Macquarie Issues Profit Warning [Morning Update]

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Every morning the Street of Walls team puts out an update on market levels, today’s top stories, and active M&A deals.

Today’s Top Stories:

  • Money Markets: the SEC over the next few weeks will unveil a proposal aimed at shoring up the money market fund industry
  • Lazard IB Results: Total revenues missed by $0.05 driven by weakness in investment banking M&A activity and Asset Management http://bit.ly/Ae6PLs
  • White House Budget: Obama will release his F13 budget next week, calling for ~$3T in deficit reductions over 10 years
  • Spanish M&A: the country’s investment banking sector could see a fresh wave of M&A activity as some of the smaller/mid-sized institutions rush to comply w/the government’s new capital rules (FT)
  • Citi Returning Capital: Prince Alwaleed bin Talal, one of Citigroup’s largest shareholders, says in a CNBC interview that he expects the bank to return capital to shareholders soon (DJ)
  • Macquarie Issues Warning: the Company said its full year profit would fall 25%, double analyst expectations (Reuters)
  • Icahn Decreases MMI Stake: As of activity on Jan. 30th through Feb. 3rd, billionaire investor Carl Icahn decreased its stake in the total outstanding common shares of Motorola Mobility to 8.68%http://bit.ly/wSEOOk
  • Mid Cap Banks: “Sector stands to benefit from distressed foreign banks deleveraging, which means reducing exposures in US, primarily through lower C&I loan volumes.  Market opportunity for sector is significant and the primary beneficiaries are CMA, CYN, FITB and Key Call KEY” (UBS)
  • Healthcare REITs: “we are beginning a rotation back to large capitalization names by upgrading HCP (HCP – $41.74) to Buy as the small cap value gap has narrowed considerably in 2012. We would have been inclined to consider upgrades of other large cap names, Ventas (VTR – $58.55 – Hold) or Health Care REIT (HCN – $56.89 – Hold) in the rotation off smaller cap names if those shares had not run up in January, as we see all three large cap HCREITs (Big 3) well-positioned to further consolidate healthcare real estate” (Stifel)
  • US Labor Force: “The January employment report revealed that demographic changes had pushed down the labor force participation rate–the share of the working-age population working or looking for work–even more than previously reported, hitting the lowest point since 1983 at 63.7%” (GS)

Economic Calendar:

  • NA

M&A Watch:

Top value fund managers are ready for the small cap bear market to be done

InvestorsDuring the bull market, small caps haven't been performing well, but some believe that could be about to change. Breach Inlet Founder and Portfolio Manager Chris Colvin and Gradient Investments President Michael Binger both expect small caps to take off. Q1 2020 hedge fund letters, conferences and more However, not everyone is convinced. BTIG strategist Read More

  • Weekly M&A Trends: This is a hot week for IPOs, 7 are expected to price in the U.S. and 11 globally. Announced M&A keeping showing negative headlines, declining 16% in the week to $25.8bnhttp://bit.ly/yyTz0i
  • NY Post says MHS-ESRX deal is more likely to be approved than rejected by the FTC