Here is what you need to know.
ChemChina made the biggest foreign purchase in Chinese history. State-owned ChemChina announced it’s buying Switzerland-based Syngenta for $43 billion. Reuters reports, the deal will give China access to the technology and expertise needed to help secure its food supply. The deal was described as “very appropriate and attractive” by Syngenta CEO John Ramsay. Last year, Monsanto failed in its attempt to buy Syngenta.
Yahoo is for sale. The search giant announced a four-point growth plan, and said it was “exploring additional strategic alternatives.” Chairman Maynard Webb noted the company remains focused on separating its Alibaba stake, and that it will “engage on qualified strategic proposals.” On Tuesday, Yahoo announced in-line earnings of $0.13 per share on revenue of $1.27 billion (1.19 billion expected). The stock is down 2% in pre-market trade.
Chipotle’s quarter was as bad as it thought. The fast-casual burrito chain announced adjusted earnings of $2.17 per share, easily beating the $1.81 expected by the Bloomberg consensus. The recent E. coli outbreak contributed to a 6.8% year-over-year drop in revenue to $999.7 million, which was shy of the $1.01 billion that was forecast. Same store sales cratered 14.6%, matching the warning Chipotle issued in January. Chipotle co-CEO Steve Ells said the fourth quarter was “the most challenging period in Chipotle’s history.” The company expects 2016 to be “a very difficult year.” Shares of Chipotle are down 7.4% in early action.
Editas is the first IPO of 2016. The Bill Gates-backed gene-editing company priced 5.9 million shares at $16 per share. The first IPO of 2016 raised $94.4 million. According to Reuters, January was the first IPO-free month since September 2011. Editas will trade under the ticker ‘EDIT.’
China announced new measures to support housing. The People’s Bank of China announced new measures to support the tepid rebound in home prices. The PBOC said first-time home buyers will be allowed to make a minimum down payment of 20%, down from the previously required 25%. Additionally, those looking to buy a second home must put down 30% up front, down from the previously required 40%. “The eased requirements will be for buyers in areas without the purchase restrictions that are applied in some of the biggest metropolitan areas such as Beijing and Shanghai,” the PBOC said.
Japan could introduce more stimulus. Speaking at a seminar on Wednesday, Bank of Japan Governor Haruhiko Kuroda said last week’s decision to introduce negative interest rates was “the most powerful monetary policy framework in the history of modern central banking.” Kuroda also noted that if the policy isn’t enough to jump start the economy they could always invent new tools. “I am convinced that there is no limit to measures for monetary easing,” Kuroda said. The Japanese yen is stronger by 0.4% at 119.53.
South Korea unveiled a new fiscal stimulus plan. South Korea has introduced a 21 trillion won (US$17.4 billion) stimulus plan in an effort to support its economy amid the big drop in its exports. Yonhap News Agency reports, the government will increase first quarter spending by an additional 6 trillion won, upping the total amount of spending earmarked for the quarter to 144 trillion won. More than 40% of government spending for the fiscal year will now happen in the first quarter. Yonhap News Agency also says, eight financial institutions will give lower interest loans to exporters and local businesses. The South Korean won weakened 1% to 1219.38.
Earnings reporting picks up. Comcast, General Motors, Marathon Petroleum, Merck and Mondelez International are among the names reporