US markets look set to open higher today as the mega-merger pharmaceutical take-over targets Allergan and AstraZeneca fight back and Chinese manufacturing data improves while remaining weak. Today we see another round of US company earnings releases including those from Apple, Facebook, Biogen, Boeing and Delta Airlines. Futures suggest the S&P500 will open half a point higher at 1,879 with the Dow Jones expected to open 15 points higher at 16,530. AstraZeneca have so far rejected offers from Pfizer and Allergen used the ‘poison pill’ tactic to give some shareholders extra voting rights in the event any holder exceeds 10%, which is just shy of Ackman’s Pershing Square Capital Management stake size. Enthusiasm for big pharma deals may soon start to wane if the two main deals from Pfizer and Valeant / Bill Ackman don’t come off. The S&P 500 and Dow Jones are both approaching the top of recent ranges after a sixth day of gains. The Nasdaq is lagging other leading US indices after the weakness in the internet-tech and biotech sectors. There are however signs of a tech-turnaround though and the Nasdaq gained ground yesterday. Today will be an important turning point for the Nasdaq as we see earnings from tech bellwethers Facebook and Apple as well as top biotech company Biogen. If yesterday’s excellent results from sector pier Amgen are anything to go by, Biogen should do well. Biogen is expected to deliver earnings of $2.57 per share on revenue of $2 0bn. It has delivered positive earnings surprises in the last four quarters and has a solid product line especially in its multiple sclerosis business. Apple is expected to show first quarter earnings at $10.18 per share on revenue of $43.53bn. These results would be essentially flat compared to the year prior which is unsurprising given the company’s loss of market share to Samsung as well no substantial improvements to its product line. Facebook is expected to have earned twice that of the quarter a year earlier at $0.24 per share on revenue over 60% higher of $2.36bn in Q1. The company appears to have turned around its mobile advertising business which troubled investors during its IPO. However risks are to the downside with a slew of pricey acquisitions and lower advertising rates as noted by Google following their earnings miss this week. Boeing is expected to report its Q1 earnings at $1.56 per share on revenue of $20.19bn Delta Airlines is expected to report its Q1 earnings at $0.29 per share on revenue of $8.92bn CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Big day for tech rebound with earnings from Apple and Facebook ahead
11:00, 23 April 2014