Morning Market Update
Pros And Cons Of Tail Risk Funds
Editor’s note: This article is part of a series ValueWalk is doing on tail risk hedge funds. The series is based on over a month of research and discussions with over a dozen experts in the field. All the content will be first available to our premium subscribers and some will be released at a Read More
* US: Dow Futures: 12526.00 (-0.08%), S&P 500 Futures: 1319.70 (-0.22%), NASDAQ Futures: 2531.75 (-0.18%)
* Europe: CAC: 3024.55 (-0.46%), DAX: 6288.11 (-0.44%), FTSE: 5317.33 (-0.62%).
* Asia-Pacific: Australia: 4029.20 (-0.66%), China: 2333.55 (-0.75%), Hong Kong: 18713.41 (0.25%), India: 4920.40 (-0.02%), Japan: 8580.39 (0.20%).
* Metals: Gold: 1560.20 (0.17%), Silver: 28.08 (-0.26%), Copper: 3.44 (0.41%)
* Energy: Crude Oil: 90.67 (0.01%), Natural Gas: 2.69 (-0.66%)
* Commodities: Corn: 5.85 (-3.76%), Soya Bean: 12.75 (1.37%), Wheat: 6.73 (-0.49%)
* Currency: EUR/USD: 1.2515 (-0.14%), GBP/USD: 1.5667 (-0.02%), USD/JPY: 79.6000 (-0.00%)
* 10 year US Treasury: 1.748% (-0.029)
Financial and Economic News Update
U.S. stock-index futures trading lower: U.S. stock index futures are pointing to a lower open on Friday amid investor concerns over the euro zone debt crisis. The Dow Jones industrial average, the S&P 500 and the NASDAQ futures are all trading marginally in the red.
European markets in the red: European markets declined on Friday, with the German DAX (INDEXDB:DAX) trading 0.4 percent lower at 6288.11, the FTSE 100 (INDEXFTSE:UKX) down 0.6 percent at 5317.33, and the CAC 40 (INDEXEURO:PX1) fell 0.5 percent to 3024.55. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.8 percent lower.
Asian markets end mixed: Asian markets closed mixed on Friday with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) gaining up 0.2 percent at 8,580.39. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed up 0.25 percent at 18,713.41, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) finished lower 0.7 percent at 2,333.6 points. The S&P/ASX 200 (INDEXASX:XJO) index closed down 0.7 percent at 4,029.2, the lowest closing level since Nov. 25. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended flat at 16,230.32 points.
Company News Update
* Mentor Graphics Corp (NASDAQ:MENT)reported fiscal first quarter adjusted earnings of 30 cents a share, topping the average analysts’ estimate of 25 cents a share. Revenues for the quarter stood at $247.92 million, compared with $230.03 million in the previous year, trailing Street expectations.
* PayPal, owned by eBay Inc (NASDAQ:EBAY), has made deals with 15 retailers including J. C. Penney Company, Inc. (NYSE:JCP), Barnes & Noble, Inc. (NYSE:BKS), Office Depot Inc (NYSE:ODP) and Toys R Us that will allow consumers to pay for purchases with their cell phones, helping the online payment giant expand into more physical stores.
* Dish Network Corp. (NASDAQ:DISH) has been sued by broadcasters Fox, NBC and CBS over its new feature AutoHop that allows subscribers to skip over commercials in recorded content.
* U.S. generic drug maker Mylan Inc. (NASDAQ:MYL) settled a patent infringement suit with Sunovion Pharmaceuticals, a unit of Japanese drug maker Dainippon Sumitomo Pharma Co., Ltd. (TYO:4506), over the bronchitis and emphysema drug Brovana. Mylan had sued Sunovion in 2007, alleging that its drug Brovana infringes seven of Mylan’s patents.
* Dell Inc. (NASDAQ:DELL) is in talks to acquire Aliso Viejo, California-based maker of database-management software, Quest Software, Inc. (NASDAQ:QSFT), Bloomberg reported. Quest Software was trading 3.9 percent higher in early morning trade.
