S&P futures vs fair value: +0.60. Nasdaq futures vs fair value: +7.90.
The S&P 500 futures trade one point above fair value.
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Markets in the Asia-Pacific region turned in a mixed showing. Some of the weakest performances were registered by smaller regional markets, which got clipped in part on continued weakness in the commodities arena. Japan was closed for a holiday, so trading volume in the region was not particularly heavy, according to news reports. China’s Shanghai Composite (+0.9%) was the winning standout, drawing some support from the securities regulator denouncing media reports suggesting it is looking into ways to withdraw government funds as being untrue.
· Economic data was limited:
o China’s June House Prices -4.9% year-over-year (prior -5.7%)
o Hong Kong’s June Unemployment Rate held at 3.2% (consensus 3.3%)
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· Japan’s Nikkei closed for holiday (Ocean Day)
· Hong Kong’s Hang Seng had a fractional loss, closing down less than 0.1%. Weakness in the financial (-0.4%) and consumer cyclical (-0.7%) sectors offset strength in the communications (+0.9%) and utilities (+0.2%) sectors. Belle International Holdings (-3.5%) and Lenovo Group (-1.7%) led the laggards while China Resources Land (+1.5%) and Tencent Holdings (+1.2%) paced the winners. Out of the 50 index members, 14 ended higher, 35 finished lower, and 1 was unchanged.
· China’s Shanghai Composite increased 0.9% in a seesaw day of trading. It was down 0.8% in early action, but recovered late with a rally in the latter stages of its trading session that was aided by the country’s securities regulator saying reports the government was looking to withdraw government funds were false. The CSI 300 Index for its part jumped 0.2%, helped by the outperformance of the technology (+3.7%) and industrial (+2.3%) sectors.
Major European indices trade higher across the board with Italy’s MIB (+1.5%) trading well ahead of its peers. Elsewhere, Greek banks have reopened today, but withdrawal restrictions remain in place for the time being.
· In economic data:
o Eurozone May Current Account surplus narrowed to EUR18.00 billion from EUR24.00 billion (expected surplus of EUR23.10 billion)
o Germany’s June PPI -0.1% month-over-month (expected 0.1%; prior 0.0%); -1.4% year-over-year (consensus -1.3%; last -1.3%)
o Spain’s trade deficit narrowed to EUR1.66 billion from EUR2.25 billion (expected deficit of EUR2.00 billion)
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· UK’s FTSE is higher by 0.2% with consumer names in the lead. Sports Direct International, International Consolidated Airlines, and Sainsbury up between 0.9% and 3.1%. On the downside, miners lag with Antofagasta, Fresnillo, Glencore, and Randgold Resources down between 0.6% and 4.2%.
· In France, the CAC trades up 0.7% with all but four members in the green. Financials Credit Agricole and Societe Generale hold respective gains of 1.6% and 1.4% while exporter Peugeot is the top performer, up 2.3%.
· Germany’s DAX has climbed 1.0% amid broad strength. Commerzbank leads with a gain of 2.2% while Deutsche Bank has added 1.6%. Conversely, exporters BMW and Volkswagen underperform with respective losses of 0.1% and 0.8%.
