Seeking Alpha
  • Today - Thursday, May 28, 2015

  • 4:25 PM
     
    • Stocks finished with modest losses a day after Nasdaq notched a record high, as hopes fade that Greece will reach a deal with its creditors.
    • Also causing some jitters at the open was a plunge in China stocks after brokerages announced tighter restrictions on stock trading.
    • The industrial sector finished at the bottom amid continued weakness among transport stocks; the Dow Jones Transportation Average lost 0.9% and widened its 2015 decline to 9.2%.
    • Trading volume remains low as investors await more news from Greece and a better handle on interest rate moves from the Fed; today's participation was comparable to recent totals with 675M shares changing hands at the NYSE floor.
    • The benchmark 10-year Treasury note ended unchanged and its yield at 2.13% although there were gains up front in the two-year yield and a downtick at the long end 30-year note that made for a slightly steeper curve.
    | Comment!
  • 3:50 PM
    • The FCC is close to rejecting T-Mobile's (TMUS -0.9%) push for more spectrum set-asides in next year's government auction -- expected to be the biggest yet -- and siding with market leaders AT&T (T -0.5%) and Verizon (NYSE:VZ), Reuters reports.
    • The agency already has some set-aside planned, but T-Mobile has been aggressively lobbying for more (40 MHz of an expected 70-80 MHz reserved for smaller carriers like T-Mobile and Sprint (S -1.6%), rather than 30 MHz).
    • Sources tell Reuters the panel's thinking is that an adequate amount is being set aside, and that frequent swing vote Jessica Rosenworcel looks disinclined to rethink the current plan.
    • Previously: Analyst: Risky to bend auction rules too much for Sprint, T-Mobile (May. 14 2015)
    • Previously: T-Mobile, Sprint gambling on increasing spectrum set-aside (Apr. 09 2015)
    | 8 Comments
  • 2:17 PM
    • Google (GOOG - unchanged) has kicked off its I/O conference with a flurry of product launches. Among them: Android Pay, a replacement for the Google Wallet Android app that handles both in-app and in-store/NFC payments. Google states 7 out of 10 Android devices currently support Pay, and that 700K U.S. stores are able to accept it. (live blog)
    • Android M, expected later this year, will be a nuts-and-bolts OS update rather than a major overhaul. Product chief Sundar Pichai: "We've really focused on polish and quality, we've literally solved thousands of bugs." New features include Android Pay, better app permission controls, deep linking between apps, and custom Chrome tabs within apps.
    • Brillo, the Android-based IoT OS rumored to be in the pipeline, will launch in Q3. The OS is promised to be very resource-efficient, and will be accompanied by a communications software stack called Weave that lets Brillo devices easily interact with each other (as well as phones).
    • Google's cloud photo service (previously buried within Google+) will now be provided through a standalone Photos app; it uses machine learning to organize pictures by people, places, and things. Notably, Google will be providing free, unlimited, cloud storage for photos and videos; photo resolution is limited to 16MP, and video to 1080p.
    • As Apple reportedly preps a Google Now rival, Google is launching Now on Tap, a feature that brings up Now cards related to whatever is on a user's screen by long-pressing the home button. Now will also handle voice searches that take into account the content a user is viewing.
    • Some shared stats: 1) Android, Chrome, YouTube, and search each have over 1B monthly active users; Gmail is at 900M. 2) 17M Chromecast HDMI sticks have been sold. 3) Over 4K apps have been developed for Android Wear. 4) 35 auto brands support Android Auto.
    • Update: A couple more announcements: 1) Google Maps is being updated to support offline search and navigation. 2) The Cardboard virtual reality platform (aimed at developers for now) has been extended to iOS.
    | 16 Comments
  • 11:29 AM
    • Amazon (AMZN -0.8%) Prime subs in 14 metro areas featuring 500 cities/towns will now get free same-day delivery on orders of $35 or more for 1M+ items. Amazon previously charged a $5.99 flat fee to Prime subs for same-day orders (limit of 150 pounds); non-Prime users are still charged $8.99 + $0.99/item.
    • Covered markets: NYC, L.A., the Bay Area, Philadelphia, Seattle/Tacoma, D.C., San Diego, Phoenix, Indianapolis, Dallas/Fort Worth, Boston, Atlanta, Baltimore, and Tampa. Orders need to be placed by noon to arrive by 9PM.
    • The move comes ahead of Wal-Mart's launch of a $50/year Prime rival (3-day delivery vs. Prime's 2-day, no media services for now). CIRP estimated last week Prime had 41M U.S. subs.
    • Along with expanding its same-day reach, Amazon has been rolling out its Prime Now 1-hour delivery service (typically involves a $7.99 fee) in a handful of metro areas. In Manhattan, Prime Now recently began supporting deliveries from local stores to go with local items.
    | 37 Comments
  • 10:01 AM
     
