Markets are mixed in both Asia and Europe this morning after GDP growth came in at about half the expected rate in Japan. Futures in the US are lower ahead of the open and it appears that we shall open lower as there is not any economic news due out today. Brent Crude rose above the $114/barrel level as traders are taking a more optimistic outlook for the commodity as they believe that growth will resume and that central banks will move to make another round of easing a reality. There are also geopolitical concerns surrounding the Middle East again with Israel discussing the Iranian threat over the weekend and of course the ongoing conflict in Syria.
Today we will not have any economic news to trade on, but Tuesday we will see a healthy batch which should help move markets.
Looking at Asian markets we see markets are mixed:
All Ordinaries - up 0.16%
Shanghai Composite - down 1.51%
Nikkei 225 - down 0.07%
NZSE 50 - up 0.48%
Seoul Composite - down 0.72%
In Europe markets are mixed as well:
CAC 40 - up 0.09%
DAX - up 0.09%
FTSE 100 - down 0.27%
OSE - down 0.63%
We have always been firm believers in there are those people who find themselves in the right place at the right time and those who create those situations. It is difficult to comprehend, but sometimes there are individuals who find themselves in the right place at the right time numerous times, believe it or not. With the missteps over the months taking place at JC Penney's (JCP) it sure seems that Ron Johnson is one of those individuals. Target and Apple seem like situations where it would be hard to mess up, but JC Penney is an entirely different situation where the customers are not nearly as loyal as Target's or Apple's and the goods do not fly off the shelf nearly as fast. The company reported results below the market's expectations but somehow found a way to rally higher as the company assured investors that the turnaround was underway. Mark us down as skeptical, but it is hard to argue with a $1.30 (5.88%) rise in shares and a close at $23.40/share on Friday. Volume was also strong, with 48.1 million shares traded.
Janus Capital Group (JNS) saw their shares rally by $0.77 (10.01%) to close at $8.46/share on volume of 20.5 million shares after the company announced that they struck a deal to partner with Dai-ichi Life Insurance Company. The deal calls for the Japanese company to take a 20% stake in Janus and get a seat on the board. Janus will get access to the insurer's distribution channels and $2 billion dollars injected into their funds, which should help with the redemption issue that the company has faced over the past few years. This looks like it could be a good deal for the company and provide growth moving forward as the Japanese have ample savings and investable income.
Sprint (S) shares closed up $0.12 (2.50%) to close at $4.92/share on volume of 71 million shares Friday as news came out that former telecom executive Sol Trujillo has been looking to raise interest and capital to do a leveraged buyout of the weaker wireless players in the US. His main target has been T-Mobile, but Sprint has also been floated according to Bloomberg (see here). This might be a bit difficult with the company raising an addition $1.5 billion on top of the $10 billion plus market cap and the outstanding debt. We think this is a long shot, but the market did rally into the close and this is popping up in numerous news sources that we read and subscribe to - so it needs to be paid attention to moving forward. Based on fundamentals alone, we still like the story surrounding Sprint right now and would continue to hold the positions that readers may have accumulated.
Speaking of Sprint, Clearwire (CLWR) may be a beneficiary of that $1.5 billion capital raise. There is speculation that these funds will in some way be used to prop up Clearwire and if you put all the pieces together, this all adds up to the company having a future after all. It appears that Sprint is willing to put further funds into the company and that DISH Network has purchased the company's debt so we could see some type of recapitalization or reorganization around these two parties' interests. On Friday the shares in Clearwire were unchanged at $1.62/share on volume of 12.5 million shares.
Shares in Monster Beverage Corp. (MNST) finished lower by $6.93 (11.32%) to close at $54.27/share on volume of 11.7 million shares as the company disclosed that it is under investigation. It might better be described that the entire industry is under investigation due to the health effects that may or may not be attributable to energy drinks. This has been an issue that has been gaining more and more traction over the years and cannot be good for business. The investigation is in the early phases, but the company did say that they had no idea regarding its impact upon their business.