Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Monday include: Yahoo! Inc. (NASDAQ:YHOO), Goldman Sachs Group, Inc. (NYSE:GS), Actavis Inc (NYSE:ACT), Warner Chilcott Plc (NASDAQ:WCRX), General Electric Company (NYSE:GE), Campbell Soup Company (NYSE:CPB), DIRECTV (NASDAQ:DTV), Accenture Plc (NYSE:ACN), Acquity Group Ltd (NYSEMKT:AQ), Morgan Stanley (NYSE:MS), Chesapeake Energy Corporation (NYSE:CHK), Deere & Company (NYSE:DE), Quality Systems, Inc. (NASDAQ:QSII), Onex Corporation (TSE:OCX)
The following is our rough coverage of the 2021 Sohn Investment Conference, which is being held virtually and features Brad Gerstner, Bill Gurley, Octahedron's Ram Parameswaran, Glenernie's Andrew Nunneley, and Lux's Josh Wolfe. Q1 2021 hedge fund letters, conferences and more Keep checking back as we will be updating this post as the conference goes Read More
• US: Dow Futures: 15295 (-0.13%), S&P 500 Futures: 1660.90 (-0.13%), NASDAQ Futures: 3018.00 (-0.16%)
• Europe: CAC: 3998.47 (-0.07%), DAX: 8409.77 (0.14%), FTSE: 6713.57 (-0.15%)
• Asia-Pacific: Australia: 5209.00 (0.54%), China: 2299.99 (0.74%), Hong Kong: 23493.03 (1.75%), Japan: 15360.81 (1.45%).
• Metals: Gold: 1354.40 (-0.75%), Silver: 21.65 (-3.14%), Copper: 3.33 (0.09%)
• Energy: Crude Oil: 95.64 (-0.40%), Natural Gas: 4.13 (1.82%)
• Commodities: Corn: 6.56 (1.60%), Soya Bean: 14.50 (1.42%), Wheat: 6.82 (-0.94%)
• Currency: EUR/USD: 1.2854 (0.12%), GBP/USD: 1.5205 (0.24%), USD/JPY: 102.4900 (-0.70%)
• 10 year US Treasury: 1.928% (-0.023)
Market and Economic News Update
U.S. stock-index futures decline: U.S. stock-index futures are pointing to a lower open on Monday, amid investors concerns that the Federal Reserve may begin to ease-off its quantitative easing program. U.S. stocks jumped to a fourth weekly gain last week, with the Dow and S&P 500 closing at record levels. On the economic front, the Chicago Fed national activity index fell to negative 0.53 in April from negative 0.23 in March.
European markets largely unchanged: European markets are flat in trade, as a rally in auto stocks was offset by declines in miners. Mining stocks were reeling under reports from South Africa that said workers were seeking a 60 percent hike in wages. The DAX (INDEXDB:DAX) was up 0.1 percent at 8409.77. The FTSE 100 (INDEXFTSE:UKX) fell 0.2 percent to 6713.57, while the CAC 40 (INDEXEURO:PX1) lost 0.1 percent to 3998.47 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) dropped 0.3 percent.
Asian markets end higher: Asian stocks finished higher, as key U.S. indexes witnessed another record close on Friday. The HANG SENG INDEX (INDEXHANGSENG:HSI) rallied 1.7 percent to a three-month high, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) added 0.7 percent. The NIKKEI 225 (INDEXNIKKEI:NI225) jumped to a new five and a half year high, as the Japanese government upgraded its domestic economy outlook for the first time in two months. The S&P/ASX 200 (INDEXASX:XJO) index gave up gains made earlier in the session to close 0.5 percent higher.
Stocks in News
Yahoo! Inc. (NASDAQ:YHOO)
Yahoo! Inc. (NASDAQ:YHOO)’s board has approved the $1.1 billion, all-cash purchase of social blogging site Tumblr, with an announced likely as soon as Monday, The Wall Street Journal reported. Interestingly, CEO Marissa Mayer is scheduled to address a press conference in New York today at which company officials said she will unveil “something special.” If the acquisition goes through, it would be the biggest for Yahoo! Inc. (NASDAQ:YHOO) under Mayer.
Goldman Sachs Group, Inc. (NYSE:GS)
Goldman Sachs Group, Inc. (NYSE:GS) is selling its entire remaining stake in Industrial and Commercial Bank of China (HKG:1398), ending a seven-year investment in the world’s biggest bank by market value. Goldman is offering the shares in a range of 5.47 Hong Kong dollars to 5.50 Hong Kong dollars (70 U.S. cents-71 U.S. cents), equivalent to a discount of up to 3 percent to Monday’s closing price of HK$5.64.
