Showing posts with label Intel. Show all posts
Showing posts with label Intel. Show all posts
Thursday, September 9, 2010
Tuesday, August 31, 2010
European and North American Review – August 31st 2010
US Shares Flat as Market Awaited for More Data
European bourses ended up on Tuesday, helped by US data which came in above the expectation. German DAX was lifted 12.81 points to 5,925.22 (+0.2%), and FTSE 100 index was up 23.66 points to 5,225.22 or up 0.5%. European data released on the same day also showed improvements.
In August, GfK consumer confidence survey index was edging higher from -22 to -18, beating the consensus of a drop to -24. German data continued to be encouraging. The jobless number was down 17,000 in August, although the unemployment rate remained at 7.6%. Euro-Zone’s unemployment rate stayed high however, at 10% in August. Another economic data from Europe showed CPI slowed from increasing by 1.7% in July to 1.6% in August.
This Wednesday, along with US ISM for manufacturing sector, PMI for manufacturing sector will be released in Germany and UK. German PMI is expected to be unchanged at 58.2, the same as in July, while UK PMI is seen to slip to 57.0 from 57.3.
On the corporate front, Bayer AG successfully proved that its Xarelto was as effective as the old warfarin drug. The medication could land Bayer in a lucrative market worth $10 billion to $20 billion of annual profit. Bayer gained 2.43% by the end of the day and closed at €48.18.
Allianz SE aimed at China and India as potentially strategic markets with high potential of both life and non-life insurance business growth in Asia Pacific. Throughout the first half of 2010 Allianz achieved 31% increase in written premiums worth €5.6 billion with life insurance as the lead contributor. For Asia Pacific, life insurance worth $4.1 billion with Taiwan as the biggest contributor, while for non-life, India and Malaysia led the market. Allianz was at €80.94 at the end of the day.
Siemens Enterprise Communications, jointly owned by Siemens AG and The Gores Group acquired a contract to build communication infrastructures for 165,000 ports from the German Federal Employment Agency. The contract was worth over 100 million euros and will span for eight years. It will be a full service contract which includes provision of software and hardware as well as end-user devices. Siemens was up 0.59% to €71.78 on Tuesday.
HSBC plann
ed to exit its entire consumer lending business in the US by the end of 2014. The most recent move from the British bank was to sell its auto loans business to Santander Consumer USA with the price tag of $3.56 billion. The value of the loans obtained by Santander was $4.3 billion. HSBC was settled at 643.70 pence or up 1.05%.
Joining Bayer and HSBC as the top gainers, Vodafone advanced 2.31% to 157.15 pence. At the bottom, Barclays Plc, BT Group, and the bourse operator Deutsche Boerse ended down 1.1%, 0.75% and 0.65%, respectively.
The North American market was boosted earlier by data from the Conference Board but unable to withhold the gains as the Dow pulled back to near flat along with S&P 500 and Nasdaq Composite indexes. Dow Jones index inched up 4.99 points to 10,014.70, S&P 500 index went 0.04% higher to 1,049.33, but Nasdaq slipped 5.94 points to 2,114.03.
Consumer confidence improved in August, according to the data from the C
onference Board. The index went up to 53.5 from the upwardly revised July’s 51.0. Initially, July’s index was at 50.4. The current situation index fell to 24.9 from 26.4, while the expectations index went up to 72.5 from 67.5. Another data due on Tuesday was the house prices from Case-Shiller. In June, prices went up 1% compared to May; while year-on-year the prices were 4.2% higher. Despite the data was positive, it should be noted that the data lagged two months as it reported June, not the most recent August market conditions. The Dow’s late slip back to the flat area was mostly due to the FOMC minutes which was lacking new leads to lift the mood, turning the market back to the cautionary mode as it waits for more data to come.
Motorola which would be split in early next year would have the mobile phone division some cash amounting to $3.5 billion, which would be used for operational needs and business expansions as well as potential acquisitions. Motorola stayed flat by the end of Tuesday at $7.52.
Microsoft was reportedly developing a search application for the Google Android platform. The application which going to be available for free for Verizon Wireless users will be the mobile version of Microsoft’s Bing. Microsoft ended at $23.47 or down 0.74%.
Google and Associated Press reached an agreement in the distribution of AP’s news materials. Google will have the right to host AP’s materials for two years ahead. Google was down 0.59% at $450.02 by the end of the session.
3M acquired
Cogent in a deal worth $943 million. The maker of the fingerprint identification systems for government and civilians was bought at $10.50 a share, or 18% above Cogent’s closing price on Friday. 3M fell however, to $78.55 or 1.38%.
JP Morgan Chase & Co. would shut down its proprietary trading desk for commodities to abide the Volcker Rule. Consequently, all of its proprietary trading desk will be closed completely. Volcker Rule, which was a result of the recent banking reform in the US, was expected to reduce JP Morgan’s annual profit by $1.4 billion. JP Morgan was at $36.36 in late New York, up 1.42%.
On downgrades and upgrades, Intel Corp. was downgraded at Charter Equity from BUY to MARKET PERFORM on the back of the recent earnings revision for 3Q 2010. Gleacher & Co. maintained Intel at BUY, while FBR Capital also kept Intel at MARKET PERFORM. Intel was down 1.64% to $17.67.