· Italy’s MIB outperforms with a gain of 1.5%. BMPS, Banca di Milano Scarl, Banca Pop Emilia Romagna, and UBI Banca are up between 2.1% and 2.9%
Gapping up/down: HZNP +8%, HAL +3%, MS +3% and LMT +1% after earnings/guidance, VSLR +43% after M&A news with SUNE; CALM -11% and CNX -3% after earnings/guidance, metals and miners trading lower
Gapping up
In reaction to strong earnings/guidance: HZNP +7.9%, EXAS +3.2%, HAL +3.2%, MS +3.1%, LMT +1.4%, HAS +1%
M&A news: VSLR +42.9% (SunEdison (SUNE) to acquire Vivint Solar for ~$2.2 bln; under the merger agreement, Vivint Solar stockholders will receive $16.50/share), UTX +1.1% (Lockheed Martin confirms it will acquire Sikorsky Aircraft from UTX for $9.0 billion), SUNE +3.4%
Other news: EXEL +33% (announces positive top-line results from METEOR, the Phase 3 pivotal trial of Cabozantinib vs. Everolimus in patients with metastatic renal cell carcinoma), DCTH +23% (confirms receipt of Orphan Drug Designation From FDA For Melphalan to treat Cholangiocarcinoma), HCLP +10.3% (Barron’s profiles positive view on the MLP space), AMRS +8.8% (cont strength), FRO +7.5% (likely due to clearer outlook for Greece), VLTC +4.4% (cont strength), DRYS +3.7% (likely due to clearer outlook for Greece), NBG +3.5% (Greek banks open up today), GPRO +3.3% (cont strength), GRFS +2.7% (announces a $700 mln contract through 2026 with Abbott (ABT) for the production of antigens), NVO +1.3% (still checking), MT +1.2% (positive Barrons article), CLF +1% (may be in tandem with MT), YHOO +0.8% (announces the initial filing with the SEC for the planned spin-off of its Alibaba (BABA) stake)
Analyst comments: CLVS +4.1% (added to Conviction Buy List at Goldman), GRNT +3.8% (initiated with a Buy at UBS), EMES +3.1% (upgraded to Neutral at Robert W. Baird), CLLS +3.1% (initiated with a Buy at BofA/Merrill), AMZN +1.7% (upgraded to Outperform at Cowen), STNG +1.6% (upgraded to Overweight from Neutral at JP Morgan), UPL +1.6% (upgraded to Buy from Accumulate at KLR Group), TXN +1.1% (upgraded to Buy from Neutral at UBS), SLB +1% (upgraded to Outperform from Market Perform at Wells Fargo)
Gapping down
In reaction to disappointing earnings/guidance: CALM -10.9%, NEWP -4.8%, CNX -3%
Select metals/mining stocks trading lower with gold futures down ~2%: AU -6.4%, GFI -6.1%, SLW -4.5%, NEM -4.1%, EGO -3.8%, GG -3.7%, GDX -3.5%, ABX -3.5%, AEM -3.4%, RGLD -3.3%, AUY -3.3%, GOLD -3.2%, AG -3.1%, SSRI -3%, GLD -1.8%, FCX -1.6%, SLV -0.6%
Other news: CRMD -11.8% (announced an update on strategic transaction process; To seek CEO successor, expects to initiate its first Phase 3 study for its lead product Neutrolin in Q4), MSB -5.6% (decreases distribution to $0.04 form $0.32 prior), FIT -1.5% (cont vol post IPO)
Analyst comments: BRCD -2.5% (downgraded to Sell from Neutral at UBS), YELP -1.9% (downgraded to Equal Weight at Barclays ), Z -1.7% (downgraded to Underweight at Barclays), PUK -1% (downgraded to Hold from Buy at Jefferies), FOXA -0.5% (downgraded to Neutral from Outperform at Macquarie)08:34 SCANX Gapping down
Gapping down
In reaction to disappointing earnings/guidance: CALM -10.9%, NEWP -4.8%, CNX -3%
Select metals/mining stocks trading lower with gold futures down ~2%: AU -6.4%, GFI -6.1%, SLW -4.5%, NEM -4.1%, EGO -3.8%, GG -3.7%, GDX -3.5%, ABX -3.5%, AEM -3.4%, RGLD -3.3%, AUY -3.3%, GOLD -3.2%, AG -3.1%, SSRI -3%, GLD -1.8%, FCX -1.6%, SLV -0.6%
Other news: CRMD -11.8% (announced an update on strategic transaction process; To seek CEO successor, expects to initiate its first Phase 3 study for its lead product Neutrolin in Q4), MSB -5.6% (decreases distribution to $0.04 form $0.32 prior), FIT -1.5% (cont vol post IPO)
Analyst comments: BRCD -2.5% (downgraded to Sell from Neutral at UBS), YELP -1.9% (downgraded to Equal Weight at Barclays ), Z -1.7% (downgraded to Underweight at Barclays), PUK -1% (downgraded to Hold from Buy at Jefferies), FOXA -0.5% (downgraded to Neutral from Outperform at Macquarie)
Shayne Heffernan founded the Heffernan Group of Companies.
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The Heffernan Group has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world.
The Shayne Heffernan led Knightsbridge Law has become an active financier on Wall St.
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