Morning Market Update
Mangrove Partners Narrowly Avoids “Extinction-Level Event”
Nathaniel August's Mangrove Partners is having a rough 2020. According to a copy of the hedge fund's August update, a copy of which ValueWalk has been able to review, for the year to August 5, Mangrove Funds have returned -38%. Over the trailing 12-month period, the funds returned -44%. The S&P 500 produced a positive Read More
- US: Dow: 12756.00 (-0.02%), S&P 500: 1387.10 (0.06%), NASDAQ: 2595.50 (0.08%)
- Europe: CAC: 3472.59 (0.30%), DAX: 7178.58 (0.12%), FTSE: 5752.37 (0.07%).
- Asia-Pacific: Australia: 4369.50 (-0.37%), China: 2030.32 (1.05%), Hong Kong: 21524.36 (1.38%), India: 5614.80 (0.78%), Japan: 9222.52 (0.87%).
- Metals: Gold: 1728.10 (0.26%), Silver: 33.10 (0.50%), Copper: 3.51 (-0.10%)
- Energy: Crude Oil: 87.82 (1.23%), Natural Gas: 3.81 (-0.68%)
- Commodities: Corn: 7.49 (0.37%), Soya Bean: 14.18 (1.38%), Wheat: 8.62 (0.12%)
- Currency: EUR/USD: 1.2810 (-0.05%), GBP/USD: 1.5941 (0.09%), USD/JPY: 82.4600 (0.95%)
- 10 year US Treasury: 1.676% (0.009)
Financial and Economic News Update
U.S. stock-index futures largely unchanged: U.S. stock-index futures are pointing to a flat open on Wednesday after European Union finance ministers failed to agree on a debt-reduction package for Greece. On the economic front, weekly jobless claims dropped 41,000 to a seasonally adjusted 410,000, according to the Labor Department, in line with estimates.U.S. manufacturing in November grew at quickest pace in five months, according to Markit’s U.S. Manufacturing PMI.
European markets rise: European markets were up in trade today after eurogroupe head Jean-Claude Juncker said progress had been made on how to reduce Greece’s debt. The German DAX (INDEXDB:DAX) edged 0.1 percent higher at 7178.58, the FTSE 100 (INDEXFTSE:UKX) was flat at 5752.37 and the CAC 40 (INDEXEURO:PX1) gained 0.3 percent to 3472.59. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.3 percent higher.
Asian markets close mostly higher: Asian markets ended higher, helped by a sharp rebound in Chinese stocks in late trading. The HANG SENG INDEX (INDEXHANGSENG:HIS) climbed 1.4 percent to 21,524.4, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) closed up 1 percent, above the key psychological level of 2000. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) jumped 0.9 percent to end at a two-month high of 9,222.5 points. The S&P/ASX 200 (INDEXASX:XJO) index closed down 0.3 percent at 4,369.5. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index gained 0.7 percent.
Company News Update
- Deere & Company (NYSE:DE) reported fourth-quarter profit of $687.6 million, or $1.75 per share, up from $669.6 million, or $1.62 per share, in the same period last year. Sales increased 14 percent to $9.79 billion. Analysts were expecting the farm equipment maker to earn $1.88 a share on sales of $8.93 billion
- Research In Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) fell 1 percent in early morning trade after The Wall Street Journal reported that the U.S. National Transportation Safety Board is considering dropping the BlackBerry in favor of Apple Inc. (NASDAQ:AAPL)’s iPhone, citing reliability issues.
- Chip maker Cirrus Logic, Inc. (NASDAQ:CRUS) said that its board has authorized a $200 million share repurchase program.
- Jewelry retailer Zale Corporation (NYSE:ZLC) reported first quarter loss of 88 cents a share on revenue of $357 million. Analysts had forecast a loss of 68 cents a share on sales of $365 million.
- Chipotle Mexican Grill, Inc. (NYSE:CMG) has added an additional $100 million to the existing $100 million share repurchase program announced in October, and said $25 million of the repurchases will be conducted through a privately negotiated accelerated share repurchase transaction with Morgan Stanley.
- Swiss drug major Novartis AG (NYSE:NVS) has secured approval from the U.S. Food and Drug Administration for a new seasonal flu vaccine that can be manufactured much more quickly than traditional vaccines that use chicken eggs.
- Specialty retailer Tilly’s Inc (NYSE:TLYS)reported third quarter profit of 33 cents a share on revenue of $125 million. Analysts had projected earnings of 30 cents a share on sales of $128.7 million.
- Illumina, Inc. (NASDAQ:ILMN) said smaller rival Complete Genomics, Inc. (NASDAQ:GNOM) rejected its takeover bid of $3.30 a share.
- Communication equipment maker JDS Uniphase Corp (NASDAQ:JDSU) has appointed Richard Belluzzo as chairman of the board.
- Children’s book publisher Scholastic Corp (NASDAQ:SCHL) cut its full-year profit forecast and said revenue will be $100 million lower than expected, as schools are delaying spending money on curriculum and holding back on orders amid the uncertainty surrounding the federal budget.
- Hewlett-Packard Company (NYSE:HPQ) was lowered to “sector perform” from “outperform” by analysts at RBC Capital Markets, who slashed its price target to $14 from $18.
- Money manager Eaton Vance Corp (NYSE:EV) was cut to “sell from “neutral” by analysts at Citigroup with a target price of $26.
- Meat products maker Hormel Foods Corporation (NYSE:HRL) was downgraded to “underperform” from “outperform” at Credit Agricole with a target price of $32.
