Strong Merger Activity Leads Off the Week
Today's financial recap and tomorrow's financial outlook.
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).
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