MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Tuesday, May 22
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11:46 AM The massive oil fields in the Santos Basin cluster found off Brazil's coast by Petrobras (PBR -1%) and its partners hold 15B-20B barrels of oil to be developed, CFO Almir Barbassa says. Oil from the region will start being produced in the next three to four years and "we will soon be cash-flow positive," Barbassa says. [Energy, Global & FX] Comment!
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11:42 AM Goldman's Bill Shope is encouraged by the huge product refresh announced yesterday by EMC (EMC +0.7%). Shope sees the company's new VMAX systems allowing it to re-take share in the high-end storage market, and believes its OneFS system, a product of the Isilon acquisition, will put EMC on better footing in the network-attached storage (NAS) market relative to NetApp (NTAP). He also likes EMC's continued embrace of flash memory. (earlier) [Tech, Quick Ideas] Comment!
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11:36 AM A bull on mortgage REITs, Dividend Master nevertheless unloads American Capital Agency (AGNC) and American Capital Mortgage (MTGE). AGNC's and MTGE's share prices tower by about 10% over their book values ($29.06 and $21.78 respectively, as of 3/31). Expect secondaries soon to "monetize the premium." [Financials] Comment!
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11:35 AM CalSTRS plans to keep the heat on Wal-Mart (WMT +0.7%) by using its 5.3M shares to vote against the entire sitting board at the company. It's not a shocker considering the teachers retirement fund filed suit against the company two weeks ago and has been a vocal shareholder in the past. (Previous: Proxy firms on WMT vote) [Consumer] Comment!
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11:34 AM Facebook's (FB) precipitous decline yesterday tripped a circuit-breaker just 15 minutes after the open and triggered restrictions on shorting. The break will remain in place until the end of today's session. Finra data shows that 23.6M Facebook shares were shorted on Friday and 6.4M yesterday. [Tech, On the Move, Consumer] Comment!
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11:21 AM What those bearish on stocks have to contend with - Morgan Stanley provides a summary of possible central bank firepower over the coming month. (via) [Global & FX, U.S. Economy] Comment!
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11:20 AM More on Hugoton Realty Trust (HGT -23%): The company disclosed late Friday it will bear ~80% of a $29.6M XTO Energy (XOM) settlement, which is expected will cause costs to exceed revenues for HGT in its Oklahoma and Kansas properties and affect the Trust's distributions going forward. (earlier) [Energy, On the Move] Comment!
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11:19 AM Stephens initiates coverage on Starbucks (SBUX +0.1%) with an Overweight rating and $66 price target after seeing shares slip 10% over the last month. The bullish vibe is nothing new on the Street, with 22 out of 28 analysts rating the stock a Buy or Overweight and nary an analyst coming in below a Hold. [Consumer] Comment!
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11:16 AM Sterne Agee says concerns over commercial aerospace companies generating excess capacity are overblown, as Boeing's (BA +0.3%) backlog deferral rates are at trough levels and the growth of the global fleet shows no signs of a slowdown. The firm reiterates its Buy rating on the shares. 1 Comment
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11:16 AM Millennial Media (MM +11.2%) rallies some more (previous) off of last week's lows after CEO Paul Palmieri makes a CNBC appearance (video) that touches on mobile ad monetization. Fellow mobile ad player Velti (VELT +6.2%), crushed last week following its Q1 report, is also jumping. [Tech, On the Move] Comment!
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11:12 AM Shares of Hugoton Royalty Trust (HGT -22.9%) plunge as a Sir Perfluis analysis on Seeking Alpha says "purchasing HGT units at current prices is like buying 60 cents for a dollar... Quite literally, unless natural gas prices stage a rally, a current HGT unit-holder can expect to receive total cash flows of less than the current share price." [Energy, Quick Ideas, On the Move] 1 Comment
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11:08 AM SEC Chairwoman Mary Schapiro tells the Senate Banking Committee that the agency will look into the "appropriateness and completeness" of JPMorgan's (JPM) financial reporting following its $2B+ trading losses. Schapiro was speaking at hearings to examine implementing derivatives reform. [Financials] Comment!
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11:07 AM Shares of Quantum Fuel Systems (QTWW +15.1%) power up a rally after the firm outlines its plans to stick to a core automotive technology focus and make a series of cost-savings initiatives. The news comes in the wake of a big management shakeup at the company earlier this month. [On the Move, Consumer] Comment!
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11:03 AM Now that the merger is official, Bloomberg BusinessWeek has published a lengthy piece on Google's (GOOG) plans for Motorola (MMI), and the background of new Motorola chief Dennis Woodside. Woodside promises not to ask for special treatment from the Android unit, but wants to use Google's resources towards goals such as improving battery life and camera image quality. It's added Google will be creating a new Motorola R&D lab focused on advanced technology projects. [Tech, M&A] Comment!
