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US stock market, economy and companies update (February 20, 2013)

Contributed by Trade The News

- Risk is off the table this morning following another round of record highs in US equity markets. Yesterday the DJIA and the S&P500 closed at fresh five-year highs, while the Nasdaq closed at a 12-year high. Traders are positioning themselves ahead of the release of the FOMC minutes later this afternoon. Spot gold took another tumble through the European session, dropping 1.5% from $1,600 to around $1,580.

- The January housing starts data missed expectations, while building permits were in line. The permits figure is the highest since June 2008. Analysts note that the dip in starts was due mainly to a decline in multi-family units, while other starts were strong. Recall that yesterday the softness in the NAHB housing market index suggested some leveling off of the current return to strength in the US housing market.

- The greenback maintained a firmer tone in the US session, as FX dealers pointed toward fading risk appetite. Many analysts were surprised to hear German Chancellor Merkel actually identify a target range for the euro. Merkel said that EUR/USD between 1.30 to 1.40 was "normal" and said that the government had limited tools for boosting domestic demand. The pound was consolidating after falling sharply in the wake of the Bank of England's policy meeting, where members indicated support for more stimulus spending to boost the UK economy.

- After some early morning confusion, it was made clear that Office Depot and smaller rival OfficeMax will merge in a $1.2B all-stock deal. OfficeMax shareholders will get 2.69 ODP shares for each share they own, valuing the company at $13.50/shr, in a deal worth $1.17B. Note that earlier in the session, Office Depot posted an earnings press release to its website that included details of the deal. It later pulled that statement down, claiming it was a draft and that the deal was not yet done.

- Shares of Harvest Natural are down more than 30% after the deal to sell off its Venezuela assets to Indonesia's state-owned PT Pertamina for $725M fell apart.

- Shares of Joy Global rose more than 6% on rumors that a deal was in the works to take out the company. Swedish firm Atlas Copco was fingered as one party to the deal, although comments from the company seemed to eliminate that possibility. When asked about the rumors, a Joy exec commented that "rumors come and go."

- Various other unconfirmed rumors are moving stocks today. JCPenny rose as much as 5% on reports that the firm's January sales comps came in about flat, which would be a huge improvement over recent performance. Meanwhile Safeway is under pressure following rumors Carl Icahn was setting his sights on the firm.

- La-Z-Boy crushed earnings and revenue expectations in its Q3 report and saw very strong sales comps. Executives said the brightening outlook for the housing market made them optimistic about Q4. Shares of LZB are +14%.

- Shares of Demand Media are up nearly 12% on decent earnings and chatter the firm was exploring separating into two separate publically traded companies.

***Looking Ahead***
- 11:30 (US) Treasury to sell 4-Week Bills
- 11:45 (DE) German Chancellor Merkel visits Oslo for talks with PM Stoltenberg
- 14:00 (US) Fed releases minutes from Jan 29-30 FOMC Meeting
- 16:00 (CO) Colombia Dec Trade Balance: +$306.0Me v -$183.2M prior; Imports CIF: No est v $5.2B prior
- 16:30 (US) Weekly API U.S. Crude Oil Inventories

***Economic Data***
- (DE) Germany Jan CPI Bavaria M/M: -0.6% v +0.9% prior; Y/Y: 1.7% v 2.2% prior
- (BR) Brazil Dec Economic Activity index M/M: 0.3% v 0.4%e; Y/Y: 1.2% v 1.4%e
- (US) MBA Mortgage Applications w/e Feb 15th: -1.7% v -6.4% prior
- (US) ICSC/GS weekly chain store sales w/e Feb 16th w/w: +2.7%; y/y: 1.8%
- (US) Jan Housing Starts: 890K v 920Ke; Building Permits: 925K v 920Ke
- (US) Jan Producer Price Index M/M: 0.2% v 0.3%e; Y/Y: 1.4% v 1.5%e
- (US) Jan PPI Ex Food & Energy M/M: 0.2% v 0.2%e; Y/Y: 1.8% v 1.7%e
- (US) Redbook Retail Sales w/e Feb 17th: +3.1% y/y prior; Feb MTD: +1.5% m/m prior; Feb MTD: +2.8% y/y
- (CA) Canada Jan Teranet/National Bank HPI M/M: -0.3% V -0.2%e; Y/Y: +2.7% v 2.9%; House Price Index: 153.00 v 153.45 prior
- (EU) Euro Zone Feb Advanced Consumer Confidence: -23.6 v -23.2e