Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Wednesday include: Time Warner Inc (NYSE:TWX), AOL, Inc. (NYSE:AOL), The Walt Disney Company (NYSE:DIS), Brookfield Property Partners LP (NYSE:BPY), Marsh & McLennan Companies, Inc. (NYSE:MMC), Wal-Mart Stores, Inc. (NYSE:WMT), Twenty-First Century Fox Inc (NASDAQ:FOX), First Solar, Inc. (NASDAQ:FSLR), Monsanto Company (NYSE:MON), Devon Energy Corp (NYSE:DVN), Amgen, Inc. (NASDAQ:AMGN), Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX)
Carlson Capital's Black Diamond Arbitrage Partners fund added 1.3% net fees in the first quarter of 2021, according to a copy of the firm's March 2021 investor update, which ValueWalk has been able to review. Q1 2021 hedge fund letters, conferences and more At the end of the quarter, merger arbitrage investments represented 89% of Read More
US: Dow Futures: 15428.00 (-0.30%), S&P 500 Futures: 1689.70 (-0.25%), NASDAQ Futures: 3113.00 (-0.16 %)
Europe: CAC: 4041.37 (0.22%), DAX: 8273.32 (-0.32%), FTSE: 6550.91 (-0.81%)
Asia-Pacific: Australia: 5011.30 (-1.85%), China: 2046.78 (-0.67%), Hong Kong: 21588.84 (-1.55%), Japan: 13824.94 (-4.17%).
Metals: Gold: 1275.40 (-0.55%), Silver: 19.25 (-1.40%), Copper: 3.17 (-1.09%)
Energy: Crude Oil: 105.20 (-0.09%), Natural Gas: 3.31 (-0.24%)
Commodities: Corn: 4.60 (-0.33%), Soya Bean: 11.71 (-1.23%), Wheat: 6.61 (0.61%)
Currency: EUR/USD: 1.3300 (-0.04%), GBP/USD: 1.5452 (0.67%), USD/JPY: 97.0400 (-0.72%)
10-year US Treasury: 2.621% (-0.021)
Market and Economic News Update:
U.S. stock-index futures decline: U.S. stock-index futures are pointing to a lower open on Wednesday amid renewed tapering concerns following hawkish comments by Federal Reserve officials. Fed presidents, Charles Evans and Dennis Lockhart, said yesterday that the central bank would likely start reducing its asset purchase program as early as September. On the economic front, mortgage applications rose 0.2 percent in the week ended August 2, as potential home-buyers crept back into the market. Up ahead, consumer credit data for June is scheduled for release at 3 p.m ET. Analysts forecast a $15 billion gain, compared to the $19.6 billion rise in May.
European markets mostly lower: European markets edged lower, mirroring earlier losses in Asia, as Bank of England governor Mark Carney said the central bank will not increase interest rates until U.K. unemployment touches 7 percent. In economic news, German industrial output increased 2.4 percent in June, beating economists’ projections for a 0.3 percent gain. The CAC 40 (INDEXEURO:PX1) added 0.2 percent to 4041.37, while the DAX (INDEXDB:DAX) lost 0.3 percent to 8273.32. The FTSE 100 (INDEXFTSE:UKX) shed 0.8 percent to 6550.91 points. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was up 0.3 percent in recent trading.
Asian stocks fall; Nikkei plunges 4%: Asian markets tumbled in trade amid investor uncertainty about when the U.S. Federal Reserve could begin tapering its bond-buying program. The NIKKEI 225 (INDEXNIKKEI:NI225) closed below the key 14,000-mark as the yen hit a new six-week high. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) reversed early morning gains to end lower, ahead of some key economic data later in the week. The S&P/ASX 200 (INDEXASX:XJO) index hit a two-week low amid big declines in mining stocks.
Stocks in News:
Time Warner Inc (NYSE:TWX)
Time Warner Inc (NYSE:TWX)’s quarterly numbers exceeded Street expectations, as the media corporation benefited from higher advertising revenue at its networks. Excluding one-time, second quarter earnings were 83 cents a share, 7 cents above the average analyst’ estimate. Revenue increased more than 10 percent to $7.44 billion, also topping expectations for of $7.11 billion. Shares soared in recent trading following the results.
AOL, Inc. (NYSE:AOL)
AOL, Inc. (NYSE:AOL)’s second-quarter profit fell 97 percent to $28.5 million, or 35 cents a share, from $970.8 million, or $10.17 a share, in the year-go period. The year-earlier period included a gain of $10.16 a share from a patent transaction with Microsoft Inc. Excluding that impact, AOL said per-share earnings grew “significantly.” Total revenue increased 1.9 percent to $541.3 million, topping expectations for of $540 million. The company also agreed to purchase video platform, Adap.tv, for $405 million to increase its presence in the online-video segment. Shares were up more than 5 percent in pre-market trading.
