MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Tuesday, June 18, 2013
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3:18 AM As expected, France Telecom's (FTE) board yesterday kept Stephane Richard as CEO despite French authorities placing him under investigation for his role in the suspected misuse of public funds. Richard's status was pretty much assured after the government said they would back him. The board said it doesn't believe that Richard's legal problems "impede his ability to fully and effectively" manage France Teleom. (PR) [Tech, Consumer] Comment!
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3:06 AM The EU new-car market showed no signs of bottoming out in May as registrations dropped 5.9% to 1.04M units, the lowest level for the month since 1993. The fall followed a 1.7% gain in April. In January-May, registrations slid 6.8% to 5.07M vehicles. GM (GM) was among those to suffer the most in May with an 11.3% decline. Toyota registrations dropped 4.9% but those of Ford fell just 0.3%. (PR) [Consumer, Global & FX] Comment!
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2:55 AM Talisman Energy (TLM) has reportedly approached potential buyers, including private-equity firms, for its shale assets in the Eagle Ford basin in south Texas with a view to raising $2B. The speculation could come as a bit of a surprise, because while Talisman has said it is looking to offload non-core assets, its Eagle Ford interest is seen as core. [Energy, M&A] Comment!
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2:05 AM Johnson Controls (JCI) is reportedly in talks with P-E firms about selling them its automotive electronics unit, which is valued at $1B, after industry interest weakened due to the unit's softer-than-expected performance. Delphi Automotive (DLPH) has pulled out the running, although Visteon (VC) and SAIC (SAI) subsidiary Huayu Automotive Systems are still involved. [M&A] Comment!
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1:55 AM Sony (SNE) repeats that it will review Daniel Loeb's proposal that the company float its entertainment business after Loeb's Third Point hedge fund increased its stake in the electronics firm to 7% from 6.5%. In the past, Sony has said that its film and device units are better together - CEO Kazuo Hirai believes they have valuable synergies - and that it would consider Loeb's spin-off idea. [Tech, Top Stories, Consumer] Comment!
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1:45 AM Japanese industrial production grew 0.9% on month in April, as in March, but came in well below preliminary data of +1.7%. On year, output dropped 3.4% vs -6.7% a month earlier. The on-month change in April was due to the government altering the base year to 2010 from 2005, which affected the weightings of items in the index and the method used to account for seasonal factors. [Global & FX] Comment!
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12:00 AM Tuesday's economic calendar:
FOMC meeting begins
7:45 ICSC Retail Store Sales
8:30 Consumer Price Index
8:30 Housing Starts
8:55 Redbook Chain Store Sales Comment! -
Monday, June 17, 2013
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11:28 PM Dan Loeb's Third Point raises its stake in Sony (SNE) to 7% from 6.5% according to a letter (text) sent to SNE's board. "Shareholders should not have to wait any longer," Loeb says, "the company’s most valuable untapped synergies lie within entertainment itself." [Tech, Breaking News, Top Stories] 1 Comment
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11:16 PM Goldman's take on the power of the press: "Stocks maintain early gains until FT Harding hits the tape with an article suggesting a signal from Bernanke this Wednesday that the taper was drawing near … Then via Twitter Harding casts doubt on his own predictions and more than half of those losses are reversed [reinforcing] how important the FOMC Wednesday will be." Speaking of reinforcement, does this action just bolster Stan Druckenmiller's contention that all price signals are now compromised by central bank interference? [U.S. Economy] Comment!
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10:53 PM Despite "mounting criticisms from multiple parties" the risk/reward profile on shares of Intuitive Surgical (ISRG) is "attractive," Wedbush says, initiating the stock at Outperform with a $580 price target citing the company's "track record of innovation" and the "ongoing launch of new instruments." [Healthcare] Comment!
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10:42 PM Premier Exhibitions' (PRXI) board authorizes a stock repurchase plan of up to 1.5M shares (about 3% of the float). "Today's announcement is indicative of the improvement in our financial condition and our positive outlook for the future," says Chairman Mark Sellers. Premier has tumbled badly of late over questions about whether the sale of its Titanic artifacts will ever go through. Remain patient, say the bulls, who also remind of now-viable operations separate from the Titanic. 1 Comment
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10:22 PM New home prices in China rise in 69 out of 70 cities surveyed in May, once again (previous) undermining government efforts to curb property inflation. Prices jump 12% and 10% in Beijing and Shanghai respectively, versus 10.3% and 8.6% gains posted in April. [Global & FX] Comment!
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9:28 PM Caution abounds as global markets nervously eye the Fed. In Tokyo the Nikkei edges up 0.4% early while shares trade modestly lower in Australia (ASX -0.4%) and hover around the flatline in Korea. The yen weakens 0.44% against the dollar to ¥94.90 at last check. [Global & FX] 1 Comment
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8:28 PM Sprint (S) files suit to end Dish's (DISH) $4.40/share tender offer for Clearwire (CLWR), alleging the deal (endorsed by Clearwire last week) violates Delaware law and the rights of Sprint and other "strategic" Clearwire investors. Among other things, Sprint claims the Dish offer can't be concluded without the approval of both Comcast and Clearwire shareholders owning at least 75% of shares (Sprint has a majority stake). Clearwire investors aren't bothered, shares +0.4% AH to $4.65. (previous: I, II) [Tech, M&A] 2 Comments
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7:59 PM MRC Global (MRC) says it's been awarded a five-year global contract to supply and distribute pipe, valve and fitting needs for Celanese (CE). Financial details of the transaction weren't disclosed. Comment!
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7:53 PM The fundamentals haven't changed enough to warrant all the skittishness in the market right now over what the Fed is going do about QE, observes Fusion Analytics' Josh Brown. He brushes off talk recently in the Financial Times that Chairman Bernanke would likely signal a drawdown to the asset purchase program this week. "No one knows what's going to happen," he says. And regardless, headlines shouldn't change an investment thesis anyway. [U.S. Economy] 4 Comments
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6:59 PM Oracle (ORCL) has the potential to support a quarterly dividend at least twice as high as its current $0.06/share (0.7% yield), argues RBC's Matthew Hedberg. Hedberg points out Oracle, whose board will be free to consider a hike in August, only paid out 9% of its free cash flow in FY12, 1/3 of a peer group average of 27%. On the other hand, buybacks consumed 45% of free cash flow, a little above the peer group's 41%. Meanwhile, Jefferies' Ross MacMillan foresees Oracle reporting an in-line FQ4 on Thursday, with FQ3 order push-outs and a server refresh offsetting IT spending weakness. (Goldman) [Tech, Quick Ideas] 2 Comments
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6:37 PM Golden Star Resources (GSS) +1.9% AH after providing an operational update, saying it is confident operations are viable in the current gold price environment and existing cash and cash flow from operations can cover its sustaining capital requirements for 2013. Gold production is seen at 290K-310K oz., ~10% lower than prior guidance, resulting in $45M less in operating costs. [Commodities, On the Move] 2 Comments
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