
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10:46 AM More on Cree: Wunderlich's Theodore O'Neill suggests the company is the First Solar (FSLR) of the LED world. He notes both Cree and First Solar rely on exotic materials few others in in their respective industries use, and argues each company's competitive edge is withering as the materials typically used by rivals - polysilicon for First Solar's competitors, sapphire for Cree's - get cheaper. Meanwhile, Digitimes reports LED prices have stabilized in Q2 thanks to strong demand. (also) [Tech, Quick Ideas] Comment!
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10:46 AM Dow Chemical (DOW -2.3%) issues some cautious comments out of Goldman's Basic Materials Conference this morning, warning that it sees a turbulent operating environment through the second half of this year. While demand in the U.S. shows signs of improvement, especially in its building, electronics and transport sectors, growth in Europe remains weak and China has stalled. [On the Move] Comment!
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10:44 AM Starbucks (SBUX +1.2%) catches an upgrade from BofA to Buy from Neutral with an improved price target of $68, as analysts see the recent 14% pullback in shares as overdone. The action seems to be tipping over to hold a bit of sway over sector rivals. GMCR +0.6%, CBOU +0.6%, PEET +1.4%. [Consumer] Comment!
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10:42 AM In the wake of the PCX disaster, is there any bottom in sight for trashed coal stocks (KOL -1.8%)? Not yet, chartist Robert Sinn writes. "A stock like ANR at $11/share has almost turned into a call option on the Chinese economy and thermal coal prices," Sinn says, but "just like a call option, it will bleed time premium if China continues to deteriorate and thermal prices continue lower." [Energy, Quick Ideas, On the Move] Comment!
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10:40 AM German bond yields continue to fall to astonishing lows, the 30-year off 11 bps to 1.99% - the first-ever time with a one handle (Japan's is 1.82%). The 10-year is off 9 bps to 1.38% (Japan 0.87%). The 2-year yields all of 5 basis points, towering over Japan at 11 bps. [Global & FX] Comment!
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10:39 AM Cree (CREE -5.1%) adds to the losses seen yesterday on news of CFO John Kurtzweil's plans to leave for Extreme Networks (EXTR -2.1%). Not helping is a downbeat assessment from Canaccord, which views the move as a "momentum killer" that while drive Cree shares lower over the near-term. The firm speculates Kurtzweil's departure is linked to a shift in Cree's business model to selling LED lighting fixtures instead of LED chips. [Tech, On the Move, Quick Ideas] Comment!
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10:34 AM Shares of Ralcorp (RAH) move down 5.1% after the firm's twice-delayed FQ2 report finally gets released. The company missed the consensus EPS estimate of analysts, reporting $0.72 vs. $0.85, while knocking out in-line sales of $1.06B that marked a 16% Y/Y gain. In a separate announcement, Ralcorp says it snapped up privately-held Petri Baking Products for an undisclosed amount. [On the Move, Consumer, Earnings] Comment!
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10:32 AM Europe rapidly deteriorates, the Stoxx 50 -3%, led by Italy, -3.8%, and Spain, -3.2%. The euro goes bidless, sliding under $1.26 for the first time since August 2010. S&P 500 -1.1%. [Global & FX, On the Move, Top Stories] 1 Comment
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10:31 AM Siemens (SI) is testing in Germany an "eHighway of the Future" in which hybrid disel-electric trucks are fitted with pantographs so that they can be powered by overhead power cables, similar to trams and railway trains. 1 Comment
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10:28 AM For whom the Dell tolls: As the IT giant's FQ1 miss and commentary lead to a tech selloff, PC-related names get hit harder than most, no doubt thanks to the 10% drop seen in Dell's (DELL -15.8%) notebook sales. Rival H-P (HPQ -4.4%), due to report this afternoon, is among the biggest losers. Also selling off: INTC -3.1%. MSFT -3.2%. AMD -3.1%. LOGI -3.3%. (more on DELL) [Tech, On the Move] 1 Comment
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10:24 AM Goodrich Petroleum (GDP +0.2%) announces the completion of the Encana-Anderson 17H-1 well in the Tuscaloosa Marine Shale with a 72-hour production rate of 1,082 boe/day. GDP also says it is participating with Encana (ECA) for a ~25% working interest in another Tuscaloosa well. [Energy] Comment!
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10:24 AM Siemens (SI) is interested in making acquisitions of around a "couple of billion" euros in the area of industrial software, CEO Peter Loescher tells an investor conference. "The core focus of Siemens is organic growth with bolt-on acquisition opportunities if they make sense," Loescher says. [M&A] Comment!
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10:24 AM The XHB pops, but then drops on the better-than-expected new home sales print. Obviously, the overall market is struggling, but also of interest was the earlier MBA Mortgage Application report. The reported gain was nearly all from refinance activity, while purchase activity remains flat. XHB -0.8%. [U.S. Economy] Comment!
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10:16 AM Ivanhoe Mines (IVN -2.7%) says it will launch a rights offering open to all its existing shareholders that would raise ~$1.8B in proceeds as part of its plan to finance development of the Oyu Tolgoi copper-gold project in Mongolia. Rio Tinto (RIO -2.9%), which owns 51% of IVN, plans to buy the maximum shares permitted by the terms of the offering. [Commodities, On the Move] 1 Comment
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10:14 AM Ingersoll Rand (IR -0.3%) CEO Mike Lamach says that he held a "constructive" meeting with Nelson Peltz's Trian Fund, which this month disclosed a 7% stake and said it would push for changes at Ingersoll. Lamach also says that the firm is receiving "solid" orders and that it could spend $300M-$800M on buybacks in H2. Comment!
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10:13 AM The SPDR Gold Trust (GLD) recorded $897M in outflows yesterday, the largest decline since August 2011. Commerzbank wants to see more days of outflows, but says it's surely a negative if even ETF investors are caught up "in the selling pull." More: Central GoldTrust (CTU) now trades at a discount to NAV vs. an average 3.4% premium over the past year. [Commodities] 11 Comments
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10:12 AM "What we’re working on now feels like the most important and the best work we’ve done," Apple (AAPL) design chief Jony Ive cryptically tells The Telegraph. Rumors abound regarding a bigger iPhone, smaller iPad, and Apple TV set. Ive also evangelizes about Apple's philosophy: "What preoccupies us is that sense of care ... what our products will not speak to is trying to respond to some corporate or competitive agenda." (previous) [Tech] 11 Comments
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10:11 AM Share of Coinstar (CSTR +4.5%) spike higher against a weak tape after the company announces that it signed a deal with Wal-Mart Canada to bring its movie rental kiosks to stores in the country. [On the Move] Comment!
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10:06 AM April New Home Sales: +3.3% to 343K vs. 335K expected, 328K (revised) prior. Median prices +0.7% to $235,700. [U.S. Economy] Comment!
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10:04 AM Mar. FHFA Housing Price Index: +1.8% month-on-month, vs. +0.3% in Feb. [U.S. Economy] Comment!
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10:03 AM India hikes gasoline prices 11.4%, effective tomorrow as the rupee at all-time lows just adds to cost pressures for the nation's refiners. The price of crude is off 15% this month alone, but a weakened currency may be negating much of the salutary effects. [Energy] Comment!
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10:02 AM More on the class-action suit against Facebook and Morgan Stanley: The firm handling the suit previously won $7B from Enron. Its complaint alleges remarks made in Facebook's S-1 about its ad outlook were "untrue statements" in light of reports an exec told analysts to lower their forecasts. Particularly incriminating, if true, are reports institutional demand fell due to the disclosure. That would make Facebook's situation the polar opposite of what may have recently happened with Groupon. [Tech, Financials] Comment!
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10:01 AM Diamond Foods (DMND +2.4%) back on the rise after locking in a $225M recapitalization investment from Oaktree that had buzzed on Monday. The deal has new senior notes and warrants for 4.4M shares that could be canceled depending on walnut crops. [Consumer, On the Move] Comment!
