Seeking Alpha
  • Today - Friday, April 25, 2014

  • 5:24 AM
     
    • Global equities are mostly lower as the tension in Ukraine continues to ratchet up.
    • However, Japan's Nikkei rose 0.2% following weaker-than-expected core inflation data, which has buoyed hopes that the Bank of Japan will increase its bond-buying program.
    • Elsewhere in Asia, Hong Kong -1.5%, China -1%, India -0.7%.
    • Euro Stoxx 50 -0.6%, London -0.2%, Paris -0.4%, Frankfurt -0.9%, Milan -0.8%, Madrid -0.9%.
    • U.S. stock futures: Dow -0.2%. S&P -0.1%. Nasdaq -0.15%
    | Comment!
  • 4:54 AM
    • Apple (AAPL), Google (GOOG), Intel (INTC) and Adobe (ADBE) agreed to pay $324M to settle an antitrust class-action suit accusing them of creating illegal no-hire agreements in Silicon Valley to keep wages down, Reuters reports.
    • The amount is far less than the $3.4B in damages that 64,000 employees were collectively seeking. That figure could have tripled had the case gone to trial and the workers won.
    • The deal was disclosed yesterday, although financial terms weren't provided.
    | Comment!
  • 3:56 AM
    • Honda's (HMC) FQ4 net profit surged to ¥170.5B ($1.67B) from ¥75.7B a year earlier as sales climbed 13% to ¥3.1T ($30B), boosted by the weak yen and a rush by Japanese consumers to purchase cars ahead of a rise in sales tax at the start of this month.
    • Honda sold almost 1.2M vehicles worldwide, with sales in Japan jumping 41%.
    • The company forecast a 21% increase in FY 2015 profit to ¥595B ($5.8B) and 7.7% growth in revenue to ¥12.75T, as well as global vehicle sales of 4.83M. (PR)
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  • 3:21 AM
    • Nokia (NOK) will reportedly name its Indian-born networks boss, Rajeev Suri, as its next CEO on Tuesday and outline what its strategy will be following the sale of its handset business to Microsoft, which could close today.
    • Suri has been considered the leading candidate to become Nokia's CEO after bringing profitability to Nokia Solutions & Networks (NSN) with a major overhaul.
    • Nokia could also announce on Tuesday how much it plans to pay out to shareholders with the cash that it's receiving from Microsoft.
    | 3 Comments
  • 2:56 AM
    • S&P has reduced Russia's rating by one notch to BBB-, or one grade above junk level, and kept the country's outlook at negative.
    • The agency cited the risk of further capital flight due to the Ukraine crisis. In Q1, outflows doubled on year to $50.6B and the government has forecast that the full-year figure could hit $70-100B. An increase in sanctions on Russia could also prompt S&P to further reduce the country's rating.
    • S&P's action comes a day after Russia began military exercises on its border with Ukraine in response to the latter's security forces killing five pro-Moscow rebels during its attempts to reassert control over the eastern part of the country. The developments have increased fears that Russia may invade eastern Ukraine, the nation's industrial heartland.
    • Russia's Micex index is -1.6% and the USD-RUB is +0.4% at 35.925 rubles.
    • More on Ukraine ETFs: RSX, RUSL, ERUS, RUSS, RSXJ, RBL, GUR, ESR, RUDR
    | 1 Comment
  • 2:25 AM
    • Japanese core inflation, which excludes fresh food prices, held steady at 1.3% on year in March but came in below consensus of 1.4%.
    • Core core CPI, which excludes fresh food and energy, slipped to +0.7% from +0.8% in February.
    • Overall inflation increased to 1.6% from 1.5%.
    • Tokyo CPI surged to +2.9% in April from +1.3% in March and core inflation to 2.7% from 1% for the biggest rise since 1992, boosted by the hike in sales tax at the start of the month. Excluding that increase, prices rose just 1%, as in March.
    • The question is whether the Bank of Japan's attempt to push inflation to 2% by 2015 has stalled despite the BOJ's massive bond-buying. If so, the bank might feel the need to increase its asset purchases. (PR)
    • BOJ officials are increasingly concerned that the domestic bond market isn't reflecting how inflation has risen over the past year or so, Bloomberg reports. That raises the risk that yields could suddenly surge. The problem for the BOJ is that yields have stayed low because of its QE program.
    • Meanwhile, President Barack Obama has ended a three-day trip to Japan without sealing a trade deal that's seen as key to the wider 12-nation Trans-Pacific Partnership. While the U.S. and Japan have made a breakthrough on market access, gaps remain.
    • The Nikkei is +0.2% and the USD-JPY is flat at ¥102.33.
    • ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, NKY, JYN, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JPNL, JSC, ITF, JGBL, JPP, JGBT, JPNS, JGBB, HEWJ, FJP
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  • Thursday, April 24, 2014

