Wednesday, January 29, 2014

Wall Street Breakfast: Must-Know News

Jan. 29, 2014 6:33 AM ET by: Wall Street Breakfast 7 comments |  Includes: BX, JPM, MCQEF, NVS, PLCM, QCOM, QQQ, S, SIMO, SPY, T, TEVA, TMUS, VZ, WGPLF, YHOO 
                                

Top Stories
Turkish "shock and awe" boosts world stocks. The Turkish lira has jumped against the dollar following "shock and awe" rate hikes by the Central Bank of Turkey late yesterday (CBRT), which have also sent many global equities indexes higher along with some other emerging-market currencies. The CBRT increased its overnight lending rate to 12% from 7.75% and the overnight borrowing rate to 8% from 3.5% in an attempt to defend the lira, which has been hit by domestic scandal and the prospect of Fed tapering. The USD-TRY was -1.4% at the time of writing, but the ISE 100 stock index was -1% after being in the green earlier.
AT&T shares fall despite $6.9B profit. AT&T's (T) Q4 earnings beat Street forecasts but shares dropped 2.1% premarket following disappointing subscriber growth. The carrier swung to a profit of $6.9B from a loss of $3.9B a year earlier, when earnings were harmed by pension costs and Hurricane Sandy. EPS came in at $0.53 and revenues rose 1.8% to $33.2B. AT&T added a net 566,000 subs, well below consensus of 636,000 and the figures for Verizon Wireless (VZ) and T-Mobile U.S. (TMUS).
Obama to use presidential power to push economic policies. As expected, President Obama said in his State of the Union address last night that he will use his executive power where he can to implement his economic and other policies in an attempt to narrow the gap between rich and poor. Obama announced a dozen such proposals, including raising the minimum wage to $10.10 an hour for future federal contract workers. He also plans to create a government-coordinated retirement savings program that would provide a guaranteed return.
Top Stock News
Teva rises after FDA OKs higher-dosage Copaxone. Teva's (TEVA) shares were +2.9% premarket after the FDA approved a 40 mg dose of the company's multiple sclerosis drug Copaxone that would be administered three times a week. Teva plans to convert 57% of patients to the new regimen by the year-end from the daily dose of 20 mg. The longer-lasting formulation should help Teva cope with generic competition when Copaxone's patent protection expires in May. The higher-dosage version is protected until 2030. (PR)
Yahoo revenues continue to slip. Yahoo (YHOO) CEO Marissa Mayer has been at the company for 18 months and has spent lots of money on acquisitions, but she's still not managed to turn around the firm's revenues. Q4 sales dropped 6% to $1.27B as ad prices fell again, although revenues were in line with consensus, while EPS of $0.46 topped forecasts and net profit rose to $348.2M from $272.3M a year earlier. "Normally you get better pricing in Q4," says BGC Partners analyst Colin Gillis. "The core business is shrinking." Shares were -3.4% premarket.
Novartis Q4 earnings miss expectations. Novartis' (NVS) Q4 earnings undershot forecasts as adjusted EPS dropped 3% to $1.20, hurt by currency fluctuations. Net income increased to $2.06B from $2.02B and sales rose 2% to $15.08B, lifted by recently-launched products and strong sales in China and Russia. Novartis projected that 2014 sales will grow by a low- to mid-single-digit percentage in constant currencies, assuming that a competitor to the company's blockbuster blood-pressure drug Diovan is launched at the start of Q2. (PR)
Qualcomm faces massive fine in China. Qualcomm (QCOM) is facing a penalty of over $1B in China as it continues talks with the country's National Development and Reform Commission (NDRC) over an antitrust probe. Earlier this month, Qualcomm said it was uncertain what the investigation was about. The NDRC can fine a company 1-10% of its revenues for the previous year - in FY 2013, Qualcomm earned $12.3B in China. The firm could get away with a lower penalty if it makes licensing and other commitments regarding its technology.
WSJ: DOJ signals "skepticism" about Sprint/T-Mobile deal. Sprint (S) CEO Dan Hesse and SoftBank (OTCPK:SFTBF, OTCPK:SFTBY) Chief Masayoshi Son met DOJ officials this month regarding a possible bid for T-Mobile USA (TMUS), and were told that a deal would be viewed "with skepticism," the WSJ reports. The DOJ and FCC have been expected to show intense scrutiny of a merger that would lower the number of nationwide U.S. carriers to three, and feature an operator that has been upending the U.S. mobile industry with new promotions and pricing schemes.
JPMorgan could decide on buyer for commodities unit this week. JPMorgan (JPM) could choose a winner this week in the auction of its commodities unit, which has attracted interest from Blackstone (BX), Macquarie (OTC:MCQEF) and Mercuria Energy, Bloomberg reports. The business could fetch $2B, below the $3.3B JPMorgan was apparently looking for when it put the business on the block.
Top Economic & Other News
German consumer sentiment rises to 6 1/2 year high. The German Gfk consumer confidence index has climbed to the highest level since August 2007, rising to 8.2 heading into February from 7.7 previously and topping consensus of 7.6. The strengthening of the consumer outlook adds to continuing bullishness among German investors and businesses, providing hope that the country can help firm up the eurozone's fragile recovery.

