Asian markets ex China finished mostly higher today, led by a 2.2% gain in Japan’s. Shanghai dropped 1.5%, while Hong Kong gained 20bps and Taiwan rose 80bps. Elsewhere, South Korea added 20bps despite Samsung Electronics’ warning that Q1 earnings will fall short of expectations, and the ASX finished little changed. Regional turnover ran ~25% below avg outside of Japan when volumes jumped 50%.
European markets currently trade at the best levels of the session with France up 60bps among the outperformers in the region. The UK adds 30bps digesting last night’s defeat for PM May with MP’s voting to seize control of Brexit. Germany’s DAX adds 10bps with most other markets in the region seeing similar results. Following yesterday's unexpected pickup in the German Ifo, the latest GfK consumer confidence reading fell back to 10.4 versus consensus 10.8 (still a historically strong value). French business confidence improved to 104 in March from prior 103. French Q4 Final GDP +0.3% q/q inline.
US futures (+50bps) extend gains out of Asia and Europe ahead of economic data that includes Housing Starts and Building Permits at 8:30am, S&P CoreLogic data at 9am, and Richmond Fed at 10am. Crude rose more than 1% helped by reports of uncertainty among Trump’s national security team on whether to extend Iranian oil waivers beyond May, and, to a lesser extent, following Pompeo’s warnings to Russia over intervention in Venezuela. API weekly inventories come at 4:30pm. In M&A news, it was reported shortly after the close Monday that Paulson no longer opposes the Newmont (NEM)/Goldcorp (GG) merger citing the 88c/sh special dividend announcement as the catalyst for his change of opinion. The NYP reported that CBS’s (CBS) independent directors are expected to approach the board in the near future to resume merger talks with Viacom (VIAB) after it resolved contract disputes with AT&T (T) yesterday. The WSJ reported that an activist group comprised of Legion Partners, Macellum Advisors, and Ancora Advisors with a combined 5% stake in Bed Bath and Beyond (BBBY) are preparing to launch a proxy fight to replace the company’s entire board. Finisar (FNSR) and II-VI (IIVI) shareholders will vote this afternoon on their pending merger. Uber confirmed reports that it agreed to acquire Careem Networks for $3.1bn. McDonald’s (MCD) will buy closely-held decision-logic tech company, Dynamic Yield for $300mm, its largest acquisition in 20 years. Finally, Liberty LatAm (LILA) will buy an 87.5% stake in Telecommunication Services N.V. for EV of $189mm in cash. In other news, the DOJ is siding with the December Texas 5th circuit court of appeals ruling that the Affordable Care Act is unconstitutional following the elimination of the individual mandate, however it is unclear what next steps the Trump Administration will take with respect to the law’s future. Weatherford (WFT) announced Monday after the close that it completed the sale of 2 land rigs in Algeria and 2 rigs in Iraq for aggregate consideration of $32mm. The sale was the last in a series of approved transactions that netted Weatherford $287.5mm which it will use to reduce debt. McDermott (MDR) received an EPCM contract with a Unipetrol refinery in the Czech Republic. Amazon (AMZN) announced plans to open more than 100 kiosks in Indian malls to sell Kindle, Echo and other products. Aldeyra (ALDX) reported positive study results. TCR2 Therapeutics (TCRR) announced a collaboration with Cell and Gene Therapy Catapult to manufacture its T cell therapies. A unit of Wabco (WBC) entered a $180mm agreement with a manufacturer to supply power steering gears. Finally, The Trade Desk (TTD) launched its programmatic ad buying platform in China.
Earnings: IHS Markit (INFO) beat EPS estimates, but missed revenue expectations, while guidance was in-line. McCormick (MKC) beat EPS estimates and reaffirmed FY guidance. Carnival Cruise (CCL) will report at 9:15am. Companies releasing earnings after the close include KB Home (KBH) and Shoe Carnival (SCVL).
Analyst Actions: BB&T (BBT) raised to buy at DB
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