New York:
May 22 1:44 | London:
May 22 6:44 | Tokyo:
May 22 14:44
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US Market Update TRADETHENEWS.COM STAFF
Q3 Opens with a Merger Monday
DJIA -77.5 Nasdaq -4.7 S&P 500 -5.8
Economic Data
- (RO) Romania Jun International Reserves: $37.1B v $37.7B prior
- (CZ) Czech Jun Budget Balance ((CZK): -71.7B v -79.1B prior
- (RU) Russia Jun Reserve Fund: $60.5B v $60.2B prior; Wellbeing Fund: $85.6B v $85.5B prior
- (US) Jun Final Markit US PMI Manufacturing: 52.5 v 52.9e
- (BR) Brazil Jun PMI Manufacturing: 48.5 v 49.3 prior
- (US) Jun ISM Manufacturing: 49.7 v 52.0e; Prices Paid: 37.0 v 45.7e
- (US) May Construction Spending M/M: 0.9% v 0.2%e
- (MX) Mexico May Remittances: $2.3B v $2.3Be
- Today is the first trading day of the third quarter of 2012 and US equities are in the red following the very weak June ISM Manufacturing data. The June indicator of factory activity contracted unexpectedly, with the ISM manufacturing index dropping below the key 50 level, down from May's 53.5. This puts the index in contraction for the first time since July 2009. There was concern about the new orders component, which fell to 47.8 from above 60 in May. Overnight a slew of European manufacturing PMI data for June were very soft. Any enthusiasm that emerged from the euro zone summit last week is gone after northern European officials poured cold water on plans to use the ESM to either buy bonds or recapitalize troubled banks. Spot gold is sustaining most of the big 3.5% gain from Friday, but has dipped back below $1,600. Crude has ticked down to the $83 handle after its big move on Friday as the EU oil embargo against Iran goes into effect.
- It's the first big merger Monday in some time this morning, with a handful of major deals making headlines. The most high-profile deal was Bristol Myers acquisition of biotechnology firm Amylin for about $5.3 billion in cash, or $31/shr, adding to the pharma giant's portfolio of diabetes treatments. Note that the merger agreement contains a provision under which Amylin has agreed not to solicit any competing offers for the company. As part of the deal, Bristol-Myers has a deal with AstraZeneca to collaborate on developing Amylin's products once the acquisition is completed. AstraZeneca will pay $3.4 billion in cash for these rights.
- There were three big M&A deals in the tech sector. Dell finally beat out rivals in its pursuit of Quest Software, reaching a deal to acquire the firm for $2.4 billion in cash in an effort to expand its software business. Dell's $28/shr offer beats the recent $27.50 bid from private investment firm Insight Ventures. Ingram Micro will acquire wireless device distributor BrightPoint for $840 million (including around $190 million in debt), or $9/shr. The deal expands IM's presence in the high-margin mobile segment and helps offset the much weaker PC market. As long rumored, Micron will pick up bankrupt DRAM maker Elpida for about $750 million, plus an additional $1.75 billion in additional milestone payments through 2019.
- The euro continued to come off the recent highs seen last Friday as the euphoria that followed the EU summit continued to fade during the US session morning as Northern European officials offered commentary that they would limit the uses of the ESM bailout facility. Finland said that it and the Netherlands would block ESM bond purchases in the secondary market while Germany warned it was wrong to say that there would not be any conditions on aid. EUR/USD dipped below the 1.26 handle following the commentary. The yen maintained a form tone against the major pairs on some risk aversion flows. USD/JPY was at 79.48 by the mid-NY morning while EUR/JPY cross was hovering around its parity mark.