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11:03 AM Hanger Orthopedic (HGR -1.2%) slips after saying its CEO Thomas Kirk, has decided to retire. In accordance with its succession plan, current President and COO Vinit Asar, has been appointed to succeed Mr. Kirk and has joined the board of directors. [Healthcare] Comment!
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11:00 AM On the hour: Dow +0.54%. 10-yr -0.27%. Euro -0.47% vs. dollar. Crude -0.22% to $92.66. Gold -0.07% to $1587.65. Comment!
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10:56 AM Investors can grab Plains All American Pipeline (PAA +1%) and its 5.3% dividend yield even cheaper than director Gary Petersen did when he bought 5K shares on May 17 at $79.47 each, DividendChannel writes. A long-term dividend history chart strongly suggests PAA is likely to continue paying a comparably attractive dividend. [Energy, Quick Ideas] Comment!
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10:55 AM A nice bookend to Goldman's bell-ringing March 21 buy stocks/sell bonds call, David Kostin and crew are today out with a bearish note warning about poor near-term prospects for stocks. The S&P vs. Treasurys in the period before and after the March 21 boner. 1 Comment
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10:53 AM Shares of Ralph Lauren (RL) are falling fast - now up only 2.4% after sporting an early 9% gain - as the company explains on a CC that macro concerns remain in place in Europe, Asia, and the U.S. The more execs talk, the more the shine comes off the firm's FQ4 earnings beat. (webcast) [On the Move, Consumer] Comment!
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10:48 AM Nordson (NDSN) +9.4% after its guidance yesterday offsets an FQ2 miss. Net profit -20% to $52.1M as lighter organic volume and higher expenses weakened margins. Nordson also announced the $200M buy of extrusion-dies producer EDI. In FQ3, Nordson expects EPS of $0.96-$1.04 vs. forecasts of $0.86 and revenue of $337M-$$349M vs. $326M. [Earnings, M&A] Comment!
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10:43 AM Global Hunter fires up Buy ratings on a number of shipping stocks including Diana Shipping (DSX +2.5%), DryShips (DRYS +9.5%), Safe Bulkers (SB +2.1%), and Baltic Trading (BALT +4.5%) - while starting Eagle Bulk Shipping (EGLE -0.9%), Excel Maritime (EXM -1.8%), Genco Shipping (GNK +1.1%) with below-keel Reduce ratings. While individual names in the sector tend to get tied up with momentum trading, the overriding theme has been a moderate bounce back off of a 25-year low in the Baltic Dry Index in February. Guggenheim Shipping ETF (SEA) +8.1% YTD. [On the Move, Consumer] Comment!
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10:42 AM Despite the fiscal compact being "misguided and poorly conceived," it's clearly in Ireland's interest to vote for it, writes Megan Greene. Why? Because Ireland is going to need another bailout and can't draw funds from the ESM if it rejects the treaty. The treaty is moving forward with or without Ireland - voting "no" accomplishes nothing for the country. [Global & FX] 1 Comment
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10:40 AM Nigeria's oil minister says it expects to renew onshore oil drilling licenses with Chevron (CVX) and Royal Dutch Shell (RDS.A, RDS.B) by June. Several licenses that expired as far back as 2008 have been in negotiations between foreign oil majors, Nigeria's state-oil firm and government for years. [Energy, Global & FX] Comment!
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10:36 AM Preferential treatment from TSMC (TSM) or not, Qualcomm's (QCOM) 28nm baseband chip shortage is leading the likes of Samsung (SSNLF.PK), LG (LGEAF.PK), and HTC to worry they won't be able to meet 4G phone demand. While 4G devices make up only a small percentage of global phone sales, they account for a much larger chunk of high-end sales. And shipments are expected to surge in 2H thanks to the Samsung Galaxy S III and next-gen iPhone. (previous) [Tech] Comment!
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10:32 AM Humana (HUM +2.4%) gets a boost from an upgrade to Outperform on valuation at Wells Fargo. The firm says the company is well positioned to gain market share from Medicare Advantage, as well as the growing senior demographic. In addition HUM's niche business insulates it from the upcoming Supreme Court ruling on health reform, making it a less risky alternative compared to its peers. [Healthcare, On the Move] Comment!
