Today’s New York Pre-Market Commentary I have written for S&P European MarketScope:
New York Market Commentary – original published 23 November 2010, 14:03 GMT
US stock futures are sharply lower, as concerns over tensions on the Korean peninsula add to ongoing woes over eurozone debt and global currency issues. Reports of an exchange of fire between North and South Korea also sent the oil price down. WTI is currently -1.50% lower at US$80.51/bbl. The mood brightened temporarily, while futures remained in the red, after US 3Q GDP was revised up to +2.5%, better than the expected +2.4%. Core PCE prices for the same quarter are in line with forecasts at +0.8%, with the headline figure at +1.0%. At 15:00 GMT, existing home sales for October will be released. The market looks for a slight fall m/m to 4.49m from 4.53m. Minutes of the FOMC’s 5 November meeting, when the Fed opted for more quantitative easing, are due at 19:00 GMT.
Medical technology company MEDTRONIC tops consensus with 2Q EPS of US$0.82 but cuts its full-year profit forecast due to challenging market conditions. HORMEL FOODS discloses solid 4Q profits of US$0.90m/share vs forecasts of US$0.79. Strong sales across all categories also induced management to forecast fiscal 2011 earnings above Wall Street estimates. CAMPBELL SOUP’s results disappointed meanwhile, as promotions failed to spur sales. 1Q profits are a penny lower than expected at US$0.82. Campell had cut its forecasts for the year earlier this month. PATTERSON COMPANIES unveils better-than-expected 2Q sales and meets the Street view with profits of US$0.45/share. After the close last night, positive news came from HEWLETT-PACKARD. The IT giant reported consensus-beating profits of US$1.33/share and surprised markets with stronger FY11 forecasts. ANALOG DEVICES’ profits also beat expectations. However, the microchip maker forecast a drop in revenues in 1Q, with growth to resume in fiscal 2Q.
In other news, fashion retailer J CREW GROUP is close to being acquired by TPG Capital and Leonard Green & Partners. The offer stands at US$43.50/share, which would mark a premium of over 15% compared to Monday’s closing share price of US$37.65. Elsewhere, DYNEGY plans to end its agreement to sell itself to Blackstone Group because it does not have shareholder support, and it will seek other buyers.
