Morning finds traders trying to assess the damage done from yesterday’s events in the Ukraine and Gaza. Shockwaves continued to trigger capital flows overnight sending Asia Pacific indices
(except for Australia like Canada which has a higher weighting in mining stocks) sharply lower.
European indices continue to decline today on uncertainty over the potential for more sanctions and their potential impact on the region. US indices are trying to stabilize while some of the markets that benefitted the most from defensive capital flows like gold and silver are dropping back a bit today in normal backing and filling.
Although the shooting down of a Malaysian airliner appears to have been an accident and may not set off a wider conflagration, it is clear that Eastern Ukraine is a tinderbox with a number of groups having powerful weapons and the will to use them which raises the risk of future incidents that could escalate the conflict. Grains have been most sensitive to political risk in the area and while wheat and corn have fallen back slightly today but remain higher than they were yesterday morning before the disaster.
While some markets appear to be stabilizing like US stocks, traders don’t appear to be running right back in leaving indices at lower levels. With tensions still running high, traders don’t appear to be in a hurry to jump back in ahead of the weekend and we could see more money move to the sidelines as the day progresses.
It has also been an active evening and morning for corporate news, particularly for deals with AbbVie and Shire agreeing to merge after days of wrangling and Time Warner still in play. Earnings have been mixed with two high profile misses. How traders react to Google and GE disappointments may give an indication of how badly confidence has shaken heading into next week’s round of earnings headlined by Apple and MicroSoft.
AbbVie has been successful in its efforts to take over Shire Pharmaceuticals for £52.48 per share or about £32B.
Time Warner could be active again today on press reports overnight that the company could be open to a deal with 21st Century Fox for the right price ($100/sh being tossed around but who knows?) and also that competitors such as CBS could be interest in parts of the company that may come up for sale in a merger scenario.
Brunswick is getting out of the bowling business to focus on billiards. It has agreed to sell its bowling alleys and related products operations to competitor AMF for $270 million.
General Electric $0.39 vs street $0.40
Honeywell $1.38 vs street $1.36
Google $6.08 vs street $6.23
IBM $4.32 vs street $4.30, maintains $18.00 full year guidance
Bank of NY Mellon $0.62 vs street $0.56
Capital One $2.04 vs street $1.82
Schlumberger $1.37 vs street $1.35
Economic reports released overnight and this morning include:
Canada consumer prices 2.4% vs street 2.3%
Canada core CPI 1.8% vs street 1.7%
Economic reports due later today include:
9:55 am EDT US consumer confidence street 83.0
10:00 am EDT US leading indicator street 0.5%