Gainers on Tuesday include AT&T (+1.5%), JP Morgan & Chase (+1.42%), and Merck & Co. (+1.24%). Languishing at the bottom were AMD (-2.94%), Dell (-2.08%) and Starbucks (-1.92%).
Wednesday’s focus will be on the ADP employment data, a guide to Friday’s non-farm payrolls figure. Another key data for the day will be ISM for manufacturing sector. ADP employment figure is expected to show an increase of private sector’s hiring by 20,000 compared to July’s 42,000. ISM for manufacturing sector however, is seen to edge down to 53.0 from 55.5.
European bourses ended up on Tuesday, helped by US data which came in above the expectation. German DAX was lifted 12.81 points to 5,925.22 (+0.2%), and FTSE 100 index was up 23.66 points to 5,225.22 or up 0.5%. European data released on the same day also showed improvements.
In August, GfK consumer confidence survey index was edging higher from -22 to -18, beating the consensus of a drop to -24. German data continued to be encouraging. The jobless number was down 17,000 in August, although the unemployment rate remained at 7.6%. Euro-Zone’s unemployment rate stayed high however, at 10% in August. Another economic data from Europe showed CPI slowed from increasing by 1.7% in July to 1.6% in August.
This Wednesday, along with US ISM for manufacturing sector, PMI for manufacturing sector will be released in Germany and UK. German PMI is expected to be unchanged at 58.2, the same as in July, while UK PMI is seen to slip to 57.0 from 57.3.
On the corporate front, Bayer AG successfully proved that its Xarelto was as effective as the old warfarin drug. The medication could land Bayer in a lucrative market worth $10 billion to $20 billion of annual profit. Bayer gained 2.43% by the end of the day and closed at €48.18.
Allianz SE aimed at China and India as potentially strategic markets with high potential of both life and non-life insurance business growth in Asia Pacific. Throughout the first half of 2010 Allianz achieved 31% increase in written premiums worth €5.6 billion with life insurance as the lead contributor. For Asia Pacific, life insurance worth $4.1 billion with Taiwan as the biggest contributor, while for non-life, India and Malaysia led the market. Allianz was at €80.94 at the end of the day.
Siemens Enterprise Communications, jointly owned by Siemens AG and The Gores Group acquired a contract to build communication infrastructures for 165,000 ports from the German Federal Employment Agency. The contract was worth over 100 million euros and will span for eight years. It will be a full service contract which includes provision of software and hardware as well as end-user devices. Siemens was up 0.59% to €71.78 on Tuesday.
HSBC plann
ed to exit its entire consumer lending business in the US by the end of 2014. The most recent move from the British bank was to sell its auto loans business to Santander Consumer USA with the price tag of $3.56 billion. The value of the loans obtained by Santander was $4.3 billion. HSBC was settled at 643.70 pence or up 1.05%.Joining Bayer and HSBC as the top gainers, Vodafone advanced 2.31% to 157.15 pence. At the bottom, Barclays Plc, BT Group, and the bourse operator Deutsche Boerse ended down 1.1%, 0.75% and 0.65%, respectively.
The North American market was boosted earlier by data from the Conference Board but unable to withhold the gains as the Dow pulled back to near flat along with S&P 500 and Nasdaq Composite indexes. Dow Jones index inched up 4.99 points to 10,014.70, S&P 500 index went 0.04% higher to 1,049.33, but Nasdaq slipped 5.94 points to 2,114.03.
Consumer confidence improved in August, according to the data from the C
onference Board. The index went up to 53.5 from the upwardly revised July’s 51.0. Initially, July’s index was at 50.4. The current situation index fell to 24.9 from 26.4, while the expectations index went up to 72.5 from 67.5. Another data due on Tuesday was the house prices from Case-Shiller. In June, prices went up 1% compared to May; while year-on-year the prices were 4.2% higher. Despite the data was positive, it should be noted that the data lagged two months as it reported June, not the most recent August market conditions. The Dow’s late slip back to the flat area was mostly due to the FOMC minutes which was lacking new leads to lift the mood, turning the market back to the cautionary mode as it waits for more data to come.Motorola which would be split in early next year would have the mobile phone division some cash amounting to $3.5 billion, which would be used for operational needs and business expansions as well as potential acquisitions. Motorola stayed flat by the end of Tuesday at $7.52.
Microsoft was reportedly developing a search application for the Google Android platform. The application which going to be available for free for Verizon Wireless users will be the mobile version of Microsoft’s Bing. Microsoft ended at $23.47 or down 0.74%.
Google and Associated Press reached an agreement in the distribution of AP’s news materials. Google will have the right to host AP’s materials for two years ahead. Google was down 0.59% at $450.02 by the end of the session.
3M acquired
Cogent in a deal worth $943 million. The maker of the fingerprint identification systems for government and civilians was bought at $10.50 a share, or 18% above Cogent’s closing price on Friday. 3M fell however, to $78.55 or 1.38%.JP Morgan Chase & Co. would shut down its proprietary trading desk for commodities to abide the Volcker Rule. Consequently, all of its proprietary trading desk will be closed completely. Volcker Rule, which was a result of the recent banking reform in the US, was expected to reduce JP Morgan’s annual profit by $1.4 billion. JP Morgan was at $36.36 in late New York, up 1.42%.
