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US FINANCIAL MARKET

U.S. Stocks Rise at the Open amid Deals Activity as Citigroup Rallies

  • Citigroup climbed 3.1 percent after also agreeing to pay $7 billion to settle a mortgage-bond probe.
  • Apple rose after Barclays Plc advised investors to buy shares in the world’s biggest company by market value.
  • The S&P 500 has rallied 7 percent this year amid signs the U.S. economy is recovering from a 2.9 percent contraction in the first quarter.
  • The benchmark gauge closed at an all-time high and the Dow topped 17,000 for the first time on July 3.
  • The S&P 500 hasn’t had a drop of 10 percent in more than two years.
  • The gauge trades at a valuation of 18 times reported earnings, the highest since 2010.
  • JPMorgan, Goldman, Yahoo, and Intel are among the 58 companies on the S&P 500 posting earnings this week.
  • Investors will also be watching statements from central banks and economic reports this week. Janet Yellen is due to testify to U.S. lawmakers.
  • European Central Bank President Mario Draghi testifies today at the European Parliament.
  • Economists surveyed by Bloomberg expect the Bank of Japan will maintain the pace of its monthly bond-buying at this week’s policy meeting.

Citigroup Reaches $7 Billion Mortgage-Bond Settlement

  • Citigroup posted second-quarter profit that beat analysts’ estimates.
  • The bank took a $3.7 billion charge in the second quarter.
  • Net income after legal charges fell 96 percent to $181 million from $4.18 billion a year earlier.
  • Revenue fell 3 percent from a year earlier to $19.4 billion, while operating expenses dropped 3 percent to $11.8 billion.
  • Analysts surveyed by Bloomberg projected $18.8 billion in revenue.

AbbVie Moves Closer to Shire Deal With $53.7 Billion Bid

  • Shire said it would support a formal bid of 53.20 pounds a share, or 9.2 percent more than Shire’s closing share price on July 11.
  • Buying Shire allows AbbVie to move its tax residence to the U.K. and add treatments for rare diseases and attention deficit disorder.

Mylan to buy some Abbott drug assets in $5.3 billion deal

  • Generic drugmaker Mylan said it would buy Abbott Laboratories’ specialty and branded generics business outside the United States in an all-stock transaction valued at about $5.3 billion.

Whiting to buy Kodiak for $3.8 billion, create No. 1 Bakken producer

  • Whiting Petroleum, after the deal, will become the largest producer in North Dakota’s Bakken shale oil formations.

Airbus jet re-launch heralds busy aerospace show

  • The Farnborough air show kicks off Monday at an airfield in rural England, represents the aerospace community’s annual opportunity to take the pulse of the business of flying.
  • Airbus will begin the air show with up to 100 commitments for the A330neo, stepping up a contest with Boeing for up to $250 billion of orders at the core of the long-haul jet market.
  • Airbus unveils revamp of A330 passenger jet. Deliveries of the A330neo will start in the fourth quarter of 2017.

Boeing Squeezes Seats into 737 to Boost Low-Cost Carrier Appeal

  • The aircraft will seat as many as 200 in a single cabin and is based on the re-engined 737 Max 8 set to debut in 2017.
  • The modified 737 model will be targeted at ultra-low-cost carriers seeking high-density seating configurations to pack in passengers on shorter flights were demand exceeds capacity.
  • Airbus previously said it planned to boost the number of seats on its A320neo by nine to 189.

Lockheed F-35 Fire Probe Finds No Sign of Systemic Flaws

  • U.S. defense officials see no broad safety issues with Lockheed Martin’s F-35 Joint Strike Fighter after an engine fire forced the grounding of the fleet.
  • The F-35 has been plagued by a costly redesign, bulkhead cracks, excessive weight and delays in software. Building all 2,443 planes is projected to cost $398.6 billion, a 71 percent increase in inflation-adjusted dollars since the contract with Lockheed was signed in 2001.