* NBCUniversal is in talks with Microsoft Corporation (NASDAQ:MSFT) to acquire its 50 percent stake in the MSNBC.com website, AdWeek reported.
* Douglas Daft, an independent director at Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) resigned from the board this week, Daft, the former chairman and CEO of The Coca-Cola Company (NYSE:KO), announced his resignation at a time when the company has been under the scanner for allegations of accounting malpractice.
* Semiconductor company Semtech Corporation (NASDAQ:SMTC) reported first quarter earnings excluding items of 27 cents a share, on revenue of $116.6 million, trailing analysts’ expectations of earnings of 31 cents a share, on revenue of $119.8 million. The company provided second quarter outlook that was in line with current Street estimates.
* Diversified industrial manufacturer Illinois Tool Works Inc. (NYSE:ITW) jumped 1.3 percent in New York pre-market trading after JPMorgan Chase & Co. (NYSE:JPM) recommended buying the company’s shares.
* Trading in the securities of Spain’s fourth-biggest lender Bankia SA was suspended on the Madrid stock exchange amid reports that the bank is expected to ask the Spanish Government for a rescue of more than 15 billion euros ($19 billion).
* Air-France-KLM (EPA:AF) plans to cut fleet and staff spending, and will reorganize its European business into three units, to reduce costs.
* GlaxoSmithKline plc (ADR) (NYSE:GSK), AstraZeneca plc (ADR) (NYSE:AZN), Johnson & Johnson (NYSE:JNJ) and Sanofi SA (ADR) (NYSE:SNY) will collaborate in a £180 million research project to tackle growing threat from bugs’ resistance to antibiotics.
* German specialty chemical maker Evonik Industries AG, owned by private equity firm CVC Capital Partners and RAG-Stiftung, is planning to make its debut on Frankfurt’s bourse in coming weeks, in what will be the country’s biggest IPO in more than a decade.
* Aviva Plc (ADR) (NYSE:AV) was raised to “outperform” from “underperform” at Exane BNP Paribas, while Logica Plc (LON:LOG), the Anglo-Dutch computer-services provider, was upgraded to “buy” from “neutral” at UBS AG. HSBC Holdings Plc upgraded Aggreko plc (LON:AGK), the world’s largest provider of mobile-power supplies, to “overweight” from “neutral”.
* Japan Tobacco Inc (TYO:2914), the world’s third-largest cigarette maker, has agreed to buy privately-held Belgian tobacco product maker Gryson NV for 475 million euros ($597.66 million), to expand its foothold in the European market.
* Cnooc Limited (ADR) (NYSE:CEO), China’s largest offshore oil producer has made a new oil discovery in the south Liaodong Bay of the Bohai Sea, with a daily production of around 608 barrels.
* Struggling Japanese chipmaker Renesas Electronics Corporation (TYO:6723) is mulling over a plan to raise 100 billion yen ($1.3 billion) and cut more than 10,000 jobs, under a new restructuring plan, Bloomberg reported.
* U.S. financial giant Goldman Sachs Group, Inc. (NYSE:GS) is planning to launch a private real estate investment trust in Japan with as much as 50 billion yen ($628 million) amid signs of a turnaround in the property market there.
* AirAsia, the region’s biggest discount carrier, is looking at buying another 50 Airbus A320 passenger jets for about $4 billion, just months after placing a record order for 200 such aircrafts.
* Australian broking house Macquarie Group Limited (ASX:MQG) reckons that upmarket department store David Jones Limited (ASX:DJS) is a prime target for a possible leveraged buyout because of its valuable real estate portfolio. The stock ended 3.2 percent higher in Sydney.
Economic Calendar for Friday, May 25, 2012:
05:30 A.M. ET: Philadelphia Federal Reserve Bank Pres. Charles Plosser speaks.
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (May)