Actavis Inc (NYSE:ACT), Warner Chilcott Plc (NASDAQ:WCRX)
Generic drug maker Actavis Inc (NYSE:ACT) has agreed to acquire specialty pharmaceuticals company Warner Chilcott Plc (NASDAQ:WCRX) for $8.5 billion in stock. Under the terms of the deal, Actavis will swap 0.16 of a share for each Warner Chilcott share. At Actavis’ closing share price of $125.50 on Friday, that amounts to $20.08 a share, 4.5 percent higher than Warner Chilcott’s closing price that day. The companies expect the deal to close by the end of the year.
General Electric Company (NYSE:GE)
GE Capital Corp. will return $6.5 billion in dividends and another $4.5 billion in special dividends to parent General Electric Company (NYSE:GE) in 2013. GE Chairman and CEO Jeff Immelt said the announcement is part of plans to shrink the overall size of GE Capital. At the end of first quarter, GE Capital had $68 billion in cash.
Campbell Soup Company (NYSE:CPB)
Campbell Soup Company (NYSE:CPB) reported third-quarter adjusted earnings of 62 cents per share, 6 cents above the average analysts’ estimate. Revenue for the period increased to $2.09 billion, from $1.82 billion a year earlier. Analysts were expecting the food company to post revenue of $2.04 billion. For the full-year, the company expects adjusted earnings in the range of $2.58 to $2.62 per share, compared to Street projections of $2.56 per share. Shares were up in pre-market trading.
DIRECTV (NASDAQ:DTV) is considering a bid for online video website Hulu, the Wall Street Journal reported late Friday. The report however did not specify whether DirecTV is interested in buying the whole or parts of Hulu. Hulu has more than 3 million subscribers and clocked revenue of around $700 million last year. Representatives of DirecTV declined to comment on the news.
Accenture Plc (NYSE:ACN), Acquity Group Ltd (NYSEMKT:AQ)
Accenture Plc (NYSE:ACN) has agreed to purchase Hong Long-based online marketing services provider Acquity Group Ltd (NYSEMKT:AQ) for about $316 million in cash to expand its bouquet of digital marketing services. Accenture will pay $13 cash for each American Depository Share of Acquity, more than double its Friday closing price of $5.96. The deal is subject to approval by Acquity Group shareholders.
Morgan Stanley (NYSE:MS)
Morgan Stanley (NYSE:MS) has agreed to sell its Indian wealth management unit to Standard Chartered PLC (LON:STAN). Financial terms of the deal were not disclosed. In an emailed statement, Morgan Stanley said the sale is expected to be completed by the year’s end. Morgan Stanley had started reviewing the business last year after it failed to grow as much as anticipated.
Chesapeake Energy Corporation (NYSE:CHK)
Robert Douglas Lawler will join Chesapeake Energy Corporation (NYSE:CHK) as chief executive officer on June 17, the Wall Street Journal reported, citing people familiar with the matter. Lawler will succeed co-founder, Aubrey McClendon, who left the company on April 1. Lawler was senior vice president of international and deep-water operations at rival Anadarko Petroleum Corporation (NYSE:APC).
Deere & Company (NYSE:DE)
Deere & Company (NYSE:DE) was cut to “sell” from “neutral” by Goldman Sachs, citing a decline in U.S. agriculture equipment capital expenditure and rising crop inventories. Its price target was also lowered to $85 from $98 per share. Analyst Jerry Revich said Goldman sees a 15 percent downside to the consensus 2014-2015 earnings. Deere & Co. shares are down close to a percent in early morning trade.
Quality Systems, Inc. (NASDAQ:QSII)
Medical-software vendor Quality Systems, Inc. (NASDAQ:QSII) said board member Ahmed Hussein has resigned. Hussein, in an email to the board, said the company “will continue to be severely damaged” under the leadership of current Chairman Sheldon Razin. Hussein has been a vocal critic of the top management of the company, and had made several unsuccessful attempts to seize control of the board.
Onex Corporation (TSE:OCX)
Canadian private equity firm Onex Corporation (TSE:OCX) has failed to find a buyer for medical imaging company Carestream Health Inc, Reuters reported late Friday. Onex Corporation (TSE:OCX) has called off the auction after Bain Capital, the last remaining private equity firm that was interested in a deal, exited the process, according to people familiar with the matter. Onex was hoping to raise as much as $3.5 billion from the sale.
Economic Calendar for Monday, May 20, 2013:
08:00 A.M. ET: Federal Reserve Chairman Ben Bernanke speaks.
08:30 A.M. ET: Chicago Fed National Activity Index (April)
11:30 A.M. ET: 3-Month Bill Auction
11:30 A.M. ET: 6-Month Bill Auction
01:00 P.M. ET: Chicago Federal Reserve Bank President Charles Evans speaks.