** MORNING WRAP **
June 29th, 2006** US MARKETS **
Dow 0,45%; Nasdaq 0,55%; S&P 0,55%; Soxx -0,57%; Russel2k 0,16%; DJAIG 0,23%;
10yr Bond 0%; 10yr Yield 5,24%; Crude future 72,38; Gold 580,79
| Energy 1,97%| Telecom 0,6%| Technology 0,56%| Financials 0,48%| Utilities
0,45%| Industrials 0,38%| ConsStaples 0,35%| Healthcare 0,26%| Materials 0,21%|
ConsDisc 0,14%
** US HEADLINES **
- Americans Want Federal Reserve to Stop Raising Interest Rates, Poll Shows
- U.S. Economy Probably Expanded at 5.6 Percent Annual Rate in First Quarter
- Carlyle Doubles Size of New Japan Buyout Fund to $1.7 Billion, People Say
- Paulson Plays Safe on China, Tax Cuts, Deficits on Road to Treasury Post
- Convertible Bond Sales Almost Double on Rising Rates and Stock Volatility
- U.S. Senators Hatch, Specter Say More Hedge-Fund Oversight May Be Required
- Research In Motion, Palm May Say Sales Growth Slows as Competition Gains
- VCs, Gripped by Green Power Frenzy, Gamble on Solar, Biofuel Money-Losers
** US; IN PLAY TODAY **
- Micron Technology (-3.2% after hours) reported Q3 (May) earnings of $0.12 per
share, $0.04 better than the Reuters Estimates consensus of $0.08. Revenues rose
7.1% year/year to $1.31 bln vs. the $1.36 bln consensus. Gross margin increased
from 19% in Q2 to 25% in Q3 due to increases in DRAM pricing and production
shifts to higher margin products including CMOS image sensors. Imaging sales
grew to about 16% of net sales for 3Q06 as a result of strong customer demand
for Micron’s industry-leading Digital Clarity products.
Without question, the focal point Thursday will be the culmination of a two-day
FOMC meeting that is widely regarded to end with the overnight lending rate
being raised another 25 basis points to 5.25% at 20:15 CET. What is not a
foregone conclusion, however, is what the accompanying Fed policy directive will
imply about further rate hikes.
Notwithstanding the markets focus on the Fed, there are still some economic data
and a few earnings reports that will garner attention. At 14:30 CET, investors
will get a final read on Q1 GDP, Q1 Chain Deflator and Initial Claims. On the
earnings front, ATI Technologies (ATYT), General Mills (GIS), Monsanto (MON) and
Worthington (WOR) are scheduled to report before the bell while Accenture (ACN),
CA Inc. (CA), Constellation Brands (STZ), Palm Inc. (PALM) and Research In
Motion (RIMM) will report after the close.
** ASIAN MARKETS **
Nikkei 1,26%; Kospi 2,31%; HSI 0,93%; Taiwan 1,02%; China 1,84%; India 1,22%;
Thailand 0,84%; Australia 0,83%
** ASIAN HEADLINES **
- Japan’s Bond Trading Disrupted by Computer Malfunction at Biggest Broker
- Asian Stocks Rise on Signs Consumers Can Weather Higher Rates; Sony Gains
- Carlyle Doubles Size of New Japan Buyout Fund to $1.7 Billion, People Say
- India Economy Won’t Be Hurt by Rising Rates, Commerce Minister Nath Says
- Indonesia’s Kalbe May Buy Drug Developer, Health Brands, President Says
- Japan’s Industrial Production Falls More Than Expected, Led by Automakers
- BlueScope Steel Cuts Profit Estimate for Third Time This Year: Shares Fall
- China Studying Plan for Hong Kong to Sell Yuan Bonds, Jia Qinglin Says
- Zinifex, Asian Zinc Producers’ Shares Set to Rise Amid Metals-Market Slump
- Gold Rises in Asian Trading as Higher Oil Prices Spark Inflation Concern
- Crude Oil Trades Near Three-Week High on U.S. Gasoline Supply Concerns
- Copper in Shanghai Rises After London Stockpiles Decline to Six-Month Low
** EUROPE: IN PLAY TODAY **
- European Money Supply Growth will be reported at 10:00 CET in Germany today.
