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Reports US

US stock market, economy and companies update (April 22, 2014)

April 22, 2014, Tuesday, 18:14 GMT | 13:14 EST | 22:44 IST | 01:14 SGT
Contributed by Trade The News

- European equities opened after the four-day Easter holiday and saw solid gains, driving a positive tone coming into the US session. US trading volumes remain somewhat subdued this morning. As of writing, the DJIA is up 0.52%, the S&P500 is up 0.47% and the Nasdaq is up 0.88%.

- Canadian pharma giant Valeant is teaming up with activist investor Bill Ackman's Pershing Square Capital Management in a $46-billion hostile bid for eye and skin care company Allergan. Valeant will pay $48.30 in cash and 0.83 of a share for each Allergan share. Pershing Square has already accumulated 9.7% of Allergan stock, and Ackman will take only stock in the merged company for his Allergan shares. Valeant said it has already lined up financing for the deal. Allergan has not agreed to the deal and last night disclosed it has had no discussions with either Valeant or Pershing Square about the deal. Shares of AGN are up 16% and VRX is up 4.7%.

- Novartis disclosed a series of huge deals that would substantially realign the company's business. Novartis will sell its animal health unit to Eli Lilly for $5.4 billion in cash, and sell its vaccines unit to GlaxoSmithKline for $7.1 billion, including $5.25 billion upfront and the rest in milestone payments. It also said it would sell off its flu vaccines business. Novartis is taking the proceeds and buying Glaxo's oncology products business for $14.5 billion and up to $1.5 billion in milestones. Under the terms of the transaction, Novartis would have opt-in rights to Glaxo's current and future oncology R&D pipeline.

- Both United Technologies and Lockheed Martin beat earnings expectations in first quarter reports and also hiked their FY14 guidance slightly. However Lockheed's revenue was down 4% or so on a y/y basis as Pentagon cuts eat into its top line. UTX's revenue was up very slightly, thanks to its non-defense segments. Both LMT and UTX are up around one percent a piece.

- Shares of McDonalds are holding up well despite the firm's miss on the top and bottom lines. Global comps remained in positive territory but US comps fell 1.7%, more than expected. The company citied a "challenging environment" but did not elaborate further. Income slipped 5% y/y.

- Regional banking names Regions Financial and Bank of New York topped earnings expectations and slightly missed revenue targets. Regions' earnings and revenue fell slightly y/y, while BK recovered well from the year-ago loss. Zions Bank missed on the bottom line and ROE shrank. RF is up 2%, BK is flat. ZION is off its worst levels, but still down 3% on the session.

***Looking Ahead***
- 11:30 (US) Treasury to sell $25B in 4-Week Bills
- 11:45 (US) Former Fed Chairmen Bernanke speaks at Economic Club
- 12:00 (RU) Russian Ambassador to Canada Mamedov speaks at Empire Club
- 13:00 (US) Treasury to sell 2-Year Notes
- 15:00 (AR) Argentina Feb Economic Activity Index M/M: No est v -0.4% prior; Y/Y: No est v 1.2% prior
- 15:00 (AR) Argentina Mar Trade Balance: No est v $44M prior
- 16:30 (US) Weekly API Oil Inventories
- 20:25 (JP) Japan BOJ Dep Gov Nakaso speech in Kyoto
- 21:30 (AU) Australia Q1 CPI Q/Q: 0.8%e v 0.8% prior; Y/Y: 3.2%e v 2.7% prior
- 21:45 (CN) China Apr Preliminary HSBC China Manufacturing PMI: 48.3e v 48.0 prior
- (AR) Argentina Apr Consumer Confidence Index: No est v 36.21 prior
- (MX) Mexico Banamex Survey of Economists

***Economic Data***
- (EU) ECB again failed to fully sterilize its 7-day Term Deposit Tender to offset Govt bond purchases under SMP program (2nd straight week)
- (US) ICSC Chain Store Sales w/e Apr 19th: w/w +0.4%; y/y: +1.9%
- (CA) Canada Feb Wholesale Trade Sales M/M: 1.1% v 0.7%e
- (US) Redbook Retail Sales w/e Apr 19th +3.7% y/y, Apr MTD: -0.5% m/m; Apr MTD +3.2% y/y
- (MX) Mexico Mar Unemployment Rate (unadj): 4.8% v 4.5%e; Unemployment Rate (Seasonally Adj): 5.3% v 4.7%e
- (US) Feb FHFA House Price Index: % v 0.5%e
- (US) Apr Richmond Fed Manufacturing: +7 v +2e
- (US) Mar Existing Home Sales: 4.59M v 4.56Me
- (EU) Euro Zone Apr Advance Consumer Confidence: -8.7 v -9.3e

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