    • April Pending Home Sales: +3.4% to 112.4 vs. +0.9% expected, +1.2% (revised) prior.
    • "The steady gains in contract activity each month this year highlight the fact that buyer demand is strong," said NAR chief economist Lawrence Yun.
    | 6 Comments
  • 8:30 AM
     
    • Initial Jobless Claims: +7K to 282K vs. 270K consensus, 275K prior (from 274K prior).
    • Continuing Claims +11K vs. 2.22M prior.
    | 18 Comments
  • 3:52 AM
    • Hopes for a deal between Greece and its international creditors were quickly raised and dashed Wednesday when Greece's optimism for an agreement was extinguished by European officials - who denied a deal was near.
    • Not only did European Commission Vice President Valdis Dombrovskis say the two sides still had some way to go before any agreement could be concluded, but German Finance Minister Wolfgang Schaeuble also poured cold water on any hopes, saying he was surprised by Athens' upbeat tone.
    • FTSE 100 -0.2%; DAX -0.4%; CAC 40 -0.6%; Euro Stoxx 50 -0.6%
    • ETFs: GREK
    | 5 Comments
  • 2:06 AM
    • Japanese shares rose a 10th day as the yen traded at its lowest level since 2002 on signs the Federal Reserve is preparing to raise rates this year.
    • The Nikkei is now up 0.4% at 20,551 - marking its longest winning streak since a 15-day run that ended in March 1988.
    • Meanwhile, Japan's retail sales rebounded modestly in the year to April following three straight months of falls, bolstering the case that consumer spending is reviving.
    • The dollar is +0.2% at ¥123.84, after touching a low of ¥124.30.
    • ETFs: DXJ, EWJ, DFJ, DBJP, NKY, JOF, EZJ, JEQ, JPNL, DXJS, EWV, SCJ, HEWJ, JSC, ITF, JPP, QJPN, FJP, JPMV, DXJT, DXJR, DXJC, JHDG, DXJH, DXJF
    | 1 Comment
  • Wednesday, May 27, 2015