VW to spend $900 million at Tennessee plant to build new SUV

  • The German automaker chose to build the seven-passenger, three-row SUV at its plant in Chattanooga, Tennessee, instead of at its facility in Puebla, Mexico starting in late 2016.
  • About $600 million of the $900 million will be invested in Tennessee, VW said.
  • VW’s $1 billion factory in Chattanooga started operating in 2011, building a cheaper, roomier version of the carmaker’s mid-sized Passat sedan specifically designed for American customers.
  • From 2014 to 2018, VW will invest more than $7 billion in the United States and Mexico.

Home Depot Starts Selling 3-D Printers in Stores

  • The 3-D printing industry is still in its early stages and will need people to become educated on how to use software to design objects, said Tim Shepherd, an analyst at research firm Canalys in the U.K.
  • “Ten years from now, it will be quite common for people to have 3-D printers in their homes,” he said.
  • The consumer market for 3-D printing will reach $600 million in 2017, up from $70 million to $80 million last year.
  • Home Depot is the home-repair market leader — with $78.8 billion in revenue last year — followed by Lowe’s, which had $53.4 billion.

Aecom Technology Agrees to Buy URS for About $4 Billion

  • The transaction brings together companies that provide support and planning services for governments and large engineering and construction projects in the U.S., Canada and other countries.
  • The combined company will have more than 95,000 workers in 150 countries.

Uber Woos Drivers With $1,000 Bonuses in Tussle With Lyft

  • For Uber, more drivers are important to establishing itself as the biggest car-booking provider.
  • Drivers are independent contractors who can work for multiple companies at the same time.
  • They typically own their car and can make as much as $8,000 a month, depending on how long they’re on the road and excluding insurance, gas and other costs.
  • Uber has rolled out its service in 75 U.S. cities and is in a total of 39 countries. Lyft is in 68 cities in the U.S.

‘Planet of the Apes’ Reigns in Cinemas with $73 Million in Sales

  • A big summer sequel from 21st Century Fox, opened as the No. 1 film in domestic theaters over the weekend.
  • Summer cinema sales in the U.S. are falling further behind last year’s record pace, in large part because studios spread out the timing for their biggest films to avoid stealing sales from each other and to work around soccer’s World Cup.
  • Weekend sales for the top 10 films fell 27 percent to $134.8 million from a year earlier.

US ECONOMY & POLITICS

Yellen says Fed easy money needed even after recovery

  • The Federal Reserve will still need to deliver “unusually accommodative” monetary policy even once the U.S. economy returns to “where we want it to be”.

Fed officials debate timing of interest rate increases: WSJ

  • A debate is intensifying among the Federal Reserve’s regional bank presidents about whether to push interest rates up from zero sooner than planned because of recent improvements in the U.S. job market, the Wall Street Journal reported.
  • Most Fed officials at June’s policy meeting didn’t see rate increases until 2015.
  • Fed officials hadn’t expected unemployment to fall to near 6.1 percent until the end of this year.

EUROPE & WORLD

Draghi Seen Delivering $1 Trillion to Banks in ECB Offer

  • The ECB has identified lending to companies and households as a key weakness in the euro area’s fragile recovery.
  • The ECB targeted lending program for banks will boost credit for the real economy as planned, and at the same time help keep the financial system flush with cash.

China’s Okay Airlines orders Boeing 737 planes

  • China’s airlines had ordered six 737 MAX 8 planes and four 737-800 aircraft, worth $980 million at list prices.

Euro zone industry stumbles in May, recovery still frail

  • Output in the 18 countries sharing the euro dropped 1.1 percent on the month in May.

Putin signs nuclear energy deal with Argentina

  • Putin’s energy minister, Alexander Novak, told reporters in the Argentine capital that the Russian state atomic energy corporation, Rosatom, had made an offer to tender for the construction of two new nuclear power units in Argentina.

TODAY in HISTORY

  • The storming and destruction of Bastille marked the beginning of the French Revolution (1789)
  • Congress passed the Sedition Act, making it a crime to publish false, scandalous, or malicious writing about the U.S. government (1798)

 

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg.

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