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10:26 AM Germany will tomorrow auction bonds with a zero coupon for the first time, underscoring its status as the ultimate safe haven despite the chaos that surrounds it. Germany plans to sell €5B ($6.41B) of two-year notes as investors seek merely "the return of capital rather than the return on capital." [Global & FX] 4 Comments
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10:22 AM The selloff in Chesapeake Energy (CHK +0.2%) creates a buying opportunity, Oppenheimer says while maintaining its Outperform rating and $28 price target. CHK is accelerating its liquids production growth and asset monetization, and the firm thinks its net asset value after pending asset sales is above its current share price.
[Energy, Quick Ideas] Comment! -
10:18 AM More on Existing Home Sales: Seasonal supply at 6.6 months, up from previous level of a 6.2-month supply. The national median existing-home price for all housing types jumped 10.1% Y/Y to $177,400. Foreclosures and short sales sold at deep discounts accounted for 28% of monthly sales, down from 37% a year ago. [U.S. Economy] 2 Comments
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10:17 AM Microsoft (MSFT) has added facial expression-recognition capabilities to its Kinect motion sensor, courtesy of a software update. The update allows the Kinect to track joints in the upper body, as well as to identify users when sitting. It could prove useful as Microsoft moves forward with its plans to bring the Kinect to PCs. [Tech] Comment!
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10:09 AM Arena Pharmaceuticals (ARNA) +4.7% to $6.24 after it yesterday completed its secondary public offering and underwriters fully exercised their option to purchase additional stock. Arena sold almost 12.65M shares at $5.50 each, raising nearly $70M. [Healthcare, On the Move] Comment!
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10:09 AM EnerNOC (ENOC +12%) shares surge after Needham raises its rating to Buy from Hold, believing the stock has bottomed and should become more attractive to long-term investors. The firm says ENOC isn't another Comverge (now private), "as the company has far more substantial scale, prior history of profitability, and healthier overall capitalization." [Energy, Quick Ideas, On the Move] Comment!
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10:08 AM Hard drive kingpins Seagate (STX -6.8%) and Western Digital (WDC -4.8%) trade lower following analyst commentary about high inventory levels. Controller chip suppliers LSI (LSI -6.7%) and Marvell (MRVL -2.3%) are falling in sympathy. (previous) [Tech, On the Move] Comment!
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10:06 AM The Conference Board's April leading index for China rises 0.8%, matching March, and down from 1% in February. However, Andrew Polk from the Board isn't yet comfortable calling for a pick-up in growth in H2, instead wanting to see if recent easing policies start to filter through to the economy. Isn't that what the leading indicator is supposed to indicate? [Global & FX] 1 Comment
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10:03 AM April Existing Home Sales: +3.4% to 4.62M vs. 4.66M expected, 4.47M prior (revised from 4.48M). [U.S. Economy] 3 Comments
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10:00 AM May. Richmond Fed Mfg. Survey: -10, to 4 (above 0 = growth). Shipments -18 to 0, new orders -12 to 1, jobs +6 to 16. [Breaking News, U.S. Economy] 3 Comments
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10:00 AM On the hour: Dow -0.1%. 10-yr -0.25%. Euro -0.49% vs. dollar. Crude -0.69% to $92.22. Gold -0.54% to $1580.05. Comment!
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10:00 AM Delta Air Lines (DAL +0.1%) pilots have tentatively approved a new labor agreement which would provide a series of pay hikes from 2013 to 2015, according to union reps. [Consumer] Comment!
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9:59 AM “LNG holds great potential as a transport fuel,” Shell (RDS.A) believes, and its plan to spend $250M on a liquefied natural gas plant and a string of filling stations in Canada is the biggest single investment yet in making it happen. For now, LNG is mostly suitable for long-haul trucks with large gas tanks, but that's a big business; U.S. truckers spent ~$135B on fuel last year. [Energy] Comment!
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9:56 AM FDA reviewers recommend rejecting Pfizer's Tafamidis for treating a rare neurodegenerative disease, as the data doesn't prove that the drug works well enough. An advisory panel is set to vote on Tafamidis tomorrow, after which the agency will make a final decision at a later date. [Healthcare] Comment!
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9:53 AM Cree (CREE -9.3%) plummets after announcing CFO John Kurtzweil has resigned to become the CFO of Extreme Networks (EXTR +4.1%). Corporate controller Michael McDevitt will serve as Cree's interim CFO while a search is conducted for a full-time replacement. At Extreme, Kurtzweil replaces interim CFO Jim Judson. (CREE PR) (EXTR PR) [Tech, On the Move] Comment!
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9:51 AM It may not work, writes Jeremey Siegel, but the ECB's best hope of saving EMU is to trash the currency upon which it is built. A devalued euro will bring some relief to the periphery by boosting trade, while pumping a bit more inflation into the German economy - a small price to pay to save the union. [Global & FX] Comment!
