Morning Market Update
This Tiger Cub Giant Is Betting On Banks And Tech Stocks In The Recovery
The first two months of the third quarter were the best months for D1 Capital Partners' public portfolio since inception, that's according to a copy of the firm's August update, which ValueWalk has been able to review. Q2 2020 hedge fund letters, conferences and more According to the update, D1's public portfolio returned 20.1% gross Read More
• US: Dow: 12996.00 (0.04%), S&P 500: 1404.20 (-0.09%), NASDAQ: 2639.50 (-0.06%)
• Europe: CAC: 3463.80 (-0.83%), DAX: 7330.69 (-0.45%), FTSE: 5841.52 (-0.46%).
• Asia-Pacific: Australia: 4474.10 (0.31%), China: 2114.03 (-0.14%), Hong Kong: 22006.40 (-0.48%), India: 5704.20 (0.11%), Japan: 9007.44 (-0.49%).
• Metals: Gold: 1681.20 (0.36%), Silver: 30.94 (0.29%), Copper: 3.46 (-0.69%)
• Energy: Crude Oil: 85.17 (0.37%), Natural Gas: 3.63 (-0.68%)
• Commodities: Corn: 7.41 (-1.30%), Soya Bean: 15.20 (-2.21%), Wheat: 8.69 (-0.06%)
• Currency: EUR/USD: 1.2791 (-0.32%), GBP/USD: 1.5974 (-0.30%), USD/JPY: 80.2500 (-0.22%)
• 10 year US Treasury: 1.686% (-0.029)
Financial and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Monday ahead of Tuesday’s presidential election. Sentiment on the Street was also affected by concerns that Greece will struggle to win a bailout.
European markets trading lower: European markets are trading lower on Monday with the German DAX (INDEXDB:DAX) down 0.5 percent at 7330.69, the FTSE 100 (INDEXFTSE:UKX) lost 0.5 percent to 5841.52 and the CAC 40 (INDEXEURO:PX1) slid 0.8 percent to 3463.80. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.9 percent lower.
Asian markets end mostly lower: Asian markets closed lower on Monday with the HANG SENG INDEX (INDEXHANGSENG:HIS) down 0.5 percent at 22,006.4 points, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) gave up 0.1 percent. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closed down 0.5 percent to 9,007.44. The S&P/ASX 200 (INDEXASX:XJO) index added 0.3 percent or 14.1 points at 4,474.1. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index was closed flat.
Company News Update
• Ford Motor Company (NYSE:F) said it sold 60,518 vehicles in China in October, up 48 percent from the same period last year. General Motors Company (NYSE:GM) sold a record 251,812 vehicles last month in the country, up 14.3 percent from a year earlier.
• Time Warner Cable Inc (NYSE:TWC) reported third-quarter earnings excluding one-time items of $1.41 per share, 2 cents below the average analysts’ estimate. Revenue for the period came in at $5.36 billion, also trailing expectations for $5.39 billion.
• Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) reported quarterly results after market close on Friday. Third quarter operating profit declined 11 percent to $3.4 billion, or $2,057 per Class A share. Analysts were expecting an operating profit of about $2,063 a share.
• Investment bank Stifel Financial Corp. (NYSE:SF) has agreed to acquire smaller rival KBW, Inc. (NYSE:KBW) for $17.50 a share, or around $575 million.
• Health-care company Humana Inc. (NYSE:HUM) reported third quarter profit of $426 million, or $2.62 a share, down from $445 million, or $2.67 a share, in the year-ago period. Revenue came in at $9.65 billion. Analysts had forecast earnings of $2.05 a share on revenue of $9.86 billion.
• The Boeing Company (NYSE:BA) is likely to secure a multi-billion dollar in military contracts from the Indian government to supply Chinook and Apache helicopters, according to a report in The Wall Street Journal.
• Commodities exchange operator IntercontinentalExchange Inc (NYSE:ICE) said third-quarter earnings fell 1.2 percent to $131.1 million, or $1.79 a share, from $132.6 million, or $1.80 a share, in the year-ago period. Revenue declined 5.2 percent to $323.2 million. Analysts were expecting the Atlanta-based company to earn $1.72 in per share on $325 million in revenue.
• Drugstore chain Walgreen Company (NYSE:WAG) said October same-store sales fell 5.9 percent. Analysts were expecting sales to decline 4.4 percent.
• Offshore-drilling company Transocean Ltd (NYSE:RIG) reported third quarter earnings excluding certain items of $1.37 a share that easily beat the average analysts’ estimate of 76 cents a share. Revenue jumped 23 percent to $2.44 billion, trailing estimates of $2.53 billion.
• Electric car maker Tesla Motors Inc (NASDAQ:TSLA) posted third quarter loss excluding one-time items of 92 cents a share, on revenue of $50.1 million. Analysts looking for a loss of 89 cents a share on sales of $55.7 million.
• Norwegian oil-rig company Seadrill Ltd (NYSE:SDRL) will sell part of its Asian business to Malaysia’s SapuraKencana for an enterprise value of $2.9 billion, according to a Reuters report.
• The Southern Company (NYSE:SO) reported a 6.5 percent rise in third quarter profit to $993 million, or $1.11, from $933 million, or $1.07 a share, in the same period last year. Revenue dropped 7 percent to $5.05 billion. Analysts had projected earnings of $1.13 a share and revenue of $5.97 billion.