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10:00 AM On the hour: Dow -0.59%. 10-yr +0.22%. Euro -0.30% vs. dollar. Crude -0.68% to $91.22. Gold -1.53% to $1552.55. Comment!
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9:57 AM Despite announcing his resignation, NRC chair Gregory Jaczko may be around for a while longer. Jaczko plans to stay on the job until the Senate confirms a successor, and Majority Leader Harry Reid sounds like he's in no hurry to take action; he says he’d be fine if his former aide stays until his term expires in June 2013. [Energy] Comment!
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9:53 AM Shares of Zale (XLC) soar 10.6% off of its narrower-than-forecast FQ3 loss, helped in part by the firm's 10.9% Y/Y increase in U.S. fine jewelry sales. Rival Signet Jewelers (SIG) +1.8% on Zale's back. [On the Move, Consumer] Comment!
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9:53 AM The ECB has set up a working group to focus on worsening financial conditions due to Greece, reports Die Welt, citing sources. Leading the panel is Germany's Joerg Asmussen. Further market deterioration is likely to instigate new anti-crisis measures from the ECB, they say. [Global & FX] Comment!
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9:46 AM Delta Air Lines (DAL -1.1%) will offer more premium seats on flights longer than 750 miles starting on June 7. While the carrier grabs a little extra seat revenue at $19-$99 a pop, customers signing on nab an extra three to four inches of legroom and can board flights earlier. [Consumer] 3 Comments
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9:46 AM More on Dell: Though lowering its PT, Stifel tries to make a bull case for the company. It views a growing mix shift to non-PC enterprise solutions (now 31.4% of revenue) as a positive, as well as its guidance for stable FQ2 gross margins. Overall, it sees "an improved/cleaner 2H2012 story" driving shares higher. Also of note: Dell, which has a market cap of $22.9B now has $8.2B in net cash and investments. (transcript) [Tech, Quick Ideas] Comment!
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9:45 AM Microsoft (MSFT) and WPP (WPPGY) agree a 3-year deal that will allow them to place and sell online ads for the brands and Internet publishers they work. The aim is to better match the supply and demand of ad inventory, with Microsoft partners AOL and Yahoo (YHOO) also set to benefit, especially in gaining access to premium ads. [Tech] Comment!
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9:41 AM Patriot Coal (PCX +6.4%) shares enjoy a decent rebound after yesterday's disaster, and the company sends a letter to employees saying "operations are performing well." A bit late after yesterday's 28% drubbing, Deutsche Bank downgrades PCX to Hold from Buy, citing the uncertainty of the company's financing arrangements. [Energy, Quick Ideas, On the Move] Comment!
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9:35 AM Sell-side commentary on Dell (DELL -14.1%) is predictably bleak following its huge FQ1 miss (I, II) and admission it's suffering from tablet cannibalization, soft enterprise demand, Asian competition, and sales issues, among other things. Deutsche is downgrading shares to Neutral, while Brean Murray voices concerns about the impact of Dell's sales problems on its efforts to lower its PC exposure. Sterne Agee, which upgraded Dell last week, wishes it kept its Underperform rating. (transcript) [Tech, Quick Ideas, On the Move] Comment!
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9:31 AM At the open: Dow -0.67% to 12420. S&P -0.67% to 1308. Nasdaq -0.86% to 2815.
Treasurys: 30-year +0.54%. 10-yr +0.19%. 5-yr +0.09%.
Commodities: Crude -0.65% to $91.25. Gold -1.13% to $1558.75.
Currencies: Euro -0.16% vs. dollar. Yen -0.7%. Pound +0.2%. Comment! -
9:29 AM BlackBay trader Todd Schoenberger says the market has it all wrong over Linkedin (LNKD -0.5%), which has been dragged down of late by Facebook. The site has well-balanced global breadth and an advantegous business model. "I would buy it now even if it goes up 20% or down 20%...It's a buy and hold," says Schoenberger. [Top Stories, On the Move] 1 Comment
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9:27 AM Amazon (AMZN) announces a licensing agreement with Paramount Pictures that will bring hundreds of well-known movies to its Prime Instant Video service over the next few years. The service now has over 17K titles in its arsenal after counting movies and individual TV episodes. (PR) [Consumer] Comment!