The Walt Disney Company (NYSE:DIS)
The media conglomerate posted better than expected quarterly earnings amid strong performance at its media networks and theme parks. Third quarter earnings stood at $1.03 a share, on revenue of $11.58 billion, compared to the consensus estimate of earnings of $1.01 a share on sales of $11.64 billion. Meanwhile, Walt Disney warned that its box office bomb, Lone Ranger, is expected to lose between $160 million and $190 million. Shares fell in recent trading.
Brookfield Property Partners LP (NYSE:BPY)
Brookfield Property Partners LP (NYSE:BPY) has agreed to buy a privately held U.S. real estate company from Japan’s Kajima Corp (TYO:1812) for $1.1 billion. The deal will likely close in the fourth quarter of the year. Brookfield’s acquisition of Industrial Developments International Inc. will increase the size of its industrial-property assets to over 62 million square feet.
Marsh & McLennan Companies, Inc. (NYSE:MMC)
The world’s largest insurance brokerage firm reported second quarter earnings of 72 cents a share, edging past Street estimates by a nickel a share. But the company recorded sales of $3.09 billion, trailing expectations for $3.14 billion. Marsh & McLennan shares closed Tuesday at $42.01 and were inactive in recent pre-market trading.
Wal-Mart Stores, Inc. (NYSE:WMT)
Reuters reported late yesterday that Wal-Mart Stores, Inc. (NYSE:WMT) is considering making a bid for Hutchison Whampoa Limited (HKG:0013)’s supermarket business. Citing people familiar with the matter, the report said that Wal-Mart is weighing its options for ParknShop, ahead of the August 16 deadline for initial bids. ParknShop is controlled by Asia’s richest man Li Ka-Shing.
Twenty-First Century Fox Inc (NASDAQ:FOX)
Rupert Murdoch’s newly separated Twenty-First Century Fox Inc (NASDAQ:FOX) reported weaker than expected quarterly earnings, but revenue beat expectations, helped by higher cable-television fees. Excluding one-time items, earnings came in at 31 cents a share, 3 cents below the average analysts’ estimate. Revenue rose 16 percent to $7.2 billion, edging past projections of $7.12 billion. Shares gained in pre-open trading.
First Solar, Inc. (NASDAQ:FSLR)
The solar company reported second quarter earnings excluding one-time items of 39 cents a share, on sales of $520 million, sharply missing Street estimates of 52 cents a share on revenue of $721 million. In addition, the company cut its full-year earnings and revenue outlook, sending shares lower in pre-market trading. Separately, First Solar unveiled a solar technology partnership with General Electric Company (NYSE:GE).
Monsanto Company (NYSE:MON)
Monsanto Company (NYSE:MON) raised its quarterly dividend by about 15 percent to 43 cents a share from 37.5 cent a share. The dividend is payable on October 25 to shareholders of record on October 4. The new dividend annualizes to $1.72 a share. Shares closed Tuesday at $95.02, and edged higher in early-hours trading.
Devon Energy Corp (NYSE:DVN)
The oil and gas company’s second-quarter earnings rose 43 percent amid higher production in Texas’ Permian basin. Excluding items, adjusted earnings were $1.21 a share, easily topping expectations for 95 cents a share. Revenue jumped 21 percent to $3.09 billion, compared to estimates of $2.66 billion. Shares closed Tuesday at $55.80 and were up in early trade.
Amgen, Inc. (NASDAQ:AMGN), Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX)
The biotech company sweetened its offer to acquire Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) to $130 per share, Bloomberg reported late Tuesday. Onyx had earlier rejected Amgen’s unsolicited offer of $120 per share, citing it as too low compared with other recent deals. Officials at Amgen and Onyx declined to comment on the report. Onyx shares closed at $132.02 on Tuesday, giving it a market value of $9.6 billion.
Economic Calendar for Wednesday, August 07, 2013:
07:00 A.M. ET: MBA Mortgage Applications (August 2)
10:30 A.M. ET: EIA Crude Oil Stocks Change (August 2)
01:00 P.M. ET: 10-Year Note Auction
01:40 P.M. ET: Cleveland Federal Reserve Bank President Sandra Pianalto speaks.
03:00 P.M. ET: Consumer Credit Change (June)