The S&P 500 futures trade 13 points above fair value.
Markets across the Asia-Pacific region were mostly higher on Monday, aided by some better than expected trade data out of China and optimism surrounding the potential for a Greek deal. China’s Shanghai Composite led the brigade, gaining 2.4%, which left it up a tidy 13.2% over the last three sessions.
Sector Summary: Technology (XLK +0.94%) trading higher today, ahead of the broader market
The tech sector — XLK — trades ahead of the broader market. Semiconductors, meanwhile, display relative strength as the SOX index trades +0.52%. Within the SOX index, MRVL (+3.92%) outperforms, while ATML (-1.21%) lags. Among other major indices, the SPY is trading 0.90% higher, while the QQQ +1.31% and the NASDAQ +1.07% both trade up on the session. Among tech bellwethers, VMW (+2.17%) is showing relative strength, while BRCD (-2.08%) lags.
Gainers on news:
· FNJN (+7.9%) co announced that the US PTO has granted its petitions for Inter Partes review, for two FireEye (FEYE) patents.
· BOSC (+5.2%) co received an updated Letter of Intent from an Israeli manufacturer of defense systems, providing an increase of contract scope to $1 mln.
· DANG (+3.9%) co announced the formation of a special committee of three independent directors, to consider its received ‘going private’ proposal.
· WATT (+4.0%) co appointed Brian Sereda to Vice President and CFO.
Laggards on news:
· STX (-2.3%) co lowered guidance for Q4 (Jun), sees Q4 (Jun) revs of $2.9 bln from $3.2-3.3 bln vs. $3.18 bln Capital IQ Consensus Estimate; sees non-GAAP gross margin of ~ 27.0% vs prior guidance of 28.5%. The difference was driven primarily by lower than expected intra-quarter demand. Seagate expects to report unit shipments for Q4 of ~45 million, maintaining approximately 40% market share and reflecting ~52 exabytes.
Among notable analyst upgrades:
· AAPL (+1.0%) upgraded to Buy from Hold at Societe Generale
In downgrades:
· GOOG (+1.5%) downgraded to Hold from Buy at Pivotal Research
· GLW (-2.2%) to Underperform from Neutral at BofA/Merrill
· STM (-2.1%) to Underweight from Neutral at JP Morgan
· BRCD (-1.9%) to Sector Perform from Outperform at RBC Capital Mkts
· ARMH (-0.8%) to Underweight from Neutral at JP Morgan
· In economic data:
o China’s June Trade Balance $46.54 bln (expected $55.70 bln; prior $59.49 bln) as Exports +2.8% year-over-year (expected -0.2%; prior -2.5%) and Imports -6.1% (expected -15.0%; prior -17.6%)
o Japan’s May Industrial Production -2.1% month-over-month (expected -2.1%; prior -2.2%) while May Capacity Utilization -3.0% month-over-month (prior -0.4%)
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· Japan’s Nikkei increased 1.6% and ended near its highs for the day. Broad-based gains were led by the consumer non-cyclical (+2.2%), financial (+1.9%), and industrial (+1.8%) sectors. Individual standouts included Nicherei Corp (+5.4%), West Japan Railway (+5.3%), and Isetan Mitsukoshi Holdings (+5.0%). JGC Corp (-2.3%) and Eisai Co (-2.3%) were the worst-performing issues. Out of the 225 index members, 205 ended higher, 16 finished lower, and 4 were unchanged.
· Hong Kong’s Hang Seng jumped 1.3% and also ended near its highs for the day. Leading gainers included the consumer cyclical (+3.5%), utilities (+1.5%), and diversified (+1.5%) sectors. Sands China (+4.7%), Hang Lung Properties (+4.6%), and China Resources Power Holdings (+4.6%) paced the winners while CITIC (-0.4%), China Petroleum & Chemical (-0.3%), and China Mobile (-0.1%) were the only stocks to register declines for the day. Out of the 50 index members, 46 ended higher, 3 finished lower, and 1 was unchanged.
· China’s Shanghai Composite continued its rebound effort, gaining 2.4% in Monday’s trade. The Composite was up as much as 3.9% intraday, which took it over the 4,000 level again, yet afternoon selling activity pared some of the gains. Including today’s action, the Shanghai Composite has risen 13.2% in the last three sessions. Leading sectors in the CSI 300 Index on Monday included the technology (+9.8%), diversified (+7.1%), and industrial (+6.9%) sectors.
Major European indices trade higher across the board with France’s CAC (+1.7%) in the lead. Regional markets have charged higher after marathon negotiations between Greece and European heads of state reportedly produced a basis for a third bailout package for Greece. The agreement is expected to include EUR25 billion for the recapitalization of Greek banks, but the country will be required to pass a series of reforms by July 15 in order to continue negotiating the full bailout.
· Investors did not receive any economic data today
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· UK’s FTSE is higher by 0.7% with consumer names in the lead. Kingfisher, WM Morrison Supermarkets, International Consolidated Airlines, and Tesco show gains between 1.7% and 2.8%.
· Germany’s DAX trades up 1.2% with financials in the lead. Commerzbank, Deutsche Bank, and Deutsche Boerse are up between 1.9% and 3.8%. On the downside, exporters BMW and Continental lag with losses close to 0.5% apiece.
· In France, the CAC has climbed 1.7% with all 40 components taking part in the advance. Vivendi is the top performer, up 3.9%, while bank shares like BNP Paribas, Credit Agricole, and Societe Generale are up between 2.2% and 2.9%.
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