  • 4:20 PM
     
    • Stocks finished mostly higher in a volatile session, as the main indexes swung in and out of negative territory on worries over military escalation in Ukraine, but investors mostly kept focus on positive earnings and stronger than expected durable-goods orders.
    • Tech shares and the Nasdaq got a huge lift from an 8.2% gain for Apple - its biggest one-day gain in two years - after it reported better than expected quarterly results, increased its stock buyback program, raised its dividend and announced a 7:1 stock split.
    • Healthcare stocks lagged, largely due to the underperformance of biotechs; financials also trailed other sectors.
    • After a 39-point rise and 49-point fall, the Dow ended little changed after components Caterpillar, 3M and Verizon posted mixed quarterly results.
    • Gold futures added 0.5% to $1,290 to end at a one-week high, but other haven investments, such as Treasurys, pared early gains; the 10-year Treasury yield dropped a basis point to ~2.69%.
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  • 4:06 PM
    • Bank of America (BAC) in Q1 salted away another $2.4B in legal reserves without saying why, but the WSJ last week reported talks between the bank and the government over a settlement had intensified following last year's massive JPMorgan deal (also $13B).
    • Today, it's Bloomberg reporting the U.S. as seeking more than $13B from BofA.
    | 44 Comments
  • 3:54 PM
    • Apple (AAPL +8.4%), Google (GOOG -0.4%), Intel (INTC - unchanged), and Adobe (ADBE -1.9%) have settled an antitrust suit accusing them of creating illegal no-hire agreements.
    • Terms are undisclosed for now. 64K employees had been collectively seeking $3B in damages, and antitrust rules could in theory triple that figure in the absence of a settlement.
    • The settlement comes after PandoDaily unearthed a slew of e-mails from Steve Jobs, Eric Schmidt, and others pointing to the existence of no-hire deals.
    • Separately, Google has denied media reports stating Glass is now publicly available. The company says it failed to edit an order page created for Glass' April 15 sale (thus giving the impression it's still available), and will be pulling the page shortly.
    | 1 Comment
  • 2:11 PM
    • After trading sharply higher premarket, Facebook (FB -0.7%) is now down slightly, as investors balance big top and bottom-line beats (the company's fourth in a row) with concerns about slowing growth and a CFO change.
    • Facebook has announced today it's buying Finland's ProtoGeo, developer of popular fitness-tracking app Moves. ProtoGeo says its team will work on improving Facebook's products/services, but will also continue supporting its standalone app and has no plans to "commingle" its data with Facebook's.
    • The acquisition comes amid surging industry hardware and software investments in mobile health/fitness-tracking solutions. Samsung included a slew of health/fitness features within its Galaxy S5, and Apple will reportedly do the same for the iPhone 6 and its anticipated iWatch. Google's new Android Wear platform also includes health/fitness-monitoring support.
    • Separately, Facebook has launched a newswire page in partnership with startup Storyful in an effort to get more breaking news into feeds. Mark Zuckerberg has wanted Facebook to be the world's "best personalized newspaper," but users haven't always felt the same way.
    | 16 Comments
  • 10:40 AM
    • Apple (AAPL +8%) has received 5 PT hikes to go with one upgrade (from CLSA) following its iPhone-driven FQ2 beat, dividend/buyback increases, and split announcement.
    • Jefferies (Buy) isn't crazy about FQ3 guidance (it thinks FQ2 demand pull-in is a factor), but is pleased with the pickup in iPhone sales growth and recommends buying shares "ahead of what we believe will be a successful iPhone 6 launch."
    • Canaccord (Buy): "While our survey work indicates iPhone will likely lose share over the next several months to refreshed Android products, we believe Apple will win back meaningful high-end market share during [2H14]."
    • Nomura (Neutral) is more cautious, noting growth was just 0.4% Y/Y outside of China and Japan. But it also sees "little risk of a material negative disappointment in the coming months."
    • Also: 1) Ahead of Angela Ahrendts' arrival next week, Tim Cook suggests Apple plans to triple its Chinese store count over the next two years. 2) Many observers have pointed out Apple's split could lead it to join the Dow (DIA), given the index is price-weighted rather than valuation-weighted.
    • More on Apple's FQ2. CC transcript.
    | 21 Comments
  • 9:08 AM
    • 3M (MMM) net profit increased to $1.21B from $1.13B a year earlier.
    • Organic local-currency sales growth +4.6%. Breakdown: Healthcare +6.2%, Industrial +4.9%, Safety & Graphics +4.6%, Electronics & Energy +4.1%, Consumer +2.6%; Asia Pacific +6.9%, Latin America/Canada +6.8%, EMEA +3.7%, U.S. +2.6%.
    • 3M maintains its outlook for FY EPS of $7.30-7.55 a share vs consensus of $7.46, and organic local-currency revenue growth of 3-6%; analysts expect overall sales to rise 4.8% to $32.35B.
    • Shares are -2.3% premarket following the Q1 EPS and revenue misses. (PR)
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  • 8:32 AM
     
