- The Fed's FOMC minutes are out today at 2 P.M EST.
- Japan and Germany show weakness and the Fed's tone could become even more important.
- There's key news surrounding Twitter, BlackBerry, Fiat Chrysler, Deutsche Bank, Dell and EMC.
Stock markets rose on Wednesday, as a rebound in biotechnology shares lifted U.S. stock markets. Oil prices snapped a rally that's continued more or less through the week as U.S. oil inventories showed an unexpected increase. For the day, key indices remained up, with the Dow Jones climbing 0.73% to 16,912, the broad based S&P 500 up 0.8% to touch its highest in three weeks, and the NASDAQ composite rising by 0.9%.
The big events today? The Fed minutes from September's FOMC meet are out today at 2 P.M E.S.T. That's going to be a big trigger, especially given that expectations are against a rate hike signal from the Fed. German exports are down 5.2% for August, the biggest decline in a long time. That, a day after recording the steepest fall in industrial output in a year, with a 1.2% decline, even as Germany's largest bank stumbles upon the possibility of a $7 billion loss in Q3 2015 (details below). But before all of that, let's spare a few minutes to review some of the big movers in the yesterday's markets, and the expectations going into today.
Why Twitter Shares Went Through The Roof - 13.4% in 3 days
Twitter shares have found support yet again, and this time, it's from a big investor, Kingdom Holdings, from the Middle East. Kingdom Holdings Company, the investment holding company of Saudi Prince, Al Waleed Bin Talal bought Twitter shares, raising their combined stake in the micro-blogging site to beyond 5% as per latest news. The two entities combined, now own close to 35 million shares in the company. The Saudi Price, with the combined stake is now the second largest stakeholder in Twitter (NYSE:TWTR).
The development has also sparked-off speculation about possible changes at Twitter's board, given the size of the combined holding. In reaction to the news, Twitter shares shot up by over 8%, taking the combined gains in the last three days to about 13.5%. Twitter shares jumped 7% higher on Monday, after Twitter announced the appointment of Jack Dorsey as permanent CEO.
Twitter also unveilied Twitter Moments, a curated news section, which the company claims consists of the very best of its content. The new feature makes it faster and easier to discover and share content and also adds the element of real time conversation around the news piece, for context. The excitement is probably because the move could potentially open up another source of revenue for the company, as it can pick what it promotes.
BlackBerry Shares Jumped As BBM Ad-Requests Hit 1 Billion A Day
Blackberry shares clocked some healthy gains in yesterdays trading session, as news broke out that BlackBerry's messaging application BlackBerry Messenger, popularly known as BBM had hit the milestone of 1 billion ad-requests in a day.
"Since we launched our Native Ad units last July, we have seen solid interest in Sponsored Posts and Invites, as well as our Sponsored Sticker packs."
"Now, I am pleased to announce we have hit another mobile commerce milestone: our BBM users running the Android, iOS and BlackBerry apps are now consistently generating more than 1 billion ad requests per day!"
Blackberry shares have been under pressure this year, as the company's much expected turnaround has been slower and less assuring, with the shares falling by nearly 35% in the year-to-date. BlackBerry shares currently trade below its book value. BlackBerry's latest earnings release didn't inspire much confidence either, with the company missing analyst estimates of revenue as well as EPS, dragging BlackBerry shares further. It's likely that the big surge yesterday, was also driven by the weak phase that the BlackBerry stock has endured lately.
Fiat Chrysler Shares Could Surge As Workers Union Strike Evaded
Fiat Chrysler's management narrowly avoided a strike at its U.S. plant, following a tentative labor agreement with the United Auto Workers (UAW) union, which had threatened the management less than two days ago, to pull-off as many as 40,000 workers from the plant. The announcement came from UAW post midnight EST, and is likely to soothe some tense nerves.
Fiat Chrysler shares surged 4% yesterday, as a slew of announcements buoyed the stock. Starting with the news that Fiat Chrysler (NYSE:FCAU) is offering heavy incentives to lure customers from battered auto-maker Volkswagen (OTC:VLKAY), Fiat Chrysler has also announced a sweeping change in the management. The company, with immediate effect is splitting its passenger car and SUV/pick-up truck divisions in to two segments, to be headed by two different executives.
Fiat Chrysler has also been in the news due the growing anticipation around the Ferrari IPO, which will see the company spin-off its iconic luxury cars brand.
Rumors Of Dell Acquiring EMC: EMC Shares 7% Higher Post Market
Dell is reportedly in talks to buy EMC, and if you hold some EMC shares, you might just be in for a good day. EMC shares have risen sharply in after hours trade, and now sit nearly 7% higher than their close last evening. The news, first reported by Reuters, suggests that an an all-cash deal might be in the offing, as Dell is in talks with banks to facilitate the reported EMC acquisition. If it comes through, the deal could be a big one, as EMC (NYSE:EMC) closed yesterday's trading session with a market cap of nearly $50 billion.
Deutsche Bank Stock Tanks After Market Post $7 Billion Loss Warning
Germany's largest bank, Deutsche Bank (NYSE:DB) issued a warning on its investor relations page, that it anticipated a loss of 6.2 billion Euros or $7.1 billion in its third quarter 2015. The release also stated that the banks board will recommend a reduction and possibly the elimination of common share dividend for the fiscal. Deutsche Bank shares reacted to the news, plunging 6.5% to $26.93 in after hours trade.
So what Happens In The Markets This Morning?
Like we said earlier in the post, all eyes will be on the Fed's FOMC minutes later today. As Germany, the glue that is holding the Euro Zone has at least a tad bit to worry about, Japan saw machinery orders fall by 5.7% in August, undermining expectations of a pick up in inflation and capital expenditure.
Most market voices are not expecting any rate action from the Fed for the remainder of this year, so, the Fed's stance, is likely to be the market's stance today. Any surprises of course, could mean choppy trade.