Seeking Alpha
  • Friday, March 27, 2015

  • 5:37 PM
    • Fitch has downgraded Greece's long-term foreign and local currency issuer ratings, as well as its senior unsecured foreign and local currency bond ratings, to CCC (substantial credit risk, with a real possibility of default) from B (highly speculative).
    • Fitch: "Lack of market access, uncertain prospects of timely disbursement from official institutions, and tight liquidity conditions in the domestic banking sector have put extreme pressure on Greek government funding. We expect that the government will survive the current liquidity squeeze without running arrears on debt obligations, but the heightened risks have led us to downgrade the ratings ... The damage to investor, consumer, and depositor confidence has almost certainly derailed Greece's incipient economic recovery. The damage will take time to repair even if prospects for a successful programme completion improve over the coming days or weeks."
    • ETF: GREK
    • Previously: Greek bank deposits plunge further
    • Previously: Deutsche: Greece could default as early as April 9
    | 2 Comments
  • 4:20 PM
     
    • Stocks eked out slim gains in quiet trading, but it was nowhere near enough to prevent the worst week for the major indexes since late January, as the S&P lost 2.2%, the Dow fell 2.3% and the Nasdaq slipped 2.7% for the week.
    • Janet Yellen released her prepared remarks on monetary policy late in the session, saying gradual rate hikes are likely this year but stressing that the Fed would move cautiously.
    • Biotech stocks rallied 2% after sharp declines earlier this week pulled the Nasdaq Biotech Index from last week's all-time highs.
    • Energy ended the day as the worst sector, -0.7%, as WTI crude oil tumbled 5% to $48.87/bbl and continued its retreat during electronic trading; despite the plunge, WTI crude gained 4.9% for the week.
    • Investor participation was below average, with ~725M shares changing hands at the NYSE floor.
    • Treasury prices rose, with the benchmark 10-year yield falling 4 bps to 1.96%.
    | 7 Comments
  • 3:53 PM
     
    • The economy isn't fully there yet, but Janet Yellen - speaking at a San Francisco conference - does expect conditions to warrant boosting the fed funds rate later this year.
    • Perhaps softening her stance on hikes a bit, Yellen says that while stronger inflation or wage growth isn't a prerequisite for boosted rates, a further weakening in key inflation indicators could put the Fed on hold for longer.
    | 34 Comments
  • 3:47 PM
    • The WSJ reports Intel (INTC +5.9%) is in talks to buy FPGA vendor/foundry partner Altera (ALTR +22.7%). Shares of both companies have surged in response. With Altera currently sporting a $12.7B market cap, the deal would be the biggest in Intel's history, and one of the biggest in the chip industry's M&A/consolidation wave.
    • Intel struck a foundry deal with Altera in 2013, and is set to produce 14nm chips for the company. Altera's FPGAs are found in plenty of products containing Intel's Xeon server CPUs or network processors. The companies have also collaborated on a solution for Web data centers that pairs a Xeon CPU and an Altera FPGA in the same package, with the latter enabling on-the-fly programmability.
    • Altera archrival Xilinx (XLNX +5%) and smaller rival Lattice (LSCC +3.7%) have also spiked higher.
    • Update (4:00PM ET): The full story is now out. The WSJ states deal terms and timing are unknown.
    • Update 2 (4:08PM): Bloomberg has joined the WSJ in reporting of deal talks. Intel closed up 6.4%, and Altera closed up 28.4%.
    | 92 Comments
  • 8:31 AM
     
    • Q4 Corporate Profits+2.9% (unadjusted) Y/Y vs. +5.06% prior.
    • -1.6% (adjusted) Q/Q vs. +1% expected, +4.7% in Q3.
    | 1 Comment
  • 8:30 AM
     
    • GDP Q4: +2.2% vs. +2.4% consensus, +2.2% second estimate, 2.6% first estimate.
    | 4 Comments
  • 7:13 AM
    | 3 Comments
  • 4:55 AM
    • Lower oil prices and subdued consumer demand have again pushed Japan to the brink of deflation, underscoring the difficulties faced by policy makers to revive the world’s third-largest economy through its ¥80T a year stimulus program.
    • Japanese core consumer price inflation, which includes energy prices but excludes food, fell to zero Y/Y in February, far below the 2% target the central bank had aimed to achieve by this spring.
    • The Nikkei Composite Index dropped 1% on the news, falling to 19,286.
    • ETFs: DXJ, EWJ, DFJ, NKY, DBJP, EZJ, EWV, JPNL, DXJS, SCJ, JSC, ITF, JPP, HEWJ, FJP, QJPN, JPMV, DXJT, DXJR, DXJH, DXJC, DXJF
    | 6 Comments
  • 4:01 AM
    • Saudi Arabian-led strikes on Yemen and a potential nuclear deal with Iran would have little near-term impact on oil supplies, Goldman Sachs said in an overnight note to clients.
    • "We expect both events to have negligible near-term supply impacts, with the build in crude inventories set to continue in 2Q15. Longer term, a deal with Iran could lead to greater OPEC supplies although the timing of the sanction relief remains uncertain," the firm stated.
    • Crude futures -1.7% to $50.52/bbl.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 15 Comments
  • 1:49 AM
    • Amazon (NASDAQ:AMZN) is in talks to buy online luxury retailer Net-a-Porter in what could be the biggest acquisition yet for the e-commerce giant, Women's Wear Daily reports.
    • Amazon has long coveted the high-end fashion retail sector and any deal for Net-a-Porter, which is owned by Swiss firm Compagnie Financire Richemont (OTCPK:CFRUY), could come with an approximate €2B price tag.
    | 7 Comments
  • Thursday, March 26, 2015

