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: 13030.00 (0.07%), S&P 500 Futures: 1416.00 (0.02%), NASDAQ Futures: 2684.75 (0.18%)
• Europe: CAC: 3578.49 (0.27%), DAX: 7428.94 (0.38%), FTSE: 5880.64 (0.18%).
• Asia-Pacific: Australia: 4506.00 (0.63%), China: 1980.12 (0.84%), Hong Kong: 22030.39 (0.49%), India: 5879.85 (0.94%), Japan: 9446.01 (0.48%).
• Metals: Gold: 1730.40 (0.19%), Silver: 34.26 (-0.26%), Copper: 3.60 (0.39%)
• Energy: Crude Oil: 87.84 (-0.26%), Natural Gas: 3.63 (-0.52%)
• Commodities: Corn: 7.56 (-0.49%), Soya Bean: 14.36 (0.17%), Wheat: 8.78 (-0.48%)
• Currency: EUR/USD: 1.2989 (0.08%), GBP/USD: 1.6007 (-0.21%), USD/JPY: 82.6700 (0.67%)
• 10 year US Treasury: 1.602% (-0.015)
Financial and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Friday amid investor caution over the looming “fiscal cliff.” On the economic front, consumer spending fell in October for the first time in five months, while personal income remained unchanged last month, the Commerce Department said on Friday
European markets edge higher: European markets are up in trade today after Germany approved the latest measures to help reduce Greece’s debt pile. The German DAX (INDEXDB:DAX) was trading 0.4 percent higher at 7428.94, the FTSE 100 (INDEXFTSE:UKX) was gained 0.2 percent at 5880.64 and the CAC 40 (INDEXEURO:PX1) added 0.3 percent to3578.49. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.3 percent higher.
Asian markets close higher: Asian markets closed higher on Friday as the Japanese cabinet approved an economic stimulus package. NIKKEI 225 (INDEXNIKKEI:NI225) rose 0.5 percent to 9,446.01, and was up 5.8 percent this month. The HANG SENG INDEX (INDEXHANGSENG:HIS) closed up 0.5 percent on the day and up 1.8 percent on the month at 22,030.4, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) climbed 0.9 percent. The S&P/ASX 200 (INDEXASX:XJO) index added33.1 points to 4,510.9 points. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index closed up 0.7 percent.
Company News Update
• Zynga Inc (NASDAQ:ZNGA) plunged 11 percent in early morning trade after revamping the terms of a longstanding alliance with Facebook Inc (NASDAQ:FB). Facebook will no longer be prohibited from developing its own games, starting March 31, 2013, heightening investor concern that they will one day be rivals.
• Apple Inc. (NASDAQ:AAPL) said its iPhone 5 has received final clearance from Chinese regulators and is all set to be launched in the country in December.
• Yum! Brands, Inc. (NYSE:YUM) reiterated its full-year earnings-per-share guidance of at least $3.24 a share against expectations for $3.28 a share. In addition, the fast-food operator said it sees 2013 earnings growth of at least 10 percent.
• United Natural Foods, Inc. (NASDAQ:UNFI) reported first quarter adjusted profit of 46 cents a share, in line with estimates. Sales rose 16 percent to $1.41 billion, topping expectations for $1.39 billion.
• Specialty retailer Zumiez Inc. (NASDAQ:ZUMZ) posted third quarter earnings of 40 cents a share on revenue of $180 million, trailing estimates of 47 cents a share on revenue of $182 million. The company handed in current quarter earnings and sales guidance that were also below expectations.
• Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) reported third quarter earnings of 59 cents a share on revenue of $506 million, topping expectations for 56 cents a share on sales of $504 million. The beauty store chain company also provided better than expected current-quarter guidance and said it will open about 125 new stores next year.
• Genesco Inc. (NYSE:GCO) posted third quarter earnings excluding items of $1.44 a share that easily beat the average analysts’ estimate of $1.33 a share. Sale rose 8 percent to $664.5 million from $616.5 million a year earlier, also topping estimates of $659.9 million.
• Medical device company St. Jude Medical, Inc. (NYSE:STJ) said its board has authorized a $1 billion share buyback program.
• Clothing and underwear maker Hanesbrand Inc. (NYSE:HBI) raised its 2013 fiscal year earnings outlook to above expectations, sending shares higher in early morning trade.
• Semiconductor company Avago Technologies Ltd (NASDAQ:AVGO) reported fourth quarter earnings excluding items of 77 cents a share, on revenue of $618 million, topping projections for 67 cents a share on sales of $615 million.
• Movie theater chain Regal Entertainment Group (NYSE:RGC) announced a special dividend of $1 a share on its class A and B shares, payable on December 27 to stockholders of record as of December 11.
• Software company Splunk Inc (NASDAQ:SPLK) reported third quarter loss excluding one-time items of a penny a share, on revenue of $52 million. Analysts had forecast a loss of 2 cents a share on revenue of $47 million. The company provided full-year 2013 revenue guidance that edged past Street expectations.
• Montreal-based Saputo Inc. (TSE:SAP) and Michael Foods Inc. are in the race to acquire Dean Foods Company (NYSE:DF) Morningstar dairy division, in a deal that could fetch up to $1.5 billion, according to a Reuters report.
• Telecom company Tellabs, Inc. (NASDAQ:TLAB) has named Daniel Kelly as its new chief executive and president, and declared a special dividend of $1 a share.