On downgrades and upgrades, Intel Corp. was downgraded at Charter Equity from BUY to MARKET PERFORM on the back of the recent earnings revision for 3Q 2010. Gleacher & Co. maintained Intel at BUY, while FBR Capital also kept Intel at MARKET PERFORM. Intel was down 1.64% to $17.67.
Gainers on Tuesday include AT&T (+1.5%), JP Morgan & Chase (+1.42%), and Merck & Co. (+1.24%). Languishing at the bottom were AMD (-2.94%), Dell (-2.08%) and Starbucks (-1.92%).
Wednesday’s focus will be on the ADP employment data, a guide to Friday’s non-farm payrolls figure. Another key data for the day will be ISM for manufacturing sector. ADP employment figure is expected to show an increase of private sector’s hiring by 20,000 compared to July’s 42,000. ISM for manufacturing sector however, is seen to edge down to 53.0 from 55.5.
Monday, August 30, 2010
European and North American Review – August 30th 2010
DAX and Dow Started the Week on a Weak Note
German DAX and the three North American indexes tumbled on Monday as economic data were unable to defend gains from last Friday’s rally. The DAX index settled the day at 5,912.41 or falling 0.65%,
the Dow Jones index tumbled 140.92 points or 1.39% to end at 10,009.73, within striking distance to the psychological support at 10k, while Nasdaq Composite and S&P 500 indexes fell to 2,119.97 and 1,048.92, respectively.
Personal spending and personal income data released on Monday showed spending increased by 0.4% in July, while personal income rose as well by 0.2%. While the personal income was below the expected 0.3% increase, the personal spending was slightly above the expected increase of 0.3%. The mixed results turned the market’s attention to the next data, especially the non-farm payrolls which will be announced on Friday. Tuesday will see Chicago PMI data falling from 62.3 to 57.5, while consumer confidence data is expected to rise from 50.4 to 51.0.
European auto shares fell after Renault-Nissan’s CEO Carlos Ghosn said that auto sales in the US are to be below the expected level, while global sales are also not as smooth as previously expected. In addition, German’s Der Spiegel reported that the sales of Daimler’s Smart are to be below 100,000 units against last year’s sales of 114,000 units. Weak demand from US and also lack of model variations were cited as the culprits. Daimler fell 0.73% to 38.12 euros, BMW and Volkswagen fell 1.33% and 0.45%, respectively.
More on M&A activities, Intel announced that it bought Infineon’s wireless unit for $1.4 billion in an effort to strengthen its position in the mobile phone business. Intel could potentially equip each of its PC with 3G feature which would put the company in a direct competition with Qualcomm who dominates the 3G business currently. Recently, Intel also bought McAfee for $7.68 billion. Intel’s rating however, got mostly downgraded. Credit Suisse downgraded Intel’s estimates, RBC Capital downgraded Intel’s target to $26 from $30, Deutsche Bank also did the same, revising its target to $25 from $27 but maintaining the BUY rating, while Lazard Capital put Intel to HOLD from BUY. Wedbush also lowered Intel’s target to $25 from $29. Intel fell 2.23% to end at $17.96.
IBM also bought its next company: Storwize after recently it bought Sterling Commerce. Its real-time data compression technology would be expandable to help IBM clients to improve data storage efficiency by up to 80%. IBM fell 1.07% to $123.40, however.
The pharmaceuticals industry will see Pfizer and Bayer AG to compete for the second spot after Boeringer Ingelheim’s Pradaxa in a blood-thinner market with the potential of $10 billion to $20 billion annually. Both companies will present their data at the meeting of European Society of Cardiology to be held on Tuesday. Afterwards, on September 20th the American regulatory body will also review the drug. Pfizer worked together with Bristol-Myers developing apixaban, while Bayer teamed up with Johnson & Johnson working on Xarelto.
Meanwhile, at Susquehanna, Texas Instruments was downgraded to NEUTRAL from POSITIVE. The shares ended at $23.25 or 3.73% below Friday’s close, joining AMD and Home Depot as worst performers of the day with AMD falling nearly 5% and Home Depot slipping 2.61%. At the top, the competing tech giants Hewlett-Packard and Dell led at 1.47% and 1.12% gains, respectively. Apple also went up slightly by 0.36%.
German DAX and the three North American indexes tumbled on Monday as economic data were unable to defend gains from last Friday’s rally. The DAX index settled the day at 5,912.41 or falling 0.65%,
the Dow Jones index tumbled 140.92 points or 1.39% to end at 10,009.73, within striking distance to the psychological support at 10k, while Nasdaq Composite and S&P 500 indexes fell to 2,119.97 and 1,048.92, respectively.Personal spending and personal income data released on Monday showed spending increased by 0.4% in July, while personal income rose as well by 0.2%. While the personal income was below the expected 0.3% increase, the personal spending was slightly above the expected increase of 0.3%. The mixed results turned the market’s attention to the next data, especially the non-farm payrolls which will be announced on Friday. Tuesday will see Chicago PMI data falling from 62.3 to 57.5, while consumer confidence data is expected to rise from 50.4 to 51.0.
