MARKET UPDATE
Equities are taking it right on the chin this morning on more banking
fears or concerns after what we saw yesterday. This is despite Buffett
buying the rest of Burlington Northern Santa Fe and despite yesterday
afternoon's Stanly Works and Black & Decker merger announcements.
ASIA: Nikkei -2.3%, Hang Seng -1.8%, Shanghai +1.2%. EUROPE: FTSE
-2.2%, DAX -1.7%, CAC -2.2%. The US dollar and bonds are trading
higher as a flight to quality. Oil is down $0.69 at $77.44 per NYMEX
WTI barrel.
ECONOMIC & MACRO EVENTS<
These are today’s top economic data:
10:00 AM EST Factory Orders
12:00 PM EST FOMC begins its two-day meeting
12:00 PM (11:45 to 2:00) Oct. Auto Sales
Major earnings reports are due from ABC, ACAS, ACOR, ADM, AMT, AUY,
CCI, EXPD, GET, HNT, ICE, JOE, KFT, MA, MHS, MRO, OSK, PER, PKD, PQ,
RCL, RDC, RL, SNH, TEVA, THC, UNM, VVUS, VIA, VNO, XCO.
BULLISH EVENTS
Viacom (VIA) significantly beat its earnings
expectations with $0.69 EPS vs. $0.57 estimates. Revenues were
slightly higher than estimates, but shares are indicated up 2%.
Burlington Northern Santa Fe (BNI) just got a $100
buyout from none other than large holder Warren Buffett. This is over
a 30% premium and should bring an eye out on the railroad sector.
MannKind (MNKD) is indicated up 5% after the biotech
company reported lower R&D costs with its losses.
InterContinental Exchange (ICE) posted net income of
$86.9 million, or $1.18 EPS, and up from $75 million or $1.04 EPS a
year ago. Revenue rose 27% to $256.3 million. That compares to
Thomson Reuters estimates of $1.15 EPS and $255+ million in revenues.
Exchanges have still grown.
Black & Decker (BDK) rose about 20% after Stanley
Works (SWK) offered a near merger of equals where BDK holders will own
49.5% of the combined company. The deal is expected to close in the
first half of 2010. <
BEARISH EVENTS
Ford Motor (F) announced after a big post-earnings
surprise up-day that it was filing a shelf registration statement.
That allows the company to raise capital and as it said "to boost
liquidity measures."
RBS (RBS) is showing that it is still fragile, or at
least reports are. There are reports in the U.K. that both Lloyds
(LYG) and RBS are in talks to raise substantial capital, a signal that
the banking system is still very fragile.
Kraft Foods (KFT) is reportedly going to formalize its
original offer for Cadbury (CBY) over the next week or so. This is
supposedly at the same price but in a hostile deal. This is ahead of
the company's third-quarter results.
Virgin Media Inc. (VMED) is planning to raise capital
in the high yield bond market, again. This would be its third recent
raise via a GBP500 million equivalent bond which will be used to buy
back existing debt.
Nokia (NOK) and Siemens (SI) have not been in the joint
venture for too long, yet the venture is laying off up to 5,700 workers
globally to cut annual costs by almost $750 million.
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