• Teen retailer Five Below Inc (NASDAQ:FIVE) has projected annual adjusted earnings per share of 47 cents to 49 cents, up from an earlier estimate of 45 cents to 47 cents.
• Generic drug maker Teva Pharmaceutical Industries Ltd (NYSE:TEVA) said it expects adjusted 2013 profit of $4.85 a share to $5.15 a share, on revenue of $19.5 billion to $20.5 billion. Analysts expect the company to earn $5.62 a share on revenue of $20.76 billion.
• National Beverage Corp. (NASDAQ:FIZZ) declared a special dividend of $2.55 a share.
• German industrial conglomerate Siemens AG (NYSE:SI) (ETR:SIE) (FRA:SIE) said it will cut another 4,700 jobs at its Osram lighting subsidiary as part of a plan to cut costs by 1 billion euros ($1.3 billion) by 2015, and phase out older technologies.
• Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) fell 1.2 percent in London as the lender said it won’t proceed with the sale of its Indian retail and commercial banking operations, and would wind down the businesses instead.
• German insurance giant Allianz SE (ETR:ALV) (FRA:ALV) is mulling the purchase of Provinzial Nordwest, the country’s second biggest public insurer and is prepared to pay the its book value of 2.25 billion euros ($2.92 billion), according to a Reuters report.
• Barcelona-based CaixaBank SA (MCE:CABK) said it will receive 600 million euros ($778 million) from Warren Buffet’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) in exchange for a reinsurance agreement for the transfer of a portfolio of life insurance policies.
• Electric utility GDF Suez SA (EPA:GSZ) is close to buying the liquefied natural gas unit of Spanish oil company Repsol SA, French website Wansquare reported on Friday.
• HeidelbergCement AG (ETR:HEI) (FRA:HEI), the world’s third-largest maker of cement, was upgraded to “overweight” from “equal weight” by analysts at Morgan Stanley.
• French auto part maker Valeo SA (EPA:FR) surged 2 percent after agreeing to sell its Access Mechanisms Business to Japan’s U-Shin Ltd. (TYO:6985) for an enterprise value of 223 million euros ($290 million).
• Luxury goods firm LVMH Moet Hennessy Louis Vuitton SA (EPA:MC) jumped 3 percent after Goldman Sachs lifted the stock to “buy” from “neutral.”
• Croda International Plc (LON:CRDA) added 1 percent in London trading after Credit Suisse lifted the chemicals company to “neutral” from “underperform.”
• British property developer Taylor Wimpey plc (LON:TW) gained 3.5 percent as analysts at UBS AG raised the stock to “buy” from “neutral.”
• Rio Tinto plc (NYSE:RIO) (LON:RIO) (ASX:RIO) is planning to cut costs by $7 billion over the next two years, at a time when rising costs and weak commodity prices have hurt profits at mining firms.
• Yum! Brands, Inc. (NYSE:YUM), the parent of the KFC, Taco Bell and Pizza Hut chain expects a decline in fourth-quarter Chinese sales. The company said it expects existing-restaurant sales in the country to slide 4 percent in the December-ending quarter.
• Hitachi, Ltd. (TYO:6501) climbed 4 percent and Mitsubishi Heavy Industries, Ltd. (TYO:7011) advanced 3 percent after agreeing to merge their thermal-power businesses and related units in a joint venture by 2014, to better compete against bigger rivals Siemens AG (NYSE:SI) (ETR:SIE) (FRA:SIE) and General Electric Company (NYSE:GE).
• Lynas Corporation Limited (ASX:LYC) slid 5.2 percent after the rare earths producer said it started operation at its long-delayed Malaysia processing plant on Friday.
• Hong Kong Exchanges and Clearing Limited (HKG:0388), the world’s second largest bourse operator by market value, fell 1 percent after it raised $1 billion to fund its takeover of the London Metal Exchange.
• Australian gold producer Northern Star Resources Ltd (ASX:NST) tumbled 11 percent as the company’s biggest shareholder and other board members sold a combined 10 percent stake in the company to a group of institutional investors.
• Chinese property stocks gained in trade today after Vice Premier Li Keqiang reportedly said urbanization remains a key focus area in coming years. China Vanke Co., Ltd. (SHE:200002) rose 4 percent in Shenzhen, while Anhui Conch Cement Company Limited (HKG:0914) (SHA:600585) jumped 5 percent and Poly Real Estate Group Co., Ltd (SHA:600048) climbed 3.5 percent in Shanghai.
• Grocery wholesaler Metcash Limited (ASX:MTS) fell 2.3 percent in Sydney after reporting a 13 percent decline in first-half net profit and downgrading its full-year earnings guidance citing greater than expected store closures.
Economic Calendar for Friday, November 30, 2012:
08:30 A.M. ET: Personal Consumption Expenditures – Price Index (MoM) (October)
08:30 A.M. ET: Personal Consumption Expenditures – Price Index (YoY) (October)
08:30 A.M. ET: Personal Income (MoM) (November)
08:30 A.M. ET: Personal Spending (October)
09:45 A.M. ET: Chicago Purchasing Managers’ Index (November)
03:00 P.M. ET: Farm Prices
05:00 P.M. ET: Minneapolis Fed President Naryana Kocherlakota speaks.