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Need to Know
AUGUST 06, 2013
6 gut checks before the stock
market's opening bell
By V. Phani Kumar
Good morning.
The
newspaper is the news this morning as stock futures gently drift lower,
lying in wait for the next lap of the Fed speakers' relay race this week.
Amazon founder Jeff Bezos's decision to plunk down $250 million of his
private wealth to snap up the Washington Post against the backdrop of the
print news industry's secular downtrend in the digital age is getting much
attention.
Rana Foroohar writes for Time the
acquisition may mean that better days are ahead for the paper, "both
journalistically and economically," and Henry Blodget mentions in this Business Insider piece
Bezos's focus on the long-term makes him a great investor for any company
that cares about building great products and services.
The Washington Post itself reports that by
taking the paper private, Bezos "will be able to experiment with the
paper without the pressure of showing an immediate return on any
investment," while the Guardian is reporting from across the pond
that the billionaire's sense of adventure will be tested by the struggling
newspaper industry.
All this provides a welcome distraction ahead of comments from Chicago Fed
President Charles Evans, who is scheduled to speak with reporters later in
the day.
Key gauges:
U.S. equity futures were nudging lower ahead of the monthly trade data and
the update on job openings, and of course, Evans' remarks, due to hit the
tape at 1 pm Eastern. DJIA and S&P 500 futures are off 0.2% each, while
those on Nasdaq 100 are mildly lower.
Earlier in the day, most Asian markets also finished lower, with poor
results from HSBC weighing on Hong Kong's Hang Seng Index .
The chart of the day:
Here's a chart that won't please Apple shareholders. As recently as the
second quarter, the iPhone commanded less than a sixth of the global smartphone
market by share of volumes , but more than half of the share of
profits. That's changing fast.
The chart below, from Business Insider, shows how Samsung is eating away at
the share of profits of... well, everyone else in the game. So what will
happen when the widely-anticipated, low-cost iPhone hits the market
, shaving another slice off Apple's profitability? "We doubt [Apple's]
the profit-share leader this time next year," Business Insider declares .
The
economy: The June trade data is on tap
at 8:30 am Eastern (Read: Spotlight on the economy ), after a surge
in imports widened the May trade deficit to $45 billion from
$40.1 billion in April. Estimates compiled by MarketWatch have penciled in
a monthly deficit of $43 billion.
The call of the day... :
... is StockPucker's
bet that Citigroup Inc. is one of the great turnaround
stories that is still taking shape. "Between the two major unloved
banks, Citi is head and shoulders above Bank of America on return on equity
and return on assets," while J.P. Morgan and Wells Fargo have run up
too much, the blogger writes.
Also noteworthy is Zach Cunningham's call on Seeking Alpha
that Chinese search engine Baidu is undervalued and a "steal"
considering its long-term prospects, and The Fiscal Times' verdict that
eHealth is the one clear winner amidst all the noise
surrounding Obamacare.
The buzz:
Despite the
buzz about Bezos's Washington Post investment, most newspaper shares are
trading flat to lower. Wapo itself is off 1%, letting the strong advances
made in Monday's afterhours trade slip away, as if to ask: Will Bezos'
gambit work? MarketWatch's Therese Poletti ponders over the same question here .
The media sector will also be under the spotlight as Dow component Walt
Disney and 21st Century Fox are due to report earnings after the closing
bell.
Meanwhile, keep an eye on the Sony ADRs. Its Tokyo-listed shares received a
drubbing Tuesday in the wake of the board's rejection of hedge-fund manager
Daniel Loeb's proposed spin-off of the company's entertainment business.
Random reads:
As one may have expected, the $332,000 experiment to grow a beef burger
patty in a laboratory wasn't an instant hit. It tasted "close to
meat," was the food tasters' verdict, according to this report . But don't write it off yet.
Mark Post, the Dutch scientist behind the "test-tube" patty, is
convinced that with current meat production at a peak, "we need to
come up with an alternative." Also read about test-tube burger's secret backer: Google's Sergey
Brin .
In the same adventurous spirit, scientists "paint" a Mini Lisa on a
substrate surface about 30 microns in width.
Here's what the Curiosity rover is up to one earth year after landing on Mars .
American tourist accidentally snaps finger off a 600-year-old statue in
Florence, believed to be the work of sculptor Giovanni d'Ambrogio.
A compelling reason for pigeons not to gamble .
And on a more solemn note, Japan observes a minute of silence on 68th
anniversary of Hiroshima nuclear bombing .
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