  • 4:20 PM
     
    • Stocks rebounded nicely from yesterday's big drop, as encouraging Greece headlines boosted sentiment amid a pause in the rise of the dollar and Treasury yields.
    • There's "some positive feeling [on] rumors that Greece may be reaching a deal," says market strategist Robert Pavlik, which provided a boost to European stocks and aided U.S. investor sentiment; later, a European official reportedly said the two sides have yet to begin working on a joint statement.
    • Tech stocks, which sustained some of yesterday's biggest losses, surged ahead, led by chipmakers after Avago (+7.8%) was reported to be in advanced talks to acquire Broadcom (+21.8%).
    • The financial sector (+0.9%) enjoyed broad support and extended its May gain to 2.7%, while health care (+1.1%) was helped by biotech gains (+1.9%).
    • On the downside, the energy sector (-0.1%) lagged as crude oil struggled, falling 0.8% to $57.57/bbl.
    • Investor participation was roughly in-line with last week's totals, as 707M shares changed hands at the NYSE floor.
    • Treasury prices started lower but recovered as the session wore on, with the benchmark 10-year yield ending flat at 2.14%.
    | 2 Comments
  • 3:00 PM
    • Chip stocks are posting outsized gains (SOXX +4%) amid a 1.3% increase for the Nasdaq after the WSJ reported Avago and Broadcom are in advanced merger talks, sparking hopes for further M&A.
    • A Broadcom/Avago deal would be worth ~$67B at current valuations, easily making it the largest in the chip industry's breathless consolidation wave. It would also touch markets ranging from smartphones to set-tops to servers to switches/routers.
    • Notable gainers include Avago RF chip peers Skyworks (SWKS +4.3%), Qorvo (QRVO +3.2%), and Anadigics (ANAD +4.9%). Others include Micron (MU +3.8%), SanDisk (SNDK +4.3%), NXP (NXPI +3.5%), Silicon Motion (SIMO +8.3%), Cirrus Logic (CRUS +4.8%), STMicroelectronics, (STM +3.4%), Synaptics (SYNA +3.4%), Atmel (ATML +2.8%), Cavium (CAVM +4.5%), Intersil (ISIL +4.6%), Semtech (SMTC +3.9%), ON Semi (ON +3.8%), Microsemi (MSCC +4.4%), and IDT (IDTI +4.2%).
    • Non-chipmakers tied to the industry are also doing well. Standouts include ARM (ARMH +4.4%), Amkor (AMKR +4.6%), ASML (ASML +3.1%), and Rambus (RMBS +3.3%).
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 37 Comments
  • 2:26 PM
    • The WSJ reports Broadcom (BRCM +16.6%) is "in advanced talks to be bought" by Avago (AVGO +6.4%). Shares of both companies have shot higher.
    • A deal would effectively be a merger rather than an acquisition: Avago is currently worth $35.1B, and Broadcom $32B. The post-merger company would have a massive product line spanning a variety of mobile, networking, home electronics, and telecom equipment chip markets.
    • Avago has bought a string of companies over the last 18 months amid a massive chip industry consolidation wave, and has been rumored to be eying several others.
    • Update (3:37PM ET): Bloomberg is backing up the WSJ's report, while adding a deal could be announced as soon as tomorrow.
    • Update 2 (3:50PM): CNBC reports Avago's board plans to vote on the deal tonight.
    | 8 Comments
  • 2:18 PM
    • 9to5 Mac reports Apple (AAPL +1.8%) is "readying a major new iOS initiative codenamed 'Proactive,' which will leverage Siri, Contacts, Calendar, Passbook, and third-party apps to create a viable competitor to Google Now (GOOG +1.1%)."
    • Proactive will reportedly replace Apple's Spotlight search feature - a dedicated search bar will be included - and be placed to the left of a user's Home screen. Like Now, it will rely on data from various apps to push timely info to a user. The service will also integrate with Apple Maps to "display personally relevant points of interest using an augmented reality interface," and have a UI that "automatically populates with content based around three key parts of iOS: Apps, Contacts, and Maps."
    • Also: 1) In addition to an augmented reality view, Maps will be given a "Browse Around Me" button that shows points of interest on an overhead map. 2) A Siri API codenamed Breadcrumbs will be provided to 3rd-party developers; its features will be limited due to privacy concerns.
    • The report comes less than a year after Apple replaced Google with Bing as Spotlight's default search provider via iOS 8; Google remains the Safari browser's default provider.  Sources tell 9to5 Google's iOS traffic has dropped since the iOS 8 launch.
    • Other news: 1) Google announces it's updating its iOS search app (features Now) to integrate with and pull data from 3rd-party apps such as OpenTable; its Android search app already supports this. 2) During a Code Conference talk, Apple operations chief Jeff Williams states Apple Watch developers will soon be able to write native apps (iPhone app pairing is currently required) and have direct sensor access. 3) CBS CEO Les Moonves says he recently met with Apple to do a TV service deal, and that a deal will "probably" happen.
    • Update: During his talk, Williams also provided more grist for Apple car rumors by declaring the car to be "the ultimate mobile device."
    | 21 Comments
  • 7:12 AM
    | 5 Comments
  • Tuesday, May 26, 2015

