Market Snapshot
Asia: Japan -0.4% to 19780. Hong Kong +2.1% to 24901. China +4.6% to 3878. India +0.3% to 27661.
Europe: London +1.1%. Paris +2.9%. Frankfurt +2%.
Futures: Dow +1%. S&P +1.1%. Nasdaq +1.1%. Crude +0.8% to $53.21. Gold +0.2% to $1161.80.
Ten-year Treasury Yield +6 bps to 2.36%
Economic News
10:00 Wholesale Trade
12:00 PM Janet Yellen speech
Markets
US stock futures are higher today as markets saw Greece’s reform proposal and bailout request as a step in the right direction. European creditors have set Sunday as the deadline to reach a deal.
Greek Prime Minister Alexis Tsipras appears to have offered to meet most creditor demands in exchange for a new €53.5B bailout, after submitting an 11th-hour proposal to get fresh funds and avoid bankruptcy. Stocks across the globe are all toasting the news. The package of spending cuts, pension savings and tax increases almost mirrors that from creditors on June 26, which was rejected by Greek voters in a July 5 referendum. Eurozone decision makers are set to assess the plan during crisis meetings on Saturday and Sunday.
Oil rose for a second day after Iran and world powers missed another deadline for a nuclear deal that could have ended sanctions on the OPEC producer. “We shouldn’t get up and leave just because the clock strikes midnight,” said Secretary of State John Kerry. “But as I have said many times…we are not going to sit at the negotiating table forever.” Any future agreement is now subject to 60 days of scrutiny, pushing back the date when Iran could qualify for a relief in sanctions.
Despite the focus on Iranian negotiations, the International Energy Agency has warned in its widely followed monthly report that the rebalancing of the oil market that started last year has yet to run its course and a bottom in prices “may still be ahead.” In a bearish assessment of market conditions, the IEA said the adjustment process would “extend well into 2016” as demand growth slowed. Oil prices on both sides of the Atlantic fell sharply this week, but staged a minor comeback since yesterday.
Federal Reserve Chair Janet Yellen will discuss her views on U.S. growth, inflation and the job market today at the City Club of Cleveland at 12:00 p.m. ET. While many don’t expect the speech to be market moving, it can provide insight into whether international risks are serious enough to keep the central bank from raising rates this year. The Fed, in the minutes from its June meeting, noted that it was watching the events in Greece and was concerned about China’s economy.
Chinese stocks rose sharply for a second day today, as Beijing’s tightening grip on the market encouraged investors to load up on shares. Regulators on Friday ordered listed companies to submit plans to stabilize their stock prices, via measures such as share buybacks and employee shareholding plans. However, it still remains to be seen whether the rally can overcome the steep declines that wiped out trillions of dollars in value from Chinese equities over the past four weeks. The Shanghai Composite closed up 4.6% (although it’s still off 24.5% from its June high).
Stocks
Aetna is lining up a $16.2B bridge loan to fund its acquisition of Humana (HUM) – the first multibillion M&A loan of 2H15 and the second-largest acquisition bridge loan so far this year. On July 3, Aetna (AET) said it would buy Humana for $37B in the insurance industry’s largest-ever acquisition. In the past two weeks, Anthem (ANTM) has also offered to buy Cigna (CI) to create the largest insurer in the country, toppling UnitedHealth (UNH).
Tesla has hired ex-Burberry (BURBY) senior vice president Ganesh Srivats to lead North American sales, adding an executive to help extend its reputation for automotive luxury. Srivats will help Tesla (TSLA) deepen its already formidable brand into a premium lifestyle experience to go with its high-tech image, taking a cue from the kind of marketing BMW, Porsche and Ferrari have done.
Private equity firm Thomas H. Lee Partners is in advanced talks to acquire the enterprise business of eBay (EBAY) for close to $1B, Reuters reports, but cautions that price disagreements remain and there’s no guarantee a deal will be inked. eBay’s enterprise business, formerly known as GSI Commerce, helps retailers around the world beef up their online presence and e-commerce capabilities.
Confirming previous reports, Holcim (HCMLY) announced CEO Bernard Fontana will step down when the merger with France’s Lafarge (LFGEF) is completed this month. Eric Olsen, who currently serves as Lafarge’s executive vice president of operations, has been selected to run the combined company. The $47B union will create a globe-spanning building materials giant with combined revenue of roughly $35B and operations in 90 countries.
IDC estimates global PC shipments tumbled to 66.1M in the second quarter, falling at a sharper clip than the first quarter’s 6.7%. Gartner is slightly less harsh, estimating shipments fell 9.5% to 68.4M. Factors blamed for the decline: Inventory reductions ahead of the Windows 10 launch set for July 29, a strong dollar which has led to higher overseas prices, and the end of Windows XP support.
Ryanair has voted to accept an offer from IAG (ICAGY) for its 29.8% stake in Aer Lingus (AIRXY), paving the way for the British Airways-owner’s €1.3B takeover of the Irish carrier. The board “believes that the current IAG offer maximizes Ryanair (RYAAY) shareholder value,” the Dublin-based company said in a statement. European Union approval is now seen as the last remaining hurdle for the proposed deal.
Six former employees of Tencent’s online video business have been arrested by Chinese authorities in connection with a bribery investigation. Among the detained is Patrick Liu Chunning, head of Alibaba’s (BABA) digital entertainment unit, who was previously a senior executive at Tencent’s (TCEHY) online video business. “This issue is related to his time at Tencent and has nothing to do with Alibaba,” an Alibaba spokesman said.
Whole Foods has adopted new rules to make it easier for groups of small shareholders to run candidates for the company’s board of directors. In a recent filing, Whole Foods (WFM) said it approved bylaw amendments to allow a group of up to 20 shareholders owning at least 3% of the company’s stock to nominate director candidates and have them included on the company’s proxy materials.
Chad Cohen, Zillow’s Chief Financial Officer since 2011, is resigning to “pursue other business interests,” effective Aug. 7. Shares dropped 4.4% during after-hours trade on the news. The fact Zillow (Z) didn’t use its announcement to reaffirm guidance could be weighing.