Wall Street Breakfast: PMI Data Weighs On Global Markets

   83 comments  |  Includes: ALSMY, AMZN, BP, CRM, DB, DTEGY, EBAY, GDFNF, HAL, H

Economy
European stocks are on the decline amid mixed reports on the region's factory activity. France's output contracted less than economists estimated in May, but German manufacturing missed projections, signaling the region's largest economy is losing momentum. Markit's composite flash PMI for the eurozone also fell below analyst expectations, dropping to 53.4 in May from 53.9 in April.

Following Wednesday's 15-year closing high, Japan's Nikkei held on to its gains after data showed the country's manufacturing sector had returned to growth. Markit's flash PMI climbed from 49.9 in April to 50.9 in May. China's factory activity, however, contracted for the third month in May as output shrank at the fastest rate in just over a year. HSBC's flash PMI came in at 49.1, below the 50-point level that separates growth from contraction.

"Our common goal remains to establish the political framework for a trans-Atlantic free trade agreement by the end of 2015," Germany's Angela Merkel said in a speech to the Bundestag this morning. According to the European Commission, the planned Transatlantic Trade and Investment Partnership (TTIP) could generate many new jobs and $100B a year in additional output.

U.S. stocks finished with slight losses yesterday, giving up earlier gains after the minutes from the FOMC's April meeting suggested an interest rate hike was unlikely in June. Investors are still looking forward to Fed chief Janet Yellen's speech tomorrow, which will likely be "more provocative" than the minutes since her remarks will account for the flurry of economic reports in April.

Stocks
CVS Health is in advanced talks to buy nursing home pharmacy owner Omnicare (NYSE:OCR) and could reach a deal as soon as this week, sources told Bloomberg. Omnicare, with a market value of about $9.2B, hired advisers to explore a sale earlier this year. CVS +0.3%; OCR +5.2% premarket.

eBay is testing an Amazon (NASDAQ:AMZN) Prime-like program in Germany that it plans to roll out more broadly in the country later this year, although it's still not clear if it would introduce the service elsewhere. The offering, known as eBay+ (NASDAQ:EBAY), promises free, fast shipping and returns for customers who, according to local press in Germany, pay €15 to €20 a year.

Deutsche Bank reshuffled its management board late on Wednesday, consolidating restructuring authority under co-Chief Executive Anshu Jain while waving goodbye to its retail banking head Rainer Neske. The shake-up comes before today's contentious annual meeting. Shareholders have previously expressed dismay at Deutsche's (NYSE:DB) lagging profits, hefty fines and sluggish reforms.

What is going on in Hong Kong? With no immediate explanation, Goldin Financial (OTC:GDFNF) and Goldin Properties, both controlled by billionaire Pan Sutong, plunged more than 60% in Hong Kong trading this morning. Before the rout, the two stocks surged more than 300% in 2015 for the biggest gains on the Hang Seng Composite Index. The tumble follows the mysterious 47% drop in 24 minutes by Hanergy Thin Film Power (OTCPK:HNGSF) on Wednesday, which erased $19B in market value before trading was suspended.

Deutsche Telekom will consider any partner that can improve profitability of its U.S. operations, its chief executive said at the company's annual shareholders meeting. "It is our duty to go on improving the return on T-Mobile (NYSE:TMUS). If we find a partner who will help us to do so, we will obviously consider it," Tim Hoettges announced. Deutsche Telekom (OTCQX:DTEGY) last year tried to sell T-Mobile to Sprint (NYSE:S), but the bid was dropped after regulatory resistance.

General Electric said it would be willing to sell off intellectual property to secure regulatory approval for its $17B acquisition of Alstom's (OTCPK:ALSMY) power business, but said concessions around the French company’s service business aren't an option. The comments made by Jeff Immelt are the most concrete indication to date of what remedy GE is willing to offer to break an impasse over approval for the deal.

Shopify has priced its IPO at $17, a mark above the e-commerce firm's lifted range of $14 to $16. Shopify (Pending:SHOP) intends to list its shares on the Toronto and New York stock exchanges.

Industry experts and safety advocates are predicting Takata's (OTCPK:TKTDY) record U.S. recall of defective air bags to take years to complete at a cost of several billion dollars, as automakers scramble to line up replacement parts. Takata shares fell again today, following a 10% plunge on Wednesday - after the air bag supplier expanded its U.S. recall to an additional 34M vehicles.

A U.S. bankruptcy judge has cleared the way for RadioShack (OTCPK:RSHCQ) to sell its trademark, customer data and other intellectual property to a Standard General affiliate for about $26M, rejecting a competing bidder's claim that the auction process was unfair. RadioShack also resolved objections to the sale from several state attorneys general who were concerned the deal could threaten consumers' privacy.

Transocean, owner of the rig that sank in the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, has now joined Halliburton (NYSE:HAL) in settling all remaining issues with BP (NYSE:BP) over the disaster. "We have now settled all matters relating to the accident with both our partners in the well and our contractors," BP spokesman Geoff Morrell said in an email. BP still faces a potential fine of up to $13.7B under the U.S. Clean Water Act. RIG+2.5%; BP +1.6% premarket.

Wednesday's key earnings
Target (NYSE:TGT) +0.3% on strong comparable-store and e-commerce sales. (link)
Lowes (NYSE:LOW) -4.6% after missing expectations. (link)
Staples (NASDAQ:SPLS) -1.6% following a Q1 profit drop. (link)
Salesforce (NYSE:CRM) +6.5% AH after beating estimates, issuing solid guidance (link)

Today's Markets:
In Asia, Japan flat at 20203. Hong Kong -0.2% to 27524. China +1.9% to 4530. India -0.1% to 27809.
In Europe, at midday, London -0.1%. Paris -0.5%. Frankfurt -0.6%.
Futures at 6:20: Dow -0.2%. S&P -0.2%. Nasdaq -0.3%. Crude +1.2% to $59.68. Gold flat at $1208.70.
Ten-year Treasury Yield -1 bps to 2.25%

Today's economic calendar:
8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
9:45 PMI Manufacturing Index Flash
9:45 Bloomberg Consumer Comfort Index
10:00 Philly Fed Business Outlook
10:00 Existing Home Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: AAP, BAH, BBY, BKE, BONT, BRC,DCI, DLTR, KIRK, MNRO, NM, PDCO, QSII, SMRT, TSL, TTC

Notable earnings after today's close: ACXM, ARO, BRCD, GMAN, GPS,HPQ, INTU, JMEI, LGF, MRVL, NWY, OESX, ROST, TFM

Source: http://seekingalpha.com/article/3201916-wall-street-breakfast-pmi-data-weighs-on-global-markets