This morning it appears that the rally is carrying forward with markets having closed up in Asia and Europe mostly higher this morning. Once again today we have very little in regards to economic news, however we have earnings news to digest. Tomorrow we will get our biggest dose of the week of economic data and that will give investors something to finally analyze.
There is more bad news out of the United Kingdom today regarding its big banks and that shall dominate the news headlines for a few days. The fact that they hid this and the magnitude of the fraud/crime will have investors scratching their heads and trying to figure out how this happened. It boils down to a bank where numerous people were behind the act and we shall see various regulators step in and chase the cockroaches out. There is never just one, and we are left to wonder if this turning up is the result of the LIBOR investigation or something entirely different.
We have one little bit of economic news out today, and it is as follows (data set - consensus):
Consumer Credit - $10.0 Billion
Looking at Asian markets we see markets are higher:
All Ordinaries - up 0.43%
Shanghai Composite - up 0.13%
Nikkei 225 - up 0.88%
NZSE 50 - up 0.61%
Seoul Composite - up 0.05%
In Europe markets are higher:
CAC 40 - up 0.13%
DAX - up 0.17%
FTSE 100 - down 0.34%
OSE - up 0.58%
NII Holdings (NIHD) had its best day in years as shares rallied $1.28 (18.82%) to close at $8.08/share on volume of 15.9 million shares. Yesterday's price action was due to Wells Fargo maintaining its forecast for upcoming results with revenue and profits expected to come in higher than expected when it announces today. Shares in the company, which operates under the Nextel name in Latin America, have been hard hit this year, having lost about 2/3rds of their value since the start of the year. It will be interesting to see if we have seen a reversal here or if the trend resumes and much of that will depend upon what the company has to say when it releases earnings today.
Retail The fact that Richard Schulze stated he was assembling a bid for the company he founded was no surprise as it was one of Wall Street's worst-kept secrets. The fact that Best Buy (BBY) shares' reaction indicates that investors highly doubt the deal gets done was a bit surprising. Mr. Schulze stated he was assembling a private equity bid, which would pay between $24-$26/share to take the company private, but the stock only rose $2.35 (13.32%) to close at $19.99/share. Volume was strong at 49.7 million shares and the company did open higher earlier in the session, but backed off as the trading session progressed. Consumer Goods: It was a rough day for shareholders of Tyson Foods (TSN) as shares tumbled $1.23 (7.99%) to close at $14.17/share on volume of 17.9 million shares after the company reported quarterly results. The stock hit a new 52-week low yesterday and the stock did finish near the day's lows. The company stated that there is lower consumer demand for both beef and chicken, and when you look at the numbers volumes were lower with pricing higher, which helped to keep the numbers from being absolutely abysmal. Due to this, the full-year forecast was cut and the outlook provided by the company appeared quite gloomy. Advertising: We saw The Interpublic Group of Companies (IPG) fall yesterday as it became obvious that the news that there were takeover talks being held in regards to the company was not true. Shares retreated $0.86 (7.84%) to close at $10.11/share as investors saw the reports yesterday that came out over the weekend where the main characters denied talks even took place. It is pretty obvious right now that there is no deal, however sometimes where there is smoke there is fire and with that said we would not at all be surprised if Interpublic found itself the target of an acquirer in the next 12 months. Financials: The saga surrounding Knight Capital Group (KCG) continues as shares fell $0.98 (24.20%) to close at $3.07/share on volume of 89.1 million shares. The shares retreated yesterday on the news of what the cost of its capital was going to be. The group of investors will have the right to buy shares equating to roughly 73% of the company at a price of $1.50/share. The company will also add three new seats to its Board of Directors, which will be given to the investor group. This will severely dilute current shareholders, but it also keeps the company from filing for bankruptcy so it appears like the deal is good for everyone at this point. Going forward however, it will provide an overhang for shares, so we will be staying clear of this one due to that fact.