• Railroad operator Genesee & Wyoming Inc. (NYSE:GWR) posted a third quarter loss of $19.6 million, or 47 cents a share, versus a profit of $32.9 million, or 77 cents a share, a year earlier. The company recorded a one-time, non-cash charge of $50.1 million during the quarter related to the funding of its $1.4 billion acquisition of RailAmerica, Inc. (NYSE:RA). Excluding the charges, the company earned 74 cents per share. Revenue increased 2.5 increased to $222.7 million. Analysts had projected earnings of 69 cents a share on revenue of $220 million.
• BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is up 25 percent in pre-market trading after a late-stage trial of its experimental genetic disorder drug, GALNS, met the main goal of improving patients’ ability to walk.
• Sysco Corporation (NYSE:SYY) posted first quarter earnings excluding items of 58 cents a share, on revenue of $11.1 billion. Analysts were expecting the food-services distributor to earn 50 cents a share on revenue of $11.14 billion.
• Manitowoc Company, Inc. (NYSE:MTW) reported a 6.3 percent fall in third quarter profit to $22.2 million, or 17 cents a share, from $23.7 million, or 18 cents a share, in the year-ago period. Revenue rose 2.2 percent to $955.7 million. Analysts were expecting the equipment manufacturer to earn 29 cents a share on revenue of $1.05 billion.
• HSBC Holdings plc (ADR) (NYSE:HBC) (LON:HSBA) fell 1.4 percent after third quarter underlying pre-tax profit rose to $5 billion, missing the average analysts’ estimate of $5.6 billion. The British bank said it had set aside an additional $800 million in relation to a U.S. money laundering probe.
• Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) slid 1.5 percent in London after the Sunday Times reported that the bank is considering a sale of its 60 percent stake in wealth management company, St James’s Place.
• CGG Veritas (ADR) (NYSE:CGV) (EPA:GA), the world’s largest surveyor of oilfields reported third-quarter net profit of $48 million, missing analyst estimates for a profit of $68 million. The company, however, confirmed its 2012 targets.
• Low cost carrier Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) (LON:RYA) climbed 7 percent after reporting a 23 percent rise in second-quarter net profit to 496.8 million euros ($636 million), topping analysts’ expectations for a profit of 440 million euros. The airline also raised its full-year earnings forecast.
• Mining stocks were among the losers gainers in London, with Kazakhmys plc (LON:KAZ) down 2.2 percent and Vedanta Resources plc (LON:VED) losing 2.7 percent. Eurasian Natural Resources Corporation (LON:ENRC) slid 2.6 percent, while Antofagasta plc (LON:ANTO) declined 1.7 percent. Rio Tinto plc (ADR) (NYSE:RIO) (LON:RIO) (ASX:RIO) and BHP Billiton Limited (ADR) (NYSE:BHP) (ASX:BHP) (LON:BLT) were also trading close to 2 percent lower.
• Dutch mail service company PostNL NV (AMS:PNL) tumbled 10 percent after reporting lower than expected third-quarter profit and revenue amid a decline in addressed mail volumes.
• British insurer Prudential plc (LON:PRU) agreed to acquire the life-assurance unit of Thailand’s Thanachart Bank for 368 million pounds ($590 million) in cash.
• The Weir Group PLC (LON:WEIR) jumped 6 percent in London after the manufacturing and engineering company said it expects to record a double-digit profit growth in 2012.
• Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203) raised its full-year net profit forecast to $9.7 billion as strong demand in the U.S. and Japan helped offset a slump in Chinese sales. The auto major now expects to earn 780 billion yen ($9.7 billion) in the twelve months ending March 2013, exceeding the previous 760 billion yen forecast.
• Australian lender Westpac Banking Corporation (ADR) (NYSE:WBK) (ASX:WBC) reported a better than expected 9 percent rise in second-half cash profit, and said it had improved its balance sheet despite an increase in bad debts.
• Mobile operator eAccess Ltd (TYO:9427) jumped to a 19-month high in Tokyo trading after Softbank Corp (TYO:9984) said it would change its share swap ratio with eAccess. Softbank Corp (TYO:9984) agreed to acquire its smaller domestic rival in a $1.84 billion deal at the start of last month.
• Electric utility Kansai Electric Power Co Inc (TYO:9503) tumbled 7 percent after the Nikkei business daily reported that Japanese officials disagreed about whether a fault line under one its nuclear-power plants is active.
• Sydney-listed Northern Iron Limited (ASX:NFE) crashed 36 percent after Essel Mining, a subsidiary of India’s Aditya Birla Group withdrew a takeover offer for the company.
• Japanese home electronics retailer Yamada Denki Co., Ltd. (TYO:9831) slid 7.5 percent to 3,225 yen after slashing its full-year operating profit forecast by 39 percent to 57.3 billion yen, citing weaker sales.
• Foxconn International Holdings Limited (HKG:2038), the world’s biggest contract maker of cell-phones, soared 32 percent in Hong Kong trading after Citigroup upgraded the stock to “buy” and raised its earnings estimate for 2013 by 134 percent.
• Daiwa Securities Group Inc. (TYO:8601), Japan’s second-largest brokerage fell 2.1 percent despite swinging to profit in the three months ended September 30. Net income came in at 7.4 billion yen ($92 million), compared with a loss of 19.4 billion yen in the year-ago period.
• Apple Inc (NASDAQ:AAPL) supplier Foster Electric Company, Limited (TYO:6794) rallied 15.4 percent in Tokyo after it said that it expects fiscal-year net profit to jump to 4.3 billion yen ($53.5 billion).
Economic Calendar for Monday, November 05, 2012:
10:00 A.M. ET: ISM Non-Manufacturing PMI (October)
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
08:00 P.M. ET: San Francisco Fed President John Williams speaks.