- European Union anti-trust regulators are set to approve Glencore International Plc (LON:GLEN)’s $32 billion takeover of diversified miner Xstrata PLC (LON:XTA) after the commodities trading house satisfied competition concerns over zinc by scrapping a sales deal with Nyrstar NV (EBR:NYR), according to a Reuters report.
- French waste and water group Veolia Environnement Ve SA (NYSE:VE) (EPA:VIE) gained 2.4 percent in Paris after it sold its U.S. solid waste business to Highstar Capital’s ADS Waste Holdings for $1.91 billion.
- Specialty chemicals company Johnson Matthey PLC (LON:JMAT) tumbled 6 percent in London after it reported first-half profit of 145.7 million pounds ($231.9 million) that missed analysts’ estimates of 149 million pounds.
- German chemicals giant BASF SE (ETR:BAS) (FRA:BAS) has agreed to buy Norwegian omega-3 fatty acids producer Pronova BioPharma ASA for 664 million euro ($845 million).
- French aircraft parts makers Zodiac Aerospace SA (EPA:ZC) fell 1.3 percent despite posting higher-than-expected full-year profit.
- Coloured gems miner Gemfields PLC (LON:GEM) will buy luxury jeweler Faberge, famous for its Tsarist-era lavish Easter eggs, from former BHP Billiton boss Brian Gilbertson’s Pallinghurst Resources, in a deal valuing the company at $142 million.
- Compass Group plc (LON:CPG), the world’s largest catering company slipped 1.6 percent after reporting full-year revenue of 16.9 billion pounds that fell short of the average analyst estimate of 17 billion pounds.
French electrical goods retailer Darty PLC (LON:DRTY) (EPA:DRTY) is planning to sell its loss-making Italian operations to DPS Group SRL, according to a Reuters report.
German engineering company Siemens AG (NYSE:SI) (ETR:SIE) (FRA:SIE) fell 1.5 percent after Deutsche Bank AG lowered the stock to “sell” from “hold,” and reduced its price target to 65 euros from 75 euros.
Lloyds Banking Group PLC (NYSE:LYG) (LON:LLOY) added 1 percent in London after Morgan Stanley late Tuesday upgraded the bank to “equal weight” from “underweight.”
Real estate investment trust The British Land Company plc (LON:BLND)advanced 2 percent after analysts at Morgan Stanley raised the stock to “overweight,” the equivalent of a buy rating, from “equal weight.”Asia-Pacific
- Ford Motor Company (NYSE:F), Mazda Motor Corporation (TYO:7261) and local partner Chongqing Changan Automobile Company Ltd (SHE:000625) have agreed to invest an additional $37.3 million in their engine plant venture in Chongqing city, buoyed by surging sales of Ford cars in the country, according to a Reuters report.
- Panasonic Corporation (NYSE:PC) (TYO:6752) dropped 0.7 percent in Tokyo after Moody’s Investors Service slashed its long-term debt rating to the lowest grade citing falling sales of its consumer electronic devices.
- Angang Steel Company Limited (HKG:0347) (SHE:000898) soared 7.2 percent after Hong Kong’s largest publicly traded steelmaker said it will sell its 45 percent stake in Tianjin Angang Tiantie Cold Rolled Sheets for 1.18 billion yuan ($189 million) to parent Anshan Iron & Steel Group.
- Japanese carmakers gained in trade today after McKinsey & Co. said China’s passenger-vehicle sales will expand by an average 8 percent a year. Toyota Motor Corporation (NYSE:TM) (TYO:7203) rallied 2.2 percent, Honda Motor Co Ltd (NYSE:HMC) (TYO:7267) jumped 3.8 percent, while Nissan Motor Co., Ltd. (TYO:7201) added 2.1 percent.
- Consumer goods conglomerate China Resources Enterprises, Limited (HKG:0291) slid 2.3 percent after reporting a smaller-than-expected 27 percent rise in third-quarter net profit.
- Australian up-market department store David Jones Limited (ASX:DJS) tumbled 6 percent after reporting a lower than expected first-quarter same-store sales growth of 0.3 percent. Analysts were expecting a rise of up to one percent.
- Oil major Royal Dutch Shell plc (NYSE:RDS.A) (LON:RDSA) is planning to annually invest around $1 billion in its upstream business in China to tap into the country’s growing natural gas demand, chief executive officer Peter Voser told state-run newspaper China Daily.
- Japanese department store operator Marui Group Co Ltd (TYO:8252) jumped 3.5 percent after the Nikkei business daily reported that the company is seeking to raise its group operating profit to 30 billion yen by March 2015.
- Brisbane-based coal seam gas producer WestSide Corporation Limited (ASX:WCL) surged 3.9 percent after receiving a takeover offer of 52 Australian cents a share from an unidentified investor.
Economic Calendar for Wednesday, November 21, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, November 16)
08:30 A.M. ET: Initial Jobless Claims (Week endingSaturday, November 17, 2012)
08:30 A.M. ET: Continuing Jobless Claims (Week ending Saturday, November 10)
08:58 A.M. ET: Markit Manufacturing PMI (November)
08:55 A.M. ET: Redbook Index (MoM) (November 11)
09:45 A.M. ET: Bloomberg Consumer Comfort Index (Week ending Sunday, Nov 18)
09:55 A.M. ET: Reuters/Michigan Consumer Sentiment Index (November)
10:00 A.M. ET: Leading Indicator (MoM) (October)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, November 16)
12:00 P.M. ET: EIA Natural Gas Report (Week ending Friday, November 16)