Today - Tuesday, March 11, 2014
- Stock futures are on track for a modestly higher open in what shapes up as a quiet day of trading, with global markets unable to find any real direction and the economic data calendar light; S&P and Dow +0.1%, Nasdaq +0.2%.
- European markets, more mindful of the Ukraine situation than in the U.S., are mostly lower; Asian markets ended mostly higher, with the Nikkei +0.7% after the Bank of Japan left its easy money policy unchanged.
- With earnings season over, investors are looking for signs to suggest the economy is coming out of the weather-related slowdown of the last couple of months, and many observers see stocks stuck in a trading range for a while.
- Treasury have alternated between slim gains and losses for the past hour, with the 10-year yield hovering near 2.78%.
- Still ahead: wholesale inventories.
- GlaxoSmithKline (GSK), Johnson & Johnson (JNJ) and TPI Enterprises want the government of Australia to let them grow poppies on the country's mainland, due to a shortage of opium for pain killers and amid soaring demand.
- Australia only allows poppy growing in Tasmania, which is responsible for around half of the world's supply of opiate-based pain relief. Recent drought and storms in Tasmania have meant that drug firms can't get enough crops.
- Bayer (BAYRY) signs multi-year extension with Roche's (RHHBY) Ventana Medical Systems to develop companion diagnostics focused on immunohistochemistry.
- The agreement focuses on the development of diagnostic tests for Bayer's biomarker-targeted therapeutics.
- Ventana will create an expert team with resources exclusively designated for Bayer.
- Financial terms are undisclosed.
- Pac Crest's Andy Hargreaves has upgraded Apple (AAPL) to Outperform, and set a $635 PT. He thinks a 4.7" iPhone 6 will arrive in the fall (in-line with reports), and that a base model will sell for a relatively steep subsidized price of $299; that could imply an unsubsidized price of $749.
- Hargreaves estimates a 4.7" iPhone could boost the iPhone's total FY15 (ends in Sep.) unit sales by 10M to 170.4M, while lifting its ASP by $36 to $641 and its EPS contribution by $4 to $33.04.
- He isn't counting on a 5.5" iPhone (also rumored to be in the pipeline) arriving this year. At the same time, he thinks new product launches (an iWatch?) provide "optionality" to Apple shares.
- Hargreaves downgraded Apple on Jan. 16, 2013; when shares were at $471.
- AAPL +0.8% premarket
- Wells (WFC) last month made news by barring its employees from making loans on peer-to-peer platforms like Prosper and Lending Club. Though growing rapidly, the P2P lending business is but a fraction of the amount of credit extended by Wells Fargo, but the bank's move showed the upstarts are clearly on its mind. Former Morgan Stanley CEO John Mack is on the board of Lending Club and Prosper is headed by former Wells prime brokerage chief Stephan Vermut.
- A fresh review by Wells found loans made by its staff were not "inconsistent with [its] code of ethics ... The P2P market is not uniform and is evolving and expanding rapidly. We will continue to review our guidance as the market evolves.”
- FuelCell Energy's (FCEL) FQ1 results aren't slowing down the recent buying frenzy in its shares, +16.8% premarket after revenue jumped 22% Y/Y and losses narrowed amid growing demand for multi-megawatt fuel cell parks.
- Inquiries and activity levels globally remain high, FCEL says, and the company is on track to close orders worth multiple megawatts of power capacity.
- Backlog totaled $327M at Jan. 31, 2014 vs. $428M a year ago.
- No FQ2 guidance is provided; consensus estimates for the quarter are an EPS loss of $0.03 on sales of $48.8M.
- Alternative energy stocks continue to rise at a torrid pace: PLUG +9.5%, BLDP +11.7%, HYGS +5.1%, ZBB +18.8%, CPST +13.2%, OPTT +9.9% premarket.
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- WuXi PharmaTech (WX) inks a collaboration with Seattle-based Pacific Biomarkers. The company will provide access to its wide menu of validated biomarker assays to support WuXi's clinical trial testing services.
- Pacific's offerings include biomarkers for cardiovascular disease, diabetes, obesity, acute kidney injury, musculoskeletal disorders and inflammation.
- Weak reports from Urban Outfitters (URBN) and American Eagle Outfitters (AEO) could cast a pall over the entire teen apparel sector.
- Both retailers say they are very cautious on Q1 results after seeing weather clip traffic and the holiday promotional activity linger on.
- On watch: ARO, PSUN, PLCE, ANF, CHS, BKE, ZUMZ, EXPR.
- Sanofi (SNY) is partnering with Belgium's UCB to develop anti-inflammatory small molecules that could be used "to treat a wide range of immune-mediated diseases in areas such as gastroenterology and arthritis."
- Sanofi will make upfront and milestone payments that have the potential to surpass €100M.
- The companies will share costs and profits on a 50-50 basis.
- The agreement is the latest example of a major pharmaceutical company looking externally for new drugs. (PR)
- ThyssenKrupp (TYEKY, TYEKF) says it will scrap the sale of its railway and construction business after failing to attract an acceptable bid; instead, the German steelmaker now plans to discontinue its railway equipment activities, selling some of its parts and closing some sites.
- However, the company says the profitable construction equipment operations will remain within the materials services division and undergo a restructuring.
- The planned disposal of the businesses, which have combined annual sales of ~€400M ($524M), was prompted by limited growth prospects in the German market and cost pressures.
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- Freeport McMoRan (FCX) has cut ore production by ~60% at its Grasberg copper and gold mine in Indonesia, according to a union official, two months after exports were halted over a dispute with the government on a new tax.
- FCX and fellow U.S. miner Newmont Mining (NEM) have been locked in talks with the government for weeks over the controversial export tax on mineral concentrates, which rises from 25% this year to as high as 60% by H2 2016.
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