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9:20 AM A day after archrival SAP spent $4.3B on Ariba, Oracle (ORCL) is reportedly spending over $300M to buy Vitrue, developer of a cloud-based social media marketing platfrorm. Vitrue, which competes with Constant Contact (CTCT) and Bazaarvoice (BV), complements the cloud customer support solutions Oracle obtained through its purchase of RightNow. Of course, the effectiveness of social media marketing has become a hot-button subject lately. [Tech, M&A] Comment!
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9:19 AM Uranium giant Cameco's (CCJ) planned effort to raise as much as $1B through a combination of securities may signal an upcoming acquisition, BMO Capital suggests, citing falling uranium equity valuations in recent weeks and CCJ's ample funding capability. Potential targets: Paladin Energy (PALAF.PK), Denison Mines (DNN), UEX Corp. (UEXCF.PK) [Energy, Commodities, M&A] 1 Comment
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9:16 AM Macy's (M) plans to invest $15M in Chinese online retailer VIpStore and sell products through the firm's website. Though it's a relatively small investment, it falls in line with the company's goal of making strategic plays in China through collaborations, joint ventures, and partnerships - instead of a large-scale all-in bet. [Consumer] 1 Comment
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9:15 AM Market preview: U.S. stock futures track EU shares lower as fears of a Greek euro exit flare up again ahead of an EU summit in Brussels, with the S&P benchmark -0.8%. Dell (-13.4%) is taking a battering following a fairly woeful earnings report, while Big Lots is -6.1% for a similar reason, although Facebook (+2.6%) gets a bit of light relief following its IPO carnage. Later: New Home Sales, H-P earnings [Top Stories, On the Move] Comment!
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9:10 AM Facebook (FB), CEO Mark Zuckerberg, and the IPO underwriters face a class-action suit by shareholders over accusations they concealed from investors "a severe and pronounced reduction" in the company's revenue growth forecasts. [Tech, Breaking News] 19 Comments
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9:06 AM Shares of Big Lots (BIG) slip 6.1% in premarket trading after the company misses with its Q1 report on weak same-store sales and offers lower guidance for the full year. The company says it will purchase up to an additional $200M worth of its stock, although inquiring minds are wondering if buybacks are the best strategy. [On the Move, Consumer] 1 Comment
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9:05 AM Veolia Environnement (VE) is in advanced talks to sell its ailing bus division to the Afikim group, according to reports. The French conglomerate is seeking to sell off its various transportation businesses all over the world. VE -1.5% premarket. [Consumer, Global & FX] Comment!
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9:02 AM Emerging from a meeting with Spain's Rajoy, French President Hollande says he's unaware of any call for EU states to come up with contingency plans for a Greek exit. Putting a slight bid into European shares are sketchy comments over the wires about Greece getting more lenient bailout terms from the EU. Stoxx 50 -2%. S&P futures well off session lows, -0.5%. [Global & FX, Breaking News] 1 Comment
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9:00 AM On the hour: S&P -0.51%. 10-yr +0.18%. Euro -0.08% vs. dollar. Crude -0.42% to $91.46. Gold -0.94% to $1561.75. Comment!
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8:55 AM With rumors flying about RailAmerica (RA) and the company disclosing that it's considering strategic alternatives, Wells Fargo takes the line that there is some meat on the bone. Analysts reiterate an Overweight rating on RA, citing strong fundamentals and the potential for bidding action. Shares +10.2% premarket to $24.50, after jumping 2.7% yesterday in a late afternoon rally. [Consumer, M&A, On the Move] Comment!
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8:55 AM GSK (GSK) ammends the conditions of its $2.6B tender offer for Human Genome (HGSI), requiring that the latter redeem or invalidate its poison pill. [Healthcare, M&A] Comment!
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8:53 AM Eaton Vance (EV): FQ2 EPS of $0.45 misses by $0.03. Revenue of $305M (-3.4% Y/Y) beats by $5M. (PR) [Earnings, Financials] Comment!
