Market Snapshot
Asia: Japan +1% to 20596. Hong Kong +0.4% to 24019. China +1.8% to 3955. India +0.1% to 27549.
Europe: London +0.9%. Paris +1.8%. Frankfurt +1.8%.
Futures: Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude +0.4% to $43.48. Gold -0.6% to $1116.80.
Ten-year Treasury Yield -3 bps to 2.16%
Economic News
8:30 Jobless Claims
8:30 Retail Sales
8:30 Import/Export Prices
10:00 Business Inventories
4:30 PM Money Supply
Markets
The markets are set to process a slew of U.S. economic data, including retail sales, which are projected to show a healthy rebound after an unexpected decline in June. Strength in July’s report will likely center around motor vehicles, although other components are also predicted to have good showings. The data is the latest in a series of economic figures to suggest the future timing of a Fed interest rate hike.
Markets across the globe staged a relief rally Thursday, taking heart from a late recovery on Wall Street and efforts by the PBOC to slow the sharp descent of the yuan. The gap between the currency’s guidance rate and traded rate closed sharply during the session, stemming a sharp selloff that saw the yuan lose around 4% in just two days. China’s central bank has also stopped “regularly” intervening in the forex market, but will still conduct “effective management” in cases of extreme volatility.
Greece’s parliament is set to vote on the country’s latest bailout deal today, which will then be sent to eurozone member states for approval on Friday afternoon. However, it is still unclear whether the multi-billion euro agreement has the vital backing of Germany. Athens hopes it can complete the accord by August 20, clearing the way for funding before a €3.2B payment falls due to the ECB.
Minutes from the ECB’s last monetary policy meeting are scheduled to be released shortly. The report will offer in-depth insight into policy makers’ views on the economy, inflation, the Greek crisis and its bond-buying scheme. Although the central bank is not currently considering a change to its monetary policy, the minutes are likely to offer more details of the pace and longevity of its quantitative easing program.
Demand for gold fell to its lowest in six years in the second quarter, in a further sign the world’s largest buyers, China and India, are staying away from the precious metal. According to the World Gold Council, overall demand totaled 915 tonnes, a 12% drop from the same period last year. Prices saw further declines due to a strong U.S. dollar and expectations for a Fed rate increase, failing to draw any direction from the uncertainty in Greece and other financial crises. Gold -0.6% to $1116.80 an ounce, after trading between $1200-$1230 during most of Q2.
Stocks
Samsung Electronics is expected to introduce two new big-screen Galaxy smartphone models later today during its Unpacked event in New York. The tech giant hopes the Galaxy Note 5 and Galaxy S6 edge+ will help it regain momentum in the smartphone market after Apple’s (AAPL) new iPhones eroded sales and a dramatic loss of Chinese market share. During the second-quarter, operating profit at Samsung’s (SSNLF) mobile division slid 38% to 2.76T won ($2.4B).
Digital publisher Vox Media has landed a $200M strategic investment from the entertainment group NBCUniversal (CMCSA), forming a partnership between the new and old media companies to collaborate on programming, advertising and technology. The deal values Vox – including SB Nation, Polygon, The Verge and Vox.com – at about $1B. NBCUniversal is also looking to invest $200M into BuzzFeed, valuing that publisher at about $1.5B.
After reporting a 51% slump in fiscal Q1 earnings, Lenovo (LNVGY) said it will cut 5% of its workforce and restructure, continuing the integration of its two recent acquisitions. Lenovo bought both Motorola Mobility and IBM’s (NYSE:IBM) low-end server unit last year, but it has been struggling with them due to China’s saturated smartphone market and slowing global demand for personal-computers.
In another sign of confidence, SoftBank (SFTBY) has purchased another $87M in Sprint (NYSE:S) shares, lifting its stake from 79.4% to about 80%. The move suggests that the struggling carrier’s Japanese parent is a firm believer in its latest turnaround plan, and may increase its stake yet again. However, SoftBank will be careful to limit its holdings to less than 85% (a threshold that would make Sprint a candidate for delisting). S +8% premarket.
Canada’s October election has become the latest event shaping the seven-year saga of TransCanada’s (TRP) Keystone XL pipeline, and may lead to yet another delay in the Obama administration’s decision to approve or reject the controversial project. Prime Minister Harper of the Conservative Party is a Keystone champion, the New Democratic Party’s Mulcair has spoken out against the pipeline, and the Liberal Party’s Trudeau supports the project but criticizes Harper for letting the issue damage relations with the U.S.
Houlihan Lokey, one of the oldest boutique investment banks on Wall Street, has priced its initial public offering at $21 per share. The IPO, which was priced a dollar below the expected range, raised $220M and valued the boutique advisory at about $1.4B. Houlihan will begin trading on the New York Stock Exchange today under the symbol “HLI”.
Nestle reported a drop in net income during the second-quarter, facing sluggish demand in emerging markets and a higher valued Swiss franc. Profits slipped 2.5% to 4.52B francs, lagging analysts’ average estimate for a 2.3% rise and mirroring recent results of many other consumer-products groups. On a positive note: Nestle (NSRGY) may see an Indian ban on its Maggi instant noodles disappear following a recall that severely cut into its sales. Testing on the noodles will take place in the coming weeks.