NYSE MARKET ACCESS CENTER: MORNING REPORT
Ahead of the Bell: Dow futures are trading down 32 points and S&P futures are trading down 4 handles. U.S. stock futures are trading below fair value ahead of the opening as investors assess a slate of deal developments, including the rejection of Pfizer’s bid to buy drug maker AstraZeneca PLC, while waiting for two Federal Reserve officials to talk about monetary policy. The corporate calendar is light with Campbell Soup (CPB) and Valspar (VAL) reporting before the opening bell, while Urban Outfitters (URBN) reports after the market close. In other news, The Kremlin is reporting that Russia is ordering troops deployed near Ukraine to return to their home bases.
• No releases scheduled on today’s economic calendar. Dallas Fed President Richard Fisher and San Francisco Fed President John Williams speak in Dallas at 12:10 ET. Market participants also await the FOMC minutes release on 21-May.
• On Friday, stocks rose with the Russell 2000 Index erasing a loss as data showing growth in housing starts overshadowed a drop in consumer confidence. The Dow and S&P still finished lower for the week ended May 16th.
• With the bulk of Q2 earnings season behind us, analysts are forecasting S&P 500 companies (in aggregate) will report 6.87% earnings growth for the second half of 2014 and 14.73% earnings growth for 2015.
• The dollar is down against a basket of major currencies. Gold is trading at $1,302. Crude oil is currently trading at $102 a barrel.
• On CNBC this morning, Ben Lichtenstein, president of TradersAudio.com, said that a “major divergence” is developing in the U.S. market as the Russell and Nasdaq are “unwilling” to participate in the rally.
Friday’s Close
DJIA up 44.50 pts / +0.27% / 16,491.31
S&P up 7.01 pts / +0.37% / 1,877.86
Nasdaq up 21.30 pts / +0.76% / 4,090.59
Monday’s Futures
Dow Futures down 32.00 pts / -0.19%
S&P Futures down 4.00 pts / -0.23%
Nasdaq Futures down 6.50 pts / -0.18%
Overseas Markets
FTSE -1.95%
CAC 40 -0.15%
NIKKEI 225 -0.64%
HANG SENG -0.04%
Overseas: Global stock markets are mixed today. In Asia, equity markets finished broadly lower. Negative sentiment surrounding China was cited as a regional headwind amidst continued slowdown in the housing sector and further crackdown on shadow lending. Following a mixed open, European equity markets have generally drifted lower, with just Greece +2.0%, Ireland +1.5% and Austria +0.04% currently trading higher. Amidst light macro updates, focus was on earnings announcements and M&A developments.
Economic Reports: None.
Top Headlines
• AstraZeneca PLC tumbled in London earlier today after the company rejected a sweetened and final offer from pharma giant Pfizer. AstraZeneca said PFE’s offer falls shorts of AZN’s value as an independent science-led company.
• AT&T Inc. announced late on Sunday it will buy DirecTV in a stock-and-cash deal worth $67.1 billion (including the DTV’s debt). Under the $95. a shares deal, approved by both companies, DTV shareholders will receive $28.50 per share in cash, and about $66.50 per share in AT&T stock (depending on price of AT&T stock upon closing of the transaction).
• Google Inc.’s YouTube unit has struck a deal to buy Twitch, a privately held video-streaming service for gamers, for more than $1 billion in cash.
Commodities/Currency
Gold: up $8.80 to $1,302.2
Oil: up $0.69 to $102.27
EUR/USD 1.3716 +0.0024
USD/JPY 101.17 -0.32
GBP/USD 1.6825 +0.0012
Volatility Index (VIX): As of the close of business Friday, May 16, 2014 the VIX is down 0.73 at 12.44
Companies Reporting Quarterly Earnings
• Campbell Soup reports Q3 EPS $0.62 vs est $0.59.
• Valspar reports Q2 EPS $1.07 ex-items vs est $1.04.
Today’s Opening and Closing Bells
Executives and guests of Merk Investments LLC will visit the New York Stock Exchange (NYSE) to highlight the launch of its deliverable gold ETF, Merk Gold Trust ETF (NYSEARCA: OUNZ). Axel Merk, Manager of the Merk Funds and President of Merk Investments LLC will ring the Opening Bell.
The Council for Economic Education Highlights the 14th Annual National Economic Challenge will ring the Closing Bell.
