Morning Market Update
Stocks that are expected to trade actively in U.S. markets on Monday include: Omnicom Group Inc. (NYSE:OMC), Perrigo Company (NYSE:PRGO), Elan Corporation, plc (ADR) (NYSE:ELN), CNA Financial Corp. (NYSE:CAN), Yahoo! Inc. (NASDAQ:YHOO), Saks Inc (NYSE:SKS), Wynn Resorts, Limited (NASDAQ:WYNN), HollyFrontier Corp (NYSE:HFC), Rockwood Holdings, Inc. (NYSE:ROC), LIBERTY GLOBAL PLC (NASDAQ:LBTYA), PPG Industries, Inc. (NYSE:PPG).
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
US: Dow Futures: 15471.00 (-0.17%), S&P 500 Futures: 1683.60 (-0.18%), NASDAQ Futures: 3066.00 (-0.15%)
Europe: CAC: 3985.01 (0.41%), DAX: 8272.27 (0.33%), FTSE: 6577.60 (0.35%)
Asia-Pacific: Australia: 5046.30 (0.09%), China: 1976.31 (-1.75%), Hong Kong: 21850.15 (-0.54%), Japan: 13661.13 (-3.43%).
Metals: Gold: 1334.70 (1.01%), Silver: 20.09 (1.61%), Copper: 3.11 (0.13%)
Energy: Crude Oil: 104.99 (0.28%), Natural Gas: 3.47 (-2.48%)
Commodities: Corn: 4.75 (-0.11%), Soya Bean: 12.15 (0.49%), Wheat: 6.51 (0.23%)
Currency: EUR/USD: 1.3250 (-0.22%), GBP/USD: 1.5352 (-0.20%), USD/JPY: 97.9600 (-0.25%)
10-year US Treasury: 2.578% (0.017)
Market and Economic News Update:
U.S. stock-index futures down: U.S. stock-index futures are pointing to a lower open on Monday, ahead of Federal Reserve’s two-day meeting, which starts on Tuesday. On the economic front, pending home sales data is scheduled to be released at 10 a.m. ET. Analysts are expecting a 1 percent drop in the index from May. Up ahead in the week, market attention will be focused on second quarter GDP data on Wednesday, and non-farm payroll report for July on Friday.
European markets rise: European markets gained in trade as investors await central bank meetings in the U.S., U.K. and Europe, later this week. On the economic front, business confidence in Italy rose in July, following last month’s strong decline, national statistics institute Istat reported Monday. The CAC 40 (INDEXEURO:PX1) added 0.4 percent to 3985.01, while the DAX (INDEXDB:DAX) gained 0.3 percent to 8272.27. The FTSE 100 (INDEXFTSE:UKX) edged 0.4 percent higher to 6577.60 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 end lower, Nikkei down more than 3%: The NIKKEI 225 (INDEXNIKKEI:NI225) tumbled to a new four-week low as a strong currency weighed down exporters. The SSE Composite Index (SHA:000001) (Shanghai Composite Index) fell for the fourth straight session, down 1.7 percent amid continued uncertainty about the growth outlook in China. The S&P/ASX 200 (INDEXASX:XJO) index ended flat in trade as gains in banks were offset by losses in resource stocks.
Stocks in News:
Omnicom Group Inc. (NYSE:OMC)
Advertising giants Omnicom Group Inc. (NYSE:OMC) and Publicis Groupe SA (EPA:PUB) have announced a merger to create the world’s biggest advertising company worth $35.1 billion. The merged entity would be called Publicis Omnicom Group, and would be jointly led by Omnicom CEO John Wren and Publicis CEO Maurice Levy. The deal is expected to be completed by the end of the March 2014.
Perrigo Company (NYSE:PRGO), Elan Corporation, plc (ADR) (NYSE:ELN)
Generic drug maker Perrigo Company (NYSE:PRGO) will buy Irish biotechnology firm Elan Corporation, plc (ADR) (NYSE:ELN) in a cash-and-stock deal worth $6.7 billion. Under the terms of the deal, Perrigo will offer $16.50 in cash and shares to Elan’s shareholders, a premium of about 11 percent over Elan’s closing price on Friday. Post the takeover, Perrigo said it would reincorporate the combined company in Ireland to benefit from the low corporate tax rate.
