Early Tour 4.23.12
Good Morning European Markets off 1.5%-2.5% (Spain -2.85%) Nikkei Closed -0.20% (HSI -1.84%, China -0.76%, KOSPI -0.10%)
EUR 1.3153 (-0.24%) JPY 81.00 (+0.71%) EUR/JPY cross 106.53 (-0.94%) NZD 0.8121 (-0.79%) Copper -1.77% US 10yr 1.926%
Futures: Dow -115, Nasdaq -22, S&P -13 DXY $79.41 (+22c) Crude $103.14 (-73c) Gold $1634.50 (-$8.30) Silver -1.21%
Europe getting hit hard today on heightened political uncertainty and generally weaker macro data across the board. Socialist Francois Hollande edges out Nicolas Sarkozy in Round 1 of the French elections as expected (28.5% to 27.1%), while the far-right National Front's Marine Le Pen took third with a record high 18.2% of the vote. Hollande & Sarkozy will now go head-to-head in a Round 2 run-off on May 6 with Hollande still holding a commanding lead in opinion polls (Sarkozy will need to convert a large % of Le Pen supporters to have a chance). Meanwhile, the Dutch government failed to agree on budget cuts over the weekend and an emergency cabinet meeting has been called for today where PM Mark Rutte may step down and announce snap elections. HSBC's April China flash PMI comes in at 49.1 which represents the 6th straight month of contraction, although an improvement from 48.3 in March. Economic data in Europe coming in weaker this morning (Eurozone flash PMI 46.0 vs 48.1 est, Germany flash PMI 46.3 vs 49.0 est = fastest rate of contraction since July 2009, France flash PMI 47.3 vs 47.4 est, Italy April consumer confidence 89.0 vs 96.2 est = lowest since data began in 1996). Spanish 10yr testing the 6.0% level again.
NYT notes that although the IMF firewall now stands at €430 billion after the meetings this weekend, global finance ministers remain divided over the roadmap from here. Jon Hilsenrath of the WSJ says the Fed will stand pat on Wednesday as their overall growth outlook is unlikely to have changed much from January (the economy has not broke significantly either way to justify signaling an early rise to rates or QE3). S&P futures -13 handles = 1362.20 last.
CHKP, EAT report pre-open / NFLX, TXN %'s after close
Pfizer announces deal to divest infant nutrition business to Nestle for $11.85B cash (high end)
AstraZeneca to acquire Ardea Biosciences (RDEA) for $1 billion ($32/share = 53.5% premium)
Amylin Pharmaceuticals said to be exploring a sale (hires CS & GS as advisers) (Reuters)
Wal-Mart probe of possibly bribery in Mexico may prompt exec departures and fines (Bloomberg)
Philips Q1 strong with solid top line driven by healthcare, remains cautious for 2012 (trading +4.7%)
Vodafone agrees to buy Cable & Wireless for 38p/share (closed Friday at 32p) (£1.04 billion)
Aviva set to pull out of US in a move that could lose the UK insurer £1 billion
Greene King Q4 better, strong momentum maintained, positive on summer of events (trading -0.50%)
Gemalto wins order from America Movil, Banamex and Banco Inbursa in Mexico (trading +0.79%)
Stagecoach IMS inline with UK and North America showing decent top line growth (trading -0.80%)
Pou Sheng (3813 HK) -18% after profit warning (key retailer of Nike & Adidas goods in China)
Leading European Sectors: Food/Bev -0.75%, Healthcare -0.77%, Teclo -0.93% Lagging European Sectors: Banks -3.05%, Insurance -2.96%, Construction -2.73%
UPS $1.3B contract - ENH $700M credit facility - HLX beats BEAV tops ests - PJC to cut 3% workforce - JAKK self tender
Notable Options Activity Yesterday:
NFLX ($106.10 -1%) customer bought 10,000 of the $105-$85 weekly put spreads that expire next week for $6.35. Earnings are 4/23
SYY ($29.02 -1.8%) 10,000 SYY May 29 puts were bought for $0.50, with earnings due out 5/7 JNJ ($63.72 +1.1%) customer bought 10,000 July 67.5-70 call spreads for $0.17
RIMM (13.34 -1.0%) opening cust bought 20k june 13 puts for .95 earnings june expiration day
HOG (51.70 +4.3%) stock and call options went crazy last 2 hours of day attributed to commentary that industry data released early and is better than expected notable may 55 and 60 call buyers 6k and 1500 respectively earnings expected 4.25
Secondaries (announced/priced): N/A
IPO's: N/A
Key Research: Barcap upgrades HTWR/AZN LN & downgrades NOVOB DC, BMO downgrades CHSI Key Research: JPM upgrades ARM LN & initiates PPG (ow), RBC initiates IPHI (op) & downgrades ABVT Key Research: MS upgrades GLE FP & initiates FFIV (ow) and FDS (ew), Piper initiates VCRA (ow) Key Research: Roth reinstates CYTR/PTN (buys), Baird downgrades FWRD, Susquehanna upgrades BMC Key Research: Bofa upgrades RY (buy), Citi downgrades PGR
Reporting Pre-Open: CHKP, COP, DHI, ETN, HAS, ROP, STI, XRX, BEAV, BOH, EAT, FCBC, HLX, KNL, MTG, NVIS, OFG, PCH, SAH, SILC, STBA, STRM, TNC, TSH, WASH, WCBO, WWW, BSRR
Reporting Post-Close: AMP, NFLX, TXN, ZION, AFOP, ALGN, ALSN, BANR, BBCN, BXS, CR, CTGX, DEL, ETH, FFIN, FIBK, FNS, HMA, HSTM, HTLF, HXL, IEX, ILMN, JJSF, NBTB, OMI, RCII, SANM, SFG, STM, TRST, TUES, UCTT, USTR, YDNT
Economic Data: No major releases.
Speakers: ECB's Weidmann @ 6pm (NYC)
Conferences: No major conferences.
Analyst/Investor Days: N/A
Non-Deal Roadshows: N/A
Shareholder Meetings: ACU, CCG, JRCC, NEPH, STBA, HON, MWV, DLR, PRK, FBHS, FBMI Equity/Mixed Shelfs: N/A
Other Newspaper Articles & Stories
Barron's cover: Barron's Big Money poll finds majority of asset managers bullish on stocks and optimistic for the economy Barron's cautious: Francesca's Holdings (FRAN) Barron's positive: Devon Energy (DVN), LSI (LSI) Barron's interview: NYSE Euronext CEO Duncan Niederauer WSJ cautious: Safeway (SWY)
Spain Steps Up Argentina Pressure
BOE: A Very Model of Dismal Forecasting
Small Banks Get a Freer Hand
Private Equity Dives Into Water Parks
Detroit Hopes Smaller Cars Can Give it More Horsepower
Critics of E-Books Lawsuit Miss the Mark
Start-Up Aims to Stream Pay TV Onto Web Devices
Climate Change to Affect Corn Prices, Study Says
Waste Management looks for R&D venture partners
U.S. tariffs on Chinese solar cells fuel debate about green jobs
IMF secures $430bn to boost firepower
Hollande and Sarkozy progress to final round of France's elections
Sarkozy seeks to 'preserve our way of life'
Dutch try to reassure Brussels on budget plans
Low rates fuel early debt repayments
China and Germany to forge closer ties
Economic outlook: QE outcomes awaited
George Osborne tries to end speculation over next Bank of England governor
Eurozone crisis set to get worse before it gets better
If the euro were to split, which way would the French connection go?
GIP to snap up Edinburgh airport in £850m deal
Record quarter for dividends after Vodafone and Cairn pay out
UK teeters on brink of new recession
Anger as Osborne gives IMF extra £10bn
Results mean improved taste for takeover
Austerity is no answer
Samsung steps up outsourcing of TV production to Taiwan makers
Key Events This Week
Tuesday: GOP Primaries (CT, Rhode Island, Delaware, NY & PA), S&P/CaseShiller Home Price Index, Richmond Fed Manufacturing Index, Barcap Retail and Restaurant Conference (NYC), Earnings (ALXN, APD, BHI, COH, HSY, MMM, R, T, WU, X, AAPL, BIDU, JNPR)
Wednesday: FOMC Rate decision (Bernanke press conference after), NZ cash rate, Earnings (BA, CAT, GLW, GD, DPS, HST, LO, S, SAP GR, CTXS)
Thursday: Chicago Fed Nat Activity Index, Pending Home Sales, Kansas City Manufacturing, Japan CPI & IP, Earnings (amy, CCE, CL, DOW, HOT, K, LMT, SWY, UPS, WM, AMZN, SBUX, ZNGA)
Friday: GDP, U of Michigan Confidence, Employment Cost Index, BoJ meets to discuss additional asset purchases, Earnings (CVX, COV, NEM, VFC, PG)
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