European auto shares fell after Renault-Nissan’s CEO Carlos Ghosn said that auto sales in the US are to be below the expected level, while global sales are also not as smooth as previously expected. In addition, German’s Der Spiegel reported that the sales of Daimler’s Smart are to be below 100,000 units against last year’s sales of 114,000 units. Weak demand from US and also lack of model variations were cited as the culprits. Daimler fell 0.73% to 38.12 euros, BMW and Volkswagen fell 1.33% and 0.45%, respectively.
More on M&A activities, Intel announced that it bought Infineon’s wireless unit for $1.4 billion in an effort to strengthen its position in the mobile phone business. Intel could potentially equip each of its PC with 3G feature which would put the company in a direct competition with Qualcomm who dominates the 3G business currently. Recently, Intel also bought McAfee for $7.68 billion. Intel’s rating however, got mostly downgraded. Credit Suisse downgraded Intel’s estimates, RBC Capital downgraded Intel’s target to $26 from $30, Deutsche Bank also did the same, revising its target to $25 from $27 but maintaining the BUY rating, while Lazard Capital put Intel to HOLD from BUY. Wedbush also lowered Intel’s target to $25 from $29. Intel fell 2.23% to end at $17.96.
IBM also bought its next company: Storwize after recently it bought Sterling Commerce. Its real-time data compression technology would be expandable to help IBM clients to improve data storage efficiency by up to 80%. IBM fell 1.07% to $123.40, however.
The pharmaceuticals industry will see Pfizer and Bayer AG to compete for the second spot after Boeringer Ingelheim’s Pradaxa in a blood-thinner market with the potential of $10 billion to $20 billion annually. Both companies will present their data at the meeting of European Society of Cardiology to be held on Tuesday. Afterwards, on September 20th the American regulatory body will also review the drug. Pfizer worked together with Bristol-Myers developing apixaban, while Bayer teamed up with Johnson & Johnson working on Xarelto.
Meanwhile, at Susquehanna, Texas Instruments was downgraded to NEUTRAL from POSITIVE. The shares ended at $23.25 or 3.73% below Friday’s close, joining AMD and Home Depot as worst performers of the day with AMD falling nearly 5% and Home Depot slipping 2.61%. At the top, the competing tech giants Hewlett-Packard and Dell led at 1.47% and 1.12% gains, respectively. Apple also went up slightly by 0.36%.
Saturday, August 28, 2010
Global Markets Review – August 27th 2010
Stocks Rallied On Revised GDP
All major indexes ended positive on Friday, excluding Hong Kong’s Hang Seng Index which ended at 0.07% lower at 20,597.30. Nikkei gained 84.58 points to end at 8,991.06, while Shanghai Composite Index added 7.26 points to end at 2,610.74. In Europe, DAX and FTSE 100 indexes turned higher as each gained 0.65% and 0.89%, respectively. American shares also rallied with the DJIA index jumped 164.84 points or 1.65% to end at 10,150.70, recovering from the sub-10,000 area. S&P 500 Index advanced 1.66% along with Nasdaq which ended 1.65% higher.
Yen Remained A Major Issue
Japanese shares rebounded on tough talk by the Prime Minister Naoto Kan who vowed to take decisive action whenever necessary if the yen continues to strengthen. USDJPY and EURJPY rallied on the comment and later in late New York trading session the pairs went even higher as Ben Bernanke indicated that the Federal Reserve will do whatever necessary to maintain economic recovery. USDJPY traded at 85.26 yen while EURJPY traded at 108.57 yen in late New York hours.
As the yen weakened, Japanese exporters gained. Nissan Motor ended 3.17% higher, Nikon Corp. gained 2.86%, while Daikin Industries ended at 2,955 with a 2.82% gains.
Nippon Ste
el was reported to rapidly building production bases and sales network overseas to fill overseas demand, dodging a takeover from European firm ArcelorMittal and to avoid rules on greenhouse gas emissions in Japan. Brazil, India, Thailand and African countries are the targets of expansion for Nippon Steel.
Toyota announced that it would recall another 1.3 million cars on Thursday, adding to a long line of recalls it had conducted this year. It was said that there were three accidents involving defects to engine control modules or ECMs. Toyota gained 0.44% however, at the end of the day.
Hang Seng Down as Investors Stayed Cautious
Hong Kong’s Hang Seng index became the only index falling on Friday as investors stay
ed on the sideline ahead of GDP revision release and the speech from Ben Bernanke during the New York hours. The constituents were actually had mixed performances with BOC HK gained 2.99%, Esprit Holdings up 1.81%, and Yue Yuen Industrial went up 1.58%. Among losers were Hang Lung Properties with 2.57% decline, China Resources dipped 2.38%, while China Life resumed its fall to 1.79%.
China Shenhua reported its 2Q net profit which hit a record 10.03 billion yuan, up from 8.98 billion in previous year. Consensus forecast 10.2 billion yuan net profit before the release. Coal production was up 3.2% during the first half from prior year to 109.2 million tonnes, while sales were up 11.6% to 137.4 million tonnes. The coal company warned however, that demand in second half could slow as the government’s economic policy could put a brake on electricity consumption.
