#PreMarket Primer: Tuesday, November 18: Abe To Delay Sales Tax Increase In Japan

Following reports that the Japanese economy had fallen into a recession in the third quarter, Prime Minister Shinzō Abe is planning to hold off on another sales tax hike initially set for October 2015. In April, the country’s sales tax was increased from 5 percent to 8 percent in an effort to reduce Japan's massive debt.

However, many are blaming the tax hike for the nation's poor economic performance, something that has prompted Abe to pull back on his rigorous efforts to cut down on spending and reform the nation's economy.

In addition to postponing the tax hike, Abe is expected to announce a snap election over the next few days.

Top News

In news around the markets:

Allergan Accepts Actavis Takeover Bid

On Monday, Allergan, Inc. AGN accepted Actavis plc’s ACT $66 billion takeover offer, causing Valeant Pharmaceuticals Intl Inc VRX to walk away from its own takeover efforts. Actavis’ offer was billions higher than Valeant’s takeover bid, resulting in a win-win situation for Allergan, which has been fighting off Valeant’s advances for months.

Facebook Tries To Break Into Corporate Space With New Service

Facebook Inc FB is planning to roll out a professional version of its social networking site over the next few months in an effort to expand the brand into the corporate space. The new services, said to be called Facebook at Work, will allow workers to share documents and send messages similarly to the social site. Details about the new venture are scarce, but the site will be competing with the likes of LinkedIn Corp LNKD and salesforce.com, inc. CRM for corporate users.

Draghi Says European Central Bank Is Ready To Extend Stimulus

In a testimony before the European Parliament on Monday, European Central Bank President Mario Draghi said that the eurozone’s central bank was ready and willing to expand on its stimulus packages if need be. Draghi promised that the bank was working to keep the region’s dangerously low inflation figures from sliding further and said that if depressed consumer prices persist, the bank would step in with more quantitative easing. Draghi also said that the bank was committed to protecting the region’s economy and would be open to using unconventional means to do so.

Halliburton, Baker Hughes Reach Acquisition Deal

With the global supply glut growing and oil prices under pressure, Halliburton Company HAL and Baker Hughes Incorporated BHI announced that they had agreed on an acquisition deal. Halliburton will pay about $35 billion to buy Baker Hughes, something that will help both companies hold on to their workforces despite the deteriorating oil market by saving around $2 billion per year in extra costs.

Asian Markets

Asian markets were mostly higher with the exception of the Shanghai composite and the Hang Seng index, which lost 0.67 percent and 1.13 percent, respectively. The NIKKEI was up 2.18 percent, the KOSPI gained 1.20 percent and the Shenzhen composite gained 0.08 percent.

European Markets

European markets were up across the board; the FTSE gained 0.47 percent, the STOXX 600 was up 0.46 percent, the DAX rose 0.89 percent and the CAC 40 was up 0.58 percent.

Commodities

Energy futures were higher. Brent futures gained 0.63 percent and WTI futures were up 0.89 percent. Gold and silver gained 1.11 percent and 1.54 percent, respectively, while industrial metals were lower with the exception of aluminum, which gained 0.35 percent. Copper fell 0.28 percent, zinc lost 0.09 percent and tin was down 0.13 percent.

Currencies

The euro gained some strength on Tuesday, rising 0.59 percent against the dollar, 0.57 percent against the pound and 0.82 percent against the yen. The dollar lost 0.03 percent against the pound, but gained 0.25 percent against the yen and 0.24 percent against the Australian dollar.

Earnings

Notable reports released on Monday included:

• Tyson Foods, Inc. TSN reported fourth quarter EPS of $0.87 on revenue of $10.10 billion, compared to last year’s EPS of $0.70 on revenue of $8.89 billion.
• Agilent Technologies Inc A reported fourth quarter EPS of $0.88 on revenue of $1.81 billion, compared to last year’s EPS of $0.81 on revenue of $1.72 billion.
• Urban Outfitters, Inc. URBN reported third quarter EPS of $0.35 on revenue of $814.00 million, compared to last year’s EPS of $0.47 on revenue of $774.05 million.

#PreMarket Movers

Stocks moving in the #PreMarket included:

• Transocean LTD RIG was up 1.11 percent in premarket trade after losing 10.52 percent over the past five days.
• Halliburton Company HAL was up 1.04 percent in premarket trade after falling 10.62 percent on Monday.
• Ford Motor Company F gained 0.58 percent in premarket trade after rising 11 percent over the past five days.
• General Electric Company GE was up 0.08 percent in premarket trade after gaining 0.57 percent on Monday.

Earnings

Notable releases expected on Tuesday include:

• The Home Depot, Inc. HD is expected to report third quarter EPS of $1.13 on revenue of $20.44 billion, compared to last year’s EPS of $0.95 on revenue of $19.47 billion.
• Dicks Sporting Goods Inc DKS is expected to report third quarter EPS of $0.41 on revenue of $1.53 billion, compared to last year’s EPS of $0.40 on revenue of $1.40 billion.
• Medtronic, Inc. MDT is expected to report second quarter EPS of $0.96 on revenue of $4.37 billion, compared to last year’s EPS of $0.91 on revenue of $4.19 billion.
• PetSmart, Inc. PETM is expected to report third quarter EPS of $0.94 on revenue of $1.73 billion, compared to last year’s EPS of $0.88 on revenue of $1.70 billion.

Economics

Tuesday’s economic calendar will be relatively light with releases including British CPI, British PPI, U.S. PPI and Germany’s ZEW current conditions survey.

For a recap of Monday’s market action, click here.

Tune in to Benzinga’s #PreMarket info show with Nic Chahine, Felix Salmon and Rev. Emmanuel Lemelson here.