Every morning we put out a report with the latest on global markets, companies, and economic data. In focus today; UBS, PNC, BAC, BLK, BK, WYNN, NEU, LON, GLG
Morning Market Update
Warren Buffett: If You Own A Good Business, Keep It
Buying private businesses is easier than acquiring public firms, and investors should avoid selling good investments at all costs, according to the Oracle of Omaha, Warren Buffett. Q2 2020 hedge fund letters, conferences and more In an interview with CNBC in March 2013, Buffett was asked if he was looking at any businesses, in particular, Read More
- US: Dow Futures: 12689.00 (-0.39%), S&P 500 Futures: 1353.30 (-0.38%), NASDAQ Futures: 2582.00 (-0.19%)
- Europe: CAC: 3200.50 (0.74%), DAX: 6585.91 (0.13%), FTSE: 5630.10 (0.02%)
- Asia-Pacific: Australia: 4123.60 (-0.42%), China: 2169.10 (0.36%), Hong Kong: 19239.88 (-1.12%), India: 5216.30 (0.45%), Japan: 8726.74 (-0.32%).
- Metals: Gold: 1574.10 (-0.97%), Silver: 26.94 (-1.36%), Copper: 3.44 (-0.33%)
- Energy: Crude Oil: 89.12 (-0.11%), Natural Gas: 2.82 (0.97%)
- Commodities: Corn: 7.65 (-0.19%), Soya Bean: 15.81 (-0.19%), Wheat: 8.86 (-0.17%)
- Currency: EUR/USD: 1.2220 (-0.60%), GBP/USD: 1.5599 (-0.35%), USD/JPY: 78.9800 (-0.10%)
- 10 year US Treasury: 1.476% (-0.032)
Financial and Economic News Update
U.S. stock-index futures trading lower: U.S. stock index futures are pointing to a lower open on Wednesday amid a cautious outlook from Intel, and investor concerns about Spain’s banking system. On the economic front, the Commerce Department said housing starts rose 6.9 percent last month to a seasonally adjusted annual rate of 760,000 units, the highest rate since October 2008, and above forecasts of a 745,000 unit rate. The Dow futures, the S&P futures and the NASDAQ future are all trading close to half a percent lower.
European markets in the green: European markets are trading higher buoyed by a slew of better than expected corporate earnings results. The German DAX (INDEXDB:DAX) was trading up 0.1 percent at 6585.91, the FTSE 100 (INDEXFTSE:UKX) was unchanged at 5630.10, and the CAC 40 (INDEXEURO:PX1) rose 0.7 percent to 3200.50. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.30 percent.
Asian markets end mostly lower: Asian markets closed mostly lower on Wednesday after Federal Reserve Chairman Ben Bernanke offered a gloomy outlook of the U.S. economy that trumped investor hopes for further monetary stimulus. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) ended 0.3 percent lower at 8726.74. The HANG SENG INDEX (INDEXHANGSENG:HSI) was the worst performer in the region, down 1.1 percent, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed at 2,169.1 points. The S&P/ASX 200 (INDEXASX:XJO) index fell 17 points to 4,123.6. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index rose 0.47 percent to 17,185.09 points.
Stocks in Focus
- Bank of America Corp (NYSE:BAC) reported second quarter earnings per share of 19 cents, five cents above the average analysts’ estimates. Total revenue soared 66 percent to $21.97 billion. The bank said provision for credit losses was down to the lowest level is over five years.
- BlackRock, Inc. (NYSE:BLK) posted second-quarter earnings, excluding certain items of $3.10 per share on revenue of $2.23 billion. Analysts were expecting earnings of $3.01 a share on $2.26 billion in revenue. Assets under management on June 30 was down 3 percent from a year ago, at $3.56 trillion
- Honeywell International Inc. (NYSE:HON) said second quarter earnings increased 11.7 percent to $905 million, or $1.14 per share, that topped estimates. Revenue increased 3.8 percent to $9.44 billion, slightly below consensus.
- U.S. Bancorp (NYSE:USB), the fifth-largest U.S. commercial bank, posted a better than expected second quarter profit as total loans grew and bad loans decreased.
- PNC Financial Services (NYSE:PNC), the seventh-largest U.S. bank by deposits, reported a 40 percent slump in second-quarter profit to $546 million, or 98 cents per share, from $912 million, or $1.67 per share a year earlier, because of costs tied to faulty mortgages and foreclosures.
- The Bank of New York Mellon Corporation (NYSE:BK), the world’s largest custody bank, said second-quarter profit fell 37 percent to $466 million, or 39 cents a share, from year-earlier profit of $735 million, or 59 cents a share, as low interest rates and a litigation-related charge cut into profits.
- The US Food and Drug Administration has approved Vivus, Inc. (NASDAQ:VVUS)’s obesity drug Qsymia, on Tuesday, a month after the drug regulators approved Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)’s Belviq.
- Tool maker Stanley Black & Decker, Inc. (NYSE:SWK) reported second quarter earnings, excluding certain items, of $1.32 per share, 20 cents below estimates. The company also lowered its full-year forecast amid a stronger dollar.
- Casino company Wynn Resorts, Limited (NASDAQ:WYNN) reported lower than expected second quarter earnings of $1.37 per share, amid a dip in revenue in Las Vegas and Macau.
- Cosmetic products retailer Sally Beauty Holdings, Inc. (NYSE:SBH) said private-equity firm Clayton Dubilier & Rice, LLC, was offloading its stake in the company. Clayton, Dubilier & Rice is the largest shareholder in the company.