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9:51 AM The public launch of CKE Restaurants - owner of burger chains Carl's Jr. and Hardee's - doesn't appear set to pose an imminent threat to McDonald's (MCD +0.1%) due to the pile of challenges at the cash-strapped company. Funds from the IPO are already earmarked for paying off debt, instead of going to upgrade company-owned restaurants in near-desperate need of a facelift. [Consumer] 1 Comment
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9:46 AM The Hellenic Financial Stability Fund is reportedly scheduled to transfer €18B ($23B) of recapitalization money to Greek banks by Friday as part of the country's bailout. An FT report says the banks are being propped up by Greece's central bank. [Global & FX] Comment!
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9:43 AM It's happening again. Facebook (FB -7%) dives in early trading to $31.65 - shares are now down 17% from their $38 IPO price, though the company's multiples are still high. If Facebook doesn't soon reverse course, class-action suits over last week's increase in its offering price may just be a matter of time. (also) [Tech, On the Move] 9 Comments
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9:41 AM American Express (AXP) expands its push into the Social Network, going after the FarmVille crowd by rolling out a line of co-branded prepaid cards with Zynga. Users won't need a credit check, but will need to sign up for a Serve account, which can be funded from existing bank accounts, or debit/credit cards. [Financials] Comment!
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9:39 AM Half of all S&P 500 stocks now yield more than the 10-year Treasury note's record low 1.74%, according to Bespoke. There are 271 stocks in the S&P 500 with a greater yield than the 10-year Treasury; of the remaining 229 stocks in the index, 126 have a dividend yield less than the 10-year, while 103 pay no dividend at all. [Quick Ideas] Comment!
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9:31 AM At the open: Dow +0.03% to 12509. S&P +0.16% to 1318. Nasdaq +0.12% to 2851.
Treasurys: 30-year -0.51%. 10-yr -0.19%. 5-yr -0.08%.
Commodities: Crude -0.41% to $92.47. Gold -0.43% to $1581.85.
Currencies: Euro -0.46% vs. dollar. Yen +0.71%. Pound +0.34%. Comment! -
9:26 AM 9to5 Mac provides the latest rumor about the next iPhone sporting a larger display. According to its source, Apple (AAPL) has two iPhone prototypes in testing that sport a 3.95" display with an 1136x640 resolution (the 4S' has a 960x640 resolution), which indicates a wider aspect ratio. It's added Apple is testing versions of iOS 6 that are custom-built for the larger display. If the rumor is true, some developers might not be thrilled about the change in dimensions. (previous) [Tech] 3 Comments
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9:25 AM Speaking to reporters on the release of an IMF report urging the U.K. to print more money, agency head Lagarde pretty much makes an outright call for eurobonds. Such "fiscal-liability sharing" remains staunchly opposed to by Berlin (with Austria adding support today). [Global & FX] Comment!
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9:22 AM Tesla Motors (TSLA) announces that it will begin deliveries of its Model S on June 22. The car marks an "all-in" bet by Tesla, with 90% of the company's revenue this year forecast to come from the sedan. Shares +4.3% premarket, helped in part by an initiation from Maxim Group at Buy. [Consumer] Comment!
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9:18 AM Anglo American (AAUKY.PK) and Chilean copper miner Codelco agree to restart settlement talks in hopes of avoiding a long legal battle over the ownership of copper mines in Chile worth as much as $22B, FT reports. The two have been at odds since last fall, when Codelco raised $6.8B to exercise an option to buy a 49% stake in Anglo's Sur mining property. [Commodities] Comment!
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9:15 AM Market preview: Stock futures are mixed and Europe is all green, with neither seeming to be particularly affected by Fitch's downgrade of Japan. S&P Benchmark +0.1%. Best Buy shot up over 8% following earnings but fell just as rapidly and is now just +0.2%. Facebook's (-3.3%) slide continues, while Express plummets 23% following a profit warning. Later: Richmond Fed Mfg., Existing Home Sales [Top Stories, On the Move] Comment!
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9:14 AM Next targets for cost-cutting at MetLife (MET) may be its annuities and U.S. retail life insurance businesses, suggests Macquarie's Sean Dargan. "The company can achieve higher returns elsewhere," he says, and indeed the company appears to be focusing more on growth prospects in emerging markets. [Financials] Comment!
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9:14 AM Shares of Express (EXPR) nosedive 22.1% premarket after the company issues a lackluster Q1 report and strikes a downbeat tone for Q2. Sales growth is slipping at the company, while it also took on extra costs related to changing its mind over the location of its flagship NYC store. [On the Move, Consumer] Comment!