  • 8:37 PM
    • With attention already starting to shift to regulatory approval, Charter Communications (CHTR +2.5%) CEO Tom Rutledge says his company's $55B acquisition of Time Warner Cable (TWC +7.3%) will do better with the FCC than Comcast's: Think small.
    • "If you look at the ecosystem, who we're playing with in terms of other competitors, they're very large, and we'll still be a relatively small company compared to the large phone companies, compared to Comcast, compared to the wireless companies," he told CNBC.
    • Charter's simultaneous deal for Bright House Networks may pump up its own leverage, but it was critical to the TWC bid, says analyst Craig Moffett: Virtually debt-free Bright House and its borrowing capacity likely added as much as $18/share to Charter's $195.71/share offer. Moffett says TWC's handling of Altice's (OTC:ATCEY) counter-play was masterful.
    • About that debt: TWC bondholders are still nervous about the combined load (While the firm's 30-year bonds rose 11.7% today, they're still down about 16% from last month). Moody's is likely to push TWC into junk rating territory as debt-to-EBITDA rises from TWC's 2.97 to about 4.79 for the combination. But again, Bright House's addition and "conservative voice on the board" may be mitigating the effects.
    • And MoneyBeat's deal tally: Aside from big winner TWC, winners include Goldman Sachs (NYSE:GS), (eventually) rewarded for backing Charter, and UBS, working as sole adviser to Bright House; Losers include Comcast backer JPMorgan Chase (NYSE:JPM), and Deutsche Bank (DB -3.4%) -- a Charter backer back when, but unseen in the new deal.
    • Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
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  • 7:34 PM
    • "Today, we’re announcing a Cortana application for Android phones and for iPhones which works as a companion to Cortana on your Windows 10 PC," says Microsoft (NASDAQ:MSFT) exec Joe Belfiore. "The Cortana app can do most of the things Cortana does on your PC or on a Windows phone ... [the app] will help you complete tasks you begin on your PC wherever you are, on your phone."
    • Reuters reported in March iOS/Android Cortana apps were on the way, and also that Microsoft is prepping a more advanced version of its personal assistant (codenamed Einstein) for Windows 10 that can read/analyze e-mail a la Google Now. Today's move is the latest in a long list of iOS/Android app launches to occur over the last two years.
    • Also unveiled: Phone Companion, an app pre-installed with Windows 10 that helps users sync files and content between their PCs and phones; iOS, Android, and Windows Phones are supported.
    • Meanwhile, Microsoft has added Sony, LG, and 18 other Android OEMs to the list of companies pre-installing Office, OneDrive, and Skype apps on their tablets. Pre-install deals with Samsung, Dell, and 9 others were announced in March.
    | 12 Comments
  • 4:25 PM
     
    • The major stock indexes all closed ~1% lower in response to a surge in the U.S. dollar and economic data that could strengthen the case for an interest rate hike from the Fed.
    • Investors also may have been unnerved by noise from Greek officials that the country could miss its debt payment to the IMF next week.
    • The U.S. dollar continued its recent rise, jumping more than 1% on the day and reaching its highest level vs. the yen since July 2007, as the greenback finds support from the slight improvement in U.S economic data and expectations of Fed tightening.
    • All 10 S&P industry sectors and all 30 Dow components ended with losses, but the S&P 500 did not close below its 50-day MA (2,096).
    • The worst performing areas were the most economically sensitive, such as energy (-1.6%), materials (-1.2%) and industrials (-1.1%); techs (-1.4%) also were weak, with Apple sliding 2.2%.
    • Trading volume of 792M shares changing hands at the NYSE was well ahead of last week's levels, but those totals were some of the lowest levels of the year.
    • Commodities were hit hard, as gold futures fell 1.4% to $1,186.90/oz. and U.S. crude oil tumbled 2.8% to ~$58/bbl.
    • Additionally, the 10-year Treasury yield fell 8 bps to 2.13% on some safe-haven positioning.
    | 7 Comments
  • 10:00 AM
     
    | 3 Comments
  • 10:00 AM
     
    • May Consumer Confidence: 95.4 vs. 95.1 consensus; 94.3 (revised) in Apr.
    • The Present Situation Index increased to 108.1 from 105.1 in Apr.
    | 1 Comment
  • 9:22 AM
    • Time Warner Cable (NYSE:TWC) is up 5% premarket, to $179.75, following confirmation of Charter Communications' (NASDAQ:CHTR) plan to acquire it for roughly $195.71/share. Charter is up 0.3% early.
    • The valuation puts TWC's enterprise value at $78.7B and allows for $100 in cash and $95.71 in "New Charter" stock (equal to 0.5409 Charter shares).
    • As part of the deal, Charter's acquiring Bright House Networks for $10.4B, finishing a deal it was pursuing during Comcast's aborted pursuit of TWC. That deal's for $2B in cash, $2.5B in convertible preferred partnership units and $5.9B in common partnership units.
    • As speculated, Liberty Broadband (NASDAQ:LBRDA) is investing $5B and will own 19% of New Charter as well, while Advance/Newhouse (owners of Bright House) will own 13% of New Charter.
    • FCC Chairman Tom Wheeler: “The FCC reviews every merger on its merits and determines whether it would be in the public interest. In applying the public interest test, an absence of harm is not sufficient. The Commission will look to see how American consumers would benefit if the deal were to be approved.”
    • Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
    • Previously: WSJ: FCC's Wheeler reassuring cable execs mergers can happen (May. 21 2015)
    • Previously: Bankers hustling to fund a Charter-TWC merger (May. 15 2015)
    • Press release
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  • 9:00 AM
     
    | 4 Comments
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