Morning Market Update
Michael Mauboussin: Here’s what active managers can do
The debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More
* US: Dow Futures: 12825.00 (-0.05%), S&P 500 Futures: 1357.50 (-0.29%), NASDAQ Futures: 2639.25 (-0.12%)
* Europe: CAC: 3215.09 (-0.44%), DAX: 6508.42 (-0.42%), FTSE: 5683.85 (-0.15)
* Asia-Pacific: Australia: 4157.80 (-0.27%), China: 2223.58 (1.00%), Hong Kong: 19800.64 (-0.04%), India: 5316.95 (-0.18%), Japan: 9020.75 (-0.65%).
* Metals: Gold: 1595.40 (-0.87%), Silver: 27.42 (-0.93%), Copper: 3.47 (-0.79%)
* Energy: Crude Oil: 85.45 (-2.03%), Natural Gas: 2.99 (1.39%)
* Commodities: Corn: 6.98 (4.75%), Soya Bean: 15.17 (3.60%), Wheat: 8.26 (3.93%)
* Currency: EUR/USD: 1.2354 (-0.30%), GBP/USD: 1.5534 (0.05%), USD/JPY: 79.5800 (-0.43%)
* 10 year US Treasury: 1.645% (-0.011)
Financial and Economic News Update
U.S. stock-index futures decline:U.S. stock index futures are to a lower on Friday, following data from the Labor Department that showed non-farm payroll increased by 80,000, missing expectations for a gain of 90,000 jobs. The unemployment rate however held steady at 8.2 percent. The Dow futures, the S&P futures and the NASDAQ future are all trading marginally in the red.
European markets in the red: European markets are trading lower, with the German DAX (INDEXDB:DAX) trading down 0.4 percent at 6508.42, the FTSE 100 (INDEXFTSE:UKX) 0.2 percent lower at 5683.85, and the CAC 40 (INDEXEURO:PX1) declined 0.4 percent to 3215.09. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was down 0.6 percent.
Asian markets end lower: Asian markets closed lower on Friday with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) down 0.7 percent to 9,020.75. The HANG SENG INDEX (INDEXHANGSENG:HSI) ended the day down 0.04 percent, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed a percent higher at 2,223.6 points. The S&P/ASX 200 (INDEXASX:XJO) index shed 11.4 points to 4,157.8. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended down 0.1 percent.
Stocks in Focus
* Goldman Sachs Group, Inc. (NYSE:GS)’s asset management unit will face a 313 million euro ($387 million) lawsuit over its handling of the Dutch pension fund, Pensioenfonds Vervoer, according to a report in the British daily, Telegraph.
* Private equity firm KKR & Co. L.P. (NYSE:KKR) agreed to buy German cutlery and coffee machines business WMF Wuerttembergische Metallwarenfabrik (ETR:WMF) for about 587 million euros ($727 million).
* Amazon.com, Inc. (NASDAQ:AMZN) is working on a smart phone that would directly compete with Apple Inc. (NASDAQ:AAPL)’s iPhone and other handheld devices that use Google Inc (NASDAQ:GOOG)’s Android operating system, Bloomberg reported.
* Electronic storage device maker Seagate Technology PLC (NASDAQ:STX) warned fiscal fourth quarter revenue will come in well below analysts’ expectations, amid reduced hard-drive shipments and quality issues at a supplier.
* Comcast Corporation (NASDAQ:CMCSA) is planning to sell NBC’s 15 percent stake in A&E to partners The Walt Disney Company (NYSE:DIS) and The Hearst Corporation, according to a report in The New York Post.
* Vornado Realty Trust (NYSE:VNO) said it agreed to buy a piece of prime retail space on New York’s Fifth Avenue for about $707 million.
* U.S. truck maker Navistar International Corp (NYSE:NAV) has announced new truck engine technology that will help it comply with federal emissions regulations.
* Japanese shoe store operator ABC-MART, INC. (TYO:2670) will acquire work and outdoor footwear company LaCrosse Footwear, Inc. (NASDAQ:BOOT), for $137 million.
* Software company Informatica Corporation (NASDAQ:INFA) said its second-quarter earnings and revenue will miss its earlier expectations, and now foresees posting adjusted earnings of 27 cents to 28 cents a share, on revenue of between $188 million to $190 million.
* Toy-maker LeapFrog Enterprises, Inc. (NYSE:LF) said chief financial officer, Mark Etnyre, will resign.
* British insurer Aviva Plc (NYSE:AV) (LON:AV) has raised 318 million pounds ($492 million) from the sale of its 21 percent stake in Dutch insurer Delta Lloyd NV (AMS:DL). Societe Generale has upgraded the insurer to “hold” from “sell.”
* European plane maker Airbus, a subsidiary of EADS NV (EPA:EAD), said it had received 230 net aircraft orders in the year to June, and managed to deliver 279 planes in the same period.
* French car-maker Peugeot SA (EPA:UG) reported a 13 per cent drop in first-half unit sales due to a demand slump in European markets.
* Retail stocks were the major losers in London trading, with Marks and Spencer Group Plc (LON:MKS), Kingfisher plc (LON:KGF), Burberry Group plc (LON:BRBY) and Next plc (LON:NXT) all trading deep in the red.
* Air France – KLM (EPA:AF) reported a 4.6 percent increase in passenger traffic in the year to June, boosted by strong performance in Asia and North America.
* HTC Corp (TPE:2498), Asia’s second-largest smart phone maker, posted a 57.8 percent decline in second quarter net profit, missing forecasts, amid stiff competition from Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co.
* Shareholders of Chinese energy distributor ENN Energy Holdings Ltd (HKG:2688) have approved its proposed $2.15 billion acquisition of rival China Gas Holdings Ltd. (HKG:0384), which it will jointly make with China Petroleum & Chemical Corp. (NYSE:SNP) (HKG:0386).
* Asia’s largest apparel retailer Fast Retailing Co Ltd (TYO:9983) posted a 22 percent rise in quarterly profit to 14.7 billion yen ($183.98 million), from 11.7 billion yen in the same period last year, but cut its full-year forecast below market expectations amid a decline in domestic clothing sales.
* China Vanke Co., Ltd. (SHE:000002) and Sany Heavy Industry Co., LTD (SHA:600031) ended significantly higher after Citigroup Inc. said that the Chinese rate cut will boost capital-intensive companies.
* Japanese shopping mall operator Parco Co., Ltd. (TYO:8251) jumped 2.5 percent in Tokyo after J Front Retailing Co., Ltd. (TYO:3086) said it will pay 42.4 billion yen ($531.36 million) to buy a majority stake in Parco.
Economic Calendar for Friday, July 06, 2012:
08:30 A.M. ET: Employment Situation (June)
10:30 A.M. ET: EIA Natural Gas Report (Week ending Friday, June 29, 2012)