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8:43 AM Italian May consumer confidence falls to 86.5 from 88.8 previously, and against expectations for a rise to 90. It's the worst print since 1996. A gauge of unemployment expectations rises to 113 from 106. Milan -3%. [Global & FX] Comment!
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8:42 AM Adidas (ADDYY.PK) files a criminal complaint against former officers of its India division. The company says it found "commercial irregularities" and expects to take a 8.7B rupee ($155.35M) charge related to the matter. [Global & FX, Consumer] Comment!
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8:41 AM Recon Technology (RCON) +67.3% premarket on news it signed a contract to provide China National Petroleum with Emerson PCS & SIS systems in its South Yolotan Gas Field Project located in Turkmenistan. The total contract value exceeds $3M. [Tech, Energy, On the Move] Comment!
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8:38 AM Needham wades into the carnage that has been Facebook's (FB) IPO and initiates coverage with a buy rating and a price target of $40 a share vs. yesterday's close of $31. "With over 900M monthly users, we believe Facebook is an option on the World" is the cheese-filled explanation. Facebook is enjoying a bit of a bounce premarket and is +2%. [Tech, Consumer] 3 Comments
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8:35 AM Each eurozone country must draw up its own contingency plan should Greece leave EMU, decides the Eurogroup Working Group (EWG). It's a significant step as nothing like this has previously been ordered for fear of leaks. Among the elements to consider are what support the EU/IMF should give. [Global & FX] Comment!
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8:32 AM An MKS Instruments (MKSI) employee has been arrested on charges he smuggled equipment into China that could be used to enrich uranium and produce weapons-grade uranium. MKS says it is cooperating with U.S. authorities, but the disruption could adversely affect its Shanghai sales office. MKSI -3.3% premarket. [Tech, On the Move] Comment!
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8:29 AM Comcast's (CMCSA) NBCUniversal plans to boost its online coverage of the London Olympics by 3K hours as it moves off of a strategy of holding back from broadcasting events until prime-time slots. NBC execs now see live streaming during the morning and afternoon hours as helping to promote evening programming - instead of cannibalizing it by providing spoilers for the results of key events. The big picture: The latest forecasts still tag Comcast with a loss over its $1.18B investment in the London Games. [Consumer] Comment!
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8:27 AM An E&Y survey of 400 CFOs around the world finds that 15% are willing to make cash payments to obtain or retain business, up from 9% last year. And 5% said they would misstate financial results vs. 3% last time. "One of the most troubling findings of the survey is the widespread acceptance of unethical business practices," E&Y says. 3 Comments
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8:24 AM Amidst the commotion over what the sell-side told favored clients ahead of the Facebook IPO, Jeff Matthews points out the company's revenue growth (publicly available) has been sliding sharply for over a year. Maybe a bigger warning sign, Zynga - the equivalent of a hot-dog vendor in Yankee Stadium (FB is The Stadium) - is slowing at an even sharper rate. "People wanted to buy Facebook, no matter what." [Tech] 3 Comments
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8:23 AM Guess? (GES) edged expectations for Q1 earnings and revenues but cut Q2 and full-year guidance, partly on worries over Europe, which generates ~38% of profits. But shares +8% premarket, perhaps sparked by Bloomberg talking up the stock as a takeover target; it's valued at a mere 3.5x EBITDA, there's lots of free cash flow, low debt, and $500M cash on the books. [Consumer, On the Move] Comment!
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8:18 AM More on American Eagle Outfitters' (AEO) Q1: Comparable-store sales up 17%. Inventory 14% higher Y/Y on a cost per foot basis. Gross margin flat compare to last year, while SG&A expenses fell to 25.2% from 25.8%. Expects Q2 EPS of $0.13-$0.15 and FY12 EPS of $1.16-$1.22. Shares -2.5% premarket. (PR) [Earnings, Consumer] Comment!
