Morning Market Update
Investors Flock To Hedge Funds As Markets Recover
According to a recent Credit Suisse survey, investors are more interested in hedge funds than any other major asset class going into the second half of the year. Q1 2020 hedge fund letters, conferences and more This is a big switch from investor sentiment in the first half of 2020. Indeed, hedge fund launches slowed Read More
• US: Dow Futures: 13065.00 (0.44%), S&P 500 Futures: 1421.00 (0.47%), NASDAQ Futures: 2694.50 (0.70%)
• Europe: CAC: 3588.65 (0.87%), DAX: 7479.08 (0.98%), FTSE: 5883.81 (0.29%).
• Asia-Pacific: Australia: 4531.50 (0.57%), China: 1959.77 (-1.04%), Hong Kong: 21767.85 (-1.21%), India: 5870.95 (-0.15%), Japan: 9458.18 (0.13%).
• Metals: Gold: 1718.50 (0.34%), Silver: 33.70 (1.25%), Copper: 3.66 (0.30%)
• Energy: Crude Oil: 89.55 (0.72%), Natural Gas: 3.58 (0.53%)
• Commodities: Corn: 7.63 (-0.69%), Soya Bean: 14.57 (-0.57%), Wheat: 8.75 (-2.76%)
• Currency: EUR/USD: 1.3055 (0.53%), GBP/USD: 1.6083 (0.44%), USD/JPY: 82.2900 (-0.23%)
• 10 year US Treasury: 1.645% (0.030)
Financial and Economic News Update
U.S. stock-index futures gain: U.S. stock-index futures are pointing to a higher open on Monday following positive comments from Treasury Secretary Timothy Geithner on the “fiscal cliff.” Geithner said on Sunday that Republicans will have to ultimately accept higher taxes on the wealthy to ensure a budget deal. On the economic front, the U.S. Markit Manufacturing PMI hit a six-month high of 52.8 in November. Economists were expecting a reading of 51.2.
European markets trading higher: European markets are up in trade today after Greece offered to spend 10 billion euros ($13 billion) buying back bonds. The German DAX (INDEXDB:DAX) was trading 1 percent higher at 7479.08, the FTSE 100 (INDEXFTSE:UKX) gained 0.3 percent to 5883.81 and the CAC 40 (INDEXEURO:PX1) added 0.9 percent to 3588.65. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.9 percent higher.
Asian markets close mixed: Asian markets closed mixed on Monday as concerns about an impasse in U.S. budget talks offset upbeat Chinese manufacturing data. China’s official manufacturing Purchasing Managers’ Index increased to 50.6 in November, the highest reading in seven months, data from the National Bureau of Statistics and China Federation of Logistics and Purchasing showed on Monday. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) closed up 0.1 percent at 9,458.18 points. The HANG SENG INDEX (INDEXHANGSENG:HIS) closed down 1.2 percent at 21,767.9 points, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) shed 1 percent to close at its lowest level since January 2009. The S&P/ASX 200 (INDEXASX:XJO) index added 25.5 points to 4,531.5. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index closed down 0.2 percent.
Company News Update
• Facebook Inc (NASDAQ:FB) is in talks to acquire multi-platform mobile messaging app, WhatsApp, TechCrunch reported on Sunday.
• A Mexican court ordered Yahoo! Inc. (NASDAQ:YHOO) to pay $2.7 billion to two local companies, in a breach of contract case related to a Yellow Pages listing service.
• Satellite TV operator Dish Network Corp. (NASDAQ:DISH) declared a “non-recurring” dividend of $1 per share, payable on December 28 to shareholders of record as of December 14.
• Dean Foods Company (NYSE:DF) has agreed to sell its Morningstar Foods unit to Canadian dairy products maker Saputo Inc. (TSE:SAP) for $1.45 billion.
• Dell Inc. (NASDAQ:DELL) jumped 5 percent in pre-market trading after analysts at Goldman Sachs upgraded the stock to “buy” from “sell.”