On ratings updates, Cosco Pacific’s target raised to HK$13.20 against prior HK$12.10 by Nomura, while its rating was raised to BUY from NEUTRAL. China Resources’ target was raised to HK$32 from HK$29 by JP Morgan, while Henderson Land was downgraded to NEUTRAL from OUTPERFORM by Macquarie while its target cut to HK$50.70.
Europe Up on US GDP
European stocks were boosted by US data as Vodafone gained 2.78%, BT Group rose 2.76%, and Prudential settled 2.26% higher. DAX top gainers include Deutsche Telekom which rose 2.31% Volkswagen and Siemens with 1.64% and 1.25% gains, respectively. At the bottom were Commerzbank (-2.0%), BP (-1.54%), Rolls-Royce (-0.63%) and ThyssenKrupp (-0.18%).
Commerzbank slumped 2% as it was reportedly planning to sell new shares as soon as autumn this year. Around 5 billion euros are said to be sold, according to a Handelsblatt’s report. Another losing side was BP who fell 1.54% to 379.65 pence. The oil giant’s executives told investigators dealing with rig explosion at the Gulf of Mexico that they did not know who was in charge of the rig just before the explosion occurred.
Marks & Spencer announced its move to enter the Egyptian market as a part of its efforts to enhance glo
bal sales. Two stores were planned over the next two years in Cairo as the company saw opportunities in the clothing sector and shopping center businesses. At the end of the trading day, Marks and Spencer settled at 346.50 pence, gaining 1.73%.
Vodafone was reportedly going to sell its assets in Poland, China and France. The move was not intended to improve cashflow, but rather as a move to discipline its international expansion. As a result, the Vodafone Essar, an Indian mobile phone firm said that it would delay its IPO plan until next year. Vodafone ended at 153.60 pence or up 2.78%.
The Fed Is Not Out of Options
US shares shot up as the GDP revision was higher than expected at 1.6% in 2Q. Consensus estimate was at 1.4% after previously the GDP was reported growing at 2.4%. Meanwhile, the decline in consumer sentiment from 69.6 in July to 68.9 in August was not able to deter stocks from rising. The figure was slightly lower than the consensus of 69.0.
Ben Bernanke’s speech in Jackson Hole, Wyoming sent a message to the markets that the Federal Reserve would be able to prevent another recession from happening. Growth was seen to be picking up in 2011 as households rebuild savings, banks expand lending and employment outlook improves. If necessary, the Fed would provide further monetary accommodation, but two criteria must be met: an increasing risk of deflation and, excluding whether deflation to happen or not, the Fed will safeguard the continuation of economic recovery. The Fed chairman indicated that three options are available: more purchases of securities, a change in the Fed’s policy statement and the reduction of interest rate that the Fed has been paying on banks’ excess reserves. Bernanke’s speech cheered the market as the Fed was initially thought of running out of options to prevent the second coming of the recession.
The bidding war over 3Par continued as Hewlett-Packard offered a counteroffer of $30 a share (or $2 billion) to acquire to compete with Dell’s offer of $27 a share. HP ended at $38, declining 0.58%, while Dell edged up 1.17% to $11.89.
Elsewhere, Bank of America was said to have to deal with a lawsuit regarding concealment of bonuses and losses at Merrill Lynch & Co. after it bought the brokerage firm. The news did not seem to hinder Bank of America’s advance to $12.64 as it settled 1.36% higher on Friday.
Intel cut its sales forecast on Friday as it saw weakened consumer PC market. Sales expectations were revised from between $11.2 billion and $12 billion to $11.00 billion plus or minus $200 million. Intel gained 1.05% to end at $18.37 instead of falling as slowdown in the PC markets had been expected long ago by investors.
Citigroup planned to open a China desk based in Singapore in order to encourage Chinese firms to set up business in Singapore. Products will cover cash management, trade services and finance, securities and fund services for Chinese clients. Citigroup ended the New York session at $3.76 or up 2.73%.
Sharing the same fate with Toyota, Ford also said that it would recall more than 575,000 units of Windstars from Canada and US due to problems with the rear axle corrosion. Ford was up 3.49% on late Friday, however.
IBM acquired Sterling Commerce as a move to improve its ability to help clients accelerate their interactions with customers, partners and suppliers through dynamic business networks. In turn, the effort would be able to enhance efficiency and profitability. The join-up of the two companies would help integrating key business processes across channels and among trading partners, which covers marketing and selling and up to order management and fulfillment.
Leaders in the North American market were Halliburton with 4.02% jump, AMD with 3.58% rally, and Ford that raced to end at $11.56 at the end of Friday’s session. At the bottom, Goldman Sachs slumped 1.45% below Thursday’s close, while HP suffered from its bidding war with Dell as it shed 0.58% to end at $38.