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9:13 AM EMC has acquired Syncplicity, a provider of enterprise cloud storage services, for an undisclosed sum. Snycplicity, whose services compete with Box (formerly Box.net) and Dropbox, complements EMC's Documentum content management software business, and provides it with another value-added service to sell. The purchase comes shortly after a major product refresh that emphasized the cloud-readiness of EMC's solutions. There's some overlap between Syncplicity and VMware's (VMW) Project Octopus. [Tech, M&A] Comment!
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9:09 AM Chipotle (CMG) could see legal fines related to a SEC probe on employee work authorizations, according to Miller Tabak's Stephen Anderson. The company disclosed in a SEC filing last week that it had received a broad subpoena for employee documents. [Consumer] Comment!
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9:07 AM Redbook Chain Store Sales: +2.7% Y/Y vs. +3.7% prior week. The cool and wet weather led to decline in apparel sales, lawn & garden sales, and sales of sporting goods. [Consumer] Comment!
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9:02 AM Google (GOOG) closes its $12.5B acquisition of Motorola Mobility (MMI), which remains a separate business. Motorola CEO Sanjay Jha has stepped down and been replaced by "long-time Googler" Dennis Woodside, who was President of Google's Americas region and who has already initiated an executive shakeup at Motorola. (PR) [Tech, Consumer, Top Stories] Comment!
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9:01 AM BlackRock (BLK), along with Waddell & Reed (WDR) and Norway's SWF purchase a 20% stake in Formula One Group from CVC Capital Partners for $1.6B ahead of its Singapore IPO (expected next month). [M&A] Comment!
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9:01 AM Shares of Benihana (BNHN) come off a trading halt to move up 21.3% premarket after receiving a go-private offer from Angelo, Gordon & Co. Following P.F. Chang's China Bisto own rocket ride after going private earlier this month, a number of other similar-sized restaurant sector names could be on watch. KONA, CHUX, BHRI, TXRH, CASA. [M&A, On the Move, Consumer] Comment!
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9:00 AM On the hour: S&P +0.02%. 10-yr -0.17%. Euro -0.55% vs. dollar. Crude -0.33% to $92.56. Gold -0.63% to $1578.75. Comment!
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8:57 AM Royal Dutch Shell (RDS.A) believes rising natural gas demand will underpin its future profits, even though oil pricing still accounts for 80% of its margins, CEO Peter Voser says. The long-term nat gas pricing outlook remains strong despite current low prices, Voser says, as Asian-Pacific customers increasingly switch from powering their industrial plants with oil to gas. [Energy] Comment!
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8:55 AM No capital has disappeared; JPMorgan's CIO losses just represent a shift in money from one entity to others. Among the those scoring gains either for themselves or clients are Goldman Sachs and Bank of America. Boaz Weinstein's Saba Capital is reportedly +16% in May after publicly recommending buying the security JPM was short. [Financials] 1 Comment
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8:51 AM Behind the Best Buy (BBY) numbers: The earnings beat knocked out by the retailer was boosted by a favorable tax rate, 30.6% compared to 34.6% previous. In addition, a seemingly strong free cash flow number is blunted by factoring in the large jump in account payable to $1.2B from a $561M a year ago. Shares +0.7% premarket. [Consumer] 1 Comment
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8:44 AM Glencore (GLCNF.PK) indirectly boosts its stake in Congolese copper and cobalt company Mutanda Mining to 60% through two stake purchases for $340M. The deals move the commodities giant closer to merging its Congo mining operations into a combined entity able to produce 160K tons of copper cathode a year and 23K tons of cobalt in hydroxide by 2013. [Commodities, Global & FX] Comment!
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8:44 AM Proxy advisors ISS and Glass Lewis & Co. both issue recommendations that shareholders of Wal-Mart (WMT) vote against CEO Michael Duke and other key board nominees due to the lack of judgement shown in the company's affairs in Mexico. The drive to make sweeping changes at Wal-Mart may be facing an uphill climb with shares just etching out their highest mark since 1999. WMT -0.2% premarket. [Consumer] 1 Comment
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8:41 AM While "re-shoring" may be happening, it's not creating that many jobs. A case in point: Whirlpool returning the production of its KitchenAid hand mixers brought just 25. Harry Moser of the Reshoring Initiative reckons 25K jobs have returned to the U.S. in recent years and thinks that the potential is far greater. [U.S. Economy] 1 Comment
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8:36 AM Georgia Gulf (GGC) +1.2% premarket after reinstating payment of quarterly dividends for the first time in four years, a reflection of its efforts to pay down debt and generate “substantial free cash flow," CEO Paul Carrico says. The $0.08/share dividend is the same level paid before it was suspended in 2008. [On the Move] Comment!