• Exxon Mobil Corporation (NASDAQ:XOM) and Canadian oil and gas company Talisman Energy Inc. (NYSE:TLM) (TSE:TLM) are in talks with Poland’s largest oil firm PKN Orlen SA to sell their Polish shale gas exploration licenses, according to a report in daily newspaper, Rzeczpospolita.
• Hospital operator HCA Holdings Inc (NYSE:HCA) declared a special dividend of $20 per share, payable before the end of the year.
• The Wall Street Journal reported that gravel maker Martin Marietta Materials, Inc. (NYSE:MLM) will explore a friendly takeover offer for rival Vulcan Materials Company (NYSE:VMC), rather than attempt another hostile takeover.
• Robert Thomson, managing editor of The Wall Street Journal, will reportedly be appointed chief executive of News Corp (NASDAQ:NWSA)’s soon-to-be created publishing company.
• Starbucks Corporation (NASDAQ:SBUX) is considering changes to its tax practices in the U.K., following criticism from lawmakers for paying little in income taxes.
• David Viniar, Chief Financial Officer of Goldman Sachs Group, Inc. (NYSE:GS) sold $11.8 million worth of Goldman shares last week, according to a Securities and Exchange Commission filing. Viniar is scheduled to retire at the end of next month.
• Postage meter and mailing services provider Pitney Bowes Inc. (NYSE:PBI) has named former International Business Machines Corp. (NYSE:IBM) executive Marc Lautenbach as president and chief executive officer, effective immediately.
• LDK Solar Co., Ltd (ADR) (NYSE:LDK) reported third quarter loss of $136.9 million, or $1.08 an American depositary share, compared a year-ago loss of $114.5 million, or 87 cents an ADS. Analysts had projected a loss of $1.24 per ADS. Sales dipped 38 percent to $291.5 million.
• Computer Sciences Corporation (NYSE:CSC) has agreed to sell its credit-services unit to Equifax Inc. (NYSE:EFX) for $1 billion in cash.
• Fashion apparel retailer Cato Corp (NYSE:CATO) announced a special dividend of $1 per share, and accelerated the payment of its entire 2013 annual dividend of $1 per share before the end of this year.
• Conn’s, Inc. (NASDAQ:CONN) reported better than expected third quarter adjusted earnings and revenue and raised its outlook for the year.
• Deckers Outdoor Corp (NASDAQ:DECK), the maker of UGG and Teva brand shoes, was raised to “buy” from “neutral” at Sterne Agee.
• Verizon Communications Inc. (NYSE:VZ) gained 1 percent in early morning trade after analysts at Nomura upgraded the stock to “buy” from “neutral” and raised its price target from $49 to $50.
• UBS AG (NYSE:UBS) fell in trade today following reports that the Swiss bank is nearing a settlement with U.K. and U.S. authorities over the libor scandal,and is expected to pay more than $465 million.
• Minority shareholders in BP plc (NYSE:BP) (LON:BP)’s Russian joint venture TNK-BP have dropped a long-running $3 billion suit against the British oil giant.
• Mining stocks were among the biggest gainers in London after Chinese manufacturing data showed business activity improved in November. Kazakhmys plc (LON:KAZ) jumped 1.5 percent and Vedanta Resources plc (LON:VED) climbed 2 percent. Eurasian Natural Resources Corporation (LON:ENRC) rose 1.2 percent, while Anglo American plc (LON:AAL) picked up 1 percent. Antofagasta plc (LON:ANTO) added 0.8 percent, as Rio Tinto plc (ADR) (NYSE:RIO) (LON:RIO) (ASX:RIO) edged up 1.4 percent. BHP Billiton Limited (ADR) (NYSE:BHP) (ASX:BHP) (LON:BLT) was up 0.8 percent.
• Cable and Wireless Communications Plc (LON:CWC) soared 5 percent after the British telecom operator agreed to sell its Monaco and Islands unit to state-controlled Bahrain Telecommunications Co. for $680 million in cash.
