Today - Monday, January 26, 2015
- Not only is Google (NASDAQ:GOOG) preparing a new cellphone service that will dial up pressure on the wireless industry’s business model, Cablevision (NYSE:CVC) is also prepping one.
- Google’s new package will hunt through cellular connections provided by Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) and WiFi "hot spots," picking whichever offers the best signal to route calls, texts and data, WSJ reports.
- Meanwhile, Cablevision will start offering Freewheel next month, a WiFi-only mobile-phone service.
- Such services pose a challenge to traditional telecom carriers, including AT&T (NYSE:T) and Verizon (NYSE:VZ).
- Previously: Report: Google to sell phone plans via Sprint, T-Mobile (Jan. 21 2015)
- Previously: Analysis: Cable WiFi services to go mainstream (Oct. 06 2014)
Sunday, January 25, 2015
- S&P 500 (NYSEARCA:SPY) futures are down 0.65%, DJIA (NYSEARCA:DIA) by 0.7%, and Nasdaq 100 (NASDAQ:QQQ) by 0.6% as the left-wing, anti-austerity Syriza party takes power in Greece. Looking like it's going to wind up with about half the seats in parliament, Syriza has just cut a deal with the small, right-wing Independent Greeks party to form a coalition government.
- The two share little in common except for opposition of the austerity measures imposed on Greece by the Troika.
- German Dax (NYSEARCA:EWG) futures are lower by 0.9%, France (NYSEARCA:EWQ) by 0.8%, and the U.K. (NYSEARCA:EWU) by 0.6%.
- The euro (NYSEARCA:FXE) sunk to as low as $1.1099 in early trade this evening, but is currently off just 0.3% to $1.1171.
- European and euro ETFs: FXE, VGK, EUO, FEZ, ERO, IEV, HEDJ, EPV, EZU, DRR, FEU, FEP, EUFX, UPV, ULE, EURL, URR, ADRU, FEEU, DBEU, IEUR, FIEU, HEZU, ESTX, FEUZ, DBEZ
- Greek ETF: GREK
- Previously: Anti-austerity Syriza set to sweep Greek elections (Jan. 25)
- Exit polls indicate leftist Syriza has 35-39% of the popular vote, well ahead of incumbent PM Antonis Samars' New Democracy party, and potentially enough to secure an absolute majority.
- Syriza could secure 146-158 seats in the 300-seat parliament, along with an automatic premium of 50 seats, but under Greece's complex rules the number of votes it needs for an absolute majority depends on how the overall vote is split up.
- A final result is due Monday morning, but at 7:30 PM GMT the interior ministry should announce its first official projections.
- Markets are concerned a Syriza victory could trigger a new financial crisis in Greece, but with weaker repercussions for the euro zone than expected in 2012.
- Greeks began voting today in an election expected to bring to power the left-wing Syriza party, which has pledged to take on international lenders and roll back painful austerity measures.
- While Syriza is expected to form the biggest group in the 300-seat parliament, it is unclear whether its share of the vote would be enough to clinch an outright majority in the legislature.
- The outcome could have lasting repercussions for both Greece and the eurozone although a Grexit remains unlikely.
- ETFs: GREK
- "Some of the pessimism prevailing in Davos this year is a bit exaggerated," said Bank of Japan Governor Haruhiko Kuroda on Saturday, as he welcomed the ECB's decision to embark on a huge bond-buying spree.
- Along with the diving price of oil, the ECB move could be "great for the world economy," he added.
- Kuroda also announced that he expects the Japanese economy to grow by around 2% in fiscal 2015.
- ETFs: DXJ, EWJ, DFJ, NKY, DBJP, EZJ, EWV, JPNL, DXJS, SCJ, JSC, ITF, JPP, HEWJ, FJP, QJPN, JPMV, DXJT, DXJR, DXJH, DXJC, DXJF
Saturday, January 24, 2015
- PE giant TPG Capital "seriously considered" buying Herbalife (NYSE:HLF) last year. It also took a look at Nu Skin (NYSE:NUS).
- It is not clear why TPG’s interest in Herbalife and Nu Skin ended without any investment.
- On Thursday, Avon (NYSE:AVP) jumped 15% on reports TPG was interested in acquiring it, only to drop 7.9% on Friday after Wells Fargo told clients in a note it was skeptical of the prospect.
