MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Tuesday, June 18, 2013
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4:15 PM Market recap: Stocks cap a two-day rally to wipe out last week's losses, as investors seem confident Bernanke will assure everyone at his press conference tomorrow that the Fed is in no rush to taper its bond-buying program. The Dow's 138-point gain marked a sixth straight day of triple-digit moves; the small-cap Russell 2000 closed at an all-time high. The dollar rose vs. the yen; Treasury prices inched up. 3 Comments
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9:15 AM Market preview: U.S. stock futures and European shares are flat-to-higher after U.S. CPI comes in slightly below expectations and as the FOMC meets on the first day of a two-day policy meeting. The S&P Mini is flat. "Today should be quiet, as people are only asking about tomorrow," says economic strategist Andrew Wilkinson. Sony is +4.25% after Dan Loeb ups the ante over a spin-off for the company's entertainment division. Ongoing: Paris Air Show Comment!
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8:30 AM May Consumer Price Index: +0.1%;vs. +0.2% expected, -0.4% prior. Core CPI +0.2%; in-line with expectations, +0.1% prior. 5 Comments
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7:46 AM The FOMC will be able to chew on inflation data for May when it meets today, with the reading due out this morning. Economists expect that CPI rose 0.2% on month after sliding 0.4% in April, driven up by slightly higher food and gasoline costs. "Inflation is low in the U.S. at the moment, giving the Fed more room to wait for improvement in employment before it starts tapering," say analysts at Danske Daily. Comment!
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5:51 AM Paris Air Show: As widely expected, Boeing (BA) has officially launched the 787-10, a stretched version of the Dreamliner with up to 330 seats, and said it already has orders for 102 jets from five buyers (PR). One of these is United Airlines (UAL), which will be the launch customer in North America with a booking for 20 aircraft, including an upgrade on 10 existing 787 orders. Air Lease Corp. (AL) has booked 30 (PR). Meanwhile, Ryanair's (RYAAY) shareholders have approved the carrier's acquisition of 175 Boeing 737 aircraft in a deal worth $15.6B at list prices. 2 Comments
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5:06 AM British Prime Minister David Cameron will lead talks on the exceptionally thorny topic of international tax reform at the G8 summit in Northern Ireland today. The discussion will focus on the key areas of transparency, tax havens and multinational tax avoidance. "We have made more progress in the last 24 hours than people have had in the past 24 years," U.K. Finance Minister George Osborne said. 1 Comment
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4:13 AM Asian and European (FEZ) shares are mixed as markets await the word from the FOMC, which is due to start a two-day session today. "I think the Fed is secretly sitting with its fingers crossed, hoping that the froth continues to be skimmed off asset markets," says analyst Nick Beecroft. "I don't think they will be bothered at all if the S&P 500 or other risk markets fall 5 or 10%, as long as it didn't happen in a (single) day." Japan -0.2%, Hong Kong flat, China +0.1%, India -0.2%. EU Stoxx 50 -0.2%, London +0.4%, Paris -0.2%, Frankfurt -0.1%, Madrid +0.4%, Milan +0.4%. 3 Comments
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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. Comment!
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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." 1 Comment
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4:15 PM Market recap: Stocks opened strong after the Nikkei jumped 2.7% as the dollar/yen rallied to 94.80, then pared gains in mid-afternoon on renewed taper talk ahead of Bernanke's Wednesday press conference. Cyclical sectors contributed to the advance as energy, financials and tech all jumped more than 1%. Homebuilder sentiment spiked, while NY Fed manufacturing also rose. 1 Comment
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10:28 AM The Supreme Court says the FTC can take action against deals struck between brand-name drug makers and manufacturers seeking to market generics. The case stems from FTC v. Actavis and revolves around so-called "reverse-payment agreements," so named because the holder of a patent makes a payment to the generic challenger as opposed to the other way around. Some say the agreements amount to the splitting of monopoly profits at the expense of the public. Shares of Actavis (ACT -1.7%) fall on the news and Abbvie (ABBV +0.1%) trades largely flat after slipping initially. Comment!
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9:15 AM Market preview: U.S. stock futures track Asian and European shares higher as investors hold out hope that the Fed won't start turning down the liquidity rush when the FOMC meets this week. The S&P mini is +0.8%. Telefonica is +3.4% following speculation that it was a buyout target for AT&T, while Terex slides 13.3% after an earnings warning. AMD is +5.3% on the heels of favorable review from Barrons. Later: NAHB Housing Market Index Comment!
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6:11 AM Elan is holding an investors' meeting today, where shareholders are due to vote on four proposals, including a share $200M buyback, a drug spin-off and a series of acquisitions. A vote in favor of any of the resolutions would void an offer of up to $8B from U.S. investment firm Royalty Pharma. Elan put itself up for sale on Friday, but still refused to engage with Royalty over the weekend, much to the latter's frustration. One imagines that Johnson & Johnson (JNJ) must be pleased to be well out of it, having last week sold the rest of its ADRs in Elan for $332.5M. Comment!
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4:08 AM European equities (FEZ) follow Asian stocks higher as traders wait on the FOMC, which is due to meet tomorrow and on Wednesday. "Investors may be getting used to the idea that a very gradual tapering isn't such bad news, considering that the (U.S) economy is slowly recovering," says Mirabaud Securities' John Plassard. Telefonica is +2.3% on buyout speculation involving AT&T. EU Stoxx 50 +1.1%, London +0.8%, Paris +1.3%, Frankfurt +1.3%, Milan +0.05%, Madrid +0.6%. Comment!
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3:59 AM Asian shares rise ahead of the FOMC's latest meeting this week, with tepid economic data in the U.S. on Friday perhaps convincing investors that the Fed won't announce an early change to its $85B-a-month bond-buying program. Japanese stocks increase sharply for a second consecutive session, boosted by bargain-hunting following the recent sell-off and the weakening yen. Japan +2.7%, Hong Kong +1.1%, China -0.3%, India +0.4%. Dollar-yen (FXY) +0.8% at $95.02. Comment!
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3:37 AM Activist investor Starboard Value has reportedly taken a 5.7% stake in Smithfield (SFD) and is urging the company to split up into three rather than complete its $4.7B acquisition by China's Shuanghui. Starboard reckons Smithfield could be worth $44-55 if it were to break up into separate U.S. pork production, hog farming and international-sales companies, well above Shuanghui's offer of $34 a share. Comment!
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3:15 AM France's government has instructed its three representatives on France Telecom's (FTE) board to vote to keep CEO Stephane Richard at a crucial directors' meeting today to discuss his future. The meeting comes after Richard was placed under formal investigation as part of a probe into a €285M government arbitration payout to a businessman in 2008. Richard also has the support of employee shareholders, who hold one seat. Comment!
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2:59 AM AT&T (T) has reportedly been thwarted in a €70B bid to acquire Telefonica (TEF) by Spain's government, which has the power to stop the sale of any company that is deemed strategic. The U.S. carrier told state representatives that it would take on the Spanish operator's €52B of debt as part of any transaction. Telefonica said it hasn't "received any approach or...indication of interest," from AT&T. 4 Comments
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