Week Ahead
Looking ahead, key US data to be announced next week would be personal income and consumer spending on Monday, each with the same expected growth of 0.3% in July, up from unchanged position in June. Chicago PMI will due on Tuesday, with August figure expected at 57 against 62.3 on July. Conference Board’s consumer confidence data is seen down from 50.4 to 50.0 in August. ADP employment will be the first major data to observe this week as it acts as a lead to the Friday’s Nonfarm Payrolls. ADP is expected to report on Wednesday. ISM will be announced on the same day, with expected August figure at 53.5, down from 55.5 in July. Construction spending is seen to have declined in July by 0.6%, compared to the 0.1% increase in June. Jobless claims will be delivered on Thursday and expect a further drop in claims from 473,000 last week to 470,000. Productivity is seen to have worsened to -2.0% in 2Q after in the prior quarter it fell 1%. Factory orders are seen to have improved in July, gaining 0.4% after a 1.2% fall in June. Another housing data will be out next week as pending home sales for the period of July is expected to have declined 1.3% after it fell 2.6% in June. Nonfarm payrolls on Friday will be the key data for next week. The markets expected a decline of 105,000 after July’s fall of 131,000. Private payrolls are seen to have shrunk to just 30,000 from 71,000, while unemployment rate is seen to have inched up to 9.6% from 9.5%. Average hourly earnings are seen at 0.1% growth in August, slowing from 0.2% in July. ISM for the service sector will end the next week’s calendar with an expected fall to 53.2 in August from 54.3 in July.
All major indexes ended positive on Friday, excluding Hong Kong’s Hang Seng Index which ended at 0.07% lower at 20,597.30. Nikkei gained 84.58 points to end at 8,991.06, while Shanghai Composite Index added 7.26 points to end at 2,610.74. In Europe, DAX and FTSE 100 indexes turned higher as each gained 0.65% and 0.89%, respectively. American shares also rallied with the DJIA index jumped 164.84 points or 1.65% to end at 10,150.70, recovering from the sub-10,000 area. S&P 500 Index advanced 1.66% along with Nasdaq which ended 1.65% higher.
Yen Remained A Major Issue
Japanese shares rebounded on tough talk by the Prime Minister Naoto Kan who vowed to take decisive action whenever necessary if the yen continues to strengthen. USDJPY and EURJPY rallied on the comment and later in late New York trading session the pairs went even higher as Ben Bernanke indicated that the Federal Reserve will do whatever necessary to maintain economic recovery. USDJPY traded at 85.26 yen while EURJPY traded at 108.57 yen in late New York hours.
As the yen weakened, Japanese exporters gained. Nissan Motor ended 3.17% higher, Nikon Corp. gained 2.86%, while Daikin Industries ended at 2,955 with a 2.82% gains.
Nippon Ste
el was reported to rapidly building production bases and sales network overseas to fill overseas demand, dodging a takeover from European firm ArcelorMittal and to avoid rules on greenhouse gas emissions in Japan. Brazil, India, Thailand and African countries are the targets of expansion for Nippon Steel.Toyota announced that it would recall another 1.3 million cars on Thursday, adding to a long line of recalls it had conducted this year. It was said that there were three accidents involving defects to engine control modules or ECMs. Toyota gained 0.44% however, at the end of the day.
Hang Seng Down as Investors Stayed Cautious
Hong Kong’s Hang Seng index became the only index falling on Friday as investors stay
ed on the sideline ahead of GDP revision release and the speech from Ben Bernanke during the New York hours. The constituents were actually had mixed performances with BOC HK gained 2.99%, Esprit Holdings up 1.81%, and Yue Yuen Industrial went up 1.58%. Among losers were Hang Lung Properties with 2.57% decline, China Resources dipped 2.38%, while China Life resumed its fall to 1.79%.China Shenhua reported its 2Q net profit which hit a record 10.03 billion yuan, up from 8.98 billion in previous year. Consensus forecast 10.2 billion yuan net profit before the release. Coal production was up 3.2% during the first half from prior year to 109.2 million tonnes, while sales were up 11.6% to 137.4 million tonnes. The coal company warned however, that demand in second half could slow as the government’s economic policy could put a brake on electricity consumption.
On ratings updates, Cosco Pacific’s target raised to HK$13.20 against prior HK$12.10 by Nomura, while its rating was raised to BUY from NEUTRAL. China Resources’ target was raised to HK$32 from HK$29 by JP Morgan, while Henderson Land was downgraded to NEUTRAL from OUTPERFORM by Macquarie while its target cut to HK$50.70.
Europe Up on US GDP
European stocks were boosted by US data as Vodafone gained 2.78%, BT Group rose 2.76%, and Prudential settled 2.26% higher. DAX top gainers include Deutsche Telekom which rose 2.31% Volkswagen and Siemens with 1.64% and 1.25% gains, respectively. At the bottom were Commerzbank (-2.0%), BP (-1.54%), Rolls-Royce (-0.63%) and ThyssenKrupp (-0.18%).
Commerzbank slumped 2% as it was reportedly planning to sell new shares as soon as autumn this year. Around 5 billion euros are said to be sold, according to a Handelsblatt’s report. Another losing side was BP who fell 1.54% to 379.65 pence. The oil giant’s executives told investigators dealing with rig explosion at the Gulf of Mexico that they did not know who was in charge of the rig just before the explosion occurred.
Marks & Spencer announced its move to enter the Egyptian market as a part of its efforts to enhance glo
bal sales. Two stores were planned over the next two years in Cairo as the company saw opportunities in the clothing sector and shopping center businesses. At the end of the trading day, Marks and Spencer settled at 346.50 pence, gaining 1.73%.Vodafone was reportedly going to sell its assets in Poland, China and France. The move was not intended to improve cashflow, but rather as a move to discipline its international expansion. As a result, the Vodafone Essar, an Indian mobile phone firm said that it would delay its IPO plan until next year. Vodafone ended at 153.60 pence or up 2.78%.