  • 5:27 PM
    • Making Starboard Value happy, Yahoo (NASDAQ:YHOO) has added $2B to be its buyback authorization, raising its total available funds to $2.73B (good for repurchasing over 6% of outstanding shares at current levels). (8-K filing)
    • The new buyback funds are good until March 31, 2018. Yahoo used part of its Alibaba IPO windfall to buy back $980M worth of shares in Q4, and has spent $9.7B on buybacks since Q2 2012. The company had $10B in cash/marketable securities at the end of 2014, and $1.17B in convertible debt.
    • YHOO +1.4% AH to $45.09.
    | 4 Comments
  • 4:29 PM
    • HP (NYSE:HPQ) is close to selling a 51% stake in its H3C Technologies Chinese networking hardware unit to state-backed Tsinghua Unigroup, the WSJ reports. Echoing an October report about HP's sale efforts, the paper states H3C is "worth roughly $5 billion in total."
    • Sources state a sale might include "a separate server operation," and could still be a few weeks away. Tsinghua is said to be competing with other bidders, including investment firm China Huaxin.
    • Tsinghua has bought Chinese chipmakers RDA and Spreadtrum, and since formed a mobile processor partnership with Intel. HP, meanwhile, saw its networking revenue fall 11% Y/Y in the January quarter, something that was blamed on "execution issues" in the U.S. and China. Like other U.S. enterprise IT firms, the NSA scandal has taken a toll on HP's Chinese sales.
    • The report comes as HP gets set to acquire enterprise Wi-Fi hardware/software vendor Aruba Networks ahead of a PC/printing spinoff expected to occur by the end of FY15 (ends Oct. '15).
    | 1 Comment
  • 4:20 PM
     
    • Stocks extended their losing streak to four days, chalking up mild losses in choppy trade but finishing well off early lows and with the S&P holding above its 100-day MA of ~2,040.
    • Activity was quiet, with short-term investors such as hedge funds making up most of the day’s action, as they have for much of this week, traders said.
    • The market began the day under pressure on reports that forces led by Saudi Arabia carried out air strikes against rebels in Yemen, which led to concerns about potential disruptions to the oil market; as a result, U.S. crude surged 4.6% to $51.43/bbl, but the energy sector (-0.2%) still finished slightly negative.
    • The tech sector eked out a gain despite weakness among chipmakers that sent the PHLX Semiconductor Index lower by 1.4%; biotechs, a big loser this week, were under pressure early but bounced near the flat line by the close.
    • Investor participation was above average, with more than 808M shares changing hands at the NYSE floor.
    • Treasury prices dropped off their early highs, with the benchmark 10-year yield rising 8 bps to 2.01%.
    | 2 Comments
  • 9:45 AM
     
    | 1 Comment
  • 8:31 AM
     
    • Initial Jobless Claims: -9K to 282K vs. 293K consensus, 291K prior (unrevised).
    • Continuing Claims -6K to 2.42M.
    | 13 Comments
  • 7:27 AM
    • DJIA and S&P 500 futures are lower by 0.7% and Nasdaq 100 by 1%, setting up the averages to add to yesterday's sharp declines at the open.
    • Europe's lower by more than 1%, and the Nikkei slid 1.4% overnight.
    • Treasury yields actually rose during yesterday's tumble - the first time in memory both stock and bond prices fell together - but the 10-year yield is lower by two basis points this morning to 1.91%. Gold is up $10 per ounce to $1,207 and oil by $2 per barrel to $51.20 as the situation in Yemen worsens.
    • 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
    | 8 Comments
  • 2:01 AM
    • Oil is flying higher after Saudi Arabia and its Gulf allies started bombing targets in Yemen as the country slides closer toward civil war.
    • Importers say the Saudi attack itself will unlikely disrupt supplies, but the threat of spreading war in the region could likely impact oil flows.
    • The crisis now risks spiraling into a proxy war with Shiite Iran backing the Houthis, and Saudi Arabia and other regional Sunni monarchies supporting Yemeni President Abd-Rabbu Mansour Hadi.
    • Crude futures +4.5% to $51.42/bbl.
    • Previously: Yemen turmoil has oil challenging $50 per barrel (Mar. 25 2015)
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 24 Comments
  • Wednesday, March 25, 2015