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8:12 AM The Gallup Economic Confidence Index rises to -16, the highest-ever level in the 4+ year history of the survey. The index has two components - current conditions and economic outlook, and the economic outlook - though still negative - is the highest since January 2008 despite a brutal few weeks for the stock averages. [U.S. Economy] 1 Comment
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8:07 AM More on Toll Brothers (TOL) FQ2: swings to a net profit of $16.9M from a loss of $20.8M last year, helped by lower inventory writedowns. Homes delivered +14% to 671, net signed contracts +47%, cancellation rate falls to 2.4% from 3.9%. "It appears that the housing market has moved into a new and stronger phase of recovery," CEO Douglas Yearley says. [Consumer, U.S. Economy] Comment!
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8:02 AM Analysts are out with calls on PetSmart (PETM) after the company smashes through estimates with its Q1 report and raises full year guidance. RW Baird lifts its price target to $62 from $57, while RBC Capital aims even higher with a $69 PT. Shares +9.7% premarket. [Consumer, On the Move] Comment!
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8:00 AM On the hour: S&P -0.57%. 10-yr +0.16%. Euro -0.13% vs. dollar. Crude -0.67% to $91.23. Gold -0.99% to $1561.05. Comment!
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8:00 AM If Greece exits the eurozone, writes The Tell, the EU should consider replacing it with Turkey. The country's speedy growth and youthful demographics would help a union sorely in need of both. One wonders if the reason Turkey's economy is perky (even overheating) is because it's not part of the eurozone. The EU may want the country, but has anybody checked with Ankara? [Global & FX] 3 Comments
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7:56 AM Industry analysts see the move by Sears Holdings (SHLD) to reduce its stake in Sears Canada to 51% as clearing the path for a host of U.S. retailers to jump in to take advantage of the void as Sears Canada trims its operations. Both Nordstrom (JWN) and Saks (SKS) could jump into a Canadian market that boasts 50% higher sales per square foot at malls than in the U.S., while Target (TGT) might accelerate its own expansion plans. [Consumer, Global & FX] Comment!
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7:48 AM Following Dell's (DELL) poor showing yesterday, the attention now switches to H-P (HPQ), which is due to release its FQ2 earnings after the bell. Analysts forecast that EPS fell to $0.91 from $1.24 and that revenue declined 5.4% to $29.9B. H-P is also expected to unveil a restructuring plan that will include laying off over 25K workers. [Earnings, Tech, Consumer] Comment!
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7:47 AM The rupee hits an all-time low for the 6th consecutive day, now requiring 56.18 of them to purchase one dollar. Traders believe the RBI intervened, temporarily sending the rupee as high as 55.52, but the currency soon weakened anew. Given global risk aversion at the moment, the RBI doesn't have a shot. [Global & FX] Comment!
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7:34 AM Bank of Montreal (BMO): FQ2 EPS of $1.44 beats by $0.09. Revenue of $3.96B beats by $60M. (PR) [Earnings, Financials] 1 Comment
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7:31 AM Spanish PM Rajoy will use the occasion of a meeting of EU leaders today to ask the ECB to purchase his country's bonds, reports El Mundo. "Enough is never enough," says Adam Johnson, recalling Spanish banks took down 47% of the recent LTRO. Madrid -2.1%. [Global & FX] 1 Comment
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7:27 AM Bill Ackman has an immediate challenge at Canadian Pacific (CP) with a strike by workers that has shut down a number of railroad lines. Union officials say that worker rules and the company's plans to slash a pension plan are major negotiating points. [Consumer] Comment!
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7:21 AM Constant chants of "catastrophe" should Greece exit EMU "borders on political blackmail," writes Ambrose Evans-Pritchard. It will only be so if the EU and IMF choose that path, thus making catastrophe not a fait accompli, but a political decision. The catastrophe, he says, comes from those clinging to failed ideology (fixed exchange rate). [Global & FX] 1 Comment
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7:10 AM A two-year boom in sales of running shoes still has legs and could propel sellers Nike (NKE), Foot Locker (FL), and Dick's Sporting Goods (DKS) even higher, according to analysts. In the last year sales jumped 14% to reach $6.46B, fueled by the increasing appetite of consumers to pay up for comfort and fashion with more sophisticated lines of running shoes. [Consumer] Comment!
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7:10 AM Annaly (NLY) CEO Mike Farrell has completed his treatment program and his cancer is in remission. "I feel good and have been given an encouraging prognosis," he says. (PR) [Financials] 5 Comments
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7:06 AM The euro hits a new low for 2012 and the lowest level since the summer of 2010 as panic once again hits the continent. The common currency touched $1.2615 earlier, now buying $1.2655, -0.2% for the session. The euro bottomed at about $1.25 during the financial crisis and $1.19 in the summer 2010 bear market. [Global & FX] Comment!
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7:05 AM MBA Mortgage Applications: +3.8% vs. +9.2% last week. Thirty-year fixed mortgage rate with conforming loan balances ($417,500 or less) decreased to 3.93% from 3.96%. [U.S. Economy, Breaking News] 1 Comment
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7:01 AM Piper Jaffray reiterates an Overweight rating on Expedia (EXPE) and raises it price target to $53 from $44. Analysts with the firm base stay bullish on EXPE after digesting the latest data dump from comScore showing strength in the travel site's Europe-based web traffic. [Consumer] Comment!
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7:01 AM Germany sells €4.56B of 2-year notes carrying a coupon of 0%, and priced to yield 0.07%. There was strong demand for the paper as investors see value even at these prices. How low can the yield go? Well, Swiss 2-year paper currently yields -0.10%. [Global & FX] Comment!
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6:47 AM Mazda (MZDAF.PK) and Fiat (FIATY.PK) join forces for the first time with plans to develop a lightweight sports car and explore strategic opportunities in Europe. The linkup between the two automakers leaves Ford (F) with one less partner as a longstanding relationship with Mazda peters out. [Consumer, Global & FX] 2 Comments
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6:40 AM The CFPB plans to announce the first set of rules for reloadable prepaid cards, including standards for fee disclosure and limits on consumer liability if cards are used without authorization. Major banks and companies such as Green Dot (GDOT) have been increasingly pushing the cards on consumers because under the current framework they can charge higher fees. [Consumer, Financials] Comment!
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6:31 AM U.S. stock futures point lower after European markets drop off ahead of a summit meeting of leaders in Brussels. S&P -0.7%, Dow -0.7%. [U.S. Economy] Comment!
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6:08 AM Iran expects "good news" from the latest talks with the P5+1 group of World Powers - which are due to take place today in Baghdad - although the U.S. says Iran won't receive relief from sanctions. News yesterday of an agreement between the IAEA and Iran over the inspection of nuclear sites sent oil prices lower. [Energy] 1 Comment
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6:00 AM Overseas: Japan -2.0%. Hong Kong -1.3%. China -0.4%. India -0.6%. London -1.8%. Paris -2.1%. Frankfurt -1.8%. Comment!
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5:56 AM EU leaders are due to meet in Brussels today as Germany comes under increasing pressure to agree to a softening of austerity and to eurobonds, ideas favored by Francois Hollande. However, as an EU diplomat says: eurobonds are "the equivalent of ringing the bell for a happy hour so the inebriated can postpone their hangover indefinitely." [Global & FX, Top Stories] 2 Comments
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5:30 AM P-E firm Hellman & Friedman is reportedly considering selling or listing Getty Images, the world's biggest provider of stock photos, video and other digital content. The company could be valued at $4B, up from the $2.4B that H&F paid to acquire the firm four years ago. [M&A] Comment!
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5:19 AM Barclays (BCS) raised a net $5.5B from the divestment of its 19.6% stake in BlackRock (BLK), selling 26.2M shares to money managers for $160 each and 6.38M shares to BlackRock for $156.80. There's also a greenshoe option of 2.6M shares. The sale will increase Barclays' Tier 1 capital ratio by about five basis points as it looks to meet Basel III requirements. [Financials, M&A] Comment!
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5:11 AM Toll Brothers (TOL): FQ2 EPS of $0.10 beats by $0.07. Revenue of $374M (+17% Y/Y) misses by $3M. (PR) [Earnings, Breaking News] Comment!