Looking Ahead
- 11:30 (US) Treasury to sell $30B in 3-Month and $27B in 6-Month Bills
- 11:30 (UK) Chancellor Osborne address LIBOR banking scandal
- 12:00 (IT) Italy Jun New Car Registrations Y/Y: No est v -14.3% prior
- 13:00 (MX) Mexico Jun IMEF Manufacturing Index: No est v 54.3 prior; Non Manufacturing Index: No est v 55.0 prior
- 13:00 (IT) Italy Jun Budget Balance: No est v -€4.3B prior; Budget Balance YTD: No est v -€35.1B prior
- 13:15 (US) Fed's Williams Speaks in San Francisco
- 14:00 (BR) Brazil Jun Trade Balance: $0.4Be v $2.0B prior; Exports: $19.1Be v $23.2B prior; Imports: $18.8Be v $20.3B prior
- 21:00 (CN) China Jun Non-Manufacturing PMI: No est v 55.2 prior
- Tues (AU) Australia Central Bank (RBA) Interest Rate Decision: Expected to leave the Cash Target unchanged at 3.50%
Economic Data
- (RO) Romania Jun International Reserves: $37.1B v $37.7B prior
- (CZ) Czech Jun Budget Balance ((CZK): -71.7B v -79.1B prior
- (RU) Russia Jun Reserve Fund: $60.5B v $60.2B prior; Wellbeing Fund: $85.6B v $85.5B prior
- (US) Jun Final Markit US PMI Manufacturing: 52.5 v 52.9e
- (BR) Brazil Jun PMI Manufacturing: 48.5 v 49.3 prior
- (US) Jun ISM Manufacturing: 49.7 v 52.0e; Prices Paid: 37.0 v 45.7e
- (US) May Construction Spending M/M: 0.9% v 0.2%e
- (MX) Mexico May Remittances: $2.3B v $2.3Be
- Today is the first trading day of the third quarter of 2012 and US equities are in the red following the very weak June ISM Manufacturing data. The June indicator of factory activity contracted unexpectedly, with the ISM manufacturing index dropping below the key 50 level, down from May's 53.5. This puts the index in contraction for the first time since July 2009. There was concern about the new orders component, which fell to 47.8 from above 60 in May. Overnight a slew of European manufacturing PMI data for June were very soft. Any enthusiasm that emerged from the euro zone summit last week is gone after northern European officials poured cold water on plans to use the ESM to either buy bonds or recapitalize troubled banks. Spot gold is sustaining most of the big 3.5% gain from Friday, but has dipped back below $1,600. Crude has ticked down to the $83 handle after its big move on Friday as the EU oil embargo against Iran goes into effect.
- It's the first big merger Monday in some time this morning, with a handful of major deals making headlines. The most high-profile deal was Bristol Myers acquisition of biotechnology firm Amylin for about $5.3 billion in cash, or $31/shr, adding to the pharma giant's portfolio of diabetes treatments. Note that the merger agreement contains a provision under which Amylin has agreed not to solicit any competing offers for the company. As part of the deal, Bristol-Myers has a deal with AstraZeneca to collaborate on developing Amylin's products once the acquisition is completed. AstraZeneca will pay $3.4 billion in cash for these rights.
- There were three big M&A deals in the tech sector. Dell finally beat out rivals in its pursuit of Quest Software, reaching a deal to acquire the firm for $2.4 billion in cash in an effort to expand its software business. Dell's $28/shr offer beats the recent $27.50 bid from private investment firm Insight Ventures. Ingram Micro will acquire wireless device distributor BrightPoint for $840 million (including around $190 million in debt), or $9/shr. The deal expands IM's presence in the high-margin mobile segment and helps offset the much weaker PC market. As long rumored, Micron will pick up bankrupt DRAM maker Elpida for about $750 million, plus an additional $1.75 billion in additional milestone payments through 2019.
- The euro continued to come off the recent highs seen last Friday as the euphoria that followed the EU summit continued to fade during the US session morning as Northern European officials offered commentary that they would limit the uses of the ESM bailout facility. Finland said that it and the Netherlands would block ESM bond purchases in the secondary market while Germany warned it was wrong to say that there would not be any conditions on aid. EUR/USD dipped below the 1.26 handle following the commentary. The yen maintained a form tone against the major pairs on some risk aversion flows. USD/JPY was at 79.48 by the mid-NY morning while EUR/JPY cross was hovering around its parity mark.
Looking Ahead
- 11:30 (US) Treasury to sell $30B in 3-Month and $27B in 6-Month Bills
- 11:30 (UK) Chancellor Osborne address LIBOR banking scandal
- 12:00 (IT) Italy Jun New Car Registrations Y/Y: No est v -14.3% prior
- 13:00 (MX) Mexico Jun IMEF Manufacturing Index: No est v 54.3 prior; Non Manufacturing Index: No est v 55.0 prior
- 13:00 (IT) Italy Jun Budget Balance: No est v -€4.3B prior; Budget Balance YTD: No est v -€35.1B prior
- 13:15 (US) Fed's Williams Speaks in San Francisco
- 14:00 (BR) Brazil Jun Trade Balance: $0.4Be v $2.0B prior; Exports: $19.1Be v $23.2B prior; Imports: $18.8Be v $20.3B prior
- 21:00 (CN) China Jun Non-Manufacturing PMI: No est v 55.2 prior
- Tues (AU) Australia Central Bank (RBA) Interest Rate Decision: Expected to leave the Cash Target unchanged at 3.50%
Copyright (c) 2012 Trade The News, Inc.
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