The Fed Is Not Out of Options
US shares shot up as the GDP revision was higher than expected at 1.6% in 2Q. Consensus estimate was at 1.4% after previously the GDP was reported growing at 2.4%. Meanwhile, the decline in consumer sentiment from 69.6 in July to 68.9 in August was not able to deter stocks from rising. The figure was slightly lower than the consensus of 69.0.
Ben Bernanke’s speech in Jackson Hole, Wyoming sent a message to the markets that the Federal Reserve would be able to prevent another recession from happening. Growth was seen to be picking up in 2011 as households rebuild savings, banks expand lending and employment outlook improves. If necessary, the Fed would provide further monetary accommodation, but two criteria must be met: an increasing risk of deflation and, excluding whether deflation to happen or not, the Fed will safeguard the continuation of economic recovery. The Fed chairman indicated that three options are available: more purchases of securities, a change in the Fed’s policy statement and the reduction of interest rate that the Fed has been paying on banks’ excess reserves. Bernanke’s speech cheered the market as the Fed was initially thought of running out of options to prevent the second coming of the recession.
The bidding war over 3Par continued as Hewlett-Packard offered a counteroffer of $30 a share (or $2 billion) to acquire to compete with Dell’s offer of $27 a share. HP ended at $38, declining 0.58%, while Dell edged up 1.17% to $11.89.
Elsewhere, Bank of America was said to have to deal with a lawsuit regarding concealment of bonuses and losses at Merrill Lynch & Co. after it bought the brokerage firm. The news did not seem to hinder Bank of America’s advance to $12.64 as it settled 1.36% higher on Friday.
Intel cut its sales forecast on Friday as it saw weakened consumer PC market. Sales expectations were revised from between $11.2 billion and $12 billion to $11.00 billion plus or minus $200 million. Intel gained 1.05% to end at $18.37 instead of falling as slowdown in the PC markets had been expected long ago by investors.
Citigroup planned to open a China desk based in Singapore in order to encourage Chinese firms to set up business in Singapore. Products will cover cash management, trade services and finance, securities and fund services for Chinese clients. Citigroup ended the New York session at $3.76 or up 2.73%.
Sharing the same fate with Toyota, Ford also said that it would recall more than 575,000 units of Windstars from Canada and US due to problems with the rear axle corrosion. Ford was up 3.49% on late Friday, however.
IBM acquired Sterling Commerce as a move to improve its ability to help clients accelerate their interactions with customers, partners and suppliers through dynamic business networks. In turn, the effort would be able to enhance efficiency and profitability. The join-up of the two companies would help integrating key business processes across channels and among trading partners, which covers marketing and selling and up to order management and fulfillment.
Leaders in the North American market were Halliburton with 4.02% jump, AMD with 3.58% rally, and Ford that raced to end at $11.56 at the end of Friday’s session. At the bottom, Goldman Sachs slumped 1.45% below Thursday’s close, while HP suffered from its bidding war with Dell as it shed 0.58% to end at $38.
Week Ahead
Looking ahead, key US data to be announced next week would be personal income and consumer spending on Monday, each with the same expected growth of 0.3% in July, up from unchanged position in June. Chicago PMI will due on Tuesday, with August figure expected at 57 against 62.3 on July. Conference Board’s consumer confidence data is seen down from 50.4 to 50.0 in August. ADP employment will be the first major data to observe this week as it acts as a lead to the Friday’s Nonfarm Payrolls. ADP is expected to report on Wednesday. ISM will be announced on the same day, with expected August figure at 53.5, down from 55.5 in July. Construction spending is seen to have declined in July by 0.6%, compared to the 0.1% increase in June. Jobless claims will be delivered on Thursday and expect a further drop in claims from 473,000 last week to 470,000. Productivity is seen to have worsened to -2.0% in 2Q after in the prior quarter it fell 1%. Factory orders are seen to have improved in July, gaining 0.4% after a 1.2% fall in June. Another housing data will be out next week as pending home sales for the period of July is expected to have declined 1.3% after it fell 2.6% in June. Nonfarm payrolls on Friday will be the key data for next week. The markets expected a decline of 105,000 after July’s fall of 131,000. Private payrolls are seen to have shrunk to just 30,000 from 71,000, while unemployment rate is seen to have inched up to 9.6% from 9.5%. Average hourly earnings are seen at 0.1% growth in August, slowing from 0.2% in July. ISM for the service sector will end the next week’s calendar with an expected fall to 53.2 in August from 54.3 in July.
Friday, August 20, 2010
North American Markets Review – Thursday, August 19th 2010
US Shares Fell Amid Intel & McAfee Deal
Dow Jones Industrial Average settled 1.39% lower at 10,271.21 an
d S&P 500 index fell 18.53 points to close at 1,075.63. The tech index Nasdaq closed at 2,178.95 or down 1.66%. The stock market declined after the jobless claims were reportedly hitting 500K, coupled with the decline in the Philly Fed Index in August to -7.7 from +5.1 in July, suggesting the weakening manufacturing activity. The final piece of the economic data, Conference Board’s leading economic index rose 0.1% in July, short of the consensus of 0.2%. The coincident economic index was up 0.2% in July. Jobless claims, which is one of the sub-indexes supporting the LEI has worsened recently, pointing at potential slip in the next LEI.
