Chinese trade data beats estimates. China's trade data for July topped expectations and provided evidence that the economy might be stabilizing after over two years of slowing growth. Imports surged 10.9% on year vs expectations of +2.1%, while exports rose 5.1% vs +3%. "Together with the rebounding official Purchasing Managers’ Index...July trade data are supportive of a better economic outlook for China," says Bank of America's Ting Lu.
Blackstone hires banks for Hilton IPO. Blackstone (BX) has reportedly recruited banks to lead an IPO of Hilton Worldwide, which the private-equity firm acquired in 2007 in a $26.7B leveraged buyout. The speculation comes as a rebound in demand for hotel rooms and a lack of supply has led to a boom in the hotel sector. It also follows reports yesterday that Blackstone is looking to exit its La Quinta Inns & Suites budget hotel chain.
Tesla shares power ahead following surprise profit. Tesla's (TSLA) shares roared 12.5% higher pre-market after the electric-car company's Q2 earnings beat expectations. EPS came in at $0.20 vs consensus for a loss of $0.17, while revenues surged to $405.1M from $26.6M last year and the gross margin hit 22%. Tesla's net loss narrowed to $30.5M from $105.6M. "What's more impressive than even the profit numbers are the increasing rate of production and growing margin that they're making per vehicle," says analyst Karl Brauer.
Top Stock News
Sanofi accused of bribery in China. Sanofi (SNY) gave 1.69M yuan ($276,000) of bribes to 503 doctors in China, a whistleblower has reportedly alleged. The French pharmaceutical giant made the payments in the guise of "research spending" in the cities of Beijing, Shanghai, Hangzhou and Guangzhou in the autumn of 2007. The allegations have surfaced after Chinese authorities recently visited Sanofi at one of its regional offices. They also come as officials probe GlaxoSmithKline (GSK) for corruption.
Green Mountain slumps following results. Green Mountain's shares were -6.2% premarket following the coffee company's FQ3 earnings, with EPS of $0.82 beating forecasts while revenue of $967.1M missed expectations despite growing 11%. Net income jumped 59% to $116.3M. One reason for the sharp slide in shares might be to do with a change in language in Green Mountain's long-term guidance. "The company expects double-digit annual revenue growth," the firm said yesterday vs a previous forecast in which it continued to "be comfortable with its longer-term outlook of annual net sales growth of 15-20%." Is that a guide down?
Rio Tinto's underlying profit tumbles 18%. Rio Tinto's (RIO) H1 underlying earnings dropped 18% to $4.23B as falling commodity prices hurt the miner's performance. Rio's net profit sank 71% to $1.72B, partly due to a $1.85B paper loss from the effect of forex fluctuations on the value of the company's debt. Rio has scrapped the sale of its Australasian aluminum assets, due to the market environment. The move follows a failure to sell the company's diamond unit. Shares were +1% premarket.
Groupon names co-founder as CEO. Groupon (GRPN) has appointed co-founder Eric Lefkofsky as CEO to replace Andrew Mason, who was fired at the end of February. Lefkofsky had been chairman and interim co-CEO since Mason departed; Vice-Chairman Ted Leonsis will now be Chairman. Groupon announced Lefkofsky's appointment after saying that Q2 EPS was $0.02, as expected, while revenue rose 7% to $608.7M and beat forecasts. The company also plans to buy back $300M in shares. The stock was +23.5% premarket.
JPMorgan under DOJ investigation over mortgages. JPMorgan Chase (JPM) is being investigated by civil and criminal divisions of the Department of Justice over offerings of mortgage-backed securities. JPM has also raised its estimate of possible legal losses in excess of reserves to $6.8B at the end of June from $6B three months earlier.
Potash Corp. boss sees cartel breakup as short-term. Potash Corp. (POT) CEO Bill Doyle doesn't expect the breakup of the Russian potash cartel to last long, nor does he foresee changes to the North America's Canpotex cartel, while his company has no plans to alter its strategy. Doyle dismissed Uralkali's prediction that prices could drop 25% to $300 a ton as a result of its split from BPC and its push to ramp up production.
Top Economic & Other News
BOJ leaves monetary policy unchanged. As expected, the Bank of Japan has maintained its pledge to expand the monetary base by ¥60T to ¥70T a year. The BOJ also kept its assessment of the economy unchanged, saying that it's "starting to recover moderately," and the bank noted that "inflation expectations appear to be rising." BOJ Governor Haruhiko Kuroda warned that Japan needs to keep its fiscal discipline, and argued that the government can increase its sales tax as planned and pull the economy out of deflation.
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In Asia, Japan -1.6% to 13606. Hong Kong +0.3% to 21656. China -0.1% to 2045. India +0.7% to 18,789.
In Europe, at midday, London +0.3%. Paris +0.3%. Frankfurt +0.3%.
Futures at 6:20: Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude -0.2% to $104.19. Gold +0.2% to $1288.
Today's economic calendar:
Chain Store Sales
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $16B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: AAP, AEC, AINV, AMCX, AMRC, APO, AWR, BCE, BCRX, BEAM, BR, CBB, CDE, CNQ, CNSL, CQB, CSIQ, CTB, DF, DNDN, FCN, FNP, FSYS, FUN, FWLT, FWM, GBDC, GLDD, GLP, GTN, HL, HSH, IQNT, IRC, KIOR, LAMR, LINE, MFC, MPW, NGPC, NVAX, NVO, OGE, OWW, PMT, RGLD, SNI, SPH, SRPT, SSYS, SWC, THI, TK, TMUS, VC, WAC, WIN
Notable earnings after today's close: AGO, AIRM, AL, ALNY, AMRS, ANAC, ASYS, ATLS, AUQ, BCEI, BNNY, BRKS, CFN, CLNE, CPE, DAR, DATA, DV, ELON, ELX, FF, FXEN, GERN, GXP, IPXL, KTOS, LGF, MCP, MDRX, MDVN, MIDD, MNST, MRGE, NDLS, NES, NFG, NOG, NPSP, NVDA, OLED, ONXX, PCLN, PDLI, RAX, RICK, RNDY, SAAS, SF, SHOR, SLXP, UBNT, UNXL, YOKU, ZGNX
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