Today - Sunday, April 20, 2014
- A gun battle near the eastern Ukrainian town of Slavyansk has reportedly left five people dead, including three pro-Russian separatist militias. The two other dead were from a group that attacked in the militias, who were at a checkpoint.
- The incident has come as the separatists refuse to vacate government buildings and other positions they've taken up despite the signing of an international agreement last week to "de-escalate" the crisis.
- Under the deal, the buildings were to be vacated and armed militias disbanded. The Ukraine government has pledged not carry out military operations until after the Easter holiday ends on Monday.
- A mediator from Europe's OSCE security body, which has been tasked with trying to help implement the international accord, traveled to eastern Ukraine yesterday in order to try to persuade the militias to stand down. The OSCE also plans to increase the number of monitors in Ukraine to 500 from 100. However, protesters want Ukraine's interim government to step down first.
- More Ukraine
- ETFs: RSX, RUSL, ERUS, RUSS, RSXJ, RBL, GUR, ESR, RUDR
Saturday, April 19, 2014
- The Obama administration is indefinitely extending its review of the Keystone XL pipeline (TRP), probably delaying a decision on the project until after November's U.S. midterm elections.
- The State Department - which has had the project under review for nearly six years - says it needs more time to prepare its recommendation to Pres. Obama because of ongoing litigation in Nebraska that is unlikely to be resolved before next year; the department was set to close a review process with eight other federal agencies on May 7.
- Pipeline supporters are criticizing the delay as a political ploy, but the move looks likely to keep environmental activist money flowing into the election races; billionaire Tom Steyer, who has pledged to spend $100M to support candidates who back strong policies to fight climate change, is praising the delay as "good news."
- ETFs: XLE, ERX, OIH, VDE, ERY, DIG, DUG, IYE, PXJ, PXI, PSCE, FENY, FXN, RYE, DDG
Friday, April 18, 2014
- Pro-Russian protesters, many of whom are armed, have refused to vacate administrative buildings they have occupied in eastern Ukraine despite an agreement between the government, Russia, the U.S. and EU to "de-escalate" the crisis.
- Under the deal, the buildings were to be vacated and armed militias disbanded.
- Despite the continued standoff, Russia's Micex index is +2.2% in response to the agreement. The USD-RUB is +0.1% at $35.568.
- More on Ukraine
- ETFs: RSX, RUSL, ERUS, RUSS, RSXJ, RBL, GUR, ESR, RUDR
- Car makers have been gearing up for two major shows this weekend: the New York International Auto Show, which starts today, and the Beijing International Automotive Exhibition, or Auto China 2014, which starts on Sunday.
- Ford's (F) Lincoln, which plans to formally enter China’s luxury market later this year, will unveil a new model in Beijing, the first time it has introduced a car outside of the U.S.
- New York show preview
- Tickers: F, GM, TM, HMC, CARZ, FIATY, PEUGF, BAMXF, DDAIF, HYMLF, NSANF, VLKAF, RNSDF, FIATY
- Virtu Financial (VIRT) has suspended its IPO plans amid market volatility and controversy about high-speed trading (HFT) firms after Michael Lewis accused them of rigging the market in a new book, the WSJ reports.
- Virtu's move also comes as regulatory scrutiny on HFT increases, with the SEC, FBI, and the state of New York investigating the sector. Virtu has received a letter from the latter's Attorney General's office asking for information about its trading operations
- Virtu had intended to raise over $200M in its IPO at a market cap of about $3B and hoped its shares would debut by mid-April.
- ETF: IPO
- Eight million people have enrolled for health insurance under Obamacare, President Obama said yesterday, easily surpassing earlier projections by the Congressional Budget Office for 6-7M signups by the end of March.
- The high number of enrollments was achieved despite the technical problems that the online exchanges suffered, particularly when the Affordable Care Act was launched last year.
- Around 35% of those who purchased coverage were people under 35, who are thought to be less likely need to treatment and so can help balance the cost of claims for those who need care.
- However, Obama didn't provide details about the number of enrollees who already had insurance before Obamacare was introduced.
- More on Obamacare
- Health insurers: AET, HNT, HUM, UNH, WLP,
- ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS
- China's new-housing inflation weakened to an eight-month low in March, with the average price of new homes in 70 major cities moderating to +7.7% on year from +8.7% in February.
- On month, housing inflation slipped to 0.2% from 0.3%.
- Home prices rose on a year-on-year basis in 69 of 70 cities, as in February.
- The softening in prices reflects the government's attempts to cool the housing sector, although it also adds to concerns about the slowdown in the wider economy.
- "There are definitely risks in the property market of China's smaller cities," says Standard Chartered's Lan Shen. "The property market will be a big factor that presses the country's economic growth this year."