  • 4:25 PM
     
    • Stocks fell sharply, with the Dow and S&P each closing ~1.5% lower as investors weighed the impact of the strong dollar on the economy.
    • A surprise decline in February durable goods orders, under pressure from the strong dollar and weak global demand, was the latest in a series of economic reports to suggest the economy slowed at the start of the year, and set the negative tone for the day's trading.
    • The benchmark S&P settled below its 50-day MA (2,067) while the Nasdaq Composite (-2.1%) underperformed, as profits of small-cap companies are more closely linked to the health of the U.S. economy than profits of their larger peers.
    • The tech sector slumped 2.7%, with all 30 components of the PHLX Semiconductor Index (-4.6%) finishing in the red, while biotechs plunged 4.1% to extend their week-to-date loss to 6.9% after rising 12% YTD.
    • The energy sector was the only gainer, adding 1.2% thanks to strength in crude oil; WTI crude climbed 3.5% to $49.19/bbl, gaining for the fourth day in a row.
    • Treasurys surprisingly fell alongside equities, with the 10-year yield adding 5 bps to 1.92%.
    | 27 Comments
  • 1:53 PM
    • Mark Zuckerberg has kicked off Facebook's (FB -1.2%) F8 developer conference by disclosing Messenger MAUs have topped 600M (up from November's 500M), and that Facebook Groups users now top 700M. WhatsApp is still said to be above 700M (as announced in January). A Bloomberg column previously mentioned Facebook's Messenger user base had reached 700M, but no longer does so.
    • Zuck has also unveiled (confirming a recent TechCrunch report) the Messenger Platform, which allows 3rd-party developers to integrate their apps with Messenger. Over 40 apps are initially supported, including ESPN, The Weather Channel, Imgur, and a slew of independent content/media apps such as JibJab, PicCollage, and UltraText; an SDK rolls out today. Disclosed along the way: Messenger now handles 10% of all VoIP phone calls.
    • Also launching: Businesses on Messenger, a solution that lets businesses use Messenger to chat with and send alerts to consumers (and vice versa). Zulily and Everlane are initial supporters of the feature, which can be launched from a business' site. Cloud customer support software vendor Zendesk (ZEN -1.4%) is working with Facebook to "support the live chat experience;" cloud live chat software vendor LivePerson (LPSN -0.5%) might be in the crosshairs.
    • Other news: 1) Facebook will begin supporting the uploading of 360-degree (spherical) videos to the news feed, and also plans to bring the feature to Oculus. 2) Facebook's sharing feature has been overhauled to include new tools. 3) Facebook, which now sees 3B+ daily video views, is testing continuous autoplay videos; when one video ends, another starts.
    • Facebook has pared its losses for the day following the announcements. The Nasdaq is down 1.6%.
    • Live blogs: CNET, The Next Web
    | 18 Comments
  • 12:03 PM
    • Chip stocks are particularly hard-hit  (SOXX -3.6%) on a rough day for tech. The Nasdaq is down 1.3%, and the S&P 0.7%. Going into today, good earnings reports and ongoing M&A activity had led the Philadelphia Semi Index to rise 10% from its Jan. 30 close; the index remains up nearly 2x from its fall 2012 lows.
    • AMD (AMD -7.2%) is a major decliner following a UBS downgrade. AMD rival/GPU giant Nvidia (NVDA -5.2%) and memory giant Micron (MU -3.7%) are also selling off, as are merger partners NXP (NXPI -3.8%) and Freescale (FSL -3.4%), RF chipmakers Avago (AVGO -5.2%), Skyworks (SWKS -5.3%), and Qorvo (QRVO -7.1%), LED/RF chipmaker Cree (CREE -4.1%), and high-flying video processor developer Ambarella (AMBA -4.3%).
    • Other decliners include telecom chipmakers/ARM server CPU vendors Cavium (CAVM -4.8%) and AppliedMicro (AMCC -4.4%), microcontroller vendors Atmel (ATML -3.5%), Cypress (CY -5.5%), and STMicroelectronics (STM -3.5%), voice processor developer Audience (ADNC -3.7%), analog/mixed-signal chipmakers Linear (LLTC -3.7%), Maxim (MXIM -3%), and Intersil (ISIL -3.5%), FPGA maker Lattice (LSCC -3.9%), and mixed-signal/wireless charging IC developer IDT (IDTI -5.4%).
    • Chip equipment, IP, and foundry providers are also underperforming. Big decliners include ARM (ARMH -4.4%), KLA-Tencor (KLAC -4.2%), Lam Research (LRCX -5.4%), ASML (ASML -4.1%), TowerJazz (TSEM -4.3%), Mattson (MTSN -4.5%), Ultratech (UTEK -4.7%), and Tessera (TSRA -6.1%). ASML has been downgraded to Hold by Banco Santander.
    • TSMC (TSM -4.6%) is among the decliners in spite of a Digitimes report stating the foundry giant's sales are expected to rise 0%-5% Q/Q in Q2 - consensus is for a 2% drop - with strong Apple A8 CPU orders offsetting soft Qualcomm Snapdragon 810 orders.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 19 Comments
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