10 things you need to know before the opening bell

This is what you need to know.

Kazakhstan’s tenge crashed. Kazakhstan removed the dollar peg of its currency, the tenge, allowing the market to set the price as its economy reels from the weakness in oil prices. “The head of state stressed that due to the new economic reality it is needed to adapt to oil prices at $US30-40 per barrel,” the presidential press service said, according to Reuters. The unpegging has the tenge down 22% at 252.05 per dollar.

Kocherlakota wants to change the Fed’s inflation target. Minneapolis Fed President Narayana Kocherlakota thinks the US Federal Reserve should increase its inflation target to make it easier to achieve price stability and full employment, Reuters reports. Kocherlakota, speaking at the Bank of Korea in Seoul, said, “This would offset the impact of a decline in the long-run neutral real rate of interest by giving the (Fed) more ‘policy space’ to respond to adverse shocks.” Boston Fed President Eric Rosengren has also recently called for the Fed to raise its inflation target.

Valeant is trying to buy Sprout Pharmaceuticals.The drug maker is said to be nearing a $US1 billion deal for Sprout Pharmaceuticals, the company who just won approval for its women’s libido drug. The Wall Street Journal reports the all-cash deal would pay $US500 million upfront and another $US500 million after one year.

Li & Fung’s profit dropped. Wal-Mart supplier Li & Fung said first-half net profits from continuing operations fell 27.2% to $US163 million. According to FT, the weakness was at least partially due to the decline in the euro. “While we expect the macroeconomic environment to remain challenging for the rest of the year, our order book remains solid and in-line with our expectations, and I am optimistic that key prospects will be converted into new businesses this year,” CEO Spencer Fung said in a statement.

L Brands raised its guidance. The retailer announced earnings of $US0.68 per share, matching the Wall Street consensus. Revenue edged up 3.4% to $US2.77 billion, which was shy of the $US2.80 billion that analysts were anticipating. The Wall Street Journal reports same-store sales at Victoria’s Secret rose 3% while Bath & Body Works saw a 5% jump. L Brands expects full year earnings per share of $US3.58 to $US3.73, up from its previous forecast of $US3.50 to $US3.70.

The Weather Channel is exploring a sale. The Weather Channel has hired Morgan Stanley and PJT Partners as its owners explore a sale of its digital businesses, people familiar with the matter told Bloomberg. The digital business, which includes The Weather Channel’s website, Weather.com, Weather Underground and Weather Services International, are said to be worth around $US3 billion. Blackstone Group LP, Bain Capital LLC and NBCUniversal bought the entire company for $US3.5 billion in 2008, according to Bloomberg.

Hong Kong stocks have entered a bear market. Today’s 1.8% drop has pushed Hong Kong’s Hang Seng into bear market territory. The index is now down 20% from its April high. Interestingly, China’s Shanghai Composite has gained 15% over that time.

Stock markets around the world are lower. China’s Shanghai Composite (-3.4%) led the way lower in Asia and Germany’s DAX (-1.1%) paces the decline in Europe. S&P 500 futures are down 14.75 points at 2057.75.

US economic data is heavy. Initial and continuing claims will be released at 8:30 a.m. ET while existing home sales, Philadelphia Fed and leading indicators are due out at 10 a.m. ET. Natural gas inventories are set for release at 10:30 a.m. ET. The US 10-year yield is lower by 3 basis points at 2.09%.

Earnings reports flow. Madison Square Garden, Sears Holdings and Tech Data are among the notables scheduled to report ahead of the opening bell. Gap, Hewlett-Packard, Ross Stores and Salesforce.com will release their quarterly results following the close.

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