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Reports US

US stock market, economy and companies update (July 14, 2014)

July 14, 2014, Monday, 15:53 GMT | 10:53 EST | 19:23 IST | 21:53 SGT
Contributed by Trade The News


- Gains among financials plus gains in Asia and European indices are sending the US markets back toward record highs this morning. As of writing, the DJIA is up 0.76%, the S&P500 is up 0.54% and the Nasdaq is up 0.63%.

- Fed Chair Yellen heads to Congress this week for her semiannual monetary policy report. She will address the Senate Banking Committee on Tuesday and the House Committee on Financial Services on Wednesday. Analysts expect that Congressmen will press Yellen to acknowledge the improvement in the labor market and higher inflation trends. The New Yorker has published a lengthy profile of Yellen. Although there is little in the way of news in the piece, it does reveal that before the crisis Yellen (like Bernanke) did not believe the housing bubble was something that could crash the economy.

- Shares of Citigroup are up 3.5% after the firm reported second quarter earnings and disclosed a big RMBS settlement deal with the DoJ. Citi beat earnings expectations handsomely on an adjusted basis, however before subtracting the $3.8B charge in the quarter for the settlement, the firm's net income was only $181M. Operating metrics were weak, as expected: fixed income revenue fell 22% q/q and stock trading revenue declined 25% q/q. The other big US banks are up 1.5-2.0% on Citi's earnings.

- There are three major deals in headlines this morning. AECOM has reached a deal to acquire URS Corporation for $56.31/shr in cash and stock in a deal valued about $6B. Kodiak Oil & Gas agreed to be acquired by Whiting Petroleum in an all-stock transaction valued at $6B. The transaction will create the largest Bakken/Three Forks producer with over 107,000 boe/day of production. Abbott is selling its developed markets branded generics pharmaceuticals business to Mylan in an all-stock deal valued around $5.3B.

- Tech name Riverbed cut its second quarter outlook to the low end of its prior guidance, sending shares of RVBD down 5.6%. Executives blamed slowing sales in North America and longer sales cycles. Elliott Management (6.0% holder) reaffirms its standing $21/shr bid for the company and said the poor performance in the quarter only strengthens the logic behind its offer.

***Looking Ahead**
- 11:30 (US) Treasury to sell 3-Month and 6-Month Bills
- 13:00 (EU) ECB Draghi at EU Parliament
- 21:30 (AU) RBA Minutes of July Meeting


***Economic Data***
- (IE) Ireland May Trade Balance: €3.3B v €2.9B prior
- (IN) India Jun CPI Y/Y: 7.7%e v 8.3% prior
- (PL) Poland May Current Account: €0.3B v €0.5Be; Trade Balance: €0.2B v €0.4Be
- (PL) Poland May M3 Money Supply M/M: 0.4% v 0.5%e; Y/Y: 5.2% v 5.3%e
- (CA) Canada Jun Teranet/National Bank HPI M/M: 0.9% v 0.8% prior; Y/Y: 4.4% v 4.6% prior; House Price Index: 163.98 v 162.5 prior