• French oil major Total S.A. (NYSE:TOT) (EPA:FP) gained 1.3 percent in Paris after announcing an oil discovery in the Norwegian North Sea. Following the news, analysts at Deutsche Bank upgraded the stock to “buy” from “hold.”
• German utility RWE AG (ETR:RWE) (FRA:RWE) is in talks to quit the Nabucco gas pipeline project and could sell its 16.1 percent stake to Austrian energy company OMV (ETR:OMV) (FRA:OMV), according to a Reuters report.
• Belgian supermarket chain Etablissementen Franz Colruyt NV (EBR:COLR) slid 2 percent after reporting first-half earnings before interest and taxes of 230.8 million euros, missing the average analysts’ estimate of 236.9 million euros. Exane BNP slashed its share-price forecast by 3 percent to 31 euros.
• Chip maker ARM Holdings plc (NASDAQ:ARMH) (LON:ARM) gained 0.5 percent after analysts at Exane BNP Paribas lifted the stock to “outperform” from “neutral.”
• Schroders plc (LON:SDR) added 3 percent as Bank of America Merrill Lynch raised the asset manager to “buy” from “neutral.”
• Toyota Motor Corporation (ADR) (NYSE:TM) (TYO:7203) ended 0.6 percent lower in Tokyo after sales in China fell 22.1 percent in November to 63,800 vehicles, from 81,800 vehicles in the same period last year. Japanese carmakers have struggled to revive sales in China as a result of a diplomatic dispute between the two neighbors.
• Singapore Airlines Ltd. (SGX:C6L) is in talks with Atlanta-based Delta Air Lines, Inc. (NYSE:DAL) to sell its 49 percent stake in Virgin Atlantic, The Wall Street Journal reported on Sunday.
• China’s Hanlong Mining has requested an extension of the timetable to close its $1.4 billion takeover of Sundance Resources Limited (ASX:SDL) after it said it will not be able to deliver key paperwork by December 13 as initially agreed upon.
• Australian department-store operators fell in Sydney after retail sales for November were unchanged, trailing consensus expectations for a 0.4 percent gain. David Jones Limited (ASX:DJS) fell 2 percent and Myer Holdings Ltd (ASX:MYR) closed 1.8 percent lower.
• Australian oil and gas company Woodside Petroleum Limited (ASX:WPL) will buy a 30 percent stake in the Leviathan gas field off the shore of Israel for an initial payment of $696 million.
• Indian IT services provider Mphasis Ltd. (NSE:MPHASIS) (BOM:526299), a unit of Hewlett-Packard Company (NYSE:HPQ), has agreed to buy U.S.-based data analytics company Digital Risk LLC for $175 million in cash.
• Hong Kong carrier Cathay Pacific Airways Limited (HKG:0293) fell 1.9 percent following a CNBC report that the airline’s staff was unhappy with the size of a planned salary hike and have threatened labor action.
• Iron ore miner Gindalbie Metals Ltd. (ASX:GBG) plunged 12 percent in Sydney after completing a $40 million fully underwritten placement to institutional investors, the proceeds from which would be used to help cover working capital commitments during the commission phase of the Karara iron ore mine in Western Australia.
• Chinese mid-sized lender Hua Xia Bank Co., Limited (SHA:600015) lost 4.3 percent after blaming a Shanghai branch employee for selling a wealth management product that defaulted, without authorization.
Economic Calendar for Monday, December 03, 2012:
08:58 A.M. ET: Markit Manufacturing PMI (November)
10:00 A.M. ET: Construction Spending (MoM) (October)
10:00 A.M. ET: ISM Manufacturing PMI (November)
10:00 A.M. ET: ISM Prices Paid (November)
11:30 A.M. ET: 3-Month Bill Auction
11:30 A.M. ET: 6-Month Bill Auction
01:40 P.M. ET: St. Louis Federal Reserve Bank President James Bullard speaks.