US stock market, economy and companies update (February 13, 2014)
February 13, 2014, Thursday, 17:25 GMT | 12:25 EST | 21:55 IST | 00:25 SGT
- The poor January US retail sales report, the bump higher in weekly jobless claims, Cisco's terrible earnings and declines in Asian and European indices overnight sent equity futures lower before the open this morning. However markets have traded straight up from the open as analysts explain away the gloom. As of writing, the DJIA is up 0.24%, the S&P500 is up 0.21% and the Nasdaq is up 0.44%.
- January retail sales slipped lower m/m even as the December result was revised lower, into negative territory. The disappointing data had a real impact before the open, however the reason for the slip is pretty obvious: icy weather. The biggest burden on the report was sagging auto sales, which was abundantly clear in US January sales numbers out of the major auto manufacturers a week ago. Add the weather-impacted report to the miss in the January PMI manufacturing and the monthly job numbers.
- The drama continues in Italy, where the PD party is meeting to discuss the future of the government coalition. PD leader Renzi sounded like he was trying to shove PM Letta out the door, calling for a "new phase" in the government under the same structure, with support from PdL. Letta is demanding a party vote before he will step down. After climbing steadily up off 1.3565 over the last 24 hours, EUR/USD topped out above 1.3680 and moved a bit lower.
- Time Warner Cable has agreed to Comcast's $158.82/shr all-stock merger offer, valuing the cable giant around $45.2 billion. Charter Communications walks away as the big loser here, as it was unable to raise its $132.50/shr offer. The deal combines the two largest US cable TV companies in an entity with 30 million subscribers, and is practically guaranteed to draw lots of anti-trust attention. Note that the deal notably did not include any breakup fee, and also that shares of TWC have only risen to $145 (up around 7%), about halfway between Charter's and Comcast's offers. Comcast has pledged to divest 3 million subscribers after the deal closes.
- CBS is up 4% or so this morning on a pretty solid quarterly report. Net income rose nearly 20% y/y and revenue gained 6% y/y, with growth seen in all the firm's main content development businesses. The TWC/CMCSA deal highlighted that content is king, said CEO Moonves, who also offered the firm isn't really looking at any deals itself right now.
- Discomfort with the future of Cisco has only deepened after its latest quarterly revenue decline. Cisco's revenue slid 8% y/y in its second quarter, and it said it would slide another 6-8% in its third quarter. CEO Chambers pounded the table, citing a book-to-bill greater than 1.0 and the best booking backlog the company has seen in years, but investors aren't buying it. CSCO is down 4.4%. Note that Applied Materials and Nvidia were up as much as 3-4% just after the open thanks to strong quarterly reports.
- Among the biggest moves is Orbitz, up 30% this morning on solid outperformance in its fourth quarter. URS Corp is down 12.5% after missing expectations in its preliminary 2014 guidance and disclosing a significant decline in the firm's end-2013 backlog.
- 12:00 (NO) Norway Central Bank (Norges) Gov. Olsen makes Annual Speech
- 12:00 (ZA) South Africa President Zuma State of the Union
- 13:00 (US) Treasury to sell $16B in 30-Year Bonds
- 14:00 (AR) Argentina Jan CPI M/M: No est v 1.4% prior; Y/Y: No est v 10.9% prior
- 17:05 (AU) RBA Dep Gov Kent gives Speech in Sydney
- 18:00 (PE) Peru Central Bank Interest Rate Decision: Expected to leave Reference Rate unchanged at 4.00% prior
- 18:00 (EU) EU's Barnier in Washington Feb. 14-15
- 20:30 (CN) China Jan PPI Y/Y: -1.6%e v -1.4% prior
- 20:30 (CN) China Jan CPI Y/Y: 2.4%e v 2.5% prior
- (RU) Russia Gold and Forex Reserve w/e Feb 7th: $490.2B v $498.8B prior
- (BR) Brazil Dec Retail Sales M/M: -0.2% v +0.3%e; Y/Y: 4.0% v 5.0%e; Broad Retail Sales Y/Y: 2.9% v 5.5%e
- (US) Jan Advance Retail Sales M/M: -0.4% v 0.0%e; Retail Sales Ex Auto M/M: 0.0% v 0.1%e; Retail Sales Ex Auto and Gas: -0.2% v +0.1%e; Retail Sales Control Group: -0.3% v +0.2%e
- (US) Initial Jobless Claims: 339K v 330Ke; Continuing Claims: 2.953M v 2.96Me
- (CA) Canada Dec New Housing Price Index M/M: 0.1% v 0.1%e; Y/Y: 1.3% v 1.3%e
- (US) Dec Business Inventories: 0.4%e v 0.4% prior
- (US) Fed Chair Yellen testimony in Senate banking committee delayed due to weather
- (US) Weekly EIA Natural Gas Inventories: -237 bcf v -226 bcf to -232 bcf expected