By Trade The News
Notes/Observations
- Asia equity markets saw their second straight session of losses in the wake of weak PMI data out of China.
- In Europe, losses were muted by impressive Spain and Ireland PMI services data. Hawkish ECB comments and more talk of austerity in the UK in 2015 are also in play.
- US equities are in the red this morning. The S&P 500 struggles to avoid a third straight session of losses as 2014 gets off to a rather tepid start. As of writing, the DJIA is down 0.18%, the S&P500 is down 0.01% and the Nasdaq is down 0.48%.
- The ISM non-manufacturing services index has disappointed expectations for the second month in a row and dropped from 53.9 in November to 53.0 in December, for the lowest print since June. Both inventories and new orders dropped into contraction territory: inventories slid from 54.0 to 48.0 while new orders dropped from 56.4 to 49.4.
- The euro has turned around after a 2014 New Year’s slide from the 1.3760 level to 1.3570. As of writing, the pair had advanced to 1.3637. The yen has strengthened thanks to dollar softness as well, with USD/JPY dropping out of the 105 handle overnight. Oil has slid a little lower after Thursday and Friday’s big moves, ducking into the $93 handle.
- Liberty Media has revised its relationship with subsidiary Sirius XM by announcing its goal to acquire the shares in the satellite radio provider it doesn’t already own. The non-binding offer is to pay a tiny premium to the closing price of Sirius when the offer was made of about $3.68 per share. Press sources suggest the Liberty offer for Sirius may be a prelude to a formal offer for Time Warner Cable via Charter Communications. Back in mid-December, Charter was said to be preparing a “bear hug” offer for Time Warner valued under $135/shr, well below the $150/shr it reportedly desires.
- Some high-profile asset deals are making lots of headlines. T-Mobile is buying a 700 mhz block of spectrum from Verizon Wireless in exchange for $2.4B in cash and certain other spectrum licenses. General Electric reached a deal to acquire cell culture and gene modulation assets from Thermo Fisher Scientific for about $1.06 billion. With this deal, GE Healthcare will strengthen its technologies for the discovery and manufacture of new medicines, vaccines and diagnostics.
- Verso Paper is up an astonishing 255% after reaching a deal to acquire NewPage Holdings Inc. for $1.4B. Privately held NewPage produces printing and specialty papers. According to the company, the deal will boost the firm’s annual revenue to $4.5B from $1.5B reported in the last fiscal year.
- Analyst commentary out of Morgan Stanley is adding to the highly volatile moves in shares of Twitter. Morgan Stanley downgraded Twitter to sell from hold and said Facebook and Google would be better stocks to own. The firm hiked its PT on Google, citing YouTube and Android, plus local advertising opportunities. TWTR is down 7% as of writing, while GOOG is up slightly. FB is unchanged.
Looking Ahead
- 11:30 (US) Treasury to sell combined $54B in 3-Month and 6-Month Bills
- 17:00 (US) full Senate confirmation vote for Fed Chair nominee Yellen
- 19:30 (AU) Australia Nov Trade Balance: -A$300Me v -A$529M prior
- 20:00 (PH) Philippines Dec CPI M/M: No est v 0.4% prior; Y/Y: 4.0%e v 3.3% prior; CPI Core Y/Y: No est v 2.8% prior
Economic Data
- (PT) European Parliament Delegation visits Portugal
- (DE) Germany Dec CPI Baden Wuerttemberg M/M: No est v 0.3% prior; Y/Y: No est v 1.3% prior
- (DE) Germany Dec CPI Bavaria M/M: % v 0.1% prior; Y/Y: % v 1.0% prior
- (PT) Portugal Dec Consumer Confidence Index: -40.4 v -41.8 prior; Economic Climate Indicator: -1.0 v -1.2 prior
- (CL) Chile Nov Economic Activity M/M: 0.5% v 0.6%e; Y/Y: 2.8% v 3.1%e
- (BR) Brazil Dec PMI Services: 51.7 v 52.3 prior; 3rd straight month of growth
- (DE) Germany Dec Preliminary CPI M/M: 0.4% v 0.4%e; Y/Y: 1.4% v 1.4%e
- (DE) Germany Dec Preliminary CPI EU Harmonized M/M: 0.5% v 0.7%e; Y/Y: 1.2% v 1.4%e
- (US) Dec Final PMI Services: 55.7 v 56.2 prelim
- (CA) Canada Nov Industrial Product Price M/M: +0.1% v -0.2%e; Raw Materials Price Index M/M: -4.1% v -1.8%e
- (SG) Singapore Dec Purchasing Managers Index: 49.7 v 51.0e; Electronic Sector Index: 50.1 v 51.0e
- (US) Dec ISM Non-Manufacturing Composite: 53.0 v 54.6e
- (US) Nov Factory Orders: +1.8% v +1.7%e
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