- BP Products North America, the U.S. unit of Europe’s largest oil company,
drove up the price of propane used to heat homes and businesses in the
northeastern U.S. in February 2004 and tried to do the same in April 2003,
according to the U.S. Justice Department and Commodity Futures Trading
Commission, which filed suit yesterday in federal court.
- French Interior Minister Nicolas Sarkozy, head of the majority UMP party, said
he backs a merger of Gaz de France and utility Suez SA to guarantee the
future for the gas company and repel a hostile takeover of the utility.
- L’Oreal SA: The world’s largest cosmetics maker said
it spent 1.25 billion euros ($1.6 billion) to repurchase 18.8
million shares, or 2.9 percent of the total, in the past year and
may buy back a similar amount in the next 12 months.
- Draka Holding NV: Europe’s third-largest cable
maker is scheduled to provide a trading update.
- EMI Group Plc: The world’s third-largest music
raised its offer for Warner Music Group to $4.6 billion
and rejected a counterbid from the U.S. company, intensifying a
six-year struggle to create the world’s second-largest record
label.
- European Aeronautic, Defence & Space Co.: The
parent company of Airbus SAS may be active. TAM SA,
Brazil’s biggest domestic airline, placed a firm order for 37
Airbus aircraft worth as much as $3 billion, part of an effort to
boost its fleet to meet rising demand.
- OAO Gazprom: The world’s largest natural gas
company and the Italian oil and gas company Eni SpA
discussed cooperating on developing new gas fields in countries
including Russia, Gazprom said in a statement after markets
closed.
- Q-Cells AG: The German solar-cell maker raised its
full-year profit forecast to 68 million euros from a prior
prediction of 65 million euros and increased its sales
expectation to about 500 million euros from 480 million euros, as
productivity improves.
- Tesco Plc: The share of the Britain’s biggest
supermarket in the U.K. grocery market reached a record in the
past month rising to 31.4 percent from 31.1 percent in the 12
weeks ended June 18, according to figures released today by
Taylor Nelson Sofres Plc.
- Vinci SA: The world’s biggest construction company
said it and a partner Consolidated Contractors Co. won a $115
million contract to build the Wadi Dayqah dams in Oman.
- Volkswagen AG: Audi AG, a division of the German
carmaker, aims for a higher return on equity than the 10 percent
targeted at the moment, Boersen-Zeitung said, citing an interview
with Chief Financial Officer Rupert Stadler.
** EUROPE: UPS & DOWNS **
+ BAYER PRICE ESTIMATE RAISED TO EU39 FROM EU32 AT ING
+ AEGON RAISED TO `BUY’ FROM `HOLD’ AT GILISSEN
+ DSM PRICE ESTIMATE RAISED TO EU47 AT ING
+ EMI PRICE ESTIMATE RAISED TO 300P FROM 260P AT MORGAN STANLEY
+ DELHAIZE PRICE ESTIMATE RAISED TO EU63.5 AT MORGAN STANLEY
+ DUKE ENERGY PRICE EST. RAISED 6.3% TO $34 AT LEHMAN
+ LADBROKES PRICE ESTIMATE RAISED TO 400P FROM MORGAN STANLEY
+ AGUAS DE BARCELONA PRICE TARGET RAISED 14.3% AT DEUTSCHE BANK
+ ASTRAZENECA RAISED TO `ADD’ FROM `SELL’ AT DRESDNER
- WIMPEY PRICE ESTIMATE LOWERED TO 500P FROM 530P AT UBS
- BOSTON SCIENTIFIC CUT TO `SELL’ VS. `HOLD’ AT CITIGROUP
- A.P. MOELLER CUT TO `NEUTRAL’ FROM `OVERWEIGHT’ AT HSBC
- HANNOVER RE PRICE TARGET CUT 2% TO EU29.9 AT DEUTSCHE BANK
- EADS PRICE ESTIMATE CUT 23% TO EU24 AT JPMORGAN
- TUI PRICE ESTIMATE LOWERED TO EU15.2 FROM EU16.5 AT DEUTSCHE
- BAE SYSTEMS PRICE ESTIMATE LOWERED TO 430P FROM 450P AT LEHMAN