Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Strong Merger Activity Leads Off the Week


Today's financial recap and tomorrow's financial outlook.

There were three main themes that dominated the weekend's activity. First, Iraqi rebels moved closer to the capital city of Baghdad, which prompted US equity futures to trade lower when they opened yesterday evening. (Crude oil traded only marginally higher, as it has already priced in a marginal shortfall in production.) In Asia, three major Chinese banks announced this morning that they had secured governmental backing for a targeted 0.5% reserve-ratio-requirement cut, which helped Chinese stocks finish higher. Lastly, Russia followed up on its deadline to cut off gas supplies to Ukraine from its state-owned entities due to outstanding unpaid debt, and will require prepayment for any future purchases.

All of the above kept risk assets generally under pressure, but US stocks managed to trade positive for much of the day. The S&P 500 (INDEXSP:.INX) ended the session near unchanged. Utilities remained strong for a second straight day, helped by the fact that longer-duration US interest rates remained lower for most of the session. Energy stocks were also strong.

Industrial production rose 0.6% month-on-month in May, beating the expectation for 0.5%  growth, and April's growth was revised higher. Housing market sentiment measured by the NAHB Housing Market Index rose to 49 in June, from 45 the month prior.

The IMF lowered its growth forecast for the US by 0.8%, to 2.0%, for 2014, echoing a cut of similar magnitude by the World Bank last week. It left its 2015 forecast unchanged. The IMF also said the Fed may have scope to keep rates at zero while remaining mindful of financial stability risks, as potential growth in the US was seen averaging 2% through 2018. It recommended raising the minimum wage, increasing investment in infrastructure, and closing tax loopholes to help stimulate overall growth.

Flash memory producer Sandisk (NASDAQ:SNDK) announced this morning that it was acquiring Fusion-io (NYSE:FIO) for $11.25 per share, or $1.3 billion. Fusion-io skyrocketed on the news, finishing up 22.63% at $11.38. Other flash names like Violin Memory (NASDAQ:VMEM) and Nimble Storage (NASDAQ:NMBL) also gained on the news.

Tomorrow's Financial Outlook

The main economic report scheduled for tomorrow morning is May consumer prices. Producer prices from the same month, reported last week, were inline with economist expectations, which has caused most CPI forecasts to be revised down slightly. Year-over-year prices are expected to continue to grow by 2.0%. May housing starts and building permits are also expected to be reported tomorrow. Starts are expected to edge down slightly to a 1.040 million annual rate, from a 1.072 million annual pace the month earlier.

The main global report scheduled for tomorrow is the ZEW survey of professional investors' thoughts on current economic conditions and future expectations. The UK's consumer price index for May will be reported tomorrow morning and will garner more attention than normal after Bank of England Governor Carney said that the bank will probably raise rates earlier than the market expects.

The only two earnings reports scheduled for tomorrow are Bob Evans Farms (NASDAQ:BOBE) and Adobe Systems (NASDAQ:ADBE).

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos