Jul 22, 2013 ... initially targeted by the regulator or their boss, commodities chief Blythe Masters,
said people familiar with the discussions. An announcement ...
Monday, July 22, 2013 On Tap
OPENING CALL
8:30 a.m. Jun Chicago Fed National Activity Index, National Activity Index (previous -0.3), 3 Month Moving Average (previous -0.43)
Stock futures were modestly higher Monday with earnings and more housing data dominating Monday’s agenda.
10:00 a.m. Jun Existing Home Sales, Total Sales (previous 5.18M), Percent Change (previous +4.2%), Month's Supply (previous 5.1), Median Price (previous 208000), Median Price - Yrly % Chg (previous +15.4%)
Recent Analyst Ratings Actions Newtek Business Services Resumed at Buy by Sidoti
“With only Existing Home Sales scheduled on the macro calendar this afternoon, traders may look to the earnings picture for guidance on market direction,” said Matt Basi, Head of U.K. Sales Trading at CMC Markets UK. “McDonald’s and Halliburton are both due to provide updates pre-market and Netflix will report after the close, as an earnings season that has been a real mixed bag to date rumbles on.”
EQUITIES J.P. Morgan Chase (JPM) is close to a roughly $410 million settlement of Federal Energy Regulatory Commission allegations that the company manipulated energy markets in California and the Midwest, said people familiar with the conversations. The nation’s largest bank by assets also would relinquish $200 million in unpaid claims from electricity buyers in California. The pact isn’t expected to result in sanctions for three J.P. Morgan energy traders initially targeted by the regulator or their boss, commodities chief Blythe Masters, said people familiar with the discussions. An announcement could be made as early as this week, but the terms aren’t yet final and could still change. Ms. Masters declined to comment through a spokesman. Apple (AAPL) and its Asian suppliers are testing larger screens for iPhones and tablets, officials at the company’s suppliers say. In recent months, Apple has asked for prototype smartphone screens larger than 4 inches and has also asked for screen designs for a new tablet device measuring slightly less than 13 inches diagonally, they said. The current iPhone 5 has a 4-inch screen, while Apple’s current iPad on sale has a 9.7-inch screen. The iPad Mini, a stripped-down version of its tablet computer, has a 7.9-inch screen. Whether either designs will make their way to market is unclear. Wednesday will mark the biggest moment in the five-month fight for company Dell (DELL). At 6 p.m. EST, shareholders will vote on Michael Dell’s and Silver Lake Partners’ $13.65-a-share buyout. Again. Last week, Mr. Dell and Silver Lake appeared to fall short of the 751 million shares they needed to win approval. Only about 77% of eligible shares voted, a turnout low enough to spook the company into adjourning the vote for fear of failure. Since shares not cast count as no votes, the buyout group had targeted a turnout of 85% Wednesday’s count will come down to whether an additional six days of cajoling by the buyout camp is successful at increasing the turnout.
Monday, July 22, 2013 If the proxy solicitors charged with trying to sway holders for Mr. Dell and Silver Lake fail to get out the vote or flip a few key votes to their side, as they appeared to just ahead of last week’s deadline, the vote could be in trouble again. Extended Stay Hotels is readying a plan to sell shares to the public, said people familiar with the matter, marking a quick turnaround for the once-troubled lodging company as its owners look to take advantage of a rising stock market. Extended Stay could file regulatory papers as soon as Monday morning stating intentions to pursue an initial public stock offering, the people said. The hotel chain has enlisted Deutsche Bank (DB), Goldman Sachs (GS) and J.P. Morgan Chase (JPM) to work on the expected IPO, which could come sometime toward the end of this year, one of the people said. A person familiar with the hotel company says it has equity valued between $3 billion to $4 billion.
FOREX Europe is yet to make its mark in the currency market with the main pairs sticking close to their opening levels. It means yen retained the gains seen as investors took profits on their short yen trades taken on the correct assumption that Japan’s ruling coalition would win Sunday’s Upper House parliamentary election. The dollar was broadly lower.
BONDS Treasurys continued the recent consolidation and completed a reversal of the “severe repricing seen on employment report Friday to leave yields in the long end at their lowest since July 4 and in the shorter end since before the FOMC meeting,” said analysts at Morgan Stanley. Data due Monday include the Chicago Fed Activity Index, June existing home sales, while later in the session the Treasury is scheduled to sell $35 billion new 2-year paper.
COMMODITIES The price of Brent crude will be pushed higher by rising U.S. imports and tighter global supply, predicted analysts at Morgan Stanley. Higher U.S. refinery runs, and the ability to move oil away from production centres more quickly, means that the U.S. is set to import more crude, they said. Simultaneously, “global supply continues to disappoint. Observable loadings... continue to remain at 5-year lows through August. South Sudan is shutting in production again (from as high as 200 kb/d) over new disagreements with Sudan. New protests at the port of Zueitina in Eastern Libya have once again cut off a material amount of Libyan exports, and Iraq continues to struggle in its efforts to restart the KirkukCeyhan pipeline.”
Monday, July 22, 2013 Spot gold was trading at its highest level in a month in Europe, breaking back above $1,300/oz as the dollar weakened and investors rushed to close out bets on lower prices. While money managers tracked by the Commodity Futures Trade Commission culled their bets on lower gold futures and options prices by 24% in the week through last Tuesday, short positions against gold remain elevated. “Positioning remains stretched, suggesting there is some way to go yet if the short positions decide to cover aggressively,” said ANZ. “Having said that, there will be those out there that are looking to fade this rally as prices reach the highest level in a month.”
Other Top Stories Of The Day U.S. Growth Outlook Stuck In Neutral A series of disappointing economic reports in recent weeks have dashed economists’ hopes from earlier this year that the U.S. was at last entering a phase of solid, self-sustaining growth.
Japan’s Ruling Coalition Secures Parliament Japanese voters granted Prime Minister Shinzo Abe more freedom to pursue his ambitious growth agenda and muscular foreign policy by handing his ruling coalition a landslide victory.
Growth Outlook in Neutral A series of disappointing economic reports have dashed economists’ hopes from earlier this year that the U.S. was at last entering a phase of solid, self-sustaining growth.
Dollar Falls After G-20, Japan Poll The dollar fell against the yen in Asia, as Japan’s upper-house election produced no market-moving surprises.
Monday, July 22, 2013 G-20 Emphasizes Growth Ahead of Austerity G-20 finance chiefs agreed at the weekend to place growth before austerity-a win for U.S. views amid concern that the global recovery remains perilously weak and uneven.
EU Banks Stung by Detroit Bust Detroit’s bankruptcy is intersecting with the troubled European banking industry, causing further distress for both the Motor City and its European lenders, including UBS.
Portuguese President Backs Coalition Portuguese President AnÌbal Cavaco Silva threw his support behind the current ruling coalition, ending weeks of political uncertainty that came close to derailing the country’s Ä78 billion ($102.5 billion) international bailout.
UBS Settles With Regulator UBS settled with a regulator over allegedly misrepresenting U.S. mortgage bonds packaged for sale during the housing bubble, leading to $919 million in charges that will knock its results.
Recovery of Japan Economy Finally In View BOJ’s Takehiro Sato said the overseas risks that forced the central bank to cut its forecasts in the last fiscal year have diminished somewhat.
G-20 Emphasizes Growth Ahead Of Austerity The Group of 20 nations agreed to place growth before austerity in a weekend meeting of finance ministers, representing a win for U.S. views.
Monday, July 22, 2013 Today In Canada Earnings scheduled Canadian National Railway (CNI) 2Q; analysts expect profit of C$1.62 a share
Stocks to watch Golds miners, including Barrick and Goldcorp, followed gold prices higher Friday, which were up in the wake of dovish comments from Fed Chairman Bernanke
Calendar items (all times EDT) Canadian National (CNI) 2Q conference call at 4:30 p.m.
