Morning Market Update
Lee Ainslie's Maverick Capital had a difficult third quarter, although many hedge funds did. The quarter ended with the S&P 500's worst month since the beginning of the COVID pandemic. Q3 2021 hedge fund letters, conferences and more Maverick fund returns Maverick USA was down 11.6% for the third quarter, bringing its year-to-date return to Read More
* US: Dow Futures: 12786.00 (0.19%), S&P 500 Futures: 1353.00 (0.18%), NASDAQ Futures: 2621.50 (0.34%)
* Europe: CAC: 3110.87 (-0.23%), DAX: 6375.13 (0.18%), FTSE: 5609.61 (0.42%).
* Asia-Pacific: Australia: 4132.40 (0.22%), China: 2292.88 (-0.35%), Hong Kong: 19518.85 (0.52%), India: 5120.55 (0.33%), Japan: 8752.31 (1.10%).
* Metals: Gold: 1604.70 (-1.14%), Silver: 28.19 (-0.63%), Copper: 3.42 (-0.52%)
* Energy: Crude Oil: 84.15 (0.14%), Natural Gas: 2.65 (4.01%)
* Commodities: Corn: 5.52 (-2.04%), Soya Bean: 13.76 (-0.56%), Wheat: 6.85 (-1.23%)
* Currency: EUR/USD: 1.2704 (0.15%), GBP/USD: 1.5747 (0.15%), USD/JPY: 78.1600 (0.27%)
* 10 year US Treasury: 1.652% (0.032)
Financial and Economic News Update
U.S. stock-index futures rise: U.S. stock index futures are pointing to a modestly higher open on Wednesday, as news poured in that Greece has formed a coalition government. Investors are also awaiting a Federal Reserve announcement on whether it will provide further stimulus. The Dow futures, the S&P futures and the NASDAQ futures were all trading marginally in the green.
U.S. mortgage applications slipped last week: Total applications for U.S. home mortgages fell last week, even as Federal Housing Authority refinancing hit an all time high. The number of total applications for U.S. home mortgages last week dropped 1.3 percent from the prior week, the Mortgage Bankers Association said.
European markets mixed: European markets are mixed in trade today, with the German DAX (INDEXDB:DAX) trading 0.2 percent higher at 6375.13, the FTSE 100 (INDEXFTSE:UKX) up 0.4 percent at 5609.61, and the CAC 40 (INDEXEURO:PX1) declined 0.2 percent to 3110.87. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was trading 0.1 percent in the red.
Asian markets end higher: Asian markets closed higher on Wednesday, after the Group of 20 leaders pledged to support economic growth at its summit meeting in Mexico. Japan’s NIKKEI 225 (INDEXNIKKEI:NI225) climbed 1.1 percent to close at its highest level in over a month. The HANG SENG INDEX (INDEXHANGSENG:HSI) gained 0.5 percent, although strong technical resistance capped gains. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) slipped for the second-straight day, ending 0.4 percent lower at 2,292.88 points. The S&P/ASX 200 (INDEXASX:XJO) index gave up earlier gains to close up 0.2 percent. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index rose 0.22 percent to 16,896.63 points.
Stocks in Focus
* Consumer product giant The Procter & Gamble Company (NYSE:PG) cut its sales and earnings guidance for the fourth quarter and the full year due to negative foreign currency impact and weakness in developed markets.
* Diversified industrial company Actuant Corporation (NYSE:ATU) posted third quarter adjusted earnings of 60 cents a share, 1 cent better than the analysts’ estimate of 59 cents a share. Revenue for the quarter stood at $429.22 million, which also managed to just beat Street expectation.
* A U.S. District Judge has ruled against JPMorgan Chase & Co. (NYSE:JPM) in a lawsuit over losses on securities backed by subprime and other risky home equity loans.
* Food and beverage major PepsiCo, Inc. (NYSE:PEP) has warned that unfavorable foreign exchange rates could hurt current year profit more than it had previously anticipated.
* IT services firm Quest Software, Inc. (NASDAQ:QSFT) has accepted a $2.17 billion takeover bid from private equity firm Insight Venture Partners, and agreed to the inclusion of San-Francisco-based Vector Capital to the buyout group.
* Furniture retailer La-Z-Boy Incorporated (NYSE:LZB) reported a fourth-quarter profit of $19.6 million or 37 cents a share, up from $10.3 million or 19 cents a share in the same quarter last year. Revenue for the quarter came in at $327.4 million, below Street estimates.
* FSI International, Inc. (NASDAQ:FSII) reported third quarter net income of $10 million or 25 cents a share, up from $4.1 million, or 10 cents a share, a year earlier. Revenue for the quarter jumped 98 percent to $50.8 million. The chip- equipment maker however projected fourth quarter revenue well below Wall Street views.
