Global markets are off to a strong start to the week. The Nikkei closed above 18,000 for the first time in two weeks to set an early positive tone. The index ended 1.58% higher as investors took the view the U.S. Fed won't raise interest rates and hedged bets on more stimulus from the Japanese government. Financial markets in China are still closed for national holidays, but the rest of Asia followed Japan higher. Australian shares rose 1.9%, while Hong Kong's Hang Seng gained 1.8%. European markets are also off to a very strong start with resource and financial stocks leading the way. The Stoxx Europe 600 Index is up 2.2% in mid-day trading. Futures in the U.S. are pointing to a higher open.
Economy
Saudi Arabia cut prices on oil sales over the weekend as it plays catch-up with OPEC and other producers in the region. State-run Saudi Aramco reduced prices significantly on oil sent to Asia and the U.S. The strategy from Dhahran is to keep producing oil at high levels in anticipation of improved demand at lower price points. Crude oil futures are up 1.06% to $46.06 at last check as investors factor in the news that Russia may meet with other producers. .
Eurozone final September services PMI came in at 53.7, missing the forecast of economists for a 54.0 mark. The reading for the month is a seven-month low. Employment was up for the eleventh straight month, led by solid increases in Germany, Spain, and Ireland.
The U.S. regulatory apparatus designed to improve financial stability is a "mess" that will likely fail when it's needed the most, according to economist Adam Posen. His analysis given at a conference sponsored by the Boston Federal Reserve focused on the ability of the Financial Stability Oversight Council, a Dodd-Frank brainchild, to react to a crisis. Other notable attendees at the financial confab who agreed that the current U.S. system is deficient included former Bank of England governor Mervyn King and ex-Fed vice chairman Donald Kohn.
The U.S. is closer to striking a deal on the Trans-Pacific Partnership after making headway with negotiations on several key issues. Talks in Atlanta over the last week are reported to have led to a resolution on the closely-watched subject of automobile manufacturing, along with progress on other critical sticking points. The landmark legislation is poised to lower trade barriers for around 40% of the world economy. Some economists think Vietnam (NYSEARCA:VNM) might be the nation with the most to gain with passage of the new trading rules.
Stocks
American Apparel filed for Chapter 11 bankruptcy in Delaware. The company plans to keep stores open while it seeks approval for its restructuring plan with lenders through the bankruptcy court. Shares of American Apparel (NYSEMKT:APP) closed at $0.11 on Friday.
Glencore rallies in Hong Kong and London trading as investors take solace in reports the company will consider takeover offers. Though senior management at Glencore (OTCPK:GLCNF, OTCPK:GLNCY) isn't convinced a potential buyer will make a high enough offer in the current market, shares are jumping off the possibility the company will enter negotiations.
Disney is considering demand-based pricing at theme parks in the U.S. Though the strategy is fairly common in the leisure industry, Disney (NYSE:DIS) has always charged the same price at U.S. parks for single and multiday tickets, despite the time of year. Disney is expected to start asking customers this week about their feelings toward variable-pricing options.
The Martian flew past projections to take in $55M at the box office during its opening weekend. The science fiction film from 20th Century Fox (NASDAQ:FOXA) is expected to have strong legs after earning a CinemaScore of "A" from moviegoers. The strong reception to the Ridley Scott movie should put an end to Hollywood's fear of the Mars jinx which is based on the performance of previous films centered on the Red Planet. Perhaps most importantly, audiences paid up to see The Martian 3D accounted for 46% of the box office haul, while the premium large screen format accounted for 11%. Those numbers are positive for IMAX (NYSE:IMAX) and RealD (NYSE:RLD).
Volkswagen will hold a special board meeting on Wednesday. Sources say the Volkswagen (OTCQX:VLKAY) board agenda will include appointing Hans Dieter Poetsch as the head of the 20-person controlling panel and reviewing the outcome of an internal investigation on the emissions cheating crisis. One of the biggest challenges for Poetsch and the VW board is how deeply to cut into Volkswagen's investment budget in order to try to stave off credit agency downgrades.
BC Partners and the Canada Pension Plan Investment Board are reportedly in discussions over the purchase of up to $1B worth of Cablevision (NYSE:CVC) shares. Share purchases would help Altice (OTCPK:ATCEY) finance its deal to acquire Cablevision. BC Partners and the Canada Pension Plan Investment Board hold an option to buy as much as 30% of Cablevision's equity. Concerns over the debt necessary to complete the Altice takeover have hounded the bonds of Altice and Cablevision since the deal was announced.
Ford reached a key agreement with an union representing workers at a F-150 plant in Missouri. The UAW workers still need to vote on the deal which covers employment conditions, not the wage levels being negotiated on a national level. The development is crucial for Ford (NYSE:F) as the Kansas City-area plant is a major producer of the new F-150. Any slowdown in production would create a ripple of worry with F-150 sales continuing to gain momentum in the U.S.
Three stocks are on watch for a Barron's bounce today. Ralph Lauren (NYSE:RL) is tapped for even more gains after rallying sharply following last week's announcement of the resignation of CEO Ralph Lauren. New CEO Stefan Larsson is seen adding some fast-fashion punch to the luxury mindset at the company. Tenet Healthcare (NYSE:THC) could rise as much as 70% with mergers expected to start feeding the bottom line, observes Barclays. Concerns over Tenet's debt load has driven shares down sharply to levels seen as attractive. Margins at Boston Scientific (NYSE:BSX) are expected to improve with new products looking promising. The consensus price target on Wall Street implies close to a 20% gain is in store for the medical devices manufacturer.
Today's Markets
In Asia, Japan +1.6% to 18005. Hong Kong 1.6% to 21855. China closed for holiday. India +2.2% to 26800.
In Europe, at midday, London +1.9%. Paris +2.8%. Frankfurt +2.1%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.4%. Crude +1.1% to $46.06. Gold -0.2% to $1134.00.
Ten-year Treasury Yield flat at 2.00%.
Today's Economic CalendarIn Europe, at midday, London +1.9%. Paris +2.8%. Frankfurt +2.1%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.4%. Crude +1.1% to $46.06. Gold -0.2% to $1134.00.
Ten-year Treasury Yield flat at 2.00%.
Monday's economic calendar:
8:30 Gallup US Consumer Spending Measure
9:45 PMI Services Index
10:00 Labor market condition index
10:00 ISM Non-Manufacturing Index
12:30 TD Ameritrade IMX
Companies reporting earnings today8:30 Gallup US Consumer Spending Measure
9:45 PMI Services Index
10:00 Labor market condition index
10:00 ISM Non-Manufacturing Index
12:30 TD Ameritrade IMX
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
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