    • Mar. Durable Goods: +2.6% vs. +2.0% expected, +2.1% prior (revised).
    • Ex-transport +2% vs. +0.9% expected, +0.1% prior (revised).
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  • 8:30 AM
     
    • Initial Jobless Claims: +24K to 329K vs. 313K consensus, 305K prior revised.(304K Prior).
    • Continuing claims -61K to 2.68M.
    | 8 Comments
  • 8:29 AM
    • Caterpillar (CAT) profit +4.8% to $922M.
    • Machinery sales -12%, with falls of 20% or more in most markets, although North American sales increased 6%.
    • Operating costs -1.2% to $11.84B.
    • Increases FY EPS guidance by 25 cents to $6.10 a share, citing growing demand from builders, although it leaves its sales outlook unchanged at $56B. Consensus is for $5.93 and $56.2B respectively.
    • Shares are +4.1% premarket. (PR)
    • Previous
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  • 7:59 AM
    • AstraZeneca (AZN) is reviewing its neuroscience and anti-infection businesses and hopes to announce news "in the near future," CEO Pascale Soriot says following the company's Q1 earnings.
    • Astra could sell or spin off the operations - which analysts reckon could bring in $15B but which the company views as non-core - or bring in partners.
    • AstraZeneca is exploring options similar to Novartis' and GlaxoSmithKline's multibillion-dollar asset swap.
    • However, Soriot declined to comment on a report that Pfizer (PFE) had offered over $100B to buy AstraZeneca.
    • Shares are +5% premarket.
    | 1 Comment
  • 7:43 AM
    • Zimmer (ZMH) says the transaction will "position the combined company as a leader in the $45B musculoskeletal industry," adding that "the complementary nature of the two businesses adds diversity and scale across various geographies and product categories."
    • Zimmer expects the purchase to be "double-digit accretive" to its EPS in the first year after closing, and to boot its cash flow from operations by 1.5 times. The company also forecasts annual synergies of $135M in the first year and $270M by the third year.
    • The combined 2013 revenues of the companies were $7.8B and adjusted EBITDA was $2.8B.
    • Zimmer will pay $10.35B in cash and the rest in shares. The company will help fund the deal with a $3B senior unsecured term loan and newly issued senior notes.
    • Zimmer shares continue to climb and are +11.5%. (PR)
    • Previous
    • Zimmer Q1 earnings
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  • 7:21 AM
    • Zimmer (ZMH) has agreed to Biomet for $13.35B in cash and stock, with the deal including debt.
    • Zimmer shares are +6.3%. (PR)
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  • 7:11 AM
    • The Nasdaq 100 (QQQ +1.5%) is leading gains in futures behind a 7.7% premarket jump for Apple post-earnings. Facebook isn't chopped liver, up 5.1% following its earnings beat. Apple accounts for 11.8% of the QQQ, while Facebook makes up for 3.1% of the index. S&P 500 (SPY) is ahead 0.4%, and DJIA (DIA) is up 0.3%.
    • Europe's up 0.7% and Asia was mixed overnight.
    • The 10-year Treasury yield is flat at 2.71% and gold is near its lowest level since the end of January, down $6 per ounce to $1,279.
    • ETFs: SPY, QQQ, SH, DIA, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, TQQQ, SPXL, QID, RSP, SQQQ, DOG, QLD, DXD, RWL, EPS, UDOW, SDOW, DDM, BXUB, QQEW, QQQE, TRND, SFLA, QQXT, BXUC, SPLX, BXDB, TNDQ
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  • 5:35 AM
    • Barclays (BCS) expects to report a "small reduction" in Q1 adjusted pretax profit due to a "significant" drop in revenue from the fixed-income credit and commodities (FICC) operations at the company's investment bank.
    • CEO Anthony Jenkins said the decline reflects "difficult market conditions and a strong comparative performance for Q1 last year."
    • Barclays' FICC woe echoes the sharp falls in revenue that JPMorgan, Goldman Sachs and Citigroup have suffered at their respective operations.
    • However, Barclays' cost-cutting program is beginning to show a "material benefit," Jenkins said.
    • Barclays disclosed the information prior to its annual meeting today.
    • Shares are +1.1% premarket.
    | 1 Comment
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