- The Shanghai Composite is -0.15%.
- ETFs: FXI, PGJ, GXC, FXP, YINN, KWEB, CYB, HAO, CNY, ASHR, CHIQ, DSUM, TAO, CHIX, YANG, CQQQ, MCHI, QQQC, PEK, XPP, YAO, CHXX, YXI, FXCH, CHXF, CHII, ECNS, CHIE, CHIM, FCA, KFYP, TCHI, CHLC, CHNA, KBA
- Russia, Ukraine, the U.S. and the EU have agreed to "de-escalate" the crisis in eastern Ukraine following talks in Geneva.
- Under the deal, non-government militias have to be dissolved and occupied government buildings vacated, while Ukraine will give amnesty to the protesters and it will start a public consultation to devolve constitutional powers to the provinces.
- The agreement also promised "additional support" for Ukraine's battered economy.
- However, the deal left various issues unaddressed such as who would disarm the militias. It also doesn't require Russia to scale back its massive buildup of troops on its border with Ukraine.
- More on Ukraine
- ETFs: RSX, RUSL, ERUS, RUSS, RSXJ, RBL, GUR, ESR, RUDR
Thursday, April 17, 2014
- Cypress (CY +1.2%) guided on its Q1 CC for Q2 revenue of $181M-$186M ($183.5M midpoint) and EPS of $0.11-$0.13 vs. a consensus of $182.8M and $0.12.
- Shares are posting moderate gains after initially trading lower following the chipmaker's Q1 results, which featured in-line EPS and a small revenue beat.
- A slightly soft gross margin (50.3%, -70 bps Q/Q and -40 bps Y/Y) pressured EPS. On the other hand, quarter-ending book-to-bill was a healthy 1.08.
- Touch controller rival Synaptics (SYNA +5.4%) is posting big gains on what's proving a good day for chip stocks (SOXX +2.2%).
- Texas researchers predict that one in twenty or ~12M people in outpatient settings in the U.S. are misdiagnosed by doctors each year. About half could potentially harm patients.
- They analyzed 3,000 patient records and found a misdiagnosis rate of 5%. Extrapolating the rate to the 80% of U.S. adults who receive outpatient medical care yields 12M people.
- Faulty medical records and other potential flaws in the data could mean the real misdiagnosis rate is higher.
- The study's lead author, Dr. Hardeep Singh of Baylor College of Medicine, hopes his team's findings give quality-of-care stakeholders a clearer sense of the problem.
- ETFs: IYH, XLV, VHT, CURE, FXH, RXL, IRY, IXJ, IHF, FHLC, XHS, PSCH, RYH, PTH, RXD
- The recent Ebola outbreak in West Africa that killed 135 people was caused by a new strain of the virus that was not imported from Central Africa. Although it is 97% similar to the Zaire strain scientists believe it has been circulating undetected in the region for an undetermined amount of time.
- WHO states that it will take as long as four months to contain the outbreak.
- Healthcare ETFs: IYH, XLV, VHT, CURE, FXH, RXL, IRY, IXJ, FHLC, PSCH, RYH, PTH, RXD
- Scientists create patient-specific cell lines from the skin cells of two adult men in a procedure called somatic cell nuclear transfer demonstrating that the technique can work for people of all ages. The embryonic cells are genetically identical to the donor and have profound therapeutic potential.
- The cloning procedure is difficult, however. Only one in thirty-nine attempts was successful.
- In therapeutic cloning, a jolt of electricity fuses a grown cell (e.g. skin cell) with an ovum whose DNA has been removed. After ~5 days of dividing and multiplying it develops into a hollow sphere-shaped embryo. The interior cells are pluripotent stem cells which can develop into many different kinds of cells. The goal is to coax them to develop into specialized cells for therapeutic purposes.
- Complicating the ability to create patient-specific cell lines for millions of people are women's reticence over donating eggs, a sometimes painful process. Widespread donations may not be ultimately necessary since many people have genetically similar immune systems so 100 human embryonic stem cell lines would match over 50% of the U.S. population according to the co-author of the study, Dr. Robert Lanza.
- Healthcare ETFs: IYH, IBB, XLV, XBI, VHT, BIB, PJP, BBH, FBT, PBE, XPH, CURE, FXH, IHE, RXL, IRY, IXJ, PPH, IHI, BIS, IHF, FHLC, XHS, PSCH, RYH, PTH, XHE, DRGS, RXD
- The iShares MSCI UAE Capped ETF (UAE) and Qatar Capped ETF (QAT) were filed yesterday, a month before both countries will be reclassified from frontier markets to emerging by MSCI; the ETFs will track the equity markets of each.
