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Reports US

US stock market, economy and companies update (December 11, 2013)

December 11, 2013, Wednesday, 17:09 GMT | 12:09 EST | 21:39 IST | 00:09 SGT
Contributed by Trade The News

- It appears that a truce in the budget battles of the last several years may be in the offing this morning, offering hope that one of the last major source of uncertainty for the recovery could be dragged out of the way. And as usual, this very good news may be inspiring many participants to bet on an earlier taper and to sell, sell, sell. As of writing, the DJIA is down %, the S&P500 is down % and the Nasdaq is down %.

- Rep Ryan and Senator Murray announced their $85B budget package last night. The agreement would undo $63B of sequester cuts that are set to take place over the next two years and puts 2014 spending at $1.012T, higher than the $967B that would have taken effect under the sequester law on Jan 15th. The package does not include an extension of unemployment insurance demanded by Democrats. The modest deal has already drawn heavy criticism from fiscal conservatives, even as senior Congressional Republican leaders voiced their support. S&P called the modest deal a positive.

- MasterCard announced a stock split and a big dividend increase. MA will split its stock 10-for-1 effective after market close on January 9. Shareholders will receive their nine additional shares on January 21. Total shares outstanding will increase from 120 million to 1.2 billion. Currently MasterCard has the third-highest share price in the S&P 500, behind Google and Priceline. Shares of MA are up 4.4%.

- Mining hardware manufacturer Joy Global saw its net profit drop nearly 90% y/y and revenue fall 35% y/y in Q4 thanks to the ongoing commodities glut. The firm's initial look at FY14 guidance was subpar. Executives lamented that prices for industrial metals and bulk commodities have declined 20-40% over the last 18 months. JOY is down 4.4%.

- Costco's earnings missed expectations slightly in its Q1 report, thanks in part to higher operating expenses. Profits were flat on a y/y basis. Comps were good, aided by lower gasoline prices and the stronger dollar. Shares of COST had dropped 2.5% as of the first minutes of trading, but are well off their lows as of writing.

- LabCorp is down 10% this morning after offering tepid FY14 guidance, including earnings that fell short of expectations. LabCorp indicated profitability challenges will continue in FY14. The company sees adjusted profit totaling about $6.50 a share, below the range expected for FY13.

- Shares of Valero Energy Partners, Valero's MLP partner, are among the biggest gainers this morning, up 22%. The San Antonio company was formed in July to own, operate and develop pipelines, terminals and other transportation and logistics assets.

***Looking Ahead***
- 12:00 (CA) Canada to sell 3-Year Bonds
- 13:00 (US) Treasury to sell $21.0B in 10-Year Notes Reopening
- 13:30 (ES) Bank of Spain (BOS) Dep Gov Rostoy speaks in Madrid
- 14:00 (US) Nov Monthly Budget Statement: -$142.0Be v -$167.0B prior
- 15:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate unchanged at 2.50%
- 15:00 (NZ) Reserve Bank of New Zealand (RBNZ) Monetary Policy Statement
- 19:00 (AU) Australia Dec Consumer Inflation Expectation: No est v 1.9% prior
- 19:30 (AU) Australia Nov Employment Change: +10.0Ke v +1.1K prior; Unemployment Rate: 5.8%e v 5.7% prior
- 20:00 (KR) Bank of Korea (BoK) Interest Rate Decision: Expected to leave 7-Day Repo Rate unchanged at 2.50%

***Economic Data***
- (PT) Portugal Nov CPI M/M: -0.2% v -0.1%e; Y/Y: 0.2% v 0.0%e
- (PT) Portugal Nov CPI EU Harmonized M/M: -0.3% v -0.2%e; Y/Y: 0.1% v 0.3%e
- (ZA) South Africa Oct Retail Sales Constant M/M: -0.4% v +0.1%e; Y/Y: 1.3% v 1.7%e
- (US) MBA Mortgage Applications w/e Dec 6th: +1.0 v -12.8% prior
- (US) DOE Crude: -10.59M v -2.5Me; Gasoline: +6.72M v +2Me; Distillate: +4.54M v +1Me