lundi 30 décembre 2013

Wall Street Breakfast: Must-Know News

Top Stories

Nikkei enjoys best annual performance in 41 years. Japan's Nikkei 225 has closed the day and the year at a fresh six-year high of 16291, representing a rise of 0.7% for the session and 57% for the year. That makes 2013 the index's best annual performance since it jumped 92% in 1972. Japanese stocks have been benefiting from the central bank's massive money printing, which has helped weaken the yen and boost exporters. The USD-JPY was +0.1% at ¥105.30 at the time of writing after the yen earlier hit a five year low of ¥105.41.


FDA rejects Sanofi multiple sclerosis drug. The FDA has rejected Sanofi's (SNY) Lemtrada treatment for multiple sclerosis, saying the French company hasn't submitted enough evidence to show that the benefits of the drug outweigh its serious side effects. "This was a big blow for Sanofi, as Lemtrada would have provided a significant growth engine," says analyst Eric Le Berrigaud. However, the FDA did leave open the possibility that Lemtrada could eventually be approved, but Sanofi would need to conduct more testing first. The company's shares were -0.9% premarket.


Chinese municipal debt near $3T. Chinese local-government liabilities stood at 17.9T yuan ($2.95T) at the end of June, a major new report shows, with the number up from 10.7T yuan the last time a full audit took place in 2010. The report comes as China's short-term money market rates calm down after spiking earlier this month due to the central bank refraining from injecting liquidity into the system as part of its efforts to rein in soaring debt.


Top Stock News

Blackstone invests $200M in Crocs; CEO to retire. Blackstone (BX) has agreed to pay $200M to acquire a 13% stake in Crocs (CROX), the latter said late yesterday, adding that CEO John McCarvel will retire at the end of April. Blackstone will receive newly issued preferred equity that it can convert into common shares and which will have a cash dividend rate of 6%. The private-equity firm will also receive two board seats. Crocs' shares rose 6.1% premarket.


Gold miners set for write-downs due to plunge in prices. Gold miners face major write-downs and a drop in the size of their reserves due to a sharp fall in the price of bullion this year, which has reduced the value of those reserves and undermined their economic viability. Gold started 2013 at around $1,600/oz, but was just above $1,200 at the time of writing. Barrick Gold (ABX) last assumed a price of $1,500/oz and Newmont Mining (NEM) $1,400/oz price; Barrick, Newcrest Mining (OTCPK:NCMGY) and other miners have already taken massive write-downs this year.


JPMorgan began hiring the well-connected after losing deals. Emails show that JPMorgan (JPM) executives started hiring the relatives of well-connected officials because it was losing business to its rivals, the NYT reports. "We lost a deal to DB today because they got (the) chairman's daughter (to) work for them this summer," lamented one JPMorgan executive about missing out on a lucrative contract to Deutsche Bank (DB) in 2009. JPMorgan and several other banks are under investigation for their recruitment policies in China and elsewhere.


Chesapeake asset sales proving expensive. Chesapeake Energy (CHK) is paying tens of millions of dollars in services it's not using and on other seemingly wasteful costs as a result of asset sales it made to plug a $25B hole in its finances. When offloading its pipeline business last year, for example, Chesapeake agreed to transport a certain amount of natural gas on lines that Access Midstream Partners (ACMP) now owns. However, Chesapeake isn't using the capacity it has reserved but could still have to pay $400M over the next five years to cover the shortfall.


Top Economic & Other News

ECB's Draghi: No pressing need for more rate cuts. European Central Bank President Mario Draghi sees "no immediate need" to cut the bank's main interest rate further. While the eurozone crisis "isn't over," Draghi told Germany's Der Spiegel, "there are many encouraging signs." These include economic recovery in some countries, lower trade imbalances and falling budget deficits. Draghi's comments come after the ECB reduced rates by a quarter of a point to a record low of 0.25% last month. The euro was +0.05% at $1.3752 at the time of writing.


Japan business lobby to call for wage increases. Japan's most influential business lobby, the Keidanren lobby, will encourage its member companies to boost basic pay in 2014 for the first time in six years. Even though CPI has been hitting multi-year highs and corporate earnings have been improving, salaries have been slow to rise. News of Keidanren's plan follows government calls for wage increases, which it sees as crucial in its battle against deflation.


Over 1M affected as extended unemployment benefits expire. Extended jobless benefits expired on Saturday, affecting 1.3M long-term unemployed who had received an average of $300 a week from the federal government. Renewing the program, which was introduced at the height of the financial crisis in 2008, would cost $25B a year, the CBA calculates. However, not renewing the scheme could cut an estimated 0.2 percentage point from GDP growth in Q1, IHS Global Insight projects.




Top Ideas: Stock Movers and Great Calls

1) On December 18, Stephen Simpson called Taseko (TGB) a solid contrarian play in the struggling mining sector, as its strong balance sheet and potential for expansion gave it an attractive risk/reward profile. The stock is +11.5% since his call. Read article »

2) Beazer Homes (BZH) got a double recommendation from PRO contributors on August 9, with David Guarino and Money Investor citing the company's substantial operational improvement and its ability to unlock a large deferred tax asset. Shares are +47.6% to date. Read first article » Read second article »


Top Ideas: Stocks To Watch

1) A long process of integrating acquistions is finally complete, making security software provider Commtouch (CTCH) a compelling target itself, writes buysider Igor Novgorodtsev. Read article »

2) Trading the Spread sees 25% upside at software supplier Cadence Design Systems (CDNS), driven by recurring revenue, growth and strong free cash flow. Read article »


Top Ideas articles are the best long and short ideas on Seeking Alpha. SA PRO subscribers receive early access to these Top Ideas articles, which often move markets. For more information about SA PRO and becoming a subscriber, click here .




Today's Markets:

In Asia, Japan +0.7% to 16291. Hong Kong flat 23245. China -0.2% to 2098. India -0.2% to 21143.

In Europe, at midday, London -0.1%. Paris -0.1%. Frankfurt -0.1%.

Futures at 6:20: Dow +0.1%. S&P flat. Nasdaq flat. Crude flat at $100.35. Gold -1% to $1201.80.

Ten-year Treasury Yield flat at 3%.


Today's economic calendar:

10:00 Pending Home Sales

10:30 Dallas Fed Manufacturing Outlook

3:00 PM Farm Prices


Notable earnings before today's open: CALM


See full real-time earnings coverage »


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Source: Wall Street Breakfast: Must-Know News

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