Flavin Nooney & Person Market Flash 8.03.14
credit to @seekingalpha
The Athens Stock Exchange has reopened and it’s not pretty. The ASE Stock Index plummeted 23% after being closed for five weeks, with banking shares down by as much as 30% – the maximum allowed. While local traders are able to buy stocks, bonds, derivatives and warrants under certain conditions, international investors don’t face any restrictions, as long as they were active in the markets before they were shuttered. GREK -2.8%; NBG -5% premarket.
The eurozone manufacturing sector grew faster than previously thought in July, as the 19-nation bloc shrugged off concerns of the Greek crisis and rising prices kept new orders in check. Markit’s final eurozone manufacturing PMI came in at 52.4, just shy of June’s 52.5, but beat a preliminary estimate of 52.2. The Netherlands, Spain, Austria, Germany and Italy all enjoyed healthy growth, with the latter seeing its strongest expansion in more than four years.
China’s factory activity shrank more than initially estimated last month, tightening the most in two years and extending the sell-off of Chinese equities. The final Caixin/Markit China Manufacturing PMI dropped to 47.8, from 49.4 in June, marking the fifth straight month of contraction. The final reading was lower than the flash PMI of 48.2 and the official manufacturing PMI, which fell to 50.0 in July from 50.2 in June. Shanghai -1.1%; Shenzhen -1.7%; Chinext -5.5%.
Meanwhile, China’s market regulator has suspended a trading account of U.S.-based hedge fund Citadel, in the watchdog’s first known move against a big foreign investor. The securities commission, which has declared war on “malicious” short selling, has been at the forefront of a government campaign to halt a meltdown of its stock markets (which have tumbled about 30% since mid-June). Thirty-four accounts have so far been suspended for trading irregularities.
Pacific Rim trade officials failed to clinch a final deal for the Trans-Pacific Partnership on Friday following several days of intense talks in Hawaii. Key sticking points: Auto trade between Japan and North America, New Zealand’s dairy exports and monopoly periods for next-generation drugs. The deadlock may also sink U.S.-led plans, which aimed to finalize the trade deal by the end of 2015.
President Obama will unveil the final version of his plan to tackle greenhouse gases from coal-fired power plants today, in what he calls the nation’s most important step to combat climate change. The revised Clean Power Plan will seek to slash carbon emissions from the power sector 32% (from 2005 levels) in 2030, and will require each state to submit a plan next year that spells out how it will meet the goal assigned to it.
A consortium of German carmakers, including BMW (OTCPK:BAMXY), Daimler (OTCPK:DDAIY) and Audi (OTCPK:AUDVF), have agreed to buy Nokia’s (NYSE:NOK) maps business HERE for an enterprise value of €2.8B ($3.07B), as they look to extend their reach into digital services for connected cars. The sale will also help Nokia focus on integrating its €15.6B purchase of Alcatel-Lucent (NYSE:ALU), which will see the Finnish group create the world’s second largest network equipment maker.
More than two months after the WSJ reported Uber (Pending:UBER) is looking at new funding rounds, the car-hailing giant appears to have raised another $1B, valuing it at almost $51B – more than Netflix (NASDAQ:NFLX), GM (NYSE:GM), FedEx (NYSE:FDX), and many other S&P 500 companies. Sources say investors in the latest round include Microsoft (NASDAQ:MSFT) and the investment arm of Indian media conglomerate Bennett Coleman & Co.
Verizon has missed its Sunday deadline to secure a deal with more than 37,000 of its wireline employees, but the unions representing them said they will keep working without a contract while talks continue. Since June, the two sides have argued over Verizon’s (NYSE:VZ) plans to cut costs by controlling healthcare and pension-related benefits over a three-year period. A walkout is still on the table. Unions voted last week to go on strike, if needed, and a similar dispute ended in a two-week walkout back in 2011.
Just two weeks after getting its merger with DirecTV (NASDAQ:DTV) approved, AT&T (NYSE:T) will introduce its first package of TV and wireless services on Aug. 10. The package will allow subscribers to get high-definition video programming on up to four TVs, unlimited talk and text on four smartphones, and 10 gigabytes of shared wireless data for $200 a month – saving consumers $600 in the first year. The carrier describes the new bundle as the “first-ever nationwide package of TV and wireless services.”
Honda reported net profit in April-June that jumped nearly 20% as strong sales and a weak yen helped offset the impact of the Takata (OTCPK:TKTDY) airbag crisis. Despite this year’s slowdown in the world’s largest vehicle market, the automaker was able to boost its Chinese sales by 30% after introducing new compact and crossover models. Honda’s (NYSE:HMC) net income rose to ¥186B ($1.5B) for the three months, up from ¥155.6B a year earlier, while sales jumped 15.5% to ¥3.7T.
Iran is planning to buy up to 90 planes a year from Boeing (NYSE:BA) and Airbus (OTCPK:EADSY) to revive its aging fleet, as European delegations head to the country in record numbers with expectations that trade sanctions will soon be lifted. Last month’s nuclear accord does little to end a raft of U.S. sanctions against the Islamic Republic, but civilian aircraft makers are an exception to the rule – a boon to companies like Boeing.
In another retreat from the emerging markets, HSBC (NYSE:HSBC) declared it would sell its Brazilian business to Bradesco (NYSE:BBD) for $5.2B, after years of feeble performance. The news came with the bank’s second-quarter results. Profit for the period fell 4% to $4.4B as HSBC continued to overhaul its operations to cut billions in annual costs by the end of 2017.
Although it still looks shaky, Halliburton (NYSE:HAL) has received a request from the European Commission for additional information about its proposed $35B merger with rival Baker Hughes (NYSE:BHI). Halliburton has also responded to a second request made by U.S. antitrust officials considering whether to approve the merger. Should the deal go through, the combined company would overtake Schlumberger (NYSE:SLB) as the world’s No. 1 oilfield services provider.
In Asia, Japan -0.2% to 20548. Hong Kong -0.9% to 24411. China -1.1% to 3623. India +0.3% to 28187.
In Europe, at midday, London -0.1%. Paris +0.4%. Frankfurt +0.5%.
Futures at 6:20: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude -1.6% to $46.36. Gold -0.3% to $1092.10.
Ten-year Treasury Yield flat at 2.19%
Today’s economic calendar:
8:30 Personal Income and Outlays
8:30 Gallup US Consumer Spending Measure
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending