Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Tuesday include: The Home Depot, Inc. (NYSE:HD), Best Buy Co., Inc. (NYSE:BBY), Tesla Motors Inc (NASDAQ:TSLA), J.C. Penney Company, Inc. (NYSE:JCP), JPMorgan Chase & Co (NYSE:JPM), Urban Outfitters, Inc. (NASDAQ:URBN), KKR & Co. L.P. (NYSE:KKR), The Blackstone Group L.P. (NYSE:BX), Bob Evans Farms Inc (NASDAQ:BOBE), Twenty-First Century Fox Inc. (NASDAQ:FOXA), International Rectifier Corporation (NYSE:IRF), Annaly Capital Management, Inc. (NYSE:NLY), Lexmark International Inc (NYSE:LXK).
ADW Capital’s 2020 letter: Long CDON, the future Amazon of the Nordics
ADW Capital Partners was up 119.2% for 2020, compared to a 13.77% gain for the S&P 500, an 11.17% increase for the Russell 2000, and an 8.62% return for the Russell 2000 Value Index. The fund reports an annualized return of 24.63% since its inception in 2005. Q4 2020 hedge fund letters, conferences and more Read More
US: Dow Futures: 15014.00 (0.08%), S&P 500 Futures: 1647.50 (0.15%), NASDAQ Futures: 3077.00 (0.21%)
Europe: CAC: 4029.34 (-1.36%), DAX: 8288.87 (-0.93%), FTSE: 6434.33 (-0.49%)
Asia-Pacific: Australia: 5078.20 (-0.67%), China: 2072.59 (-0.63%), Hong Kong: 21970.29 (-2.25%), Japan: 13396.38 (-2.70%).
Metals: Gold: 1364.60 (-0.08%), Silver: 22.95 (-0.93%), Copper: 3.33 (-0.14%)
Energy: Crude Oil: 105.91 (-1.11%), Natural Gas: 3.47 (0.20%)
Commodities: Corn: 4.79 (-1.24%), Soya Bean: 12.88 (-1.15%), Wheat: 6.49 (-0.61%)
Currency: EUR/USD: 1.3424 (0.67%), GBP/USD: 1.5680 (0.20%), USD/JPY: 97.3200 (-0.24%)
10-year US Treasury: 2.825% (-0.055)
Market and Economic News Update:
U.S. stock-index futures edge higher: U.S. stock-index futures are pointing to a modestly higher open on Tuesday after the Dow Jones Industrial Average (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) logged their first four-day losing streaks this year. In economic news, the Chicago Fed’s national activity index improved to a negative 0.15 in July from negative 0.23 in June.
European markets decline: European markets are down in trade following continued investor concerns over a possible reduction in bond buying by the U.S. Federal Reserve. Mining stocks were the biggest losers in today’s session, as weaker than expected quarterly results from BHP Billiton plc (LON:BLT) and Glencore Xstrata PLC (LON:GLEN) weighed on sentiment. On the economic front, German producer prices fell 0.1 percent last month after being unchanged in June, according to the Federal Statistics Office. The CAC 40 (INDEXEURO:PX1) lost 1.4 percent to 4029.34, while the DAX (INDEXDB:DAX) slid 0.9 percent to 8288.87. The FTSE 100 (INDEXFTSE:UKX) edged 0.5 percent lower to 6434.33 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was down 1.4 percent in recent trading.
Asian stocks sell-off; Nikkei down 2.7%: Asian markets tumbled in trade amid concerns that a reduction in the U.S. Federal Reserve’s bond purchases would hit demand for regional emerging market assets. The NIKKEI 225 (INDEXNIKKEI:NI225) closed at a near two-month low at 13396.38. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) managed to avoid the region’s sharp losses, ending down 0.6 percent. The S&P/ASX 200 (INDEXASX:XJO) index finished 0.7 percent lower, hurt by some weak corporate earnings.
Stocks in News:
The Home Depot, Inc. (NYSE:HD)
The home improvement retailer posted second quarter profit of $1.24 per share, beating the consensus estimate by three cents. Total sales climbed 10 percent to $22.52 billion, while same-store sales were up 10.7 percent. In addition, the company raised its sales and earnings estimates for the full year, sending shares higher in early morning trade.
Best Buy Co., Inc. (NYSE:BBY)
Best Buy Co., Inc. (NYSE:BBY)’s second-quarter profit rose to $266 million, or 77 cents a share, from $12 million, or 4 cents a share, in the same period last year. Excluding items, the company earned 32 cents per share. Revenue declined to $9.30 billion, from $9.34 billion a year earlier. Analysts had forecast earnings of 12 cents a share on sales of $9.13 billion. The electronics retailer expects second half results to be hurt by a number of factors including mobile warranty costs. Shares in Best Buy soared 12 percent in pre-market trading.
Tesla Motors Inc (NASDAQ:TSLA)
The automaker’s flagship Model S sedan received the highest safety rating ever issued by the National Highway Traffic Safety Administration (NHTSA). The battery-powered vehicle got five-star ratings in every safety and crash category set by the NHTSA. Earlier in May, Consumer Reports magazine rated Model S among the best cars it’s ever tested. Tesla plans to deliver a record 21,000 sedans this year to customers in North America, Europe and Asia.
J.C. Penney Company, Inc. (NYSE:JCP)
J.C. Penney Company, Inc. (NYSE:JCP) lost $2.16 per share for the second quarter, wider than the loss of $1.06 per share estimated by analysts. Revenue was also below consensus at $2.66 billion, hurt by unusually high markdowns and failed promotional strategies. Separately, Bloomberg reported that Hayman Capital Management LP ‘s Kyle Bass has taken a long position in the company’s secured debt. Shares of J.C. Penney Company, Inc. (NYSE:JCP) rallied following the earnings announcement.
JPMorgan Chase & Co (NYSE:JPM)
The Wall Street Journal reported that the bank is the subject of a Department of Justice investigation into energy market manipulation. In July, JPMorgan Chase & Co (NYSE:JPM) agreed to pay $410 million to end similar allegations by the Federal Energy Regulatory Commission. The report did not state if the investigation is civil or criminal.
Urban Outfitters, Inc. (NASDAQ:URBN)
The clothing retailer posted better than expected quarter earnings amid improved sales and margins. Second quarter earnings came in at 51 cents a share, 3 cents above the average analysts’ estimate. Revenue increased 12 percent to $758.5 million, trailing projections for $768.1 million. However, same-store sales, including e-commerce, rose 9 percent, beating analysts’ average estimate of a 8.1 percent rise. Shares soared in extended-hours trading.
KKR & Co. L.P. (NYSE:KKR), The Blackstone Group L.P. (NYSE:BX)
KKR & Co. L.P. (NYSE:KKR), The Blackstone Group L.P. (NYSE:BX) and Warburg Pincus LLC will participate in the auction for Mitchell International Inc, a car and property claims software company that could fetch up to $1.5 billion, according to a Reuters report. Founded in 1946, and currently owned by buyout firm Aurora Capital Group, Mitchell has EBITA of about $90 million, the report said, citing people familiar with the matter.
Bob Evans Farms Inc (NASDAQ:BOBE)
The restaurant chain posted fiscal first quarter earnings excluding items of 58 cents a share, on sales of $329 million, versus expectations for earnings of 57 cents a share on revenue of $333 million. Bob Evans also increased its quarterly dividend by 12.7 percent to 31 cents per share from 27.5 cents per share. The new dividend is payable on September 16 to shareholders of record on September 3. Shares ticked higher in pre-market trading.
Twenty-First Century Fox Inc. (NASDAQ:FOXA)
Twenty-First Century Fox Inc. (NASDAQ:FOXA) has increased its budget provision by $110 million to cover additional legal costs tied to the U.K. phone-hacking scandal. In a filing Monday, Twenty-First Century Fox said it has recognized about $40 million in costs tied to the scandal that led to the closure of the News of the World tabloid in 2011.
International Rectifier Corporation (NYSE:IRF)
The technology company posted fourth quarter loss excluding one-time items of 2 cents a share, on sales of $276 million, edging past Wall Street expectations for a loss of 10 cents a share on revenue of $260 million. For the first quarter, the company expects revenue to range from $260 million to $268 million, compared to current analysts’ projections for $260.39 million. Shares rose in pre-open trading.
Annaly Capital Management, Inc. (NYSE:NLY)
The largest mortgage REIT announced its CFO Kathryn Fagan will retire. The company’s current chief administrative officer Glenn Votek will succeed Fagan, and will also serve on the operating committee. Shares of Annaly Capital Management, Inc. (NYSE:NLY) closed Monday at $10.66, and were up close to a percent in early-hours trading.
Lexmark International Inc (NYSE:LXK)
Lexmark International Inc (NYSE:LXK) will buy Germany-based software company Saperion AG for about $72 million. The deal is expected to close in the current quarter, and is subject to regulatory approvals. Lexmark International Inc (NYSE:LXK) shares closed Monday at $39.66 and were inactive in recent pre-market trading.
Economic Calendar for Tuesday, August 20, 2013:
07:45 A.M. ET: ICSC-Goldman Store Sales
08:30 A.M. ET: Chicago Fed National Activity Index (July)
08:55 A.M. ET: Redbook Index (MoM)
11:30 A.M. ET: 4-Week Bill Auction
11:30 A.M. ET: 52-Week Bill Auction