- iShare also filed for the iSharesBond Dec 2016 Corporate Term ETF (IBDF), a fund which will track U.S. investment grade corporate bonds maturing at the end of 2016.
- Other ETFs focused on the Middle East: GULF, GAF, MES, PMNA
- Other Investment Grade U.S. Target Date ETFs: BSCE, BSCF, BSCH, BSCG, BSCI, IBCE, BSCK, IBCB, IBCC, IBDC, BSCJ, BSCM, IBDA, IBDB, IBCD, BSCL, IBDD
- "There is vivid interest already from both hedge funds and institutional investors," says Petros Christodoulou, deputy CEO of National Bank of Greece (NBG +4.4%). The €750M senior unsecured bond will be the first such issue by the bank in nearly 5 years, and it's expected to have a 5-year maturity and be priced to yield around 4.5% (the government just sold 5-year paper last week at 4.95%).
- The bond sale comes alongside an expected €2.5B equity offering aimed at filling the large capital hole in the bank.
- The moves comes as Piraeus Bank - the largest Greek lender - last month raised €500M in debt, followed by a €1.75B equity sale. Third-ranked lender Alpha Bank has also raised €1.2B in capital and #4 Eurobank has an investor group ready to anchor a €2.9B stock sale later in April.
- Greek ETF: GREK
- The major averages are managing to hang in there - S&P 500 (SPY +0.1%), Nasdaq 100 (QQQ) - despite sizable earnings-related declines in a number of high-profile names. IBM -3.4%, Google -4.5%, American Express -2%, and Chipotle Mexican Grill -1.9%. United Health -3.7%, and leading health insurer stocks lower amid dour comments on Medicare rate cuts and high Hepatitis C costs.
- Not all the big earnings names are lower though: Morgan Stanley +3.6%, GE +2.3%, and Goldman Sachs about flat.
- Also weighing is a big jump in Treasury yields after initial jobless claims remained right around 300K and the Phila Fed Index popped to a 7-month high. The 10-year Treasury is up 8 basis points to 2.71%.
- ETFs: SPY, QQQ, IVE, SH, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, TQQQ, SPXL, QID, RSP, SQQQ, QLD, RWL, EPS, SPYG, IVW, RPG, RPV, SPYV, VOOG, BXUB, QQEW, VOOV, QQQE, TRND, SFLA, QQXT, BXUC, SPLX, BXDB, FTA, TNDQ
- Weibo (WB) opened at $16.27, below its $17 IPO price (at the low end of a $17-$19 range) . But shares have very quickly jumped to $18.18, giving them a 6.9% gain.
- The Chinese microblogging leader is worth $3.64B. Parent Sina (SINA +2.4%), which stands to own 58% of Weibo post-IPO after accounting for its downsized offering, has shot higher as well.
- Prospectus, IPO preview
- Update (12:20PM): Weibo is now up 10.1%.
- Deutsche Bank analysts raise their price targets on top oil service stocks (OIH), seeing increasing strength in a North American cyclical recovery with current forward earnings estimates perhaps proving to be conservative.
- Basic Energy Services (BAS) gets a big price boost to $43 from $18, citing a recent activity update that indicated utilization levels had increased across all the company’s business segments.
- Other top stocks rated Buy at the firm, including those whose price objectives have been raised: BHI, EXH, HAL, PTEN, PES, SLB.
- TriVascular Technologies (TRIV +12%) holds onto its gain from yesterday's debut that ended at $13.79 (+14.9%) on turnover of 2.2M shares. Volume thus far in today's trading is light at 63K, however.
- The medical device maker's lead product is its Ovation System, an endovascular stent graft for the repair of an abdominal aortic aneurysm. It received CE Mark approval in August 2010 and FDA approval in October 2012. Commercial sales began in the U.S. in November 2012.
- Revenues for 2012 and 2013 were $5.4M and $19.5M, respectively.
- Gross profit was -$3.6M and $7.8M.
- Net loss was -$43.3M and -$50.3M.
- Net loss/share was -$5.89 and -$5.01.
- CF Ops was -$34M and -$46.9M.
- (IPO) (FPX)
- With natural gas in storage at more than a decade low, there needs to be plenty of inventory-building this spring and summer, but the season is off to a slow start with the EIA reporting a build last week of just 24 bcf vs. 36 bcf expected. Stocks today stand at 850 bcf, 50% off the level from one year ago and vs. a 5-year average for this time of year of 1 trillion cubic feet.
- Futures jump in response, with the May 2014 contract up 4% to $4.707. UNG +3.5%
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, KOLD, UNL, NAGS, DCNG