Amid the worsening economic data, Intel Corp. announced its acquisition of McAfee Inc. for a price tag of $7.68 billion, as the chip maker giant aimed at integrating its semiconductors with security features, especially for smartphones, cars, TVs, and other devices. McAfee investors will get $48/share, about 60% premium over the current share price. While McAfee’s shares jumped 57% to $47.01, Intel shares slumped 3.5% to close at $18.90.
After the closing bell two tech companies reported their earnings. Dell announced earnings of $545 million or 28 cents per share, up from $472 million or 24 cents per share in the 2Q a year ago. Excluding one-time items, earnings were $629 million or 32 cents per share. The results were below consensus of 30 cents per share. Revenue was $15.5 billion, slightly above consensus of $15.2 billion and above prior year’s $12.8 billion. Main contributor of Dell’s results were the sales of commercial, or business computer products and services which showed networking revenue up 35% from last year, services revenue increased 57% and storage sales were 13% higher than last year. Mobility products increased 21% while desktop sales increased 17% from previous year. Looking ahead, the third quarter is seen to rise 14% to 19% from 3Q 2009’s sales of $12.9 billion.
From Palo Alto, California, Hewlett-Packard said that its quarterly profit increased 6%. Fiscal third quarter recorded a profit of $1.8 billion or 75 cents per share, against $1.7 billion or 69 cents per share last year. Revenue was up from $27.6 billion to $30.7 billion. Consensus was $1.07 per share with sales of $30.1 billion. Enterprise storage and server business led the earnings with 19% increase from the same quarter last year. Personal systems, which include PCs were up 17%, while imaging and printing contributed 9% increase in sales. On its future outlook, adjusted earnings are seen between $1.25/share to $1.27/share, with revenue in the range between $32.5 billion to $32.7 billion.
Dell ended the day at $12.04 or -1.23%, but slipped further during the after-hours to $11.70 or another 2.82%. HP also fell during extended hours to $40.35 or -1.01% from the closing price of $40.76 when it shed 1.45%.
Upgrades / Downgrades
Google at OUTPERFORM with $550 as target, according to Southridge. Strong balance sheet and internet ads should be beneficial.
Dow Jones Industrial Average settled 1.39% lower at 10,271.21 an
d S&P 500 index fell 18.53 points to close at 1,075.63. The tech index Nasdaq closed at 2,178.95 or down 1.66%. The stock market declined after the jobless claims were reportedly hitting 500K, coupled with the decline in the Philly Fed Index in August to -7.7 from +5.1 in July, suggesting the weakening manufacturing activity. The final piece of the economic data, Conference Board’s leading economic index rose 0.1% in July, short of the consensus of 0.2%. The coincident economic index was up 0.2% in July. Jobless claims, which is one of the sub-indexes supporting the LEI has worsened recently, pointing at potential slip in the next LEI. Amid the worsening economic data, Intel Corp. announced its acquisition of McAfee Inc. for a price tag of $7.68 billion, as the chip maker giant aimed at integrating its semiconductors with security features, especially for smartphones, cars, TVs, and other devices. McAfee investors will get $48/share, about 60% premium over the current share price. While McAfee’s shares jumped 57% to $47.01, Intel shares slumped 3.5% to close at $18.90.
After the closing bell two tech companies reported their earnings. Dell announced earnings of $545 million or 28 cents per share, up from $472 million or 24 cents per share in the 2Q a year ago. Excluding one-time items, earnings were $629 million or 32 cents per share. The results were below consensus of 30 cents per share. Revenue was $15.5 billion, slightly above consensus of $15.2 billion and above prior year’s $12.8 billion. Main contributor of Dell’s results were the sales of commercial, or business computer products and services which showed networking revenue up 35% from last year, services revenue increased 57% and storage sales were 13% higher than last year. Mobility products increased 21% while desktop sales increased 17% from previous year. Looking ahead, the third quarter is seen to rise 14% to 19% from 3Q 2009’s sales of $12.9 billion.
From Palo Alto, California, Hewlett-Packard said that its quarterly profit increased 6%. Fiscal third quarter recorded a profit of $1.8 billion or 75 cents per share, against $1.7 billion or 69 cents per share last year. Revenue was up from $27.6 billion to $30.7 billion. Consensus was $1.07 per share with sales of $30.1 billion. Enterprise storage and server business led the earnings with 19% increase from the same quarter last year. Personal systems, which include PCs were up 17%, while imaging and printing contributed 9% increase in sales. On its future outlook, adjusted earnings are seen between $1.25/share to $1.27/share, with revenue in the range between $32.5 billion to $32.7 billion.
Dell ended the day at $12.04 or -1.23%, but slipped further during the after-hours to $11.70 or another 2.82%. HP also fell during extended hours to $40.35 or -1.01% from the closing price of $40.76 when it shed 1.45%.
Upgrades / Downgrades
Google at OUTPERFORM with $550 as target, according to Southridge. Strong balance sheet and internet ads should be beneficial.
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