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8:32 AM Analysts at Facebook's (FB) lead underwriters cut their revenue estimates ahead of the IPO, reports Reuters, passing the information on to a few of their key clients. "My biggest hedge fund client told me they lowered their numbers right around mid-roadshow," says an IPO researcher. He still bought the issue, he says, but flipped it immediately and went short. Shares -3.8% premarket. [Tech] 8 Comments
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8:31 AM GameStop (GME) CEO Paul Raines adds another 6,570 shares to his position in the company to take his stake up to 546,012 shares, according to a SEC filing. GME +1.0% premarket. [Consumer] Comment!
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8:27 AM Benihana (BNHN) will go private, agreeing to be acquired by Angelo, Gordon & Co.'s Private Equity Group for ~$296M; the $16.30/share price represents a premium of 46% over the average closing price for the 30 days ended March 13, 2012, when BNHN announced it was exploring strategic alternatives. Trading halted. [M&A, Consumer] Comment!
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8:18 AM Shares of Ralph Lauren (RL) move down 2.4% in premarket trading after the company beats the earnings estimates of analysts with its FQ4 report and doubles its quarterly cash dividend to $0.40 a share. Analysts are already using the report as a possible indication that luxury names have been beaten down too much on Europe sales concerns with Ralph Lauren overcoming its exposure to the continent. As for that share movement, the speculative buzz says the company may have lowballed its guidance intentionally to tee up a beat down the road. [On the Move, Consumer] Comment!
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8:15 AM UN atomic inspectors and Iran reach agreement that will allow the IAEA to inspect suspected nuclear weapons sites, possibly opening the door to a deal to ease sanctions which could push crude oil prices down another $5/bbl or more. Iran's incentive: Its crude shipments are stalled, with ~40M bbls floating around in the Persian Gulf with nowhere to go. [Global & FX, Energy, Commodities] 4 Comments
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8:12 AM Facebook (FB -2.4%) continues to fall as the blame game starts over responsibility for its 11% slump yesterday. Among the chief names are Morgan Stanley (MS), the lead underwriter; Nasdaq (NDAQ), for the tech problems on Friday; and of course Facebook. Among the criticisms: the price was too high and too many shares were sold. [Tech, Consumer, On the Move] 2 Comments
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8:10 AM ICSC Retail Store Sales: -1.7% W/W, vs. -0.8% last week. +3.8% Y/Y, vs. +4.5% last week. The report notes little positive effect from favorable weather or from lower gas prices. [U.S. Economy] 1 Comment
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8:06 AM Late to the mutual fund game, Wells Fargo (WFC) looks to aggressively grow its $444B unit internationally, taking advantage as European firms pull in their horns. Key, says Morningstar, will be overcoming the perception that bank and insurance-run mutual funds are among the most expensive. [Financials] Comment!
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8:06 AM The FTC speeds up its investigation of Google's (GOOG +0.3%) competitive practices, Bloomberg reports, asking for information from rivals about the company's behavior. The requests to the firms, which include eBay (EBAY), were sent prior to the EU saying yesterday that Google has a "matter of weeks" to resolve a probe and avoid possible fines. [Tech, Consumer] Comment!
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8:03 AM More on Best Buy (BBY): The company plans to keep a $750M-$1B share repurchase plan percolating right along - a move that NBG's Brain Sozzi calls surprising. Retail analyst Rahul Sharma also remains unconvinced about the Q1 report, saying BBY's malaise is spreading to its international segment. Shares +8.5% premarket in bouncy trading. [Consumer, On the Move] Comment!
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8:00 AM On the hour: S&P +0.3%. 10-yr -0.19%. Euro -0.42% vs. dollar. Crude -0.04% to $92.83. Gold -0.46% to $1581.35. Comment!
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7:52 AM Cowen upgrades Aeropostale (ARO) to Outperform from Neutral. Analysts with the firm cite the specialty retailer's fashion mix and potential to improve margins in lining up the rating. Just last week, weak margins were the theme at Aeropostale when it reported profits slipped dramatically compared to a year ago. [Consumer] Comment!
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7:50 AM Medtronic on (MDT) FQ4: Net profit rises to $991M from $776M, benefiting from growth across MDT's businesses and geographies - particularly in emerging markets - and strong product launches. Guidance: FY 2013 revenue growth 2%-4%, EPS of $3.62 to $3.70 vs. consensus of $3.66. Shares +2.65%. [Earnings, Healthcare] Comment!