- Data-storage company EMC Corporation (NYSE:EMC)reported second quarter earnings per share of 39 cents, on revenue of $5.31 billion. Analysts were expecting the company to earn 40 cents a share on revenue of $5.30 billion.
- The board of fuel additives company, NewMarket Corporation (NYSE:NEU) has approved a $250 million share-repurchase program.
- Chemical and ammunition maker Olin Corporation (NYSE:OLN) has agreed to buy privately held K.A. Steel Chemicals Inc, a Lemont, Illinois-based manufacturer of bleach, for $328 million in cash.
- Carbo Ceramics Inc. (NYSE:CRR), the world’s largest supplier of ceramic proppant for fracturing oil and gas wells, approved a 13 percent increase in quarterly dividend to 27 cents a share.
- Luxury goods retailer, Tiffany & Co. (NYSE:TIF), was upgraded to “buy” from “neutral” by analysts at Goldman Sachs.
- Analysts at Bank of America/Merrill Lynch have initiated coverage of online photo service company, Shutterfly, Inc. (NASDAQ:SFLY), with a “buy” rating.
- Credit Suisse Group AG (NYSE:CS) reported a 3.6 percent rise in second quarter net profit, and unveiled a string of measures to boost its capital base by 15.3 billion Swiss francs ($15.6 billion) before the year end.
- London Stock Exchange Group Plc (LON:LSE) said fiscal first-quarter income jumped 10 percent to 209.5 million pounds ($328 million), largely due to the acquisition of the FTSE index unit late last year.
- Network equipment maker, Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), reported a bigger than expected fall in second-quarter net profit to 1.11 billion Swedish kronor ($159 million), from 3.12 billion Swedish kronor in the same quarter last year, amid a sharp drop in sales of network equipments due to the global economy slowdown.
- Irish airline Aer Lingus Group Plc has asked its shareholders to reject the latest 694 million euro ($849 million) offer from rival, Ryanair Holdings plc (NASDAQ:RYAAY) (LON:RYA).
- German sportswear maker Puma AG Rudolf Dassler Sport (ETR:PUM) (FRA:PUM) expects first half net earnings to decline 13 percent, and also lowered its full year earnings and revenue guidance.
- · ASML Holding N.V. (ADR) (NASDAQ:ASML) (AMS:ASML), the world’s largest chip equipment maker, posted a 30 percent fall in first half net profit to 539 million euros from 827 million euros the year earlier. Revenue declined 17 percent to 2.5 billion euros.
- Swedish bank Nordea Bank AB (STO:NDA-SEK) posted better than expected second quarter profit and net income, but warned that slower growth in the region due to the European debt crisis was taking its toll on business.
- Spanish banks Banco Santander, S.A. (NYSE:SAN) and Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), slumped in trade today after analysts at Societe Generale said second quarter earnings for Spanish lenders could fall by as much as half.
- Norwegian fertilizer producer Yara International ASA (ADR) (PINK:YARIY) reported a better than expected rise in second-quarter net profit to NOK2.80 billion ($460 million), from NOK2.23 billion, in the same period last year. Revenue came in at NOK21.42 billion, slightly lower than estimates.
- British fund manager Ashmore Group plc (LON:ASHM) was raised to “buy” from “neutral” by analysts at Goldman Sachs Group Inc, while Barclays Plc upgraded Capital Shopping Centres Group plc (LON:CSCG) to “overweight” from “equal weight.”
- BHP Billiton Limited (NYSE:BHP) (ASX:BHP) (LON:BLT), the world’s largest mining company, reported a 15 percent increase in fourth quarter iron ore production, and said it expects to lift output by 5 percent in the current financial year, despite the deteriorating global economic conditions.
- Dell Inc. (NASDAQ:DELL) Chief Executive Michael Dell said the company is witnessing a business slowdown in China, its largest market outside of the United States, which accounts for about $5 billion in annual revenue.
- Dutch brewer Heineken N.V. (AMS:HEIA) said it would act to safeguard its interests in Asia, after Thai billionaire Charoen Sirivadhanabhakdi offered to buy a $1.6 billion stake in its partner in the region.
- Japanese utility Kansai Electric Power Co Inc (TYO:9503) shed 6.3 percent in Tokyo trading after geological studies into the area around its Ohi power plant found the possibility of an active fault line.
- Fortescue Metals Group Limited (ASX:FMG), Australia’s third-biggest producer of iron ore, slumped 3.5 percent in Sydney trading after analysts at Deutsche Bank downgraded the stock to “hold” from “buy,” and Morgan Stanley slashed its target price.
- Hong Kong-listed luggage maker Samsonite International S.A. (HKG:1910) agreed to buy US-based casual bag distributor, High Sierra Sport Company, for $110 million cash.
- Adelaide-based Gerard Lighting Group Limited (ASX:GLG) recommended a 1.05 Australian dollar per share cash takeover offer from private equity group Champ, valuing the company at 186 million Australian dollars ($191.6 million).
- State-owned airlines, Air China Ltd. (HKG:0753) (SHA:601111), said first half profit may drop by as much as half from a year earlier, amid a slowdown in the industry and high fuel prices.
- Chinese department store operator Maoye International Holdings Limited (HKG:0848) expects first half profit and revenue to record moderate growth.
Economic Calendar for Wednesday, July 18, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, July 13, 2012)
08:30 A.M. ET: Housing Starts (MoM) (June)
08:30 A.M. ET: Building Permits (MoM) (June)
10:00 A.M. ET: Federal Reserve Chairman Ben Bernanke speaks.
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, July 13, 2012)
02:00 P.M. ET: Fed’s Beige Book