Here is what you need to know.
Dow Chemical and DuPont are discussing a merger. A combination of the two chemical giants would create a $120 billion behemoth, people close to the talks told Reuters. The combined company would then possibly split up into material sciences, specialty products and agrochemicals businesses, according to the sources. A combination could produce as much as $3 billion in synergies, according to CNBC.
Yahoo won’t spin-off Alibaba. Yahoo won’t spin-0ff Alibaba, but is considering a spin-off or sale of its core internet business. This is a major shift in strategy for Yahoo as the company had been planning to spin-off its 15% stake in Alibaba for several months. The decision comes amid pressure from activist investor Starboard Value, who has called for the company to abandon its Alibaba spin-off and instead sell its core internet business.
Kinder Morgan slashed its dividend. The pipeline operator cut its quarterly divided by 74% to $0.125 per share. The announce comes as Kinder Morgan continues its efforts to deal with the fallout from the oil bust and “enables the company to use a significant portion of its large cash flow to fund the equity portion of its expansion capital requirements, eliminate any need to access the equity market for the foreseeable future and maintain a solid investment grade credit rating.” The stock is down about 8% in pre-market trade.
Smith & Wesson had another great quarter. The gunmaker announced earnings of $0.22 per share, outpacing the Bloomberg consensus by four cents. Revenue surged 32.1% to $143.2 million, which was ahead of the $139 million Wall Street consensus. The company said gun sales rose 15.2% to $124.9 million. “Higher revenue in our firearms division was driven by increased orders for our Smith & Wesson SDVE polymer pistols, M&P Shield and M&P BODYGUARD polymer pistols, and our long guns, especially our Thompson/Center Venture bolt-action rifles,” CEO James Debney said in the earnings release.
Lululemon posted a mixed quarter. The athletic apparel maker announced earnings of $0.38 per share, topping the Bloomberg consensus estimate by a penny. Revenue rose 14.4% to $479.7 million, which was shy of the $481.9 million that Wall Street was expecting. Comparable same store sales rose 6% for the third quarter on a constant dollar basis. “We had a solid quarter in line with our expectations underscored by the combination of our product, guest and community initiatives along with tremendous guest reception to major store openings around the world,” CEO Laurent Potdevin said in the press release.
The creator of bitcoin may have been unmasked. A report from Wired suggests Craig Steven Wright, an Australian finance geek, and possibly his close friend, Dave Kleinman, who is now deceased, could be the creator(s) of bitcoin. Evidence pointing to Wright, and maybe Kleinman, as the creator(s) of the digital currency includes his blogging about writing papers about a cryptocurrency, his ownership of two supercomputers and the fact Kleinman had a trust holding exactly the same number of bitcoins the rumoured creator owned.
Meredith Whitney is back. Meredith Whitney left the hedge fund world in June, at the time saying the managing money chapter of her life was “over.” However, Bloomberg reports Whitney will resurface at Bermuda-based insurer Arch Capital Group in September, where she will manage an $800 million portfolio.
Consumer prices in China ticked higher. Chinese consumer prices grew at a 1.5% year-over-year clip in November, up from the 1.3% reading in October. Meanwhile, producer prices fell 5.9% YoY, matching the pace of decline from the two months prior. China’s yuan slipped 0.2% to 6.4272 per dollar, ending at its weakest level in over four years.
Stock markets around the world are mostly lower. Spain’s IBEX (-0.9%) paces the decline in Europe after Japan’s Nikkei (-1%) led the way lower in Asia. China’s Shanghai Composite (+0.1%) eked out a gain. S&P 500 futures are up 1.25 points at 2060.00.
US economic data remains light. Wholesale inventories will be released at 10 a.m. ET and crude oil inventories are due out at 10:30 a.m. ET. Treasury will hold a $21 billion 10-year reopening at 1 p.m. ET. The US 10-year yield is up 2 basis points at 2.24%.