** MORNING WRAP **
** US MARKETS **
Dow 0,67%; Nasdaq 0,65%; S&P 0,81%; Soxx 1,77%; Russel2k 1,4%; DJAIG -1,1%; 10yr
Bond -0,09%; 10yr Yield 5,13%; Crude future 71,1; Gold 635,5
| Energy 2,01%| Utilities 1,36%| Materials 1,21%| ConsDisc 1,03%| Telecom 0,96%|
Industrials 0,8%| Healthcare 0,73%| Financials 0,61%| ConsStaples 0,44%|
Technology 0,26%
** US HEADLINES **
- Fed Policy Makers, Seeking Chance to Pause, Less Likely to Get One in June
- U.S. Bancorp, GlaxoSmithKline May Find Favor as Stock Volatility Returns
- OPEC May Keep Oil Production Quotas Steady Until Yearend to Soothe Markets
- Microsoft Allies With Toshiba, DoCoMo, Victor to Develop Japan IPod Rival
- Dollar Gains Versus Euro as Traders Boost Bets for Further Rate Increases
- Gold Falls Most in a Week as Iran Nuclear Talks Ease Demand for Safe Haven
- Oil Falls as U.S. Offers to Join Talks on Iran
** FED MINUTES **
With the market still reeling since the Fed last raised interest rates on May
10th, investors were somewhat optimistic throughout the session about the Fed’s
comments discussing a possible pause with its tightening. Nevertheless, since
the minutes clearly reflected uncertainty and disagreement on the part of
members as to what the future will bring, as the range of discussion bordered a
possible no hike to as much as a 50-basis point increase, the slightly higher
degree of concern about inflation raises the risks that the Fed will find the
need to keep raising rates. To wit, fed funds futures are now pricing in more
than a 70% chance for the first time since late April of a 1/4% rate hike in
late June. Bond traders were also less optimistic about what Fed officials had
to say about inflation pressures and a potential pause, as the yield on the
10-yr note crept up 6 basis points from session lows to 5.11% — the highest
closing level since mid-May.
** US: AFTER HOURS / IN PLAY TODAY **
- Excluding non-recurring items, Novell (-9% after hours) reported Q2 earnings
of $0.03 per share, in line with the Reuters Estimates consensus of $0.03. Total
revenues fell 6.3% year/year to $278.3 mln vs. the $276 mln consensus. Co issued
downside guidance for Q3, sees EPS of $0.03 (consensus $0.04) and revenues of
$239-247 mln (consensus $282.80 mln).
- Sun Microsystems (unchanged after hours) announced that it’s board of
directors has approved a growth plan with the goal of accelerating Sun’s return
to consistent profitability. The plan provides for increasing investment in core
technology and channel resources, while accelerating acquisition synergies and
disinvestments in non-core processes and R&D activities.
Investors will get a revision to Q1 Productivity and weekly jobless
claims to sift through at 14:30 CET. The May ISM Index and April Construction
Spending will be out at 16:00 CET while the Energy Dept.s weekly inventories
data will hit the wires at 16:30 ET. The OPEC meeting and a UN Security Council
meeting to discuss Iran will also keep oil prices in focus while car makers will
garner some attention amid the intraday releases of monthly auto sales data.
Also on the corporate news front, May same-stores sales figures from more than
60 retailers will be out before the bell along with earnings reports from HJ
Heinz (HNZ), Dollar General (DG), Ciena (CIEN), and Brown-Forman (BF.B).
** ASIAN MARKETS **
Nikkei 0,17%; Kospi -1,58%; HSI -0,11%; Taiwan 0,38%; China 2,18%; India -0,61%;
Thailand 0,23%; Australia 0,75%
** ASIAN HEADLINES **
- Tabcorp Bids $1.4 Billion for Unitab, Topping Agreed Tattersall’s Offer
- Japan’s A2 Sovereign Debt Rating Outlook Raised to `Positive’ at Moody’s
- Asian Stocks Rise as U.S. Dollar Strengthens; Toyota, BHP Billiton Advance
- Bank of China Shares Rise in Hong Kong Following $9.73 Billion Share Sale
- India May Raise Interest Rate to Curb Inflation as Economy Accelerates
- Thailand’s Inflation Accelerated in May to Seven-Month High on Fuel Costs
- Malaysia Risks Igniting Inflation as Power, Fuel Increases, Spark Protests
** EUROPEAN MARKETS **
S&P future 0,97%; Bund future -0,22%; Crude future 71,1; €/$ 1,2773; Gold 635,5
** EUROPE: IN PLAY TODAY **
- ABB Ltd.: The world’s largest maker of electricity
networks said creditors holding more than 600 million euros ($770
million) of its debt have agreed to exchange their holdings for a
longer-dated bond that will allow the company to extend the
maturity of its borrowings.
- Arcelor SA: Luxembourg’s financial securities
regulator approved Mittal Steel Co.’s revised offer for
the steelmaker and extended the bid’s offer period to July, the
agency said.
- Assicurazioni Generali SpA: Italy’s largest insurer
denied it’s planning a takeover of Swiss Life Holding,
Switzerland’s biggest life insurer.
- Commerzbank AG: Germany’s second-biggest lender may
cut as many as 3,000 jobs in its domestic market, Die Welt said,
citing unidentified people familiar with the situation.
- Deutsche Bank AG: Europe’s biggest securities firm
by revenue plans to expand its wealth management business, the Sueddeutsche
Zeitung sai, citing the head of the bank’s private wealth management.
- Deutsche Telekom AG: Europe’s largest phone company
is “well underway” to complete the first phase of its 3
billion-euro fiber-optic network in Germany that can transmit
data such as live television programs.
- Man Group Plc: The world’s largest hedge fund
company may say full-year profit rose to a record $1.05 billion
from $885 million a year earlier, as clients invested more money
and performance fees increased.
- OAO Gazprom: Morgan Stanley Capital International
Inc. will raise the weighting of the world’s largest natural gas
producer in the MSCI Emerging Markets Index to 2.45 percent from
0.38 percent as of June 1. The index provider will further
increase Gazprom’s share to 4.79 percent in August.
- Royal BAM Groep NV: The biggest Dutch builder
will probably say first-quarter net income rose 19 percent from a
year earlier to 27.4 million euros, according to the median
estimate of eight analysts surveyed by Bloomberg News.
- United Utilities Plc: The U.K.’s largest publicly
traded water company will release preliminary fiscal full-year
earnings, according to the company’s web site.
- E.ON AG’s headquarters may have been searched by European Union regulators,
who seized senior managers’ computers in connection with an inquiry linked to
competition law, Berliner Zeitung said, citing “official” EU documents.
- German PMI Manufacturing Growth is released at 9:55 CET.
** EUROPE: UPS & DOWNS **
+ SCOTTISH POWER ADDED TO `EUROPE 1′ LIST AT MERRILL LYNCH
+ BANK OF IRELAND PRICE EST. RAISED TO EU14 AT DEUTSCHE BANK
+ RICHEMONT RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ STADA RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ BANK OF IRELAND PRICE ESTIMATE RAISED TO EU15.17 AT LEHMAN
+ TATE & LYLE RAISED TO `BUY’ FROM `HOLD’ AT CITIGROUP
- SCOTTISH & SOUTHERN PRICE EST. CUT TO 1240P AT MORGAN STANLEY