#PreMarket Primer: Tuesday, May 6: Credit Suisse Could Be Moving Towards Guilty Plea
Allegations that Credit Suisse helped rich customers evade taxes could end with the company pleading guilty and paying more than $1 billion in fines.
US prosecutors have said they are close to getting the bank to plead guilty in the coming days once the two sides agree on the consequences of such a plea.
Federal prosecutors will need to ensure that the bank will still be allowed to operate and that an admission of guilt won’t have a negative effect on the US economy or put the bank out of business.
In other news around the markets:
- A Reuters poll showed that analysts are expecting to see stabilization in China’s factory and investment sectors in April. Most think that the government’s targeted policies will help boost industrial output by 8.9 percent in April. However, Beijing’s next order of business will be cutting down on its high debt levels, which will likely inhibit growth in the future.
- Wal-Mart’s global internet sales finally outpaced that of internet giant Amazon.com last year, marking the first time in ten years that Wal-Mart outdid its rival. Wal-Mart sales gained 30 percent last year while Amazon’s sales rose by just 20 percent in 2013. However, Amazon sales are exponentially higher in scale; the company sold more than its 10 largest competitors combined in 2013.
- Eurozone businesses proved resilient as they got off to a running start in the second quarter. Data out on Tuesday showed that business activity increased at its fastest pace in nearly three years. The region’s Composite Purchasing Managers’ Index rose to 54.0 in April, a jump from March’s 53.1 reading.
- After Alstom said it would review General Electric’s $16.9 billion bid for its energy business last week, French President Francois Hollande expressed his disapproval with the offer on national radio. On Tuesday, Hollande said the bid was not acceptable and that the government is looking to find better offers.
Asian markets were mixed; the Japanese NIKKEI lost 0.19 percent, the South Korean KOSPI was down 0.12 percent and the Hang Seng index lost 1.28 percent. However, the Shanghai composite was up 0.03 percent, the Shenzhen composite gained 0.48 percent and Australia’s ASX 200 gained 0.35 percent.
European markets were also mixed; the UK’s FTSE was down 0.19 percent, the German DAX lost 0.11 percent and France’s CAC 40 was down 0.10 percent. However, Italy’s MIB gained 0.08 percent and the Spanish IBEX was up 0.25 percent.
Tension in Ukraine kept energy futures elevated; Brent futures gained 0.14 percent and WTI futures were up 0.30 percent. Gold and silver gained 0.58 percent and 0.45 percent respectively while industrial metals also rose. Aluminum was up 0.06 percent, Zinc gained 0.94 percent and tin rose 1.05 percent.
The euro soared after positive PMI data. The common currency gained 0.36 percent against the dollar and 0.20 percent against the yen. The dollar lost ground, falling 0.20 percent against the yen, 0.41 percent against the franc and 0.44 percent against the pound.
Notable earnings released on Monday included:
- Pfizer (NYSE: PFE) reported first quarter EPS of $0.57 on revenue of $11.40 billion, compared to last year’s EPS of $0.51 on revenue of $13.50 billion.
- Sysco (NYSE: SYY) reported third quarter EPS of $0.38 on revenue of $11.30 billion, compared to last year’s EPS of $0.40 on revenue of $10.93 billion.
- Tyson Foods (NYSE: TSN) reported second quarter EPS of $0.60 on revenue of $9.03 billion, compared to last year’s EPS of $0.36 on revenue of $8.42 billion.
- Occidental Petroleum (NYSE: OXY) reported first quarter EPS of $1.75 on revenue of $6.09 billion, compared to last year’s EPS of $1.69 on revenue of $5.87 billion.
Stocks moving in the Premarket included:
- Pfizer (NYSE: PFE) was up 0.43 percent in premarket trade after losing 6.49 percent over the past week.
- Verizon Communications (NYSE: VZ) was down 0.61 percent in premarket trade after gaining 0.57 percent on Monday.
Notable earnings releases expected on Tuesday include:
- Walt Disney Company (NYSE: DIS) is expected to report second quarter EPS of $0.95 on revenue of $11.23 billion, compared to last year’s EPS of $0.79 on revenue of $10.55 billion.
- DirecTV (NASDAQ: DTV) is expected to report first quarter EPS of $1.50 on revenue of $7.91 billion, compared to last year’s EPS of $1.20 on revenue of $7.58 billion.
- Emerson Electric Company (NYSE: EMR) is expected to report second quarter EPS of $0.81 on revenue of $5.91 billion, compared to last year’s EPS of $0.77 on revenue of $5.96 billion.
- Whole Foods Market (NASDAQ: WFM) is expected to report second quarter EPS of $0.41 on revenue of $3.34 billion, compared to last year’s EPS of $0.38 on revenue of $3.03 billion.
Tuesday’s economic calendar will be a busy one with several important releases including, Chinese services PMI, US crude inventory data, the US Redbook, US trade balance data, eurozone retail sales, eurozone services PMI, British services PMI, and the Reserve Bank of Australia’s interest rate decision.
For a recap of Monday’s market action, click here.
Tune into Benzinga’s #PreMarket Prep show with Dennis Dick and Joel Elconin here.
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