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7:50 AM European markets are at session highs, bouncing from an ugly few weeks of trade. Stoxx 50 +1.3%, led by Italy +2.6%. Germany +1%, Spain +1.1%. S&P futures turn back to green, +0.3%. Interestingly, the euro is lower by 0.5%. Could the break in correlation suggest easier monetary policy is about to come to the continent? [Global & FX] 1 Comment
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7:45 AM More on Best Buy's (BBY) Q1: Comparable-store sales down 5.3%, led lower by 10.5% fall in international sales. Domestic segment online revenue growth +20% Y/Y. Domestic segment mobile phones growth +13% Y/Y. Revenue per square foot flat compared to last year. Maintain FY13 EPS guidance of $3.50-$3.80. Shares +4.6% premarket. (PR) [Earnings, On the Move] Comment!
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7:43 AM CME Group has been eliminated from the bidding process to purchase the London Metal Exchange (LME), say sources, leaving just the ICE and Hong Kong Exchanges and Clearing as possible suitors. [Financials, M&A] Comment!
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7:37 AM Financial discipline, not the "nonsense" put forth by France's Hollande will resolve the EU debt crisis, says Austrian finmin Maria Fekter, clearly placing her country in the German camp as a power battle shapes up in the eurozone. "Growth financed by debt? Those are the recipes ... (that) got us into this whole mess." [Global & FX] 1 Comment
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7:35 AM Best Buy (BBY): Q1 EPS of $0.72 beats by $0.13. Revenue of $11.6B (+2% Y/Y) beats by $110M. Shares +7.9% premarket. (PR) [Breaking News, Earnings, Consumer, On the Move] Comment!
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7:29 AM As of last Friday, Jeff Saut's key technical indicators were in historic negative territory. In past cases, he says, major market averages were higher a month later 92% of the time. "You can have cheap equity prices, or you can have good news, but you can't have both," says Joe Rosenberg. We currently have "bad news" and "cheap prices." Take advantage. Comment!
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7:25 AM Las Vegas Sands (LVS) decides to pass on building a casino in Massachusetts, saying the state's plan to allow three casinos in the region will dilute the Boston-area market. The decision comes about a month after Wynn Resorts bailed out of plans to develop in the region after a groundswell of local opposition arose against it. [Consumer] Comment!
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7:23 AM Medtronic (MDT): Q4 EPS of $0.99 beats by $0.01. Revenue of $4.3B (+3% Y/Y) beats by $70M. (PR) [Earnings, Healthcare] 1 Comment
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7:16 AM Goldman Sachs reiterates its Sell rating on Campbell Soup (CPB) after the company recorded a "low quality" earnings beat in FQ3. Analysts with the firm see the core U.S. soup segment as a major issue, with price increases at risk of driving down sales. [Consumer] Comment!
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7:10 AM Comcast (CMCSA) launches Xfinity TV on its X1 next-generation cloud-enabled TV platform. The company says the service - available soon for HD/DVR customers - will use cloud servers to integrate customized apps, social media, and traditional video services - all controlled by an iPhone or iPod touch if desired. [Consumer] 1 Comment
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7:02 AM United Airlines (UAL) plans to add daily nonstop service to Tokyo from Denver International Airport - the first carrier to fly direct to Asia out of Denver. The move continues an industry trend of unprofitable European routes getting trimmed in favor of new Asian routes. [Consumer] Comment!
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7:00 AM On the hour: S&P -0.12%. 10-yr -0.11%. Euro -0.48% vs. dollar. Crude -0.46% to $92.43. Gold -0.71% to $1577.35. Comment!
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6:57 AM Guess? (GES) delivers a parting shot against Gucci over a three-year lawsuit that ended up with a small award of $2.5M against it over licensing issues, saying the whole affair could have been settled with a single letter or phone call. The suit asked for damages of over $100M, tripled, on the premise that Gucci's designs were intentionally copied by Guess? to boost sales. [Consumer] Comment!
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6:45 AM More on Williams-Sonoma's (WSM) Q1: Brand revenue gain of 5.4% led by West Elm brand and Pottery Barn, offsetting declines at PBteen, Williams-Sonoma, and Pottery Barn Kids. Operating margin falls to 6.0% from 6.7% last year. Sees FY12 EPS of $2.42-$2.49, up from prior guidance of $2.37-$2.47. Expects FY12 revenue of $3.95B-$4.02B, just above the prior estimate of $3.93B-$4.02B. (PR) [Earnings] Comment!
