#PreMarket Primer: Tuesday, August 12: NATO Reports 'High Probability' Of Russian Invasion
Despite warnings from Western leaders, Russian President Vladimir Putin announced on Monday that he was sending a convoy of humanitarian aid to Eastern Ukraine.
Many are worried that Putin is planning to use the convoy as a facade to get Russian troops into Ukraine and begin an invasion as Ukrainian officials have reported around 45,000 Russian troops stationed at the nation’s border.
With Ukrainian troops closing in on the final pro-Russian separatist stronghold, NATO has said there is a “high probability” that Moscow will invade in support of the separatists.
In other news around the markets:
- On Sunday, Kinder Morgan announced that it was planning to consolidate its pipeline companies in a $44 billion deal. The decision to streamline has been extremely well received by the markets and has many analysts predicting that the energy sector could see some big acquisitions moving forward as other companies follow suit.
- On Monday, two Brazilian companies offered $625 million to acquire Chiquita Brands International in an effort to keep the company’s planned merger with Fyffes from going forward. The new offer boosted Chiquita shares by more than 30 percent as the company agreed to review the offer.
- On Monday, former Iraqi Prime Minister Nouri al-Maliki refused to step down and deployed special forces in Baghdad in what many worry could become a political showdown. Iraqi President Fouad Masoum named Haidar al-Abadi as the nation’s new Prime Minister, something al-Maliki said was “legally worthless." Washington has warned al-Maliki to step aside and allow the political process to run its course, but he vowed to “fix the mistake” in a televised speech on Monday.
- On Tuesday, Israeli officials said there had been little progress in negotiations to end the month long conflict on the Gaza strip as the two sides remain at odds. Israeli and Palestinian representatives are expected to resume negotiations later in the day as they work to find a lasting solution for peace in the region before the 72 hour ceasefire agreement expires.
Asian markets were mostly higher with the exception of the Shanghai composite and the Hang Seng index, which lost 0.14 percent and 0.04 percent respectively. The NIKKEI was up 0.20 percent, the KOSPI gained 0.10 percent and the Shenzhen composite rose 0.25 percent.
Europe’s markets were down across the board; the FTSE fell 0.21 percent, the STOXX 600 was down 0.23 percent, the DAX lost 0.44 percent, the CAC 40 fell 0.65 percent and the MIB was down 0.36 percent.
Energy futures were lower despite ongoing conflicts around the globe. Brent futures lost 0.81 percent and WTI futures were down 0.99 percent. Gold and silver were down 0.13 percent and 0.42 percent respectively, while industrial metals rose. Copper was up 0.11 percent, aluminum gained 0.47 percent and zinc rose 0.39 percent.
Currency markets were quiet as investors waited for a spate of economic data due out later in the week. The euro was steady at $1.3369 and lost 0.05 percent against the pound and 0.03 percent against the yen. The dollar rose 0.06 percent against the yen, 0.07 percent against the pound and 0.14 percent against the franc.
Notable earnings released on Monday included:
- Sysco (NYSE: SYY) reported fourth quarter EPS of $0.50 on revenue of $12.29 billion, compared to last year’s EPS of $0.47 on revenue of $11.60 billion.
- Dean Foods (NYSE: DF) reported a second quarter loss of $0.14 on revenue of $2.40 billion, compared to last year’s EPS of $0.26 on revenue of $2.23 billion.
- Caesars Entertainment (NASDAQ: CZR) reported a second quarter loss of $3.24 on revenue of $2.19 billion, compared to last year’s loss of $1.69 on revenue of $2.16 billion.
- Priceline.com (NASDAQ: PCLN) reported second quarter EPS of $12.51 on revenue of $2.10 billion, compared to last year’s EPS of $9.70 on revenue of $1.68 billion.
Stocks moving in the Premarket included:
- Carnival Corp (NYSE: CCL) gained 1.03 percent in premarket trade after rising 1.51 percent over the past week.
- Alcoa (NYSE: AA) was up 0.68 percent in premarket trade after losing 3.11 percent over the past five days.
- Apple (NASDAQ: AAPL) was up 0.51 percent in premarket trade after gaining 1.32 percent on Monday.
- Transocean Ltd. (NYSE: RIG) was down 0.53 percent in premarket trade after rising 1.67 percent on Monday.
Notable earnings releases expected on Tuesday include:
- CST Brands (NYSE: CST) is expected to report second quarter EPS of $0.49 on revenue of $3.22 billion, compared to last year’s EPS of $0.66 on revenue of $3.21 billion.
- Valspar (NYSE: VAL) is expected to report third quarter EPS of $1.16 on revenue of $1.19 billion, compared to last year’s EPS of $1.07 on revenue of $1.09 billion.
- Flowers Foods (NYSE: FLO) is expected to report second quarter EPS of $0.24 on revenue of $940.83 million, compared to last year’s EPS of $0.24 on revenue of $898.15 million.
- Fossil (NASDAQ: FOSL) is expected to report second quarter EPS of $0.96 on revenue of $771.15 million, compared to last year’s EPS of $1.15 on revenue of $706.20 million.
Notable economic releases expected on Tuesday include Japanese GDP, US oil inventory data, Germany’s ZEW sentiment survey, Italian CPI, and Japanese industrial production.
For a recap of Monday’s market action, click here.
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