Morning Market Update
Warren Buffett’s 2018 Activist Investment
Most investors are aware of Warren Buffett's most high profile long-term investments. However, there is one long term investment that is often overlooked. Q2 2020 hedge fund letters, conferences and more This is building materials maker USG, which was owned by Berkshire Hathaway for more than 17 years before it was acquired in 2018. If Read More
• US: Dow: 13051.00 (0.16%), S&P 500: 1409.00 (0.16%), NASDAQ: 2649.00 (0.32%)
• Europe: CAC: 3416.47 (-0.37%), DAX: 7257.81 (-0.04%), FTSE: 5827.54 (0.77%).
• Asia-Pacific: Australia: 4457.60 (-1.32%), China: 2104.43 (1.69%), Hong Kong: 21821.87 (0.83%), India: 5642.50 (0.41%), Japan: 8946.87 (0.21%).
• Metals: Gold: 1724.00 (0.29%), Silver: 32.58 (0.83%), Copper: 3.55 (0.90%)
• Energy: Crude Oil: 86.41 (0.20%), Natural Gas: 3.72 (0.81%)
• Commodities: Corn: 7.62 (1.92%), Soya Bean: 15.66 (0.94%), Wheat: 8.72 (0.90%)
• Currency: EUR/USD: 1.2974 (0.11%), GBP/USD: 1.6154 (0.15%), USD/JPY: 80.0500 (0.35%)
• 10 year US Treasury: 1.708% (0.018)
Financial and Economic News Update
U.S. stock-index futures rise: U.S. stock-index futures are pointing to a higher open on Thursday following a couple of better than expected employment data. Initial claims for state unemployment benefits fell 9,000 to a seasonally adjusted 363,000 in the previous week, according to the Labor Department. Economists were expecting claims to rise to 370,000. U.S. non-farm productivity also increased at a modest pace in the third quarter, the Labor Department said on Thursday. Elsewhere, employment data firm ADP said the private sector added 158,000 jobs in October.
European markets trading mixed: European markets are trading mixed on Thursday with the German DAX (INDEXDB:DAX) flat at 7257.81, the FTSE 100 (INDEXFTSE:UKX) was up 0.8 percent at 5827.54 and the CAC 40 (INDEXEURO:PX1) lost 0.4 percent to 3416.47. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.7 percent higher.
Asian markets end mostly higher: Asian markets closed higher on Thursday with the HANG SENG INDEX (INDEXHANGSENG:HIS) up 0.8 percent at 21,821.9, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) rose 1.7 percent. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closed up 0.2 percent to 8,946.8. The S&P/ASX 200 (INDEXASX:XJO) index fell 59.3 points to 4,457.6, slipping below the key 4,500 level. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index closed up 0.3 percent.
Company News Update
• Exxon Mobil Corporation (NYSE:XOM) said third quarter earnings excluding items fell to $2.09 per share from $2.13 a share in the same period last year. Revenue fell 8 percent to $115.71 billion. Analysts had expected Exxon to report earnings excluding items of $1.95 a share on $112.4 billion in revenue.
• Pfizer Inc. (NYSE:PFE) said third quarter adjusted profit fell to 53 cents a share from 60 cents a share. Revenue dropped 16 percent to just under $14 billion. Analysts expected Pfizer to earn 52 cents a share on revenue of $14.7 billion. The company provided full year earnings forecast that fell below analysts’ consensus.
• Kellogg Company (NYSE:K) reported a 2.1 percent rise in third quarter profit to $296 million, or 82 cents a share, compared with $290 million, or 80 cents a share, in the year-ago period. Sales gained 12 percent to $3.72 billion. Analysts were expecting the cereal maker to earn 80 cents on revenue of $3.69 billion.
• Japanese electronics giant Sony Corporation (ADR) (NYSE:SNE) (TYO:6758) reported second-quarter net loss of 15.5 billion yen ($194 million) that was narrower than the average analysts’ estimate for a loss of 15.6 billion yen. The maker of Bravia TVs kept its full-year profit guidance.
• Costco Wholesale Corporation (NASDAQ:COST) said same-store sales rose 5 percent in October against analysts’ expectations for a 5.6 percent increase. Customer traffic gained 4 percent on a comparable-store basis.
• Watson Pharmaceuticals, Inc. (NYSE:WPI) reported third quarter earnings excluding certain items of $1.35 per share, compared to estimates of $1.28 a share. Revenue rose 19 percent to $1.29 billion, ahead of Street expectations for $1.27 billion.
