US President Barack Obama called on Congress on Monday to vote on the authorization of military action in Syria. The President is expected to continue rallying for support on Tuesday as the Syrian government braces for an attack by evacuating military bases and the surrounding areas.
In other news around the markets:
- After almost 10 years of negotiation, Verizon inked a deal with Vodafone to buy out Vodafone’s stake in Verizon Wireless, their US joint venture, for $130 billion. The purchase will be the second largest takeover deal ever and could generate more than $500 million in fees.
- Shortly after announcing that chief executive Steve Ballmer was headed for retirement, Microsoft announced that it will pay $7 billion to purchase nearly all of Nokia’s business, but most importantly their cell phone operations. The deal is expected to close in the first quarter of 2014.
- The Reserve Bank of Australia kept interest rates fixed at 2.5 percent and released a statement saying the bank is willing to adjust fiscal policy as needed to help promote sustainable growth. The bank also said the country’s economic growth has been below trend this year and is expected to continue at that pace in the near term.
- The Japanese government has pledged to spend $473 million on the containment of a radioactive leak at the country’s Fukushima power plant.
Asian markets were up across the board on Tuesday following strong manufacturing data. The Japanese NIKKEI was up 2.79 percent, helped by a weakening yen. China’s Shanghai and Shenzhen composites were up 0.91 percent and 1.40 percent respectively. The Hang Seng index was up 1.18 percent and the South Korean KOSPI was up 0.32 percent.
European Markets
European markets were mixed on Tuesday, the German DAX fell 0.31 percent and the Spanish IBEX was up 0.28 percent. The UK's FTSE and the STOXX 600 were both flat with relatively small gains.
Energy futures slipped as concerns about military action in Syria eased on Tuesday. Brent futures were down 0.13 percent and WTI futures were down 0.85 percent. Gold lost 0.27 percent but Silver gained 2.62 percent. Industrial metals were up across the board with copper up $1.86 percent and aluminum 0.85 percent.
The euro continued to lose ground, falling 0.14 percent against the dollar after weak eurozone unemployment figures cast doubt on the region’s recovery. The yen also slipped against the greenback as it approached the 100 yen to a dollar mark and fell 0.26 percent. The pound to dollar ratio was mostly flat.
Earnings Reported Yesterday
Notable companies that reported earnings on Friday included:
- Frontline Ltd. FRO reported a second quarter loss of $0.50 per share, compared to last year’s loss of $0.21 per share.
- Big lots, Inc. BIG reported second quarter EPS of $0.31 on revenue of 1.23 billion, compared to last year’s EPS of $0.36 on revenue of $1.22 billion.
Stocks moving in the pre-market included:
- Citigroup Inc C gained 2.42 percent in premarket trade after the Wall Street Journal reported that the company had sold more than $6 billion worth of private equity and hedge fund assets last month.
- ADT Corp ADT lost 88.80 percent in premarket trade with a price of $4.46
- Alcoa Inc AA was up 1.69 percent ahead of the market after reports that the company had broken ground on its Tenessee expansion.
- Schlumberger NV SLB gained 1.30 percent in premarket trade after the company traded ex-dividend for its $0.3125 quarterly dividend on Monday.
Notable companies expected to report earnings on Tuesday include:
- H&R Block HRB is expected to report a first quarter loss of $0.37 per share on revenue of $98.4 million, compared to last year’s loss of $0.38 per share on revenue of $96.49 million.
Economics
On Tuesday’s economic calendar investors are expecting Spanish business confidence data, British construction PMI, US manufacturing PMI, Australian GDP and Chinese services PMI data.
Happy trading and good luck!
For a recap of Friday’s market action, click here.
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