Market Snapshot
Asia: Japan -0.1% to 19634. Hong Kong -2% to 27095. China -1.6% to 4218. India -2% to 27886.
Europe: London +0.6%. Paris +0.3%. Frankfurt +1.3%.
Futures: Dow +0.5%. S&P +0.5%. Nasdaq +0.4%. Crude +0.6% to $57.67. Gold +0.1% to $1203.70.
Ten-year Treasury Yield -3 bps to 1.85%
Economic News
8:30 Chicago Fed National Activity Index
Key earnings before the open
BOH, CBU, CHKP, HAL, HAS, LII, MS, MTB, RCL, STI
Key earnings after the close
BMI, BRO, BXS, CNI, ELS, FTNT, GLF, HLX, HSTM, HXL, IBM, IEX, LRCX, PKG, RCI, RLI, RMBS, SANM, STLD, UCTT, WAL, WWD, ZION
Markets
U.S. stock futures shoot higher this morning, regaining their footing once again after the worst one-day point declines for the S&P 500 and Dow industrials in more than three weeks. Friday’s dip came on a raft of reactionary fears hit that the market, including a glitch that shut down Bloomberg trading terminals globally, fears over a Greek default, and Chinese securities regulators tightened rules on margin lending and promoted the use of short selling.
Following the country’s soft GDP data last week, China’s central bank cut the reserve requirement ratio for all banks by 100 bps to 18.5% yesterday, adding more liquidity to the world’s second-largest economy to combat slowing growth. Despite the news, Asian shares tumbled today feeling pressure from China’s move on margin trading on Friday.
ECB president Mario Draghi said Saturday that the Hellenic Republic is the only party that can save itself. Ongoing talks between Athens and its creditors have been going painfully slow, with the latter insisting on a set of detailed structural reforms to approve €7.2B in aid for the cash-strapped country. Draghi also referred to a comment he made in August 2012 – when pressed by reporters about a Grexit – affirming that the euro “cannot be reversed.”
Oil prices eased off early highs this morning after Saudi Oil Minister Ali al-Naimi said production in the world’s biggest crude exporter would stay near record peaks of around 10M bpd in April. Brent crude fell to $63.76 a barrel, down from an intraday peak of $64.34, while U.S. crude dropped to $56.03/bbl, from an earlier high of $56.65.
Saudi Arabia’s Tadawul All Share Index surged 4% on Sunday after the Kingdom announced last week it would open its $530B stock market to direct foreign investment from June 15. Final rules will be published on May 4. Up to now, foreigners have been restricted to buying Saudi shares indirectly through swaps or ETFs.
Stocks
Comcast (CMCSA) and Time Warner Cable (TWC) are slated to sit down for the first time on Wednesday with Justice Department officials in hopes of negotiating concessions to assuage the department’s reported opposition to their $45B merger.
Genetic Technologies (GENE) jumps after announcing new healthcare centers offering its BREVAGenplus breast cancer testing for at-risk patients, bringing the total to eight. The company expects new health centers to follow suit in 2015 and reiterates expectations for sales growth to accelerate in the second half of 2015 and beyond.
Halliburton (HAL) gains after beating EPS forecasts.
Hasbro Inc. rose over 8% after first-quarter profit and sales beat expectations.
Jon Corzine, the disgraced former head of MF Global Holdings, is rumored to be considering starting his own hedge fund. Speaking with about a half-dozen potential investors, Corzine expects the fund to have $150M in AUM if it takes off, including cash from his own personal funds. MF Global filed for Chapter 11 protection in 2011 as worries mounted over its use of new customer money to cover liquidity shortfalls on its massive European sovereign debt bet.
Morgan Stanley (MS) trades up after the investment bank reported first-quarter profit and revenue that were better than analysts’ estimates. Separately, the company says it’s in discussions with New York’s top litigator to settle an investigation over its shoddy mortgage bonds that lost value during the financial crisis. The $500M deal would likely include some cash as well as consumer relief, although it is unclear whether the bank would need to boost legal reserves to account for a settlement.
In one of the largest real-estate deals so far this year, warehouse and distribution center owner Prologis (PLD) has agreed to buy industrial-property owner KTR Capital Partners for $5.9B. The 60M square foot operating portfolio of KTR Capital comprises 322 properties with about a 95% overlap with Prologis’ existing U.S. portfolio.
Raytheon (RTN) has agreed to acquire Websense from P-E firm Vista Equity Partners, in a deal that values the network security company at $1.9B, including debt. The new company will be 80% owned by Raytheon and Vista will keep a 20% stake. Websense makes software that blocks websites and lets companies inspect network traffic and filter emails for security and hacking threats.
Royal Caribbean Cruises (RCL) slumped in premarket trade Monday, after the company lowered the outlook for 2015 citing a strong dollar and rising fuel costs.
As part of efforts to reduce pollution in the country, Toyota (TM) says it will launch two hybrid cars in China in the second half of this year – the Levin Hev and Corolla. Toyota’s joint venture with Guangzhou Automobile Group (GNZUY) will make the Levin Hev, while its venture with FAW Group will manufacture the Corolla.