• US stock market, economy and companies update (September 22, 2015)

    European equities closed sharply lower, while the VIX has risen above 22 and bond yields have come in sharply. The benchmark UST yield is down more than seven basis points, to trade 2.13%. The Asian Development Bank lowered its forecast for China 2015 GDP to +6.8% from +7.2% prior. Commodity prices have move notably lower, taking the miners and oil names lower along with them. Meanwhile the Volkswagen scandal has weighed heavily on German equities. As of writing, the DJIA is down 1.5%, the S&P500 is off 1.7% and the Nasdaq is down 1.9%.

    Volkswagen has lost 35% of its market value over the last two days after the EPA said the company had installed software to circumvented emissions testing on 482K diesel vehicles sold in the United States. Under the Clean Air Act, the company could be liable for up to $18 billion in penalties. This morning, Volkswagen said it would set aside a €6.5 billion provision to deal with the charges and warned FY15 guidance would be adjusted as necessary. Subsequently there were reports in a German newspaper that CEO Winterkorn would be dumped and replaced by Porsche CEO Matthias Mller as early as Friday, Sept 25th.

    The response to the Turing Pharma fracas is ringing across the biotech area this morning as analysts and even presidential candidates weigh in. Hilary Clinton will lay out her plan to tackle "price gouging" in the specialty drug market at an event in Iowa later today, while analysts at Jefferies and Piper Jaffray are recommending select biotech stocks that they view as buys amid the weakness in the space. The IBB is off 8% since yesterday morning, while Retrophin - founded by Turing chief Shkreli, with a very similar approach to Turing - is down 23% since Monday. VRX had initially gained a bit on the story, but is off 10% since midday on Monday. Recall that over the weekend, the NYT wrote a scathing expose of Turing's plan to hike prices by 5,000% on a 62-year-old drug that fights complication of AIDS and cancer.

    Shares of Office Depot and Staples are both down about 7% this morning on more press reports that suggest the FTC will block the merger between the companies, just two weeks after press reports said the FTC was intensifying its antitrust review of the merger. Back in June, a Federal judge blocked the Sysco/US Foods merger, and a host of other deals are looking shaky as a result. Shares of Hertz are down 3.6% as prospects of a deal for eligible bachelor in the car rental space look worse.

    Looking Ahead
    - 15:00 (AR) Argentina Aug Trade Balance: No est v $0.2B prior
    - 16:30 (US) Weekly API Oil Inventories
    - 20:00 (AU) Australia July Conf. Board Leading Index M/M: No est v -0.2% prior
    - 21:00 (PH) Philippines July Trade Balance: -$0.1Be v -$0.6B prior; Imports Y/Y: -0.4%e v +22.6% prior
    - 21:45 (CN) China Sept Preliminary Caixin China PMI Manufacturing: 47.5e v 47.3 prior


    Economic Data
    - (US) Goldman Economist Chain Store Sales w/e Sept 19th w/w: +0.2%; y/y: +1.4%
    - (BR) Brazil Sept IBGE Inflation IPCA-15 (mid-month) M/M: 0.4 v 0.4%e; Y/Y: 9.6% v 9.6%e
    - (US) July FHFA House Price Index M/M: 0.6% v 0.4%e
    - (US) Weekly Redbook Sales w/e Sept 19th: 0.9% y/y, Sept MTD m/m: -1.4%; Sept MTD y/y: 1.3%
    - (EU) Euro Zone Sept Advance Consumer Confidence: -7.1 v -7.0e
    - (US) Sept Richmond Fed Manufacturing Index: -5 v 2e

    [I]Contributed by Trade The News[/I]
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