Morning Market Update
Qualivian Investment Partners Up 30% YTD; Long ORLY Thesis
Qualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” - Ian Cassell Executive Summary Readers of investment letters fall into Read More
- US: Dow Futures: 13188.00 (0.21%), S&P 500 Futures: 1400.70 (0.28%), NASDAQ Futures: 2729.25 (0.33%)
- Europe: CAC: 3273.61 (1.37%), DAX: 6809.51 (1.03%), FTSE: 5782.84 (0.59%).
- Asia-Pacific: Australia: 4362.10 (-0.30%), China: 2396.32 (-0.35%), Hong Kong: 20741.45 (-0.33%), India: 5190.60 (0.03%), Japan: 9520.89 (-0.43%).
- Metals: Gold: 1660.30 (-0.01%), Silver: 31.14 (-0.23%), Copper: 3.80 (0.80%)
- Energy: Crude Oil: 104.33 (-0.21%), Natural Gas: 2.16 (1.60%)
- Commodities: Corn: 6.12 (0.99%), Soya Bean: 13.65 (-0.66%), Wheat: 6.40 (1.27%)
- Currency: EUR/USD: 1.3258 (0.30%), GBP/USD: 1.6249 (0.40%), USD/JPY: 80.5400 (-0.56%)
- 10 year US Treasury: 1.949% (0.009)
Financial and Economic News Update
U.S. stock-index futures little changed: U.S. stock index futures erased their earlier gains and are pointing to a flat open on Friday, following a weaker-than-expected GDP report. The Dow Jones industrial average, the S&P 500 and the NASDAQ futures were all trading marginally in the green.
U.S. economic growth slows: The Commerce Department said today gross domestic product expanded at an annual rate of 2.2 percent in the first quarter, which was below the 2.6 percent growth that economists were expecting.
European markets gain: European markets were trading higher after a number of companies reported better than expected earnings, which helped to ease off investor concerns about the economic deterioration in Spain. The German DAX (INDEXDB:DAX) was 1.03 percent higher at 6809.51, the FTSE 100 (INDEXFTSE:UKX) was up 0.6 percent at 5782.84, and the CAC 40 (INDEXEURO:PX1) was up 1.4 percent to 3273.61. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 1.3 percent higher.
Asian markets end lower: Asian markets closed lower on Friday as a cut in Spain’s credit rating revived concerns over Europe. The HANG SENG INDEX (INDEXHANGSENG:HSI) ended 0.33 percent lower at 20,741.45, dragged by financial stocks, while the Shanghai Composite Index (SHA:000001) slipped 0.4 percent to 2,396.3. The NIKKEI 225 (INDEXNIKKEI:NI225) gave up gains made earlier in the day and ended 0.4 percent lower at 9,520.89. The S&P/ASX 200 (INDEXASX:XJO) index lost 13.1 points, or 0.3 percent to 4362.1, while the Indian benchmark 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended flat at 17,134.25.
Bank of Japan expands stimulus: The Bank of Japan expanded its government bond buying scheme by 10 trillion yen ($123.8 billion), bowing to pressure from lawmakers who have been calling for more aggressive steps to fight deflation. As widely expected, the central bank maintained its key policy rate at a range of zero to 0.1 percent.
Company News Update
- Ford Motor Company (NYSE:F) reported a 45 percent drop in first-quarter net income to $1.4 billion, or 35 cents a share, with operating income of 39 cents a share, beating the 35 cents average analysts’ estimate.
- Chevron Corporation (NYSE:CVX) posted first-quarter profit of $6.5 billion, or $3.27 per share, beating street estimates of $3.26 per share. Revenue rose to $60.7 billion, as higher oil prices and better refining margins offset a decline in oil and gas production.
- The Procter & Gamble Company (NYSE:PG), the world’s largest consumer products company, said third-quarter net income slipped 16 percent to $2.41 billion, or 82 cents per share, due to high raw material costs. Core net earnings per share were flat at 94 cents, but topped analysts’ expectations of 93 cents a share.
- Merck & Co., Inc. (NYSE:MRK), the second-largest U.S. drugmaker, reported first-quarter profit slightly above Wall Street forecasts, but reported revenue that trailed expectations.
- Online travel service Expedia Inc (NASDAQ:EXPE) reported first-quarter adjusted earnings of 26 cents a share, topping analysts estimates of 15 cents a share. Revenue increased 12 percent to $816.5 million, which was also better than the $790.9 million expected by analysts.
- Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), the maker of clinical software posted first quarter profit much below analysts’ expectations and slashed its earnings forecast for 2012. The Chicago-based company also fired its chairman, Phil Pead, and said three directors resigned.
