1) Christine Lagarde Under Investigation. The IMF Director is now considered a suspect for having facilitated a judgment overly favourable to the former owner of Adidas, who in the 1990s sued Credit-Lyonnais, then partially owned by the state, for mishandling the sale of the footwear giant. Lagarde says she will not resign.
2) Gun Rally Over? Shares in Smith & Wesson were collapsing Wednesday morning after the gunmaker slashed its full-year sales expectations for the second time in two months. Sturm Ruger shares were down 5% Wednesday morning in sympathy. “We believe that the current environment reflects high inventories industry-wide resulting from channel replenishment that occurred following an earlier surge in consumer buying,” Smith & Wesson CEO James Debney said in a statement. “That environment, combined with typical seasonality that slows consumer buying activity during the summer, is causing us to lower our financial outlook for fiscal 2015.”
3) Time Warner Cable Outages. Time Warner Cable customers across the U.S. are reporting outages. The incident follows a similar incident that occurred Tuesday morning in which Virgin Media customers in the U.K. were unable to access the internet due to a network issue.
4) Autonomous Driving Firm Still Rallying. Israeli firm Mobileye shares were up another 2.5% Wednesday, after rallying more than 8% Tuesday as major sell-side analysts initiated favourable coverage of the stock. Morgan Stanley’s Ravi Shenkar called it the only pure play name in the autonomous driving industry.
5) Snapchat $US10 Billion. The Wall Street Journal’s Evelyn Rusli and Doug MacMillan report Kleiner Perkins has invested in the ephemeral photo-sharing app at a valuation of $US10 billion. “Snapchat, which has talked to several potential investors in recent months, is in the process of raising a large investment round that would make it one of the world’s most valuable private tech startups despite virtually no revenue,” they wrote. “Kleiner, one of Silicon Valley’s best-known venture-capital firms, committed to invest up to $US20 million in May, one of the knowledgeable people said.”
6) Danish National Fund In Rate Hike Hedge. Bloomberg’s Peter Levring writes that Denmark’s ATP national pension fund is repositioning itself to protect gains from imminent interest rate increases. “For ATP, the goal is not to be part of the crowd of investors heading for the door when markets exit securities that rely on low rates to stay profitable,” he writes. “‘We’ll continue to protect against interest rate increases and if that happens, the effect will be substantial,’ Chief Executive Officer Carsten Stendevadsaid in a phone interview. ‘There could naturally be some costs associated with that before it comes through.'”
7) Anti-ISIS Alliance Forming. The New York Times’ Helene Cooper and Mark Landler report President Barack Obama is putting together an international coalition to fight the Islamist militant group that could include Australia, Britain, Jordan, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates. “The officials, who asked not to be named discussing sensitive internal deliberations, said they expected that Britain and Australia would be willing to join the United States in an air campaign. The officials said they also wanted help from Turkey, which has military bases that could be used to support an effort in Syria.”
8) No Major Data. Mortgage applications increased 2.8% week-over-week but remain anemic. “The refinance index reached its highest level in more than two months,” said Michael Fratantoni, chief economist for the MBA per CNBC. “Purchase volume continues to be weak despite the small increase and was 11 per cent below this time last year.”
9) Earnings. Tiffany shares were up more than 1% Wednesday morning pre-market after the company reported profits that beat expectations by $US1.11 and lifted its outlook. Shares in Chinese solar firm Yingli were down 7% after reported earnings $US0.14 short of forecasts and revenue that missed by $US38.5 million and was flat year-on-year. Express and Michaels also report Wednesday.
10) Markets. Stocks across the world, along with U.S. futures, were mostly flat. Japan’s Nikkei was up 0.1%, as was London’s FTSE. Dow futures were up 15 points.
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