Overnight news out of China sparked that market sharply higher, as can be seen below under the Asian markets recap section. The move was the result of factory output growth numbers released yesterday, which is the main driver behind their economy. Also German economic data was not bad and seems to be the one bright spot in Europe right now. Unfortunately, the news in China may not have much of an impact as usual as the world's largest economy, the US, is muting positive news abroad as we approach even closer to the fiscal cliff.
We have economic news due out today, and it is as follows:
CPI - -0.2%
Core CPI - 0.1%
Industrial Production - 0.3%
Capacity Utilization - 78.0%
Asian markets finished mixed today:
All Ordinaries - up 0.05%
Shanghai Composite - up 4.32%
Nikkei 225 - down 0.05%
NZSE 50 - up 0.11%
Seoul Composite - down 0.39%
In Europe, markets are mixed this morning:
CAC 40 - down 0.02%
DAX - up 0.21%
FTSE 100 - down 0.11%
OSE - up 0.03%
Clearwire (CLWR) shares rose $0.43 (14.91%) during yesterday's session to close at $3.16/share, above the price Sprint offered which was $2.90/share. With Sprint thinking that its price is more than fair based off of where Clearwire's shares traded prior to the buyout rumors circulating and Clearwire shareholders believing that they need to receive a price more in line with industry averages for other acquisitions it sure appears that we will have a stand-off between Softbank, Sprint and Clearwire.
Last night, it was revealed that Softbank was limiting Sprint's offer price to a level no higher than $2.97/share. It will be interesting to see how that affects the trading today, but as part of Sprint's offer they have agreed to provide financing for Clearwire in the interim -which would solve the cash issues the company faces moving forward.
Rigel Pharmaceuticals (RIGL) was a big loser yesterday with investors pushing shares lower by $2.92 (34.64%) to close at $5.51/share after announcing that its rheumatoid arthritis drug being co-developed with AstraZeneca performed at a level below Abbott's Humira (which is the current market leader for the category). This news was disappointing; however, there is a Phase III study which will report results of fostamatinib when combined with other drugs and is due out in the first half of 2013.
Investors saw shares in Best Buy (BBY) rise $1.94 (15.93%) yesterday to close at $14.12/share on volume of 44.1 million shares. The rumor yesterday was that founder Schulze will now submit a bid for the company by Saturday now that he has obtained financing to do the deal. The whisper numbers regarding price per share for the deal were between $15-18, so if that holds true, we are glad we have been so negative on this one and were adamant about keeping readers from engaging in 'buyout rumor speculation'. Sure some who recently bought would have made money if the rumor holds true, but everyone before that would be deeply in the red.
J.C. Penney (JCP) has been a big winner over the past few sessions and the winning streak continued yesterday as the shares finished at $20.80/share after having risen by $1.35 (6.94%). The stock has reversed that major downtrend that it was in and rallied sharply, up over 30%, since the lows that it put in during the month of November. What has changed is that investors have become more open to owning shares again as CEO Ron Johnson has displayed that he may be open to altering his strategy in order to achieve success in the transformation of the company.
Retail investors believe that coupons and sales are needed which is why optimism has reappeared here; however, many are saying that his is just another instance of Johnson acting on whims. Time will tell, but we would point out that it is quite difficult to establish a policy of everyday low prices when you tease customers with coupons and sales during the transition as they will come to expect that treatment in the future. This could help boost current results but wind up counterintuitive long-term unless the company's strategy shifts.
For those not paying attention, Delta Air Lines (DAL) has been on a tear lately. The company saw its shares rally another $0.57 (5.32%) to close at $11.29/share during yesterday's session. The company is buying a competitor, announced that it expected earnings to double and doing a lot of deals which are changing the standard way it does business. Although the company is doing it a different way, it sure seems like a new Southwest as investors are giving the shares a good bit of luvin' (pun intended) as the company has worked to lower its fuel costs via a refinery deal, helped consolidate the industry and continue to wring efficiencies out of the business model.