Reports » US

US stock market, economy and companies update (November 26, 2012)

Contributed by Trade The News

- Concerns about the fiscal cliff are trumping strong holiday spending this morning. Yesterday key Demcratic Senator Durbin commented that little progress was made toward resolving fiscal cliff during Congressional recess over the past 10 days.

- US stocks open in the red, helping US Treasurys add to existing gains. The yield on the 10-year UST ticked below 1.645%, the S&P500 and DJIA are trading down 0.6% a piece, while the NASDAQ is down 0.2% but off its worst levels.

- FX markets have been relatively quiet during as participants await news from the latest Eurogroup meeting on Greece. Achieving debt sustainability for Athens is the continuing goal, although opinions are mixed as to whether a deal is possible today. The current Greek government may fall if a deal is not reached.

- Morgan Stanley forecasted an FY13 S&P target of 1,434 and said corporate earnings would modestly recover in FY14. MS expects the US deficit, the EU sovereign crisis and slower growth from emerging markets to continue to be issues in FY14, but not as serious as this year.

- Retail names are trading lower after what is being seen as a somewhat disappointing Black Friday. According to ShopperTrak, Black Friday retail sales in the US declined 1.8% y/y to $11.2B. Online retailers are another story: comScore reported that Black Friday online sales rose 26% y/y, hitting a record $1.04B.

- UnitedHealth Group is down 1.6% after offering initial FY13 EPS guidance that was below expectations
($5.25-5.50 v $5.60e). Revenue guidance for the year was better than expected.

- Knight Capital Group is up 9.6% after financial blogs reported that it may have been approached by Getco and Virtu Financial about selling market making operations, its largest and most profitable business

- McGraw Hill confirmed reports from earlier this month that it would sell its education business to Apollo Global Management for $2.5B. The transaction, which is expected to close in late 2012 or early 2013, is subject to regulatory approval and customary closing conditions. McGraw-Hill will be renamed McGraw Hill Financial. MHP is up 2.7%.

- As part of its ongoing strategic repositioning, ConocoPhillips said it would sell its stake in the Kashagan North Caspian venture in Kazakhstan for $5B in proceeds. Shares of COP are flat.

- Goldman Sachs's GS Capital Partners is selling its USI Insurance Services property to hedge fund Onex Corporation for approx $2.3B

***Looking Ahead***
- 11:00 (US) Fed to purchase $1.75-2.25B Notes
- 11:30 (US) Treasury to sell combined $32B in 3-Month and 6-Month Bills
- 13:30 (EU) ECB's Praet Speaks in Berlin
- 14:00 (CA) Canadian PM Harper calls for By-Elections
- 17:00 (GR) Planned Eurogroup press conference on Greece

***Economic Data***
- (IE) Ireland Oct Property Prices M/M: -0.6 v +0.9% prior; Y/Y: -8.1% v -9.6% prior
- (DE) Germany Dec GfK Consumer Confidence Survey: v 6.2e
- (TR) Turkey Nov Industrial Confidence: 101.0 v 102.4 prior; Capacity Utilization: 74.0% v 74.9% prior
- (US) Oct Chicago Fed Nat Activity Index: -0.56 v 0.00 (flat) prior
- (MX) Mexico Oct Preliminary Trade Balance: -$1.7B v -$0.6Be
- (US) Nov Dallas Fed Manufacturing Activity: -2.8 v 2.0e