Top Ideas: Movers and Great Calls
1) Last Tuesday, Fincom Investment Partners called Wellgreen Platinum (OTCQX:WGPLF) a gem among the rubble of mining stocks and projected that the stock could rise by as much as 1,000%. Shares are +35% since. Read article »
2) On July 1, tech expert Ashraf Eassa predicted significant opportunity beyond near-term concerns for semiconductor firm Silicon Motion (SIMO). After a blowout earnings report on Monday, the stock is +63% to date. Read article »

Top Ideas To Watch
1) Communications provider Polycom (PLCM) offers a solid risk/reward profile for 2014, with share repurchases, an attractive product line and cost-cutting being factors that can drive upside. Read article »
2) Mobile device maker Micronet Enertec has explosive growth potential, says Igor Novgorodtsev, obscured by a limited operating history and the accounting effects of a recent merger; the core business alone could lead to 150% upside. Read article »

Top Ideas are the best long and short ideas on Seeking Alpha. SA PRO subscribers receive early access to these Top Ideas, which often move markets. For more information about SA PRO and becoming a subscriber, click here.

Today's Markets:
In Asia, Japan +2.7% to 15384. Hong Kong +0.8% to 22142. China +0.6% to 2050. India -0.2% to 20647.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt +0.3%.
Futures at 6:20: Dow flat. S&P flat. Nasdaq +0.15%. Crude -03% to $97.08. Gold +0.3% to $1254.40.
Ten-year Treasury Yield -1 bps to 2.76%
Today's economic calendar:
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
11:30 FRN 2-Yr Note Auction
2:00 PM FOMC Announcement
Notable earnings before today's open: AME, AUDC, BA, BABY, BIIB, CAJ, CFR, CP, CVLT, EMC, ENR, EVER, EVR, FLWS, GIB, GNTX, HES, ISSI, JBLU, MDP, MKC, MKTX, MPC, MPLX, MTOR,MWV, NMM, NVS, NYCB, PSX, PSXP, PX, RES, ROK, SEIC, SLAB, SO, TCB, TUP, VLO, WLP
Notable earnings after today's close: ACXM, AF, ALGT, AVB, CACI, CAVM, CBT, CDNS, CLB, CMO, CNQR, COHR, CTXS, DOX, DRE, ELY, EXAR, FB, FBHS, FLEX, FTNT, HBI, IEX, INFN, ININ,INVN, IRF, ISIL, KEX, LRCX, LVS, MLNX, MUR, NOW, NSR, OPLK, PRXL, QCOM, QGEN, QLGC, QTM, SFG, SGI, SLG, SPB, SYMC, TSCO, TTEK, VPRT, VRTX

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