• Micron Technology, Inc. (NASDAQ:MU)’s plan to acquire bankrupt Japanese memory chipmaker Elpida Memory Inc (TYO:6665) got a boost when a Tokyo court approved the agreement and dismissed a rival proposal, according to a Reuters report.
• Managed-care company Cigna Corporation (NYSE:CI) posted third quarter earnings excluding items of $1.69 per share, on revenue of $7.36 billion. Analysts had projected earnings of $1.36 a share on revenue of $6.63 billion. The company also raised its full-year adjusted earnings outlook.
• Avon Products, Inc. (NYSE:AVP) reported third quarter earnings excluding one-time items of 17 cents per share, 5 cents below the consensus estimate. Sales fell 7.3 percent to $2.51 billion, also trailing estimates of $2.58 billion in sales. The door-to-door cosmetics vendor lowered its quarterly dividend to 6 cents per share from 23 cents per share.
• Online real estate database Zillow Inc (NASDAQ:Z) has acquired New York-based startup Buyfolio, an online and mobile platform for users to search and discuss listings with real estate agents, for an undisclosed amount.
• Limited Brands, Inc. (NYSE:LTD) said same-store sales rose 3 percent in October, below analysts’ expectations for a growth of 5 percent. The parent of Victoria’s Secret and Bath & Body Work also raised its fiscal third-quarter earnings forecast.
• Potash Corp./Saskatchewan (USA) (NYSE:POT), the world’s largest fertiliser producer, today said that it has held talks with Israeli government over raising its stake in Israel Chemical Ltd, according to a report in The Wall Street journal.
• Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) said third quarter adjusted profit rose to $1.28 a share from $1.25 a share in the year-ago period. Revenue rose to just under $5 billion from $4.34 billion a year earlier. Analysts expected the pharmaceutical company to earn $1.25 a share on revenue of about $5.1 billion.
• Canadian energy company Suncor Energy Inc. (USA) (NYSE:SU) (TSE:SU) said third quarter profit gained 21 percent to 1.56 billion Canadian dollars, or 1.01 Canadian dollars a share, from 1.29 billion Canadian dollars, or 82 Canadian cents, a year earlier. Operating earnings stood at 1.30 billion Canadian dollars or 85 Canadian cents a share that beat analysts’ estimate for a profit of 78 Canadian cents a share.
• Printing company R.R. Donnelley & Sons Company (NASDAQ:RRD) posted third quarter earnings excluding one-time items of 51 cents a share, 7 cents above the consensus estimate. Revenue dipped 7 percent to $2.5 billion, trailing estimates of $2.58 billion. The company lowered its full-year forecast.
• Spectra Energy Corp. (NYSE:SE) said third quarter profit dropped 30 percent to $179 million, or 27 cents a share, from $254 million, or 39 cents a share. Operating revenue dipped 4.5 percent to $1.07 billion. Analysts were looking for earnings of 31 cents a share on revenue of $1.16 billion.
• Dollar Thrifty Automotive Group, Inc. (NYSE:DTG) said third quarter net profit fell 17 percent to $55.5 million, or $1.91 a share, from $66.6 million, or $2.13 a share, in the year ago period. Revenue rose 2 percent to $460.6 million. Analysts had forecast earnings of $1.69 a share on revenue of $454 million. The company, in the process of being acquired by rival Hertz Global Holdings, Inc. (NYSE:HTZ), raised the lower end of its full-year earnings forecast.
• Royal Dutch Shell plc (ADR) (NYSE:RDS.A) (LON:RDSA) is up 1 percent in London trading after reporting third-quarter earnings that beat market expectations. Excluding one-time items, profit came in at $6.6 billion, beating the average analysts’ estimate of $6.3 billion. Revenue declined 8.4 percent to $115.43 billion. Production fell 1 percent to 2.982 million barrels of oil equivalent a day from a year ago.
• British phone company BT Group plc (ADR) (NYSE:BT) (LON:BT.A) lowered its full-year revenue forecast after European corporate customers slashed spending in response to tough economic conditions and regulatory changes. Second quarter pre-tax profit increased 7 percent to 608 million pounds, beating the average analysts’ estimate of 595 million pounds.
• Britain’s biggest mortgage lender Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) reported a third-quarter loss, as it set aside another 1 billion pounds ($1.6 billion) to compensate clients who were mis-sold loan insurance. Net loss, however, shrank to 361 million pounds from 501 million pounds in the same period last year.
• French oil explorer Maurel & Prom (EPA:MAU) soared 12 percent amid reports that China Petroleum & Chemical Corp. (ADR) (NYSE:SNP) (HKG:0386) (SHA:600028) is considering a takeover offer for the company.
• British Sky Broadcasting Group plc (LON:BSY), U.K.’s biggest pay-television provider, rallied 4.5 percent after first-quarter operating profit beat analyst estimates. Earnings before interest, taxes and other items gained 5.1 percent to 310 million pounds ($500 million), topping estimates for 300 million pounds. Sales rose 3.5 percent to 1.72 billion pounds, in line with estimates.
• Cosmetic ingredients maker Croda International Plc (LON:CRDA) reported a 3.2 percent rise in third quarter underlying group sales and announced the disposal of its unit in Cremona, Italy.
• Insurance firm Legal & General Group Plc (LON:LGEN) reported record third quarter sales and said assets under management were over 390 billion pounds.
• British energy firm BG Group plc (LON:BG) lost 5 percent in London trading as Bank of America Merrill Lynch downgraded the stock to “neutral” from “buy.” Analysts at Societe Generale also lowered their recommendation to “hold” from “buy.”
• Consumer electronics giant Panasonic Corporation (ADR) (NYSE:PC) (TYO:6752) plunged 19 percent in Tokyo after forecasting a full-year net loss of 765 billion yen ($9.6 billion), as it seeks to write down billions of yen of goodwill from past acquisitions.
• Australian steelmaker Arrium Ltd (ASX:ARI) fell 13 percent after a consortium including South Korean steel producer Posco (ADR) (NYSE:PKX) and commodities trader Noble Group dropped their 1.2 billion Australian dollar ($1.24 billion) takeover bid for the company.
• Japanese mobile operator Softbank Corp (TYO:9984) gained 3.6 percent after reporting better-than-expected quarterly results. Third quarter operating income rose 6.7 percent to 210.6 billion yen ($2.6 billion), while sales increased 6 percent to 819.2 billion yen ($10.25 billion).
• Australian coal miner Whitehaven Coal Limited (ASX:WHC) ended 1.6 percent lower after its shareholders overwhelmingly voted to keep the company’s board intact, refusing to join largest single investor Nathan Tinkler to oust chairman Mark Vaile and four other directors.
• Japanese automaker Mazda Motor Corporation (TYO:7261) surged 11 percent after forecasting full-year operating profit of 25 billion yen ($310 million) that was above the consensus estimate of 23 billion yen.
• Taiwan’s United Microelectronics Corp (ADR) (NYSE:UMC) (TPE:2303), the world’s second-largest contract chip-maker, slipped 2.8 percent in Taipei after reporting third-quarter profit that missed analyst estimates.
• Macau casino operators closed significantly higher in trade today after a report showed better than expected gaming revenue in the city in October. Sands China Ltd. (HKG:1928) climbed 2.9 percent; Wynn Macau Ltd (HKG:1128) was up 2.7 percent, while Lui Che-Woo’s Galaxy Entertainment Group Limited (HKG:0027) rose 1.3 percent.
• TDK Corp (TYO:6762) fell 4.7 percent in Tokyo, while Fujifilm Holdings Corp (TYO:4901) dropped 4.4 percent, after both firms cut their full-year outlook while reporting earnings.
Economic Calendar for Thursday, November 01, 2012:
07:30 A.M. ET: Challenger Job Cuts (YoY) (October)
08:15 A.M. ET: ADP Employment Change (October)
08:30 A.M. ET: Initial Jobless Claims (Week ending Saturday, October 27, 2012)
08:30 A.M. ET: Continuing Jobless Claims (Week ending Saturday, October 20, 2012)
08:30 A.M. ET: Non-farm Productivity (Q3)
08:30 A.M. ET: Unit Labor Costs (Q3)
08:58 A.M. ET: Markit Manufacturing PMI (October)
09:45 A.M. ET: Bloomberg Consumer Comfort Index (Week ending Sunday, Oct 28)
10:00 A.M. ET: ISM Manufacturing Index (October)
10:00 A.M. ET: Consumer Confidence (October)
10:00 A.M. ET: Construction Spending (MoM) (September)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, October 26, 2012)
10:30 A.M. ET: EIA Natural Gas Report (Week ending Friday, October 26, 2012)
12:30 P.M. ET: Atlanta Federal Reserve Bank President Dennis Lockhart speaks.
04:30 P.M. ET: Fed Balance Sheet
04:30 P.M. ET: Money Supply