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4:41 AM European stocks extend their losses following ugly U.K. retail numbers and BoE minutes. London -1.4%. Paris -1.8%. Frankfurt -1.5%. [Global & FX, On the Move] Comment!
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4:36 AM Horrible retail figures out of the U.K.: Sales fell 2.3% M/M in April, far exceeding the expected 0.8% drop. Sales -1.1% Y/Y vs. expectations of +1%. [Breaking News, Global & FX, Consumer] Comment!
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4:32 AM BoE minutes show members voted 8-1 to keep QE total at £325B in April; David Miles voted for an increase to £350B. Interest rate vote was 9-0. [Breaking News] Comment!
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4:30 AM Golden Star Resources (GSS) is bewildered by the 32% fall in its stock price since its May 17 announcement of a debenture purchase and exchange agreement; "there are no undisclosed material events at the company that would support the recent deterioration in the stock price." Q2 guidance unchanged at 83K-87K ounces of gold. [Commodities] Comment!
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4:22 AM BofA (BAC) will buy back $330M of home loans from Freddie Mac (FMCC.OB) after flaws were found in how the loans were created. Though a relatively small re-purchase, the bank's overall costs tied to defective home loans have totaled more than $42B so far. [Financials] 5 Comments
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4:13 AM Sony (SNE) and Samsung (SSNLF.PK) are trying to force retailers to rein in discounts on televisions, a move that could not only save profit margins at two of the world's largest TV makers but also help retail chains like Best Buy (BBY) and Target (TGT) remain competitive against online discounters. [Consumer, Tech] Comment!
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3:29 AM Thailand's PTT Exploration and Production trumps Shell's (RDS.A) bid for Cove Energy (CNVGF.PK), offering £1.22B ($1.9B) for the Mozambique-focused explorer. Cove's management says it now backs PTT's bid, with the reversal coming just hours ahead of a deadline for investors to accept Shell's $1.8B offer. Shell -1.2% in London. [M&A, Energy, Top Stories] Comment!
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3:13 AM Ahead of its investor conference today, MetLife (MET) outlines its strategic value plan. Highlights: By 2016, increase its ROE to 12-14% from 10.3% last year, grow emerging markets business to 20% or more of operating earnings, shift its product mix toward protection products and away from more capital-intensive products, and re-focus its U.S. business. [Financials] Comment!
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2:55 AM Some blunt eurozone truths from Jin Liqun, chairman of CIC's supervisory board: Eurozone leaders have demonstrated a "lack of leadership" on the region's debt crisis, "too much time has been wasted on endless bargaining... for piecemail bailouts," and the core eurozone nations will have to "keep an eye out for possible copycats should the Greeks be allowed to escape from the crisis unscathed." [Global & FX] 2 Comments
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2:50 AM Asian stocks are heavily down, and Japan is the big loser of the bunch, sinking 2% on BOJ inaction, a widening trade deficit and the never-ending eurozone drama. Hong Kong -1.3%. China -0.6%. India -0.9%. [Global & FX, On the Move] Comment!
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2:48 AM The Bank of Japan keeps its monetary policy unchanged, leaving rates in the 0-0.1% band and holding asset purchases steady at a total of ¥70T ($880B). Analysts expect an increase in asset purchases to come soon, either during a meeting next month ahead of Greek elections, or in July, when the bank gives its updated inflation forecast. [Global & FX] Comment!
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2:38 AM Japan's trade deficit widened to ¥520.3B ($6.5B) in April from a shortfall of ¥84.5B in March, as exports rose a less-than-expected 7.9%. Finmin Jun Azumi calls for the Bank of Japan to "take appropriate steps in a timely manner;" analysts believe BOJ may boost asset purchases in the coming months. [Global & FX, Top Stories] 3 Comments
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12:00 AM Wednesday's economic calendar:
7:00 MBA Mortgage Applications
10:00 New Home Sales
10:00 FHFA House Price Index
10:30 EIA Petroleum Inventories
1:00 PM Results of $35B, 5-Year Note Auction
2:00 PM Fed's Kocherlakota: Monetary Policy Comment!
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