- Footwear maker Deckers Outdoor Corp (NASDAQ:DECK) said first-quarter earnings slumped 59 percent to $7.9 million, or 20 cents per share, trailing the 25 cents per share which analysts were expecting.
- Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) has agreed to acquire cancer drug maker EUSA Pharma Inc. for $650 million, and expects the deal to add 75 cents to 85 cents in earnings per share.
- WPP PLC (LON:WPP) (NASDAQ:WPPGY), the world’s largest advertising company, reported a 7.6 percent rise in first-quarter sales to 2.4 billion pounds ($3.86 billion), topping analysts estimate of sales of 2.35 billion pounds. The Dublin-based company also raised its annual revenue guidance.
- Britain’s second-largest drug maker AstraZeneca plc (LON:AZN) (NYSE:AZN) has named Chief Financial Officer Simon Lowth as interim chief executive officer after David Brennan resigned following rising investor discontent.
- Total S.A. (EPA:FP) (NYSE:TOT), Europe’s third-largest oil producer, recorded a 7 percent fall in first quarter net profit to 3.66 billion euros ($4.83 billion). Adjusted net income stood at 3.07 billion euros, in line with analysts’ estimates. But the company warned that production in the second quarter will be impacted by the gas leaks at operations in the North Sea and Nigeria.
- France’s largest drug maker Sanofi SA (EPA:SAN) (NYSE:SNY) said first-quarter profit excluding some costs was 2.44 billion euros ($3.2 billion), or 1.85 euros a share, above forecasts of 2.18 billion euros. The Paris-based company however said that earnings are likely to fall as much as 15 percent this year.
- BASF SE (FRA:BAS), the world’s largest chemical maker, said first quarter net income dropped 28.5 percent to 1.72 billion euros ($2.27 billion), despite a 6 percent increase in revenues to 20.59 billion euros.
- German auto maker Daimler AG (FRA:DAI) reported a surprise increase in first-quarter operating profit due to rising vehicle sales and stronger performance from its car financing unit.
- Japanese electronics giant Sharp Corporation (TYO:6753) reported its biggest-ever net loss for the just-ended fiscal year, as demand waned for its LCD panels and TVs. The company recorded an annual loss of 376.1 billion yen ($4.66 billion), and forecast loss in the current fiscal year as well.
- Japan’s largest securities firm Nomura Holdings, Inc. (TYO:8604) (NYSE:NMR), said fourth quarter profit soared 86 percent, beating analysts’ estimates, due to a better than expected performance at its trading business and investment trust sales. Meanwhile, Daiwa Securities Group Inc. (TYO:8601), Japan’s second-largest brokerage, reported its first profit in five quarters as gains from its retail business outweighed declines in investment banking.
- Samsung Electronics, Asia’s largest consumer-electronics maker, reported a record first quarter net profit of 5.05 trillion won ($4.44 billion), lifted by a surge in Galaxy smart phone sales. The Suwon, Korea-based company said sales rose 22 percent to 45.27 trillion won ($40 billion), which helped it to overtake Nokia as the world’s top handset maker for the first time this quarter.
- Industrial and Commercial Bank of China (HKG:1398), the world’s biggest bank by market value, reported first quarter net profit of 61.34 billion yuan (US$9.77 billion), which was slightly below the average analysts’ estimate of 61.52 billion yuan.
- China’s biggest oil and gas company PetroChina Company Limited (HKG:0857) (NYSE:PTR) posted a 5.8 percent increase in first-quarter net profit to 39.15 billion yuan ($6.23 billion), beating forecasts.
- China Telecom Corporation Limited (HKG:0728) (NYSE:CHA), the country’s biggest fixed-line carrier, said first quarter net income fell 6.5 percent to 4.27 billion yuan ($677 million), missing analyst estimates.
- Shares of HAITONG SECURITIES CO.LTD ‘H’CNY1 (HKG:6837), China’s second-biggest broker by assets, ended lower in its Hong Kong debut, after raising $1.68 billion in the world’s largest IPO so far this year.
- Macquarie Group Limited (ASX:MQG), Australia’s top investment bank, reported a 24 percent slump in annual net profit to 730 million Australian dollars (US$757.5 million), its lowest full-year profit in seven years, but slightly better than the 726 million Australian dollars that analysts had forecast.
Economic Calendar for Friday, April 27, 2012:
08:30 A.M. ET: Gross Domestic Product Annualized (Q1)
08:30 A.M. ET: Gross Domestic Purchases Price Index (Q1)
08:30 A.M. ET: Real Personal Consumption Expenditures (QoQ) (Q1)
08:30 A.M. ET: Employment Cost Index (Q1)
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (April)