Morning Market Update
Market Levels
- US: Dow Futures: 13160.00 (-0.09%), S&P 500 Futures: 1401.40 (-0.07%), NASDAQ Futures: 2722.00 (0.04%)
- Europe: CAC: 3441.66 (0.18%), DAX: 6945.81 (0.02%), FTSE: 5829.65 (-0.30%)
- Asia-Pacific: Australia: 4283.30 (0.14%), China: 2136.08 (-1.53%), Hong Kong: 20081.36 (-0.27%), India: 5347.90 (0.52%), Japan: 8885.15 (-0.07%).
- Metals: Gold: 1625.10 (0.14%), Silver: 28.00 (-0.20%), Copper: 3.37 (-0.77%)
- Energy: Crude Oil: 93.63 (0.82%), Natural Gas: 2.77 (-0.07%)
- Commodities: Corn: 7.99 (-1.49%), Soya Bean: 16.22 (0.83%), Wheat: 8.85 (-2.56%)
- Currency: EUR/USD: 1.2354 (0.52%), GBP/USD: 1.5710 (0.13%), USD/JPY: 78.3200 (0.06%)
- 10 year US Treasury: 1.656% (-0.002)
Financial and Economic News Update
U.S. stock-index futures edge lower: U.S. stock index futures are pointing to a marginally lower open on Monday after five consecutive weeks of gains, as Japan reported a sharp deceleration in growth, renewing investor concerns of a global slowdown. Japan’s gross domestic product grew at a slower than expected 0.3 percent in the second quarter, the Cabinet Office reported Monday. Analysts at Bank of America/Merrill Lynch also slashed their full-year growth estimate for China, to 7.7 percent from 8 percent previously. The Dow Jones industrial average, S&P 500 and NASDAQ futures were all trading largely unchanged. Trading volume is expected to be light today with the absence of any major corporate or economic news.
European markets mixed: European markets are trading mixed on Monday with the German DAX (INDEXDB:DAX) largely unchanged at 6945.81, the FTSE 100 (INDEXFTSE:UKX) down 0.3 percent to 5829.65, and the CAC 40 (INDEXEURO:PX1) up 0.2 percent at 3441.66. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) gained 0.4 percent.
Asian markets end mostly lower: Asian markets closed mostly lower on Monday with Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closing 0.1 percent lower at 8885.15 points. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed down 0.3 percent at 20,081.4, while the SSE Composite Index (SHA:000001) ended down 1.5 percent at 2,136.1 points. The S&P/ASX 200 (INDEXASX:XJO) index rose 6 points to 4,283.3. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended up 0.43 percent at 17,633.45 points.
Stocks in Focus
U.S.
- Bank of America Corp (NYSE:BAC) has sold the non-US wealth management business of Merrill Lynch to Swiss private banking group, Julius Baer, for $882 million.
- Google Inc (NASDAQ:GOOG) will cut about 4000 jobs at its Motorola Mobility wireless phone unit, and close up to a third of its offices around the world.
- FedEx Corporation (NYSE:FDX), the world’s largest air-cargo shipper by revenue, will offer voluntary buyout incentives to U.S. employees as part of a broader plan to improve efficiencies and cut costs.
- Video game publisher Electronic Arts Inc. (NASDAQ:EA) said the company is in talks with Microsoft Corporation (NASDAQ:MSFT) to bring mobile games to the next version of its Windows 8 platform.
- British energy group BP plc (NYSE:BP) (LON:BP) has agreed to sell two gas processing plants in Texas to Eagle Rock Energy Partners, L.P. (NASDAQ:EROC), for $227.5 million in cash.
- Jeff Smisek, the Chief Executive of United Continental Holdings Inc (NYSE:UAL) has bought 55,600 shares of the airline at around $18 per share, bringing his total holdings to more than 339,000 shares.
- Bookseller Barnes & Noble, Inc. (NYSE:BKS) has slashed the price of its less expensive 8 gigabyte Nook tablet computer to $179 from the current $199.
- Auto parts retailer O’Reilly Automotive Inc (NASDAQ:ORLY) has added $500 million to its share repurchase program, which currently stands at $2.5 billion.
- The board of logistics company C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) has authorized a new 10 million share buy-back program.
- Yahoo! Inc. (NASDAQ:YHOO) was trading 0.5 percent lower in New York pre-market trading after analysts at Stifel Nicolaus downgraded the stock to “hold” from “buy.”
- Analysts at Goldman Sachs have removed The Coca-Cola Company (NYSE:KO) from its “conviction buy” list on a valuation basis.
- Retailer Bed Bath & Beyond Inc. (NASDAQ:BBBY) has been upgraded to “buy” from “hold” at Canaccord Genuity, with a price target of $75, up from $71.
