Thursday Morning Reads
- Tune Out The Noise
- Trade War
- Its the Buybacks Stupid
- Treasuries Risk
- Crash Course in Market Timing
- Facebook Data Leak
- Likes Growth Prospects, Despite Risks
- Impossible’ to Call It a ‘Buy’
U.S. market futures were pointing to a fractionally higher open after Wednesday’s huge late-session turnaround rally, which saw stocks reverse sharply higher following the dour trade that had started the day. The Dow climbed more than 700 points from its session low, assisted by some short-covering activity that further accelerated the upward move in the major averages to their best marks of the day. The specific turnaround point appeared to occur when NEC Director Larry Kudlow discussed the possibility that the China tariffs would not go into effect and that Pres. Trump wants to solve the trade dispute through negotiations.
Following Wednesday's tariff battle between the U.S. and China, which prompted volatile trade during the session, the sides "will now follow a timeline stretching over the next half year, during which the two sides will seek to negotiate a new normal," says a Wall Street Journal analysis. "As the trade negotiations grind on, many investors resigned themselves to more significant price swings in the markets," says the WSJ, even as many are skeptical that any trade war "will ever come to fruition."
With Japan's inflation climbing at a faster-than-expected pace, the country's benchmark rate will probably be raised within a year, said a former Bank of Japan chief economist in a Bloomberg interview. Hideo Hayakawa said the hike should come after "core core" inflation - that of consumer prices, excluding fresh food and energy - rises to 1% from the current 0.5%.
Industrial orders in Germany ticked 0.3% higher in February from the prior month, widely missing the economist consensus of 1.5%. However, the rise marks a reversal from January's 3.5% slide. The pickup was largely driven by a 1.4% rise in foreign demand, whereas domestic orders slumped 1.4%.
J.M. Smucker has agreed to acquire pet food and pet snacks maker Ainsworth Pet Nutrition for ~$1.7B, in a bid to strengthen its position in an industry that generates more than $30B in annual retail sales. Smucker (NYSE:SJM) expects the acquisition to contribute $800M in net sales in the first full year after closing the transaction, and contribute ~$0.25/share of accretion to its adjusted earnings.
Tension is running high in the talks to merge CBS (NYSE:CBS) and Viacom (VIA, VIAB), and the rancor could derail or at least delay the proposed recombination, according to people familiar with the matter, reports the Wall Street Journal. Both companies are now "digging in their heels in negotiations over deal price and leadership," says the WSJ, after CBS's lowball offer for Viacom earlier this week.
Facebook has two basic questions to address in the Cambridge Analytica data leak scandal, CEO Mark Zuckerberg said on a conference call with media: Can Facebook (NASDAQ:FB) protect users, and can it make sure it's not used to undermine democracy? "We have to go through every part of our relationship with people, and make sure that we're taking a broad enough view of our responsibilities," he said.
Carlyle Group has inked a deal to take out Accolade Wines, Australia's biggest winemaker, for $772 million (A$1B). Carlyle (NASDAQ:CG) is buying Accolade from 80% holder CHAMP Private Equity and Constellation Brands (NYSE:STZ) - the beer, wine and spirits giant - which owns the remainder. “This is a company with great brands and strong market positions, with multiple growth opportunities, particularly in Asian markets,” said Carlyle in a statement.
The cyberattack that hit the operations of at least four gas pipeline companies in recent days also was felt in the utility industry, Bloomberg reports. Duke Energy (NYSE:DUK) said it first learned of the attack on March 30 because it shares consumer data with third-party electricity and gas providers in Ohio through an electronic system run by Energy Services Group, the data firm that was hacked.
Sears Holding and Delta Air Lines said a security breach at 7.ai, which handles online customer support for both companies, may have exposed some of their customers' credit card data. Sears (NASDAQ:SHLD) said the hack has impacted fewer than 100,000 of its customers, and Delta (NYSE:DAL) relayed that such personal details as passport information have not been compromised.
Carl Icahn said he will nominate a full slate of board members for SandRidge Energy (NYSE:SD) that would commit to seeking strategic alternatives for the company, according to an SEC filing. Icahn, SD's largest shareholder with a 13.5% stake, also said he is willing to make an all-cash offer for the company that would allow SD shareholders the choice of monetizing the investment or continuing on as investors.
The Massachusetts attorney general can move forward with a lawsuit accusing credit reporting firm Equifax (NYSE:EFX) of failing to safeguard its databases or provide prompt notice of a breach that exposed the personal data of 147M people, a state court judge ruled today. The lawsuit states a plausible claim that EFX breached its legal duties to address all reasonably foreseeable risks to its data security, the judge said.
Royal Dutch Shell is threatened with legal action aimed at forcing the company to shift away from fossil fuels if it fails to commit within eight weeks to bring its business into line with the Paris climate agreement, the Financial Times reports. Shell (RDS.A, RDS.B) has gone further than most peers by setting an “ambition” to reduce its carbon footprint by 50% by 2050.
BHP Billiton has withdrawn from the World Coal Association, a coal lobbying group, due to a "material difference" over climate change and in view of "the narrow range of activities of benefit to BHP from membership." The company, which publicly supports the Paris climate accord, first signaled its intent to potentially leave the WCA in December.
Gamco has given a boost to its stake in Clear Channel Outdoor Holdings (NYSE:CCO), according to an amended ownership filing. Various Mario Gabelli affiliates report an aggregate ownership of 5,386,718 shares, amounting to 11% of shares outstanding. Gabelli/Gamco is the No. 2 shareholder in Clear Channel Outdoor.
Nike's top HR executive has issued a memo panning the company's failure to promote enough women and minorities to senior-level positions, the Wall Street Journal reports. “While we’ve spoken about this many times, and tried different ways to achieve change, we have failed to gain traction—and our hiring and promotion decisions are not changing senior-level representation as quickly as we have wanted,” Nike's (NYSE:NKE) Monique Matheson wrote.
In Asia, Japan +1.53%. Hong Kong closed. China closed. India +1.94%.
In Europe, at midday, London +1.29%. Paris +1.75%. Frankfurt +1.81%.
Futures at 6:20, Dow +0.28%. S&P +0.38%. Nasdaq +0.55%. Crude +0.08% to $63.42. Gold -0.72% to $1,330.60. Bitcoin -3.8% to $6,780.
Ten-year Treasury Yield +3.3 bps tp 2.823%.
Today's Economic Calendar
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 International Trade
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet