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Author: skywalker   |   Latest post: Thu, 21 Jun 2018, 10:48 AM

 

Wall Street Breakfast: General Mills Goes Shopping For Pet Food

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General Mills is moving into the pet food business with a deal to buy Blue Buffalo (NASDAQ:BUFF) for $40 a share, or nearly $8B in cash. The transaction, which will help the company offset intensifying competition in the packaged food industry, is expected to be neutral to General Mills' (NYSE:GIS) cash earnings per share in fiscal year 2019, but will add to earnings in fiscal year 2020. BUFF +16.9% premarket.

Economy

Will Fed Chair Jerome Powell be able to calm the recent game of tug-of-war between stocks and bonds? The first sign may come today when the central bank releases its monetary policy report, expected to be a blueprint for Powell's testimony before Congress next week. Investors will also be watching Fed speakers today at the U.S. Monetary Policy Forum annual conference.

President Trump has called a meeting with key senators and Cabinet officials next week to discuss potential changes to the biofuels policy, Reuters reports. It follows the recent bankruptcy of Philadelphia Energy Solutions, which blamed the regulation for its demise. Sources said the meeting will also consider whether to cap prices for biofuel credits, let higher ethanol blends be sold all year and get speculators out of the market.

The Chinese government has seized control of Anbang Insurance Group and said its chairman had been prosecuted, in a striking move that highlights Beijing's willingness to crack down on financial risk and curtail debt-laden conglomerates. Anbang is said to have violated laws and regulations that "may seriously endanger the solvency of the company," following acquisitions including the Waldorf Astoria and insurers in Europe and Asia.

Japanese core consumer prices remained at 0.9% in January on higher energy costs, almost matching market forecasts but still below the 2% goal of the BOJ. That adds to growing challenges for Governor Haruhiko Kuroda as he prepares for his second term in April, with the central bank unable to reach its inflation target despite years of massive stimulus.

Australian Prime Minister Malcolm Turnbull will head to the White House today to meet with President Trump. Topics likely to be explored include China's rising influence, investing Australian pension money in U.S. infrastructure and convincing the U.S. to rejoin the Trans-Pacific Partnership. The pact among 11 countries includes Australia, which also has a bilateral free trade deal with the U.S.v

Economy

Will Fed Chair Jerome Powell be able to calm the recent game of tug-of-war between stocks and bonds? The first sign may come today when the central bank releases its monetary policy report, expected to be a blueprint for Powell's testimony before Congress next week. Investors will also be watching Fed speakers today at the U.S. Monetary Policy Forum annual conference.

President Trump has called a meeting with key senators and Cabinet officials next week to discuss potential changes to the biofuels policy, Reuters reports. It follows the recent bankruptcy of Philadelphia Energy Solutions, which blamed the regulation for its demise. Sources said the meeting will also consider whether to cap prices for biofuel credits, let higher ethanol blends be sold all year and get speculators out of the market.

The Chinese government has seized control of Anbang Insurance Group and said its chairman had been prosecuted, in a striking move that highlights Beijing's willingness to crack down on financial risk and curtail debt-laden conglomerates. Anbang is said to have violated laws and regulations that "may seriously endanger the solvency of the company," following acquisitions including the Waldorf Astoria and insurers in Europe and Asia.

Japanese core consumer prices remained at 0.9% in January on higher energy costs, almost matching market forecasts but still below the 2% goal of the BOJ. That adds to growing challenges for Governor Haruhiko Kuroda as he prepares for his second term in April, with the central bank unable to reach its inflation target despite years of massive stimulus.

Australian Prime Minister Malcolm Turnbull will head to the White House today to meet with President Trump. Topics likely to be explored include China's rising influence, investing Australian pension money in U.S. infrastructure and convincing the U.S. to rejoin the Trans-Pacific Partnership. The pact among 11 countries includes Australia, which also has a bilateral free trade deal with the U.S.

Thursday's Key Earnings

Apache (NYSE:APA) -6.3% after disappointing production guidance.
Chesapeake Energy (NYSE:CHK) +21.7% on higher output, lower costs.
First Solar (NASDAQ:FSLR) -2.4% AH as revenues slipped.
Herbalife (NYSE:HLF) -3.8% AH after a surprise GAAP loss.
Hewlett Packard Enterprise (NYSE:HPE) +12.1% AH topping estimates.
HP Inc. (NYSE:HPQ) +6.8% AH following upside guidance.
Newmont Mining (NYSE:NEM) -1.4% despite beating expectations.

Today's Markets

In Asia, Japan +0.7%. Hong Kong +1%. China +0.6%. India +1%.
In Europe, at midday, London -0.2%. Paris -0.1%. Frankfurt +0.1%.
Futures at 6:20, Dow +0.4%. S&P +0.3%. Nasdaq +0.4%. Crude -0.4% to $62.54. Gold -0.1% to $1331.60. Bitcoin +4% to $10222.
Ten-year Treasury Yield -2 bps to 2.89%

Today's Economic Calendar

10:15 Fed's Dudley: Monetary Policy
10:15 Fed's Rosengren speech
1:00 PM Baker-Hughes Rig Count
1:30 PM Fed's Mester speech
3:40 PM Fed's Williams Speech

 

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