CNA Financial Corp (NYSE:CNA)
CNA Financial Corp. (NYSE:CNA)’s second-quarter net income rose to $194 million or 72 cents a share, from $166 million, or 62 cents a share, in the same period last year. Operating income came in at $204 million or 75 cents a share. Analysts were expecting earnings per share of 63 cents. In addition, the company declared a quarterly dividend of 20 cents a share, payable on August 28 to shareholders of record on August 12.
Yahoo! Inc. (NASDAQ:YHOO)
All Things Digital reported that the Internet giant is close to buying e-commerce app platform Lexity. Lexity, based in Mountain View, offers platforms for e-commerce and marketing apps, and it’s CEO and founder Amit Kumar was a long time Yahoo employee. Shares of Yahoo were down in recent trading following the report.
Saks Inc (NYSE:SKS)
U.S. luxury retailer Saks Inc (NYSE:SKS) has agreed to be acquired by Hudson’s Bay Co (TSE:HBC) for about $2.9 billion in cash. Hudson’s Bay will pay Saks shareholders $16 a share, 4.5 percent higher than the stock’s Friday closing price. Saks will operate separately within the Canadian retailer and have its own merchandising and marketing teams.
Wynn Resorts, Limited (NASDAQ:WYNN)
The casino operator earned second quarter profit of $1.51 a share, six cents below the average analysts’ estimate. Revenue edged 6.3 percent higher to $1.33 billion, topping expectations for $1.34 billion. Revenue from Las Vegas operations increased 16 percent, while Wynn’s Macau operations witnessed a 2.6 percent rise. Shares closed Friday at $130.98 and fell close to a percent in pre-open session.
HollyFrontier Corp (NYSE:HFC)
Shares of the Dallas-based oil refiner could rise 30 percent over the medium term, Barron’s reported on Sunday. Citing Stelliam Investment Management analyst Matt Murphy, the weekly business newspaper said HollyFrontier could benefit from its access to cheaply-priced crude produced in North Dakota, West Texas, and the Rocky Mountain region, amid the current boom in North American oil production.
Rockwood Holdings, Inc. (NYSE:ROC)
The chemicals maker has agreed to sell its global rheology business to German specialty chemicals group Altana for $635 million. The transaction is expected to close in the fourth quarter of 2013, and is subject to regulatory approval. Rockwell shares closed Friday at $66.09, and are inactive in pre-market trading.
LIBERTY GLOBAL PLC (NASDAQ:LBTYA)
John Malone’s LIBERTY GLOBAL PLC (NASDAQ:LBTYA) has increased its stake in Dutch cable operator Ziggo NV (AMS:ZIGGO) from 18.2 percent to 28.5 percent. The U.S. cable group has been acquiring European assets to increase its presence in the continent’s pay-TV market. Liberty holds a controlling stake in Ziggo’s Dutch rival UPC, and Belgian cable operator Telenet.
PPG Industries, Inc. (NYSE:PPG)
PPG Industries, Inc. (NYSE:PPG) will sell its $1.73 billion controlling stake in Transitions Optical to business partner Essilor International SA (EPA:EI). As part of the deal, Essilor will also acquire PPG’s optical sun lens business. The transaction is expected to close in the first half of next year. PPG said it plans to use proceeds from the sale on acquisitions and share repurchases.
Economic Calendar for Monday, July 29, 2013:
10:00 A.M. ET: Pending Home Sales (YoY) (June)
10:00 A.M. ET: Pending Home Sales (MoM) (June)
10:30 A.M. ET: Dallas Fed Manufacturing Business Index (July)
11:30 A.M. ET: 3-Month Bill Auction
11:30 A.M. ET: 6-Month Bill Auction