Thursday, March 5, 2015

Wall Street Breakfast: Signs Of A Top?


Economy
Stocks fell for the second straight day, continuing their modest pullback from recent all-time highs and sending the Dow and S&P to their lowest levels in two weeks. Declines were broad-based, with nearly all S&P 500 sectors in negative territory. 3 comments »
U.S. investors have pulled $16.8B from equity-based ETFs in 2015 and sent $16.9B to bonds. That’s the biggest divergence in quarterly data going back to 2000. With nine straight quarters of stock-market gains, equity valuations at a five-year high, and the Fed bracing to raise interest rates, investors may be rethinking the $240B they've pumped into U.S. stocks over the past two years. 1 comment »
The ECB will focus on improved growth prospects when it meets today, and unveil some details of its €1T+ bond buying plan. The bank is expected to keep interest rates on hold and lift growth forecasts after a string of positive data surprises. But it could cut inflation projections or even flip to expecting deflation due to the effect of low oil prices. 1 comment »
China lowered its growth forecast to 7% for 2015, an acknowledgement of the "new normal" of slower growth in the world's No.2 economy. Last year's target was around 7.5%; the lower number is in line with expectations. 7 comments »
Mohamed El-Erian's prediction for oil in 2015: i) Expect continued consolidation, volatile at times, with a tendency toward higher oil prices. ii) There will be no quick return to the $100 level. iii) Low-cost producers of oil and energy products will expand their market share. 2 comments »
Global trade in liquefied natural gas (LNG) will exceed $120B in 2015, surpassing iron ore as the most valuable commodity after oil, Goldman analysts say. Competition among producers will increase as buyers shift away from long-term contracts. U.S. supplies coming online and other factors will lead to declines in LNG prices "until they can challenge thermal coal in the fuel mix of the power sector," the report says. Comment »
Stocks
Abbvie surprised investors by acquiring cancer biotech Pharmacyclics (NASDAQ:PCYC) with a bid of about $21B. Earlier Wednesday there were rumors J&J (NYSE:JNJ) would acquire PCYC. With the deal, AbbVie (NYSE:ABBV) gets blockbuster Imbruvica for hematologic malignancies, which logged $548M in revenues in 2014, and could go all the way to $5B/year, and which will allow ABBV to lessen its reliance on Humira. 18 comments »
Costco reported FQ2 EPS of $1.35 on revenue of $27.45B, largely in line with estimates. Same-store sales grew 8%, beating expectations of 6.4% growth. Comment »
Etsy plans to go public on the Nasdaq under the symbol ETSY. Etsy's top-line numbers suggest a valuation of well above $1B. The company had 2014 revenue of $195.6M (+56% Y/Y), and a net loss of $15.2M. In January it was reported the craft and vintage goods marketplace could seek to raise $300M.3 comments »
Apple is reportedly delaying production of the 12.9" iPad to September due to supply issues. Apple (NASDAQ:AAPL) previously planned to start production in calendar Q1. The larger iPad is expected to be aimed at enterprises and creative pros. iPad sales have been a weak spot for Apple lately. 34 comments »
HBO is talking with Apple (AAPL) as a launch partner for its streaming service, to be called "HBO Now," which rolls out next month. A standalone service from HBO (NYSE:TWX), often a $15-$20/month add-on, could send ripples throughout the pay TV industry. For Apple, it would mean a chance to add a high-quality offering to push adoption of Apple TV. 27 comments »
Simon Property Group has made overtures for rival Macerich (NYSE:MAC) over the past few weeks, in an apparent bid to combine two of the largest U.S. shopping-mall owners. In November, Simon (NYSE:SPG) disclosed a 3.6% stake in Macerich, seen by many as the first step in a takeover attempt. MAC shares have risen to new multi-year highs since then, and were +5.25% late last night. Comment »
Bristol-Myers rose more than 6% after the FDA approved Opdivo for the treatment of patients with advanced (metastatic) squamous non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy. NSCLC is the most common form of lung cancer, affecting almost 90% of lung cancer patients. There are 225K new diagnoses of lung cancer in the U.S. each year and 160K deaths. This was an extraordinarily quick approval even under Priority Review. 1 comment »
Today's Markets:
In Asia, Japan +0.3% to 18751. Hong Kong -1.1% to 24193. China -0.95%to 3248. India +0.2% to 29448.
In Europe at midday, London +0.2%. Paris +0.5%. Frankfurt +0.3%.
Futures at 6:00: Dow flat. S&P flat. Nasdaq +0.1%. Crude +1.5% to $52.30. Gold -0.1% flat to $1199.80.
10-year Treasury Yield flat at 2.12%
Notable earnings before Thursday’s open: ACRE, AMRC, AXAS, BKCC,BRLI, BTE, CECE, CIEN, CNQ, COST, CSIQ, CTCM, CVGW, DATE, EXK, GTN,JOY, KR, MEI, NAVB, PRFT, SFE
Notable earnings after Thursday’s close: ADUS, ALDW, ALJ, ATSG, CKP,COO, DMD, DMND, EBS, ERII, ESL, FNSR, FRM, GALE, HCI, ICEL, MNTX, SKUL,TFM, THO, VMEM, WX, YY, ZQK
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