Before markets open on Tuesday here’s what you need to know.
Elon Musk’s SpaceX did something that had never been done before. The space exploration company made history by sending an orbital rocket into space and landing it back on the ground. The milestone is significant as it could eventually lead to spaceflight that uses reusable rockets. Elon Musk tweeted, “There and back again” and attached a picture of the flight path once the mission was complete.
Pep Boys likes Carl Icahn’s offer. Activist investor Carl Icahn has raised his offer for the US auto parts retailer to $16.50 per share. Pep Boy’s board of directors has come out in support of the Icahn offer, saying it preferred his offer to the $15.50 per share offer from Bridgestone. Initially, Bridgestone had offered $15 per share, but raised their bid to $15.50 to match Icahn.
NetApp is buying a storage company. Tech storage giant NetApp has agreed to buy solid-state storage startup SolidFire for $870 million in cash. The acquisition will help NetApp reach enterprises who want to build their storage systems in a quieter, faster and more efficient way. “SolidFire will materially improve the growth rate of NetApp over time,” NetApp CEO George Kurian said. “It will take time and investment to achieve that. And at that point it will also improve earnings. In the near term it will be dilutive to earnings because we need to invest to make it succeed.”
Brazil is going after BHP Billiton and Vale. A Brazilian court has ordered miners BHP Billiton and Vale to set aside $491 million after a collapsed dam at their joint venture released 60 million cubic meters of mud downstream, killing at least 17, and contaminating the water systems of hundreds of towns and cities. The companies’ assets in the country have been frozen, and they face the possibility of billions of dollars more in damages. Both companies have been ordered to carry out extensive environmental and social work in the areas impacted by the collapse.
The CDC is looking into another possible E. coli outbreak at Chipotle. The CDC says there are five new E. coli cases that could possibly be linked to Chipotle. People in Kansas (1), North Dakota (1) and Oklahoma (3) all reported eating at Chipotle within the week prior to falling ill. This follows cases in Illinois, Maryland and Pennsylvania, as well as an ongoing investigation of a strain that left 120 Boston College students ill. Chipotle has since created new food safety programs and is in the process of implementing them. “With all of these programs in place, we are confident that we can achieve a level of food safety risk that is near zero,” Chipotle spokesman Chris Arnold said in a statement.
Toshiba was cut to junk at Moody’s. The electronics maker is having a bad week. On Monday, the company announced it was taking a record ¥550 billion ($4.5 billion) loss and eliminating 7,000 jobs as it narrows its focus on chips and nuclear energy. On Tuesday, the company’s debt rating was cut to junk at Moody’s with a two-notch downgrade from Baa3 to Baa2. “We expect that Toshiba’s leverage will stay high over a prolonged period, given that its restructuring costs will exceed our previous estimates, and our expectation of improvement in earnings, if any, for each business segment will be very gradual even after the restructuring,” Masako Kuwahara, a Moody’s vice president and senior analyst, said.
Bill Gates was the biggest insider seller in 2015. Microsoft founder Bill Gates sold $1.5 billion worth of the company’s stock in 2015, according to Sqoop.com. However, that was far less than the $3.35 billion he sold in 2014. The data shows Google co-founders Sergey Brin ($868 million) and Larry Page ($857 million) were second and third on the insider selling list. Insiders are allowed to sell stock as long as they don’t used privileged information during their decision process.
Stock markets around the world are little changed. China’s Shanghai Composite (+0.3%) hit its best level in four months while leading the gains in Asia. Elsewhere, Spain’s IBEX (+0.7%) outperforms during a quiet session in Europe. S&P 500 futures are up 1.25 points at 2016.25.
US economic data picks up. The third estimate of US third quarter GDP is due out at 8:30 a.m. ET. We also get a look at the housing market as the FHFA’s Housing Price Index is set for release at 9 a.m. ET and existing home sales are announced at 10 a.m. ET. The US 10-year yield is higher by 1 basis point at 2.21%.
There are a few earnings reports of note. ConAgra reports ahead of the opening bell while Micron and Nike release their quarterly results after markets close.