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Reports US

US stock market, economy and companies update (May 08, 2014)

May 8, 2014, Thursday, 16:23 GMT | 11:23 EST | 19:53 IST | 22:23 SGT
Contributed by Trade The News

- Global equity markets moved higher overnight and US shares have benefitted from follow-through strength. As of writing, the DJIA is up 0.39%, the S&P500 is up 0.42% and the Nasdaq is up 0.84%.

- Once again there were no surprises from either the BoE or ECB rate decisions. In his post-decision press conference, President Draghi offered another helping of dovish verbal intervention. In a way he partially abandoned Trichet's principle that the ECB never pre-commits, noting that the committee had laid the ground work for action in June, if needed. Note that next month's meeting will include fresh staff projections; Draghi said the council would be comfortable acting at that time if necessary. The dovish remarks took the euro off its 2014 highs around 1.3993 to back under the 1.3900 level

- The 10-year benchmark yield is below 2.560% at multi-month lows as Chair Yellen holds her second day of semi-annual monetary policy testimony before Congress. Nothing really new is being heard from Yellen, or in other Fed speak this morning from Plosser, Fisher and Tarullo. Low-rated company bonds are averaging yields of 5.04%, just shy of the all-time low from May 2013 at 4.95%, according to a Barclays index tracking the debt.

- Shares of Tesla are off their worst levels this morning, but are still down 7%. The media focus has shifted to CEO Musk's comment that Tesla would be marginally profitable in Q2, and to questions about the viability of the Gigafactory project and the choice of partner for the facility. On the conference call Musk said he would be surprised if Panasonic did not agree to come on board, however in a statement Panasonic warned that nothing has been decided at this stage. Back in April, Panasonic executives hinted that the Gigafactory presented considerable investment risks.

- Among the big losers this morning are Teradata Corp, down nearly 10% after trimming its FY guidance, and Dot Hill, down nearly 15% on some weak revenue and guidance numbers.

- April same-store sales were broadly higher than expectations and showed a pronounced improvement from the weak results seen over February and March. Executives were nearly unanimous in describing improved traffic and spending driven by some pent-up demand. McDonalds saw a nice bounce back from its winter comps, however US sales were flat and all the growth came from abroad.

- Danish firm H. Lundbeck reached a deal to acquire biotech Chelsea Therapeutics for $6.44/shr, in a deal valued at $658 million. The deal bolsters Lundbeck's position in rare neurologic disorders, giving it access to Chelsea's Northera drug, used to treat symptoms such as dizziness and blurred vision that are associated with neurogenic orthostatic hypotension. Several beaten-down biotechs are benefitting from the deal, with neurologics-focused names like SGMO and ACAD up 5% a piece, but off their best levels

***Looking Ahead***
- 12:30 (CH) SNB's Danthine in Lausanne
- 13:00 (BR) Brazil Mar CNI Capacity Utilization: No est v 82.6% prior
- 13:00 (US) Treasury to sell $16B in 30-Year Bonds
- 14:00 (US) Fed's Bullard gives Welcome at Household Finance Conference
- 16:30 (NZ) RBNZ Dep Gov Spencer on housing
- 19:00 (PE) Peru Central Bank Interest Rate Decision: expected to leave Reference Rate unchanged at 4.00%
- 21:00 (KR) Bank of Korea (BOK) Interest Rate Decision: Expected to leave 7-Day Repo Rate unchanged at 2.50%
- 21:30 (CN) China Apr PPI Y/Y: -1.9%e v -2.3% prior
- 21:30 (CN) China Apr CPI Y/Y: 2.1%e v 2.4% prior
- 21:30 (AU) RBA Statement on Monetary Policy

***Economic Data***
- (ZA) South Africa Apr Gross Reserves: $ v $49.6Be; Net Reserves: $ v $45.1Be
- (MY) Malaysia Central Bank (BNM) Interest Rate Decision: expected to leave Overnight Policy Rate unchanged at 3.00%
- (IE) Ireland Apr CPI M/M: 0.1% v 0.7% prior; Y/Y: 0.4% v 0.2% prior
- (IE) Ireland Apr CPI EU Harmonized M/M: 0.0% v 0.1%e; Y/Y: 0.5% v 0.4%e
- (UK) Bank of England (BOE) left both Interest Rates and Asset Purchase Target unchanged at 0.50% and £375B respectively, as expected
- (RU) Russia Gold and Forex Reserve w/e May 2nd: $471.6B v $482.7B prior
- (ZA) South Africa Mar Manufacturing Production M/M: -1.9% v -1.1%e; Y/Y: 0.7% v 2.9%e
- (EU) ECB left all Key Rates Unchanged; Main Refi Rate unchanged at 0.25%; Deposit Facility Rate unchanged at 0.00% and Marginal Lending Facility unchanged at 0.75%
- (CL) Chile Apr CPI M/M: 0.6% v 0.2%e; Y/Y: 4.3% v 3.9%e; CPI Core M/M: 0.8% v 0.2%e
- (CA) Canada Apr Housing Starts (Annualized): 194.8K v 175.0Ke
- (US) Initial Jobless Claims: 319K v 325Ke; Continuing Claims: 2.685M v 2.76Me
- (CA) Canada Mar New Housing Price Index M/M: 0.2% v 0.2%e; Y/Y: 1.6% v 1.5% prior
- (MX) Mexico Apr CPI M/M: -0.2% v -0.1%e; Y/Y: 3.5% v 3.6%e; CPI Core M/M: 0.3% v 0.4%e
- (US) Weekly EIA Natural Gas Inventories: +74 bcf vs. +69-73 bcf expected