Flavin Nooney & Person Market Flash 7.13.14
courtesy of @seekingalpha
The eurozone and Greece have agreed in principle to a third bailout that will keep the beleaguered country in the currency area, for now, after almost total capitulation from Prime Minister Alexis Tsipras. Greece will have to put €50B of state assets in a trust fund so that they can be sold off and the proceeds used to repay debt. The government will also have to get further austerity measures through parliament, a tough ask given the “no” vote in the recent referendum.
Chinese exports grew for the first time in four months in June, rising 2.8% on year after dropping 2.8% in May and easily beating expectations of -0.2%. Imports slumped 6.1%, although that represented an improvement from a plunge of 18.1% previously. Still, the weak imports indicate that domestic demand remains tepid and adds to the feeling that the central bank could further loosen monetary policy.
While an agreement seems to have been reached over Greece, could a deal between Iran and six world powers over the country’s nuclear program also be in the offing? The breaking news at the time of writing was that the Iranian president was set to address his nation at 5.30 pm GMT following marathon talks. The idea is that Iran will curb its activities in exchange for sanctions relief.
European equity markets and U.S. futures were higher at the time of writing after news that a deal with Greece has been reached. Asian shares also rose following strong export figures from China and the recent rout in the country’s stocks. The euro took a jump on initial delight at the agreement with Athens, but soon fell back down to earth and was -0.7% at $1.11. Oil was lower in anticipation of a deal with Iran over its nuclear program.
U.S. power stations generated 31% of electricity from natural gas in April compared with 30% from coal, research firm SNL Energy estimates, the first time that gas has overtaken coal. In 2010, the latter accounted for 45% of power. The trend has been a long time in coming, with the shale boom causing gas prices to plummet and increasing regulation leading to higher expenses for coal.
Nintendo CEO Satoru Iwata has died aged 55 from bile duct cancer. Iwata became CEO in 2002 and led the company to ascendancy in the video-game market with the introduction of hit products the Wii and Game Boy Advance SP. However, Iwata also oversaw a subsequent decline in sales at Nintendo (OTCPK:NTDOY) as he held out against entering the mobile market until only recently.
BP may have to pay out over $2B more than the $10.3B it has set aside to compensate businesses over the 2010 oil spill in the Gulf of Mexico, the FT reports. The money for the firms is in addition to the $18.7B settlement that BP (NYSE:BP) agreed to last week, which resolved all actions against the company from federal, state and local governments.
Detroit’s “Big Three” carmakers are today due to start talks with the United Auto Workers (UAW) over a new contract for employees, with the WSJ reporting that the two-tier wage system is likely to be a main topic of discussion. Ford (NYSE:F), General Motors (NYSE:GM) and Fiat Chrysler (NYSE:FCAU), along with the UAW, have until September 14, when the current contract expires, to reach an agreement.
Serial deal-maker Martin Franklin appears to have had a busy weekend. Chemicals maker Platform Specialty Products (NYSE:PAH), which he founded and chairs, has agreed to acquire British peer Alent (OTC:ALNXF) for £1.35B ($2.09B) in cash. Franklin’s other company, consumer-goods group Jarden, is reportedly close to agreeing to a deal to purchase Waddington Group, a provider of disposable dishes and utensils, in a transaction worth $1.35B.
Diversified energy firm Black Hills (NYSE:BKH) has agreed to acquire natural-gas utility SourceGas Holdings for $1.89B from investment funds managed by General Electric (NYSE:GE) and Alinda Capital Partners. The deal allows the South Dakota-based Black Hills to expand in Colorado, Nebraska, Wyoming and Arkansas, and “will add meaningfully to Black Hills’ earnings per share beginning the first calendar year after closing,” the company said.
Apple grabbed 92% of the operating profit of the world’s top eight smartphone companies in Q1, financial firm Canaccord Genuity calculates, up from 65% a year earlier. Samsung (OTC:SSNLF) took 15% in this year’s period. The reason why Apple (NASDAQ:AAPL) and Samsung earned over 100% combined is because some rivals only broke even or lost money.
In Asia, Japan +1.6% to 20090. Hong Kong +1.3% to 25224. China +2.4% at 3970. India +1.1% at 27961.
In Europe, at midday, London +0.7%. Paris +2%. Frankfurt +1.4%.
Futures at 6:20: Dow +0.7%. S&P +0.7%. Nasdaq +0.9%. Crude -0.6% to $52.40. Gold -0.3% to $1154.90.
Ten-year Treasury Yield +4 bps at 2.46%.
Today’s economic calendar:
2:00 PM Treasury Budget
Notable earnings after today’s close: NEPT, OZRK