Morning Market Update
Every morning we put out a report with the latest news in global stock markets, company news, and global economic news.
- US: Dow Futures: 13114.00 (-0.14%), S&P 500 Futures: 1398.90 (-0.19%), NASDAQ Futures: 2723.50 (-0.12%)
- Europe: CAC: 3443.30 (-0.20%), DAX: 6939.46 (-0.50%), FTSE: 5839.22 (-0.44%).
- Asia-Pacific: Australia: 4281.20 (-0.26%), China: 2118.94 (-1.11%), Hong Kong: 20052.29 (-1.19%), India: 5380.35 (0.00%), Japan: 8925.04 (-0.05%).
- Metals: Gold: 1602.20 (-0.01%), Silver: 27.69 (-0.26%), Copper: 3.35 (-0.21%)
- Energy: Crude Oil: 93.12 (-0.33%), Natural Gas: 2.80 (-1.34%)
- Commodities: Corn: 7.88 (-0.03%), Soya Bean: 16.06 (0.50%), Wheat: 8.62 (0.47%)
- Currency: EUR/USD: 1.2278 (-0.36%), GBP/USD: 1.5689 (0.08%), USD/JPY: 78.6500 (-0.11%)
- 10 year US Treasury: 1.758% (0.019)
Financial and Economic News Update
U.S. stock-index futures decline: U.S. stock index are pointing to a lower open on Wednesday after the Labor Department said the consumer price index remained unchanged last month. U.S. consumer prices were flat for a second-straight month in July. Economists were expecting the index to rise 0.2 percent last month. In other economic news, the New York Empire State Manufacturing Index dropped to minus 5.85 in August, from 7.39 in July, trailing expectations for 6.5. The Dow Jones industrial average, the S&P 500 and the NASDAQ futures were marginally in the red.
European markets in the red: European markets are down in trade today, with the German DAX (INDEXDB:DAX) trading 0.5 percent lower at 6939.46, the FTSE 100 (INDEXFTSE:UKX) down 0.4 percent at 5839.22, and the CAC 40 (INDEXEURO:PX1) fell 0.2 percent to 3443.30. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.3 percent lower.
Asian markets end lower: Asian markets closed lower on Wednesday, with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closing 0.1 percent lower at 8,925.04 points. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed down 1.2 percent at 20,052.3, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) ended down 1.1 pct at 2,118.9. The S&P/ASX 200 (INDEXASX:XJO) index fell 11 points to 4,281.2. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index was closed for a public holiday.
Company News Update
- Farm and construction machinery maker Deere & Company (NYSE:DE) posted third quarter profit of $788 million, or $1.98 per share that missed estimates of $2.32 per share. Revenue increased 15 percent to $9.59 billion. The world’s largest agricultural equipment maker cut its full-year earnings forecast.
- Discount chain Target Corporation (NYSE:TGT) reported second quarter earnings excluding items of $1.12 per share, on revenue of $16.78 billion that beat the average analysts’ estimate of earnings excluding items of $1.01 a share on $16.75 billion in revenue. Target Corporation (NYSE:TGT) also raised its full-year earnings outlook.
- Staples, Inc. (NASDAQ:SPLS) said second-quarter profit fell 32 percent to $120.4 million, or 18 cents a share, from $176.4 million, or 25 cents, a year earlier. Revenue declined 6 percent to $5.5 billion from $5.82 billion in the same period last year. Analysts were expecting a profit of 22 cents a share on revenue of $5.72 billion. The office supply chain also slashed its full year guidance.
- Teen retailer Abercrombie & Fitch Co. (NYSE:ANF) said second-quarter profit plunged 52 percent to $15.5 million, or 19 cents a share, from $32 million, or 35 cents a year, a year earlier. The company reaffirmed its full-year guidance, which was lowered earlier in the month.
- Private equity firm Carlyle Group LP (NASDAQ:CG) has agreed to acquire a controlling stake in photo and video distributor Getty Images from private equity firm Hellman & Friedman for $3.3 billion.
- Philip Morris International Inc. (NYSE:PM) was down 0.5 percent in pre-market trading after an Australian court rejected claims by the American tobacco company that the plain packaging laws of tobacco in the country infringed on its intellectual property rights.
- David Einhorn’s Greenlight Capital has taken new stakes in Aetna Inc. (NYSE:AET), Coventry Health Care, Inc. (NYSE:CVH), Humana Inc. (NYSE:HUM) and Chipotle Mexican Grill, Inc. (NYSE:CMG) during the second quarter, while offloading its stakes in Dell Inc. (NASDAQ:DELL) and HCA Holdings Inc (NYSE:HCA), according to a 13-F filing.
- Video streaming company Netflix, Inc. (NASDAQ:NFLX) said it is planning to launch its popular on-demand video service in Norway, Denmark, Sweden and Finland by the end of the year.
- Kraft Foods Inc (NASDAQ:KFT) said its board of directors has approved plans for spinning off its North American grocery business to shareholders.
- Computer-memory systems maker Netlist, Inc. (NASDAQ:NLST) posted a second-quarter net loss of 14 cents per share, compared to a year ago loss of 6 cents per share, and said revenue for the period declined 34 percent to $10.6 million.
- John Malone’s Liberty Media Corp (Capital) (NASDAQ:LMCA) has raised its stake in satellite radio operator Sirius XM Radio Inc (NASDAQ:SIRI) to 48 percent, a securities filing showed.