* Research In Motion Limited (TSE:RIM) (NASDAQ:RIMM), the struggling maker of the BlackBerry smart phone, has started laying off employees as part of a wider effort to reduce costs.
* Health insurer Aetna Inc. (NYSE:AET) has been awarded a group Medicare Advantage contract by the Teacher Retirement System of Texas that could boost Medicare premiums by as much as $800 million next year.
* Online-communications company Mitel Networks Corporation (NASDAQ:MITL) reported fiscal fourth quarter earnings that exceeded Wall Street analysts’ expectations. Revenue for the quarter rose 4 percent to $157.6 million, from $152.2 million in the same period last year.
* The board of nutritional-supplement retailer GNC Holdings Inc (NYSE:GNC) has authorized up to $300 million in share buy-back.
* Drugstore chain Rite Aid Corporation (NYSE:RAD) has agreed to pay as much as $20.9 million to resolve allegations by salaried assistant store managers and co-managers who claim the company failed to pay proper overtime wages.
* Telefonica S.A. (NYSE:TEF), Spain’s biggest phone company, had its long-term debt rating cut one notch by Moody’s Investors Service, as Spanish consumers scale back on spending.
* Ryanair Holdings plc (NASDAQ:RYAAY), Europe’s largest budget carrier, has launched a fresh 694 million euros ($880 million) cash bid to take over Irish rival Aer Lingus. Ryanair already owns a 29.8 percent stake in its rival.
* Stephen Hester, Chief Executive Officer of Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) said it may take years before Europe finds a solution to the debt crisis, Bloomberg reported.
* British electrical and electronic retailer Kesa Electricals plc (LON:KESA) reported a 42 percent slump in full-year adjusted pretax profit to 59 million euros ($75 million). The company also slashed its dividend and named Mothercare plc (LON:MTC)’s Alan Parker as the new chairman.
* Swedish fashion retailer H&M Hennes & Mauritz AB posted a second-quarter net profit of 5.22 billion Swedish kronor ($748.5 million) that beat analysts’ expectations, as the company recorded strong sales despite tough economic conditions.
* British television network ITV plc (LON:ITV) soared 2.8 percent in London trading on media speculation that a private-equity firm may make a bid for the company.
* Software firm The Sage Group plc (LON:SGE) was upgraded to “hold” from “sell” at Investec Securities. The stock was trading 3 percent higher.
* Rupert Murdoch’s News Corp (NASDAQ:NWSA) made a $2 billion takeover offer for James Packer’s majority-owned media investment firm Consolidated Media Holdings Limited (ASX:CMJ), in a move that, if successful, would further strengthen Murdoch’s position in Australia’s media sector.
* Shrugging off forecasts of waning demand from China, Rio Tinto plc (NYSE:RIO) said it would invest a further $3.7 billion in its iron ore operations in Australia.
* Mitsubishi Heavy Industries, Ltd. (TYO:7011) slid 3.1 percent in Tokyo trading after the US Nuclear Regulatory Commission said that the industrial equipment maker was responsible for a radioactive leak at the San Onofre Nuclear Power plant in California, as it did not properly test pipes before installation.
* South Korean computer chip maker SK Hynix (KRX:000660) has agreed to acquire California-based maker of memory-chip controllers, Link A Media Devices for 287 billion won ($248 million).
* China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU), the country’s second-biggest wireless carrier, reported a disappointing growth in new 3G subscribers last month. The company added a net 2.73 million 3G subscribers in May, 6.6 percent lower than April’s numbers.
* Japan Airlines, which is planning to raise around $8 billion in the world’s second-biggest initial public offering this year, is expected to apply for a September re-listing.
* LG Display Co Ltd. (ADR) (NYSE:LPL) overtook Samsung Display to top the global market for 9-inch-or-larger liquid-crystal displays, in terms of revenue and market share, according to market research firm DisplaySearch.
* Carmaker Honda Motor Co Ltd (ADR) (NYSE:HMC) was upgraded to “buy” from “neutral” at Nomura Securities, citing a strong U.S. sales recovery. The stock ended 1.1 percent higher in Tokyo.
Economic Calendar for Wednesday, June 20, 2012:
07:00 A.M. ET: MBA Purchase Applications (Week ending Friday, June 15, 2012)
10:30 A.M. ET: EIA Petroleum Status Report (Week ending Friday, June 15, 2012)
12:30 P.M. ET: Fed Interest Rate Decision
02:00 P.M. ET: FOMC Economic Projections
02:30 P.M. ET: Fed’s Monetary Policy Statement and press conference