- Campbell Soup Company (NYSE:CPB) was up 1.8 percent in early morning trade after analysts at Goldman Sachs upgraded the stock to “conviction buy” from “sell,” citing favorable risk-reward ratio.
Europe
- Short selling of European auto stocks is at a two-year high, according to a Financial Times report, as traders bet slowing growth in the continent will hurt profit margins of carmakers such as Fiat SpA (BIT:F) and Peugeot SA (EPA:UG).
- Standard Chartered PLC (LON:STAN) (HKG:2888) gained 1.5 percent, partly recovering from a steep loss last week, following a report that the bank has discussed a settlement with a New York regulator over allegations of colluding with the Iranian government to hide transactions worth at least $250 billion.
- German utility E.ON AG (ETR:EOAN) (FRA:EOAN) said first half net profit jumped to 2.91 billion euros from 691 million euros a year earlier, while revenue increased 23 percent to 65.4 billion euros from 53.05 billion euros in the same period last year. The company also confirmed its outlook for higher full-year profit.
- British oilfield services company Petrofac Limited (LON:PFC) plunged 5.9 percent in London trading after saying second half net profit growth will be lower than in the first-half of the year. The company, however, posted a 32 percent rise in first half net profit, with revenue increasing 20 percent.
- Sovereign wealth fund Qatar Holding, the second-largest shareholder in takeover target Xstrata PLC (LON:XTA), has increased its stake in the company to 11.5 percent, according to a regulatory filing on Monday.
- SolarWorld AG (ETR:SWV) (FRA:SWV), Germany’s biggest solar panel-maker, reported a second quarter net loss of 161 million euros ($198 million), its second-biggest quarterly loss, and slashed its full-year outlook, amid growing competition in the solar-energy industry.
- Belgian cable operator Telenet Group Holding NV (EBR:TNET) jumped 2.7 percent after announcing plans to buy back up to 18.2 percent of its stock for 35 euros a share.
- Dublin-based biotechnology company Elan Corporation, plc (ADR) (NYSE:ELN) will spin off its Neotope drug discovery business as a separate publicly listed company.
- Kloeckner & Co SE (ETR:KCO) (FRA:KCO), Europe’s largest independent steel trader, was lowered by analysts at Bank of America to “underperform” from “buy.”
Asia-Pacific
- BlueScope Steel Limited (ASX:BSL), Australia’s largest steelmaker has agreed to sell half of its Southeast Asian and North American building products businesses to Nippon Steel Corporation (TYO:5401) for 512 million Australian dollars ($540 million) in cash.
- Nippon Sheet Glass Company, Limited (TYO:5202) will resume the construction of a touch screen panel plant in Vietnam that was stopped in February due to bad business conditions, Japanese business daily Nikkei reported.
- Australia’s Newcrest Mining Limited (ASX:NCM), the world’s fourth-largest gold miner, reported a 23 percent rise in full-year profit, and said it is planning to spend about 5 billion Australian dollars ($5.28 billion) over the next five years to increase output by 1 million ounces.
- Japanese TV maker, Sharp Corporation (TYO:6753) ended 4.3 percent lower despite a report in the Nikkei business daily on Saturday that it is planning to sell its liquid crystal display modules to Taiwanese technology manufacturing giant, Hon Hai Precision Industry Co., Ltd. (TPE:2317).
- Australian building products maker James Hardie Industries SE (ADR) (NYSE:JHX) (ASX:JHX) reported first quarter profit that beat estimates, but said market conditions in Australia remain weak, and the extent and rate of improvement in the US housing market were uncertain.
- Japanese watchmaker Citizen Holdings Co., Ltd. (TYO:7762) said that its U.S. unit has acquired the LCD operations of chipmaker Micron Technology, Inc. (NASDAQ:MU) for an undisclosed amount.
- Australian consumer electronics chain JB Hi-Fi Limited (ASX:JBH) posted full-year net income of 104.6 million Australian dollars, which was better than analysts’ estimate of 103.4 million Australian dollars. The Melbourne-based company said sales for the year ending June 2013 are likely to increase 5.5 percent to 3.3 billion Australian dollars ($3.5 billion), despite the “challenging” retail environment.
- Chinese brokerage firms were among the worst performers in mainland trading, amid a weak market outlook and worries over quarterly earnings. Citic Securities Company Limited (SHA:600030) (HKG:6030) plunged 9.1 percent and Haitong Securities Company Limited (SHA:600837) (HKG:6837) skidded 8.6 percent in Shanghai, while Guoyuan Securities Company Limited (SHE:000728) lost 8.2 percent in Shenzhen.
Economic Calendar for Monday, August 13, 2012:
11:00 A.M. ET: 4-Week Bill Announcement
11:30 A.M. ET: 3-Month Bill Auction
11:30 A.M. ET: 6-Month Bill Auction