- British state-backed lender Lloyds Banking Group PLC (NYSE:LYG) (LON:LLOY) has agreed to sell a 1.05 billion pound ($1.65 billion) portfolio of private equity-related investments to Coller Capital, as it continues to dispose of riskier assets following its 2008 bailout.
- British American Tobacco plc (LON:BATS) and Imperial Tobacco Group PLC (LON:IMT) were down in trade today after Australia’s High Court dismissed claims that the government infringed on the intellectual property rights of tobacco companies.
- Danish brewer Carlsberg A/S (CPH:CARL-A) (CARL-B) reported a 63 percent jump in second-quarter net profit to 3.36 billion kroner ($556 million) that beat analysts’ expectations for 3.2 billion kroner. Sales increased five percent to 19.6 billion kroner, boosted by strong performance in Asia.
- UBS AG (NYSE:UBS) has denied that it advised wealthy German clients to move funds to Singapore to evade taxes, ahead of a Swiss tax deal due to come into force early next year.
- Kazakhstan-focused Eurasian Natural Resources Corporation (LON:ENRC) shed 7.3 percent in London trading after reporting a 60 percent drop in first- half profit, and cutting back on its full-year spending plans.
- British public transport company FirstGroup plc (LON:FGP) won a U.K. Department for Transport contract to operate the West Coast line, which runs from London to Scotland, until 2026. FirstGroup had placed a bid of around 6 billion pounds ($9.4 billion) to run the service, which outbid current operator Virgin Trains by about 1 billion pounds.
- Telecom major Vodafone Group Plc (ADR) (NASDAQ:VOD) (LON:VOD) was trading 1 percent lower after analysts at Bank of America Merrill Lynch downgraded the stock to “neutral” from “buy.”
- Commonwealth Bank of Australia (ASX:CBA), the country’s biggest lender by market value, said second-half cash profit was almost flat at 3.54 billion Australian dollars ($3.72 billion), compared with the 3.5 billion Australian dollars made a year ago. Full-year cash profit increased 4 percent to a record high of 7.11 billion Australian dollars. The Sydney-based bank announced a higher than expected final dividend of 1.97 Australian dollars a share.
- Chinese automaker Great Wall Motor Co Ltd (HKG:2333) (SHA:601633) recalled most of its vehicles sold in Australia following the discovery of asbestos in the engine and exhaust gaskets of some models.
- Australia and New Zealand Banking Group (ASX:ANZ) might sell some of its stakes in Asian banks if Australia’s banking regulator does not ease stringent capital rules for minority stakes, chief executive Mike Smith said today.
- Embattled Japanese TV maker Sharp Corporation (TYO:6753) closed 12 percent lower after analysts at Deutsche Securities downgraded the stock to “sell” from “hold,” and Goldman Sachs slashed its share price target to 190 yen from 260 yen.
- Chinese oil giant China Petroleum & Chemical Corp. (ADR) (NYSE:SNP) (HKG:0386) (SHA:600028) is close to acquiring a $1 billion equity stake in a Texas clean-energy project, the Wall Street Journal reported.
- Wilmar International Limited (SGX:F34), the world’s biggest palm oil processor, fell 10 percent to more than a three-year low after reporting second quarter earnings that missed expectations. The Singapore-based company also warned of a tough operating environment in the near term.
- Pipeline Partners Australia, a consortium of Australian and Canadian pension funds, has raised its offer for Hastings Diversified Utilities Fund (ASX:HDF) by 4.5 percent to 1.29 billion Australian dollars ($1.35 billion).
- Mongolia-focused coal miner Southgobi Resources Ltd (HKG:1878) plunged 13.3 percent in Hong Kong trading after it said that it expects Chinese state-controlled Aluminum Corp. of China Limited (ADR) (NYSE:ACH) (HKG:2600) (SHA:601600) to drop its $926 million takeover bid amid strong opposition from the Mongolian government.
- Japanese social gaming company Gree,Inc. (TYO:3632) reported fourth quarter operating profit of 19 billion yen ($242.59 million) that missed analysts’ estimates of a profit of 22.4 billion yen. Sales jumped 90 percent to 40.1 billion yen. The Tokyo-based company forecast full-year profit will rise as much as 8.4 percent.
- Australian copper and gold miner Oz Minerals Limited (ASX:OZL) reported a better than expected first half net profit but forecast full year copper and gold production at the lower end of its guidance range. The group also announced a dividend of 10 cents per share that missed some estimates.
- Nippon Steel Corporation (TYO:5401), Japan’s biggest steelmaker fell 2.4 percent in Tokyo after analysts at BNP Paribas slashed its earnings forecast.
Economic Calendar for Tuesday, August 14, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, August 10, 2012)
08:30 A.M. ET: Consumer Price Index (MoM) (July)
08:30 A.M. ET: Consumer Price Index (YoY) (July)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (MoM) (July)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (YoY) (July)
08:30 A.M. ET: NY Empire State Manufacturing Index (August)
09:00 A.M. ET: Net Long-Term TIC Flows (June)
09:00 A.M. ET: Total Net TIC Flows (June)
09:15 A.M. ET: Industrial Production (MoM) (July)
09:15 A.M. ET: Capacity Utilization (July)
10:00 A.M. ET: Housing Market Index (August)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, August 10, 2012)
08:00 P.M. ET: Minneapolis Fed President Naryana Kocherlakota speaks