- If TPG does not buy Avon, it “might take a new look” at Herbalife, with its stock falling in half over the last 12 months, a source says.
- Source: NY Post
Friday, January 23, 2015
- Stocks ended mostly lower as the Dow and S&P closed near session lows, but the Nasdaq was able to register its fifth consecutive advance.
- The Dow lagged as UPS fell 10%, issuing disappointing guidance due to weakness in the U.S. domestic segment.
- The financial sector struggled again despite better than expected reports from some regional banks, widening its January decline to 3.5%.
- The major averages nevertheless finished the week with solid gains: The Dow rose 0.9% on the week, the S&P surged 1.6%, and Nasdaq jumped 2.7%.
- Participation was slightly below average, with 765M shares changing hands at the NYSE floor.
- WTI crude fell 1.7% at $45.59/bbl, tumbling to new six-year lows and giving up early gains after the death of Saudi Arabia's King Abdullah; Brent crude rose 0.6% to $48.79.
- Treasury prices rose, sending the 10-year yield sliding 6 bps to 1.80% and the 30-year yield to its lowest close on record (2.39%).
- BOX opened at $20.20 and is now at $21.21, up 52% from its $14 IPO price.
- The enterprise cloud storage/file-syncing platform is valued at $2.53B, potentially 10x-11x 2014 billings and slightly above the $2.4B valuation it was granted in a funding round last year.
- Prior Box coverage
- Prospectus, IPO analysis
- Q4 adjusted EPS is expected to come in at about $1.25 per share, well south of estimates for $1.47. The company says package volume and revenue results were in line with forecasts, but expenses were higher-than-expected.
- CEO David Abney: "Going forward, we will reduce operating costs and implement new pricing strategies during peak season."
- CFO Kurt Kuehn: "The rapid expansion of e-commerce has created a complex operating environment during peak season."
- The company warns on full-year 2015 as well, expecting EPS growth to be slightly less than the long-term target of 9-13%.
- Source: Press Release
- UPS -8.2%
- So much for efficient markets. The whole world knew for some time of the ECB's plan to launch QE yesterday, and thus had plenty of time to get rid of its euros (as the Swiss did a week ago). Nevertheless, the decline in the common currency has picked up steam since the announcement on Thursday, now off more than 400 pips in 24 hours.
- At last check it's lower by 1.8% on today's session to $1.1170.
- FXE -1.8% premarket
- ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
- Not complaining are European multinationals, and the Stoxx 50 (NYSEARCA:FEZ) is rallying hard for a 2nd day, now up 2.5% on the session.
- ETFs: VGK, FEZ, IEV, HEDJ, EPV, EZU, FEU, FEP, UPV, EURL, ADRU, FEEU, DBEU, IEUR, FIEU, HEZU, ESTX, FEUZ, DBEZ
- Europe's up another 1.8% and nearly all Asian markets advanced overnight.
- Money continues to flow into fixed income however, with European bond yields setting a number of all-time lows - Germany's 10-year Bund yield drops seven basis point to 0.33% and Spain's another 12 basis points to 1.29%. The U.S. 10-year yield towers alongside - down five basis points to 1.81%.
- Gold and oil are little-changed.
- ETFs: SPY, QQQ, DIA, SH, SSO, SDS, VOO, PSQ, IVV, SPXU, UPRO, TQQQ, SPXL, RSP, QID, SQQQ, DOG, QLD, DXD, RWL, EPS, UDOW, SDOW, DDM, BXUB, QQEW, QQQE, SPLX, BXUC, SFLA, QQXT, SPUU
- European stocks extended seven-year highs following a strong Asian session overnight, after the ECB announced plans yesterday to expand asset purchases by €60B per month until at least September 2016.
- The ECB’s new stimulus "should strengthen demand, increase capacity utilization and support money and credit growth," said Mario Draghi after unveiling the new plan.
- Bonds in the region are also joining the rally, with the 10-year notes of Germany, Italy, Spain and France falling to all-time lows.
- FTSE 100 +0.6%; DAX +1.7; CAC 40 +1.7; Euro Stoxx 50 +1.5%.
- "The Greek election provides another reason to sell euro in case the ECB decision was not enough," said Sean Callow, a currency strategist at Westpac Banking.
- The euro is headed toward a sixth weekly decline against the dollar, now trading down 0.1% at $1.1347, before Greek voters go to the polls on Sunday.
