Every morning we put out a news report with the latest news in global stock markets, company news, and global economic news.
Morning Market Update
Odey's Brook Absolute Return Fund was up 10.25% for the third quarter, smashing the MSCI World's total return of 2.47% in sterling. In his third-quarter letter to investors, which was reviewed by ValueWalk, James Hanbury said the quarter's macro environment was not ideal for Brook Asset Management. Despite that, they saw positive contributions and alpha Read More
- US: Dow Futures: 12415.00 (-0.50%), S&P 500 Futures: 1307.70 (-0.54%), NASDAQ Futures: 2521.75 (-0.53%)
- Europe: CAC: 3029.10 (-1.78%), DAX: 6346.65 (-1.40%), FTSE: 5311.22 (-1.73%).
- Asia-Pacific: Australia: 4067.00 (-1.31%), China: 2363.44 (-0.42%), Hong Kong: 18786.19 (-1.35%), India: 4835.65 (-0.51%), Japan: 8556.60 (-1.70%).
- Metals: Gold: 1558.20 (-1.17%), Silver: 27.66 (-1.82%), Copper: 3.42 (-1.81%)
- Energy: Crude Oil: 91.15 (-0.76%), Natural Gas: 2.70 (-2.70%)
- Commodities: Corn: 5.96 (-4.49%), Soya Bean: 12.62 (-1.71%), Wheat: 6.67 (-1.82%)
- Currency: EUR/USD: 1.2673 (-0.09%), GBP/USD: 1.5728 (-0.20%), USD/JPY: 79.4800 (-0.60%)
- 10 year US Treasury: 1.740% (-0.029)
Financial and Economic News Update
U.S. stock-index futures down: U.S. stock index futures are pointing to a lower open on Wednesday as investors worry about Greece leaving the euro zone. The Dow Jones industrial average, the S&P 500 and the NASDAQ futures were all trading close to half a percent lower.
European markets trading deep in the red: European markets declined on Wednesday, with the German DAX (INDEXDB:DAX) trading 1.4 percent lower at 6346.65, the FTSE 100 (INDEXFTSE:UKX) down 1.7 percent at 5311.22, and the CAC 40 (INDEXEURO:PX1) slumped 1.8 percent to 3029.10. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 1.8 percent lower.
Asian markets end lower: Asian markets closed lower on Wednesday over renewed fears that Greece would leave the euro bloc. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) slumped to a four-month closing low, down 2 percent. The HANG SENG INDEX (INDEXHANGSENG:HSI) closed down 1.3 percent at18786.19, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) fell 0.4 percent to 2363.44. The S&P/ASX 200 (INDEXASX:XJO) index declined 1.3 percent to 4,067. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index lost 0.5 percent after the Rupee hit a new record low.
Company News Update
- Luxury homebuilder Toll Brothers, Inc. (NYSE:TOL) reported better than expected second quarter net income of $16.9 million, or 10 cents a share, helped by improving demand for the company’s move-up houses, but revenue trailed estimates.
- Toronto-based Bank of Montreal (USA) (NYSE:BMO) posted second-quarter adjusted earnings of 1.44 Canadian dollars a share, better than the average analysts’ estimate of 1.36 Canadian dollars a share.
- Facebook Inc (NASDAQ:FB) rebounded ahead of the open, and was trading 2 percent higher at $31.62.
- Morgan Stanley (NYSE:MS), lead underwriter of Facebook Inc (NASDAQ:FB)’s IPO was subpoenaed by a Massachusetts regulator over its handling of sensitive information related to the social media website.
- MetLife Inc (NYSE:MET), the largest U.S. life insurer, will increase its presence in emerging markets, and will focus more on protection rather than capital-intensive products, as it aims to shed $600 million in pretax costs.
- U.S. clothing maker Guess?, Inc. (NYSE:GES) reported first quarter profit of $26.6 million, or 30 cents a share, that beat market expectations, helped by improved demand in Asia.
- Close-out retailer Big Lots, Inc. (NYSE:BIG) reported first quarter income, excluding certain items, of 68 cents a share that trailed Street estimates by one cent, and approved a new share buy-back program of up to $200 million of its shares.
- Pet-products retailer PetSmart, Inc. (NASDAQ:PETM) posted a better than expected first quarter profit and raised its full-year outlook on robust growth in same-store sales and improved margins.
- Analog Devices, Inc. (NASDAQ:ADI) reported fiscal second quarter earnings that narrowly beat market expectations, but forecast third quarter earnings per share of 54 cents to 58 cents, that was largely below analysts’ estimates.
- Starbucks Corporation (NASDAQ:SBUX) was raised to “buy” from “hold” at Bank of America/Merrill Lynch, who said the coffee chain is well-positioned to witness strong earnings growth in the coming years.
- British defence giant BAE Systems plc (LON:BA) has won a $3 billion contract to supply Hawk trainer jets to Saudi Arabia’s air force.
- British luxury goods company Burberry Group plc (LON:BRBY) reported a 26 percent jump in adjusted pretax profit to 376 million pounds ($594 million) in the 12 months to March, narrowly missing the average analysts forecast of a profit of 377 million pounds. The London-based company however said that profitability may decline in the first half of the fiscal year.
- Italian banks UniCredit SpA (BIT:UCG) and Intesa Sanpaolo SpA (BIT:ISP) have offloaded their entire stakes in the London Stock Exchange Group Plc (LON:LSE) at 960 pence a share as the Italian banks look to trim their non-core assets to strengthen their balance sheets.
- Europe’s largest retailer Carrefour SA (EPA:CA) was upgraded by Credit Suisse to “outperform” from “underperform”, and its target price was raised by 25 percent to 17.50 euros. Credit Suisse said the arrival of new chief executive Georges Plassat should help the company “sustain long-overdue radical change”.
- Man Group Plc (LON:EMG), the world’s largest publicly traded hedge fund, tumbled 6.6 percent in London trading after Moody’s Investors Services said it is continuing its review for a possible downgrade of the company’s senior debt, and will also take into consideration the recent acquisition of fund of hedge funds manager, FRM Holding Ltd.
- U.K.’s largest online grocer Ocado Group PLC (LON:OCDO) forecast sales growth of 13 percent in the second quarter of the year, raising hope that the troubles at its warehouse have been fixed, which last year led to a string of profit downgrades.
Lenovo Group Limited (HKG:0992), China’s largest, and the world’s second biggest maker of personal computers, said full year profit rose 73 percent to $473 million, up from $273.2 million a year earlier. For the tenth consecutive quarter, the company was the fastest growing among the top four PC vendors, and is expected to overtake market leader Hewlett-Packard Company (NYSE:HPQ) as early as next year, according to analysts.
China-based integrated solar power products maker Trina Solar Limited (ADR) (NYSE:TSL) reported first quarter net loss of 42 cents per American Depositary share (ADS), on revenue of $349.9 million, trailing analysts’ estimate of a loss of 29 cents per ADS on revenue of $396.24 million.
Myer Holdings Limited (ASX:MYR), Australia’s largest department store chain has cut its annual profit guidance after reporting a 0.9 per cent decline in sales for the third quarter, due to an unseasonably warm autumn and subdued consumer sentiment.
Japanese automaker Mazda Motor Corporation (TYO:7261) and Fiat SpA (BIT:F) will be working together on the development and production of a new two-seater sports car as part of a technology and product development alliance.
Thai group PTT Exploration & Production Public Co Ltd has raised its offer for oil and natural gas exploration company Cove Energy PLC (LON:COV) to 1.22 billion pounds ($1.92 billion), trumping Royal Dutch Shell plc (NYSE:RDS.A)’s bid for access to the Anadarko Petroleum-led block off the coast of Mozambique, where massive gas finds have been made.
India’s biggest power producer NTPC Limited (NYSE:NTPC) is planning to spend as much as $15 billion over the next decade to secure overseas coal supplies as prices of the fuel slump to a 19-month low.
Economic Calendar for Wednesday, May 23, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, May 18, 2012)
10:00 A.M. ET: FHFA House Price Index (MoM) (March)
10:00 A.M. ET: New Home Sales (MoM) (April)
10:00 A.M. ET: New Home Sales Change (MoM) (April)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, May 18, 2012)
01:00 P.M. ET: 5-Yr Note Auction
02:00 P.M. ET: Minneapolis Federal Reserve Pres. Naryana Kocherlakota speaks.