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6:31 AM U.S. stock futures reverse early moderate gains after Fitch cuts Japan's credit rating. S&P -0.2%, Dow -0.2%. [U.S. Economy] 1 Comment
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6:25 AM Piper backtracks on a recent upgrade of Lowe's (LOW) after yesterday's guidance blunder, shuffling LOW to Neutral from Overweight, and reducing price-target to $28 from $41. "We still expect home remodeling growth to run above GDP growth for 2012-3, but no longer believe LOW is fully participating in the remodeling cycle," firm says. Shares -10% Monday to $25.60. [Consumer, Quick Ideas] 1 Comment
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6:00 AM Overseas: Japan +1.1%. Hong Kong +0.6%. China +1.1%. India -1.0%. London +0.8%. Paris +0.7%. Frankfurt +0.7%. [Global & FX] Comment!
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5:51 AM More on Vodafone (VOD) earnings: Takes impairment charge of £4B related to Southern Europe ops vs. £6.15B last year. Forecasts this FY's adjusted op profit at £11.1B-£11.9B vs. £11.5B last FY. Raises dividend 7% to 9.52 pence, excluding Verizon Wireless payout. [Earnings, Tech, Consumer] 1 Comment
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5:15 AM The IMF says the U.K. should consider cutting interest rates and more quantitative easing. The country should prepare a Plan B for deficit reduction if those measures don't work. [Global & FX, Breaking News, Top Stories] 2 Comments
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5:06 AM Fitch downgrades Japan to A+, outlook negative. "The country's fiscal consolidation plan looks leisurely relative even to other fiscally-challenged high-income countries, and implementation is subject to political risk." [Breaking News, Global & FX, Top Stories] Comment!
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4:54 AM Bayer (BAYRY.PK) and Onyx Pharmaceuticals (ONXX) announce a Phase 3 trial of Nexavar tablets in patients with certain lung cancers did not meet its primary endpoint of improving overall survival. [Healthcare] Comment!
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4:33 AM U.K. April CPI comes in at 0.6% M/M, in-line with consensus. Prices +3% Y/Y vs. 3.1% expected. Core CPI of 2.1%, down from 2.5% in March. [Global & FX, Breaking News] Comment!
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4:30 AM Greece's banking system is being propped up by ~€100B of emergency liquidity provided by the country's central bank and quietly approved by the ECB, according to a report in the Financial Times. An ECB decision to pull the plug could potentially prompt a Greek exit from the eurozone. [Global & FX, Top Stories] 1 Comment
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4:22 AM Coming from the OECD's live twitter stream, "we need decisive policy action now" but "we're aware of the political economy of some of these problems. The scope for macro-economic policy is virtually exhausted." The OECD released its revised economic outlook just moments ago, warning the recovery is both fragile and uneven. (more) [Global & FX, U.S. Economy, Top Stories] 2 Comments
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4:15 AM The OECD cuts its 2012 eurozone GDP forecast to -0.1% from +0.2%; U.S. forecast raised to +2.4% from +2%; China to come in at +8.2% this year, +9.3% next year; Greece -5.3% this year, -1.3% next year; Japan +2% this year, +1.5% next year. Joins calls for eurozone bonds. (OECD economic outlook report) [Breaking News, Top Stories, Global & FX, U.S. Economy] Comment!
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4:08 AM Not so much a Grexit as a Geuro, Deutsche Bank head of research Thomas Mayer says Greece's best chance of survival may be to stay in the eurozone but opt for its own parallel currency. The Geuro would help Greece balance its budget without Troika help, which means Greece could jettison the strict austerity conditions attached to the aid money. [Global & FX] 2 Comments
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3:29 AM Blackstone (BX) will buy Accor's troubled U.S. budget hotel business for $1.9B. Accor, a French hotel group, is trying to focus on growth outside the U.S., while Blackstone wants to invest "significant capital" in Motel 6 properties to "accelerate the expansion of the franchise base." [M&A, Top Stories] Comment!
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3:23 AM China plans to fast-track approvals for infrastructure projects to combat an economic slowdown, according to the state-backed China Securities Journal. The government is reportedly asking for project proposals by June 30, even for projects initially earmarked for year-end, and hasn't ruled out bringing forward next year's projects. (previously) [Global & FX] Comment!
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2:54 AM Asian markets shoot up, following notable U.S. gains yesterday and continued talk of reform in China. Japan +1.1% to 8729. Hong Kong +1.1% to 19123. China +1.0% to 2371. India +0.6% to 16276. [Global & FX] Comment!
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2:52 AM Conditions are ripe to open up China's capital account, according to a front-page article in the PBOC-backed Financial News, which cited several government officials and scholars. The removal of many of the capital controls keeping the yuan from being fully convertible would mark a major milestone in China's reform program. [Global & FX] Comment!
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12:00 AM Tuesday's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 Existing Home Sales
10:00 Richmond Fed Mfg. Comment!
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