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: 12712.87 (0.76%), S&P 500 Futures: 1342.99 (0.35%), NASDAQ Futures: 2867.41 (0.15%)
- Europe: CAC: 3101.57 (0.87%), DAX: 6445.75 (0.87%), FTSE: 5518.62 (0.35%)
- Asia-Pacific: Australia: 4123.90 (-0.23%), China: 2136.15 (-0.39%), Hong Kong: 18877.33 (-0.14%), India: 5109.60 (-0.36%), Japan: 8365.90 (-1.45%).
Financial and Economic News Update
U.S. markets open higher: U.S. markets opened higher following three days of sharp declines, amid a number of better than expected corporate earnings.
European markets in the green: European markets are trading higher with the German DAX (INDEXDB:DAX) was trading up 0.9 percent at 6445.75, the FTSE 100 (INDEXFTSE:UKX) was up 0.4 percent at 5518.62, and the CAC 40 (INDEXEURO:PX1) rose 0.9 percent to 3101.57. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.90 percent.
Asian markets end lower: Asian markets closed lower on Wednesday anid growing worries about the situation in Europe. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) fell 1.4 percent to a seven-week closing low. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed down 0.1 percent, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed down 0.5 percent at 2,136.2. The S&P/ASX 200 (INDEXASX:XJO) ended 0.2 percent or 9.3 points lower to finish at 4,123.9. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index rose 0.47 percent to 17,185.09 points.
Stocks in Focus
· Ford Motor Company (NYSE:F) reported second quarter earnings excluding one-time items of 30 cents per share, 2 cents above consensus estimate. The company however doubled its forecast for losses in Europe to more than $1 billion.
- Aircraft maker The Boeing Company (NYSE:BA) posted better than expected second quarter profit and revenue, and raised its full-year earnings forecast. Profit increased to $967 million, or $1.27 per share, from $941 million, or $1.25 per share, while revenue jumped 21 percent to $20 billion.
- Construction-machine maker Caterpillar Inc. (NYSE:CAT) reported second-quarter profit of $1.67 billion, or $2.54 per share, on revenue of $17.37 billion. Analysts on average were expecting earnings of $2.28 per share on $17.11 billion in revenue. The company also boosted 2012 profit forecast.
- PepsiCo, Inc. (NYSE:PEP) reported second-quarter profit that topped analysts’ estimates, helped by an increase in prices, and maintained its full-year outlook.
- Oil and gas producer, ConocoPhillips (NYSE:COP) reported second quarter earnings excluding one -time items of $1.22 per share, topping expectations of $1.17 per share.
- Bristol-Myers Squibb Co. (NYSE:BMY) posted lower-than-expected second quarter results amid growing pressure from generic rivals, but still maintained its full-year profit outlook.
- Eli Lilly & Co. (NYSE:LLY) reported second-quarter profit that fell less than what analysts had expected, and raised its 2012 earnings forecast.
- Communications equipment maker Motorola Solutions Inc (NYSE:MSI) reported a lower-than-expected second quarter profit, hurt by a dip in demand for its enterprise business.
- Corning Incorporated (NYSE:GLW) reported second-quarter revenue that missed Street expectations amid weak consumer demand for its television-screen glass.
- NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) posted second quarter profit of $93 million, or 53 cents a share that topped expectations of Wall Street analysts.
- Wyndham Worldwide Corporation (NYSE:WYN) reported second quarter net income of $128 million or $0.88 per share, up from net income of $114 million, or $0.67 per share, a year ago. Revenues stood at $1.1 billion, an increase of 4% from the prior year period.
- World’s largest steelmaker ArcelorMittal (ADR) (NYSE:MT) (AMS:MT) reported a sharp decline in earnings for the first half of 2012, and forecast tough operating conditions in the second half of the year amid continued weakness in Europe.
- BT Group plc (ADR) (NYSE:BT) (LON:BT.A) reported first-quarter earnings and sales that fell short of expectations amid reduced spending from customers. The group, however, reiterated its full-year outlook.
- Deutsche Bank AG (USA) (NYSE:DB) (ETR:DBK) (FRA:DBK0 slumped 3.3 percent after warning that its second-quarter results would fall well short of analysts’ estimates, due to the weakness in the euro that led to an increase in operating costs in the United States and Britain.
- British low-cost airline easyJet plc (LON:EZJ) said third quarter revenue increased 11 percent, boosted by strong demand for beach holidays, and cheaper fuel prices. The company also upgraded its full-year revenue forecast.
- German luxury car maker, Daimler AG (ETR:DAI) (FRA:DAI) reported a 13 percent decline in second-quarter profit despite record sales of its Mercedes-Benz compact cars, but stuck to its full-year earnings forecast.
- British American Tobacco plc (LON:BATS), Europe’s largest cigarette maker, posted an increase in first-half net profit, as demand from emerging markets offset lower sales in Southern and Western Europe.
- French car maker, Peugeot SA (EPA:UG) outlined plans to raise 1.5 billion euros ($1.81 billion), after swinging to a first half loss of 819 million euros ($990 million).
- British chip designer, ARM Holdings plc (ADR) (NASDAQ:ARMH) (LON:ARM), reported better than expected second quarter profit and revenue amid robust demand for its low power chips in smart phones and tablets.
- Japanese camera maker, Canon Inc. (ADR) (NYSE:CAJ) (TYO:7751) slashed its full-year profit forecast by 13 percent amid concerns over weak growth in the US, Europe and China, and a stronger yen. The company also reported a 4 percent decline in second-quarter profit, missing forecasts.
- Australian gas distributor APA Group (ASX:APA) has raised its hostile takeover bid for rival Hastings Diversified Utilities Fund (ASX:HDF) by 21 percent to 1.33 billion Australian dollars ($1.37 billion), or 2.50 Australian dollars a share, topping an offer from a consortium that includes a Canadian fund.
- Nintendo Co., Ltd (TYO:7974), the world’s largest games console maker, reported a lower than expected first-quarter loss, and forecast full-year operating profit that was slightly better than consensus estimates.
- GOME Electrical Appliances Holding Ltd. (HKG:0493), China’s second-biggest electronics retailer, said that it is likely to post a net loss for the first half of 2012 amid a drop in sales revenue and losses at its e-commerce unit.
- Australian investment bank, Macquarie Group Limited (ASX:MQG) said first quarter earnings declined compared to the previous three months, but struck an upbeat tone for the rest of the year, in which it expects net profit to recover from an eight year.
- Hong Kong billionaire Li Ka-shing’s flagship, Cheung Kong (Holdings) Limited (HKG:0001) slumped 1 percent in trade today following news that the property major is leading a consortium to buy a U.K. gas-distribution company for 645 million pounds ($1 billion)
- A consortium led by Japanese conglomerate Hitachi, Ltd. (TYO:6501) has won a 4.5 billion pound ($7 billion) contract to build 92 intercity trains at a newly-constructed factory in Britain.
- India-based Jindal Steel & Power Limited (NSE: JINDALSTEL) (BOM:532286) has agreed to acquire Canadian coal mine developer, CIC Energy Corp. (TSE:ELC) for 116 million Canadian dollars ($114 million) in cash.