Wall Street Breakfast: Euro Drops To Fresh 11-Year Low Economy European stocks extended seven-year highs following a strong Asian session overnight, after the ECB announced plans yesterday to expand asset purchases by €60B per month until at least September 2016. The ECB’s new stimulus should strengthen demand, increase capacity utilization and support money and credit growth, said Mario Draghi after unveiling the new plan. Bonds in the region are also joining the rally, with the yields on 10-year notes of Germany, Italy, Spain and France falling to all-time lows. The Greek election provides another reason to sell euro in case the ECB decision was not enough, said Sean Callow, a currency strategist at Westpac Banking. The euro hit fresh 11-year lows today, now trading down 1.1% at $1.1239, before Greek voters go to the polls on Sunday. With the left-wing Syriza party ahead in the latest surveys, power may shift from Prime Minister Antonis Samaras to his anti-austerity opponent Alexis Tsipras. Crude is on the rise after the Saudi royal court announced the death of King Abdullah, who died at about the age of 91 late last night. Abdullahs half-brother, Crown Prince Salman, has been declared king. A key indicator of future Saudi oil policy will now be whether Salman retains oil minister Ali Al-Naimi, who has driven decision-making since 1995. Brent is 1.8% higher at $49.37/bbl, while WTI is up 1.1% at $46.84. Despite testing the nation’s booming energy sector, a collapse in oil prices is leaving more money in consumers pockets with one of gasolines swiftest price declines on record. Gas prices appear headed below a nationwide average of $2 a gallon in the coming days, with average pump prices — $2.04 a gallon Thursday — down more than 40% since last June, according to auto club AAA. Through last week, pump prices have declined for 16 straight weeks, breaking the last record set in 2008. Stocks The first batch of GlaxoSmithKlines experimental Ebola vaccine has been shipped to West Africa and is expected to arrive in Liberia later today. While it is currently being tested in five small Phase I safety trials in Britain, the U.S., Switzerland and Mali, Glaxos (NYSE:GSK) vaccine will be used in the first large-scale trials in the coming weeks. The World Health Organization said on Thursday that the Ebola outbreak in West Africa appears to be waning but still cautioned against its risks. The NYSE has issued a fresh warning to RadioShack saying it could delist the struggling electronics retailer as its average market capitalization stayed below $50M for more than 30 consecutive days. RadioShack (NYSE:RSH), which is expected to file for bankruptcy by next month, received a similar warning in July. The companys shares have fallen 85% in the past 52 weeks. Confirming earlier reports, DreamWorks Animation announces it will cut 500 jobs, about one-fifth of the work force, as part of a plan to restructure its core feature animation business. DreamWorks Animation (NASDAQ:DWA) also says it will lighten its management structure, firing three top executives, and will produce only two feature films a year, instead of three, starting in 2016. The studio expects to incur a pre-tax charge of about $290M in connection with the restructuring. DWA +1% premarket. Sony will delay the official submission of its third-quarter results due to the massive cyber attack on Sony Pictures (NYSE:SNE), and has asked financial regulators to extend the filing of its report to March 31 from Feb. 16. The company will still hold a news conference on Feb. 4, the originally scheduled date of its results announcement, to give updated financial forecasts for the quarter. Starbucks +4.1% premarket after posting quarterly net income of $983.1M, up from $540.7M in the year-earlier quarter. Sales at Starbucks cafes open at least 13 months were up 5%, while traffic was 2% higher during the quarter. The worlds biggest coffee chain also announced that director Kevin Johnson would become president and COO, effective March 1, replacing long-time executive Troy Alstead, who said he is taking an extended sabbatical. Adidas has sold its Rockport shoe business for $280M to a new entity formed by Berkshire Partners and New Balance, as the German company narrows its focus on sporting goods. Adidas (OTCQX:ADDYY) CEO Herbert Hainer is under pressure for a turnaround after scrapping sales and profit targets for 2015 last year because of slumping demand for golf supplies in North America and turmoil in Russia. Janus Capital Chief Executive Dick Weil has confirmed that more than $700M of the $1.2B that flowed into Bill Gross new bond fund in fact came from Gross himself. The disclosure confirmed earlier reports that stoked some debate within the fund industry about whether Janus should have been more forthcoming with details of how Gross managed to build such a large fund in such a short period. Yesterday, Janus (NYSE:JNS) reported a 22% increase in fourth-quarter earnings, sending up shares almost 13%. JNS +3.1% premarket. Portugal Telecom shareholders have signed off on the $8.4B sale of Ois (NYSE:OIBR) Portuguese assets to Altice (OTC:ATCEY). With the sale approved, debt-laden Oi is expected (perhaps with the help of rivals) to turn its sights on acquiring part or all of TIM Participacoes (NYSE:TSU), thereby cutting the number of Brazilian mobile carriers to three. PT +5%; OIBR -1.7% premarket. Telefonica is poised for a cash deal of more than £10B ($15B) to sell O2 to Hutchison Whampoa, the owner of Britains fourth largest mobile operator 3 Group, FT reports. The paper notes the deal would create the U.K.s largest mobile carrier, claiming 31M+ subs and a 41% market share. EE, which BT (NYSE:BT) is in talks to acquire from Orange (NYSE:ORAN) and Deutsche Telekom (OTCQX:DTEGY), claims a 32% share, and Vodafone (NASDAQ:VOD) a 24% share. TEF +1.4% premarket.
Posted on: Fri, 23 Jan 2015 12:20:28 +0000
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