Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Mattress Firm Holding Corp (NASDAQ:MFRM), UnitedHealth Group Inc. (NYSE:UNH), International Business Machines Corp. (NYSE:IBM), JPMorgan Chase & Co. (NYSE:JPM), Toyota Motor Corporation (ADR) (NYSE:TM), Bob Evans Farms Inc (NASDAQ:BOBE), Sprint Nextel Corporation (NYSE:S), DISH Network Corp (NASDAQ:DISH) and Ambarella Inc (NASDAQ:AMBA).
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
• US: Dow Futures: 15134.00 (-0.30%), S&P 500 Futures: 1626.00 (-0.32%), NASDAQ Futures: 2966.50 (-0.28%)
• Europe: CAC: 3888.18 (-0.97%), DAX: 8240.17 (-0.68%), FTSE: 6466.78 (-1.42%)
• Asia-Pacific: Australia: 4835.20 (-1.34%), China: 2270.93 (-0.07%), Hong Kong: 22069.24 (-0.98%), Japan: 13014.87 (-3.99%).
• Metals: Gold: 1404.30 (0.51%), Silver: 22.59 (0.81%), Copper: 3.38 (0.42%)
• Energy: Crude Oil: 93.82 (0.55%), Natural Gas: 4.00 (0.10%)
• Commodities: Corn: 5.49 (-1.34%), Soya Bean: 15.32 (-0.16%), Wheat: 7.09 (0.04%)
• Currency: EUR/USD: 1.3078 (-0.02%), GBP/USD: 1.5357 (0.29%), USD/JPY: 99.5800 (-0.45%)
• 10 year US Treasury: 2.123% (-0.023)
Market and Economic News Update
U.S. markets decline: U.S. markets are down in early Wednesday trading amid a weaker-than-expected private payrolls report. The private sector created 135,000 jobs in May, according to data from the ADP National Employment Report, compared to estimates for 165,000. Also on the economic front, unit labor costs dropped 4.3 percent, while productivity gained 0.5 percent. Traders will now focus on factory orders data which is scheduled for release at 10 A.M. ET
European markets slump: European markets are down in trade following worse-than-expected data from the euro region. Euro-zone retail sales dropped 0.5 percent in April, compared to the decline of 0.2 percent registered in March. In other economic news, the euro-zone composite output declined for the 16th consecutive month in May, according to Markit’s composite output Purchasing Managers’ Index. The DAX (INDEXDB:DAX) and the CAC 40 (INDEXEURO:PX1) lost close to a percent, while the FTSE 100 (INDEXFTSE:UKX) slumped 1.4 to 6466.78 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) is down 1 percent.
Asian markets end lower; Nikkei down 4%: The NIKKEI 225 (INDEXNIKKEI:NI225) tumbled close to four percent in another choppy session on Wednesday after Prime Minister Shinzo Abe’s blueprint to spur long-term growth failed to impress investors. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) managed to rebound from lows in the dying minutes of trade to end largely unchanged. The S&P/ASX 200 (INDEXASX:XJO) index hit its lowest level since January following weaker than expected GDP figures. The Australian economy grew 0.6 percent in the first quarter of the year, compared to market expectations of 0.8 percent.
Stocks in News:
Apple Inc. (NASDAQ:AAPL)
The U.S. International Trade Commission has imposed a ban on the sale of several Apple’s iPhone and iPad models after the devices were found to violate a patent held by South Korean rival Samsung. The order would block sales of several older AT&T Inc. (NYSE:T) models of the iPhone 4, iPhone 3GS, iPad 3G and iPad 2 3G, according to a notice posted on the ITC website. Apple Inc. (NASDAQ:AAPL) shares declined in pre-market trading.
Microsoft Corporation (NASDAQ:MSFT)
Microsoft Corporation (NASDAQ:MSFT) unveiled the updated version of its Windows 8 operating system at a computer show in Taipei. The Windows 8.1 would be available on PCs and tablets later this year. According to Tami Reller, chief financial and marketing officer of the company’s Windows Division, the new update includes a number of features that should render the operating system more appealing.
Mattress Firm Holding Corp (NASDAQ:MFRM)
Mattress Firm Holding Corp (NASDAQ:MFRM) reported first quarter earnings excluding one-time items of 38 cents a share, on sales of $276 million, edging past expectations for 36 cents a share on revenue of $274 million. In addition, the mattress store chain provided full-year earnings outlook that matched projections and revenue guidance that topped forecasts. Shares rallied in early-hours trading.
UnitedHealth Group Inc. (NYSE:UNH)
UnitedHealth Group Inc. (NYSE:UNH) has raised its quarterly dividend by 32 percent to 28 cents per share from 21.25 cents a share, and also renewed its share buyback program after the board authorizing the repurchase of 110 million shares over time. The new dividend will be paid on June 21 to all shareholders of record on June 14. Shares closed Tuesday at $62.36 and were up in recent pre-market trading.
International Business Machines Corp. (NYSE:IBM)
International Business Machines Corp. (NYSE:IBM) has agreed to acquire privately-held web hosting company SoftLayer Technologies as part of efforts to bolster its cloud services portfolio. IBM did not disclose the financial terms of the deal, but according to several reports, the Dallas-based company is worth close to $2 billion. SoftLayer has close to 25,000 customers that include big names like AT&T Inc and Citrix Systems Inc, and operates 13 data centers in the U.S., Europe and Asia.
JPMorgan Chase & Co. (NYSE:JPM)
JPMorgan Chase & Co. (NYSE:JPM) will take an $842 million loss as part of a deal reached with Alabama’s Jefferson County to refinance most of the county’s debt. The county’s biggest creditor is a major holder of debt related to the county’s sewer systems that is at the heart of its financial breakdown. The deal covers about $2.4 billion of Jefferson County’s total $3.078 billion in sewer debt
Toyota Motor Corporation (ADR) (NYSE:TM)
Toyota Motor Corporation (NYSE:TM) will recall 242,000 Prius and Lexus hybrid cars globally to fix a possible issue with braking systems. The Japanese automaker is recalling the Prius made between March and October 2009, and the Lexus HS 250h produced between June and October 2009, company spokeswoman Shino Yamada said in a statement. Toyota said a mechanical design flaw in a brake part was allowing nitrogen gas to leak into the brake fluid, resulting in a reduction of braking power.
Bob Evans Farms Inc (NASDAQ:BOBE)
Bob Evans Farms Inc (NASDAQ:BOBE) reported fourth quarter earnings of 71 cents a share on sales of $354 million, beating Street projections for 64 cents a share on revenue of $331 million. In addition, the food services and processing company handed in full-year revenue guidance that exceeded expectations. Shares were inactive in pre-market trading.
Sprint Nextel Corporation (NYSE:S), DISH Network Corp (NASDAQ:DISH)
Sprint Nextel Corporation (NYSE:S) shareholders should abstain from voting on Japanese telecom company SoftBank Corp (TYO:9984)’s takeover bid on June 12 as DISH Network Corp (NASDAQ:DISH)’s rival $25.5 billion takeover proposal was still being reviewed, shareholder advisory firm Glass Lewis & Co. said late Tuesday. The recommendation contradicted bigger proxy advisory firm Institutional Shareholders Services, which last week told investors to support SoftBank’s proposal.
Ambarella Inc (NASDAQ:AMBA)
Ambarella Inc (NASDAQ:AMBA) posted better than expected first quarter results amid strong growth in its Internet-protocol security camera and wearable sports camera markets. The electronics chip designer earned 21 cents per share, excluding one-time items, 6 cents above the average analysts’ estimate. Revenue jumped 31 percent to $33.9 million, also beating expectations for $31.9 million. Shares soared in pre-open session following the announcement.
Economic Calendar for Wednesday, June 05, 2013:
07:00 A.M. ET: MBA Purchase Applications (May 31)
08:15 A.M. ET: ADP Employment Report (May)
08:30 A.M. ET: Building Permits (MoM) (April)
08:30 A.M. ET: Non-farm Productivity (Q1)
08:30 A.M. ET: Unit Labor Costs (Q1)
10:00 A.M. ET: Factory Orders (MoM) (April)
10:00 A.M. ET: ISM Non-Manufacturing PMI (May)
10:30 A.M. ET: EIA Petroleum Status Report (May 31)
02:00 P.M. ET: Fed’s Beige Book