- With the left-wing Syriza party ahead in the latest surveys, power may shift from Prime Minister Antonis Samaras to his anti-austerity opponent Alexis Tsipras.
- ETFs: FXE, EUO, GREK, ERO, DRR, EUFX, ULE, URR
Thursday, January 22, 2015
- Saudi Arabia King Abdullah has died at about the age of 91, according to the royal court. Crown Prince Salman - 79 years old and Abdullah's half-brother - has been declared king, and Prince Muqrin Crown Prince.
- Stability was key for Abdullah, and he was seen as a bulwark against both the democratic and Islamist movements spreading across the Arab world. His immediate successor(s) are seen as conservative as he was, or more.
- WTI crude oil is up 2.3% in evening trade to $47.37 per barrel. USO +1.95% after hours.
- BOX has priced its 12.5M-share IPO a dollar above its initial $11-$13 range. Shares begin trading tomorrow.
- The enterprise cloud storage/file-syncing service provider is valued at $1.67B, or perhaps ~7x likely 2014 billings. Its strong top-line growth, heavy sales/marketing spend, and colorful CEO have all received plenty of attention.
- Previously: Coverage of Box's Jan. 9 S-1 filing
- Prospectus, IPO analysis
- LeapFrog (NYSE:LF) reports preliminary FQ3 sales of $145M, far below guidance of $220M-$240M and a $226.1M consensus. Excluding charges, preliminary reported EPS is at -$0.25, well below a $0.19 consensus.
- FY15 (ends March '15) guidance has been withdrawn. A $107M write-down of goodwill and deferred tax assets is being taken. Full FQ3 results are due on Feb. 5.
- LeapFrog blames weaker-than-expected children's tablet sales, delays in shipping the LeapTV video game system, lower cartridge/accessories demand, lower-than-expected LeapReader sales, tighter inventory management, and the West Coast port slowdown.
- CEO John Barbour: "In light of our significant sales decline and losses, we are thoroughly reviewing our product strategies, operations and cost structure in order to improve our financial performance."
- Shares have plunged to $3.05 in AH trading.
- The FT reports Telefonica (NYSE:TEF) is "poised to agree a cash deal of more than £10bn ($15B)" to sell British mobile carrier O2 to Hutchison Whampoa, owner of rival carrier Three. A deal could be announced "as early as Friday morning."
- The paper notes the deal would create the U.K.'s largest mobile carrier, claiming 31M+ subs and a 41% market share. EE, which BT is in talks to acquire from Orange (NYSE:ORAN) and Deutsche Telekom (OTCQX:DTEGY), claims a 32% share, and Vodafone (NASDAQ:VOD) a 24% share.
- U.K. telecom regulator is bound to closely scrutinize a sale, given its historical preference for wanting four mobile carriers and Three's history of aggressive pricing.
- Telefonica/Hutchison reportedly are looking to argue BT, which (like Vodafone) is looking to offer quad-play bundles, is "already changing the boundaries of how telecoms should be judged alongside TV and broadband services." The FT states regulators are likely to push for O2/Three to sell some of its spectrum for use by MVNOs such as TalkTalk, Tesco Mobile, and Virgin Media.
- TEF +0.6% AH. An O2 sale would further Telefonica's efforts to lower its huge debt load. The carrier's net debt stood at €41.2B ($46.8B) as of September.
- Previously: Hutchison in talks for O2 mobile network
- Update: Hutchison says it's in "exclusive talks" to buy O2 from Telefonica for over £10B. Telefonica has confirmed.
- Stocks racked up big gains that pushed the S&P well past its 50-day MA and into positive territory YTD after the European Central Bank unveiled a larger than expected bond buying program.
- Some of the year’s worst performing sectors led the charge higher, led by a jump in financial stocks (+2.4%); the move narrowed the sector's loss so far this month to 2.9%.
- Transport stocks soared following better than expected results from Southwest Airlines, Alaska Air, JB Hunt and Union Pacific.
- Dollar strength resulting from the ECB's move was a headwind for dollar-denominated commodities, and especially crude oil, which also had to contend with a larger than expected inventory build; after rising above $49/bbl early in the day, the price of U.S. crude fell 2.9% to $46.38.
- Stock market participation was ahead of average with ~871M shares changing hands at the NYSE floor.
- Treasury prices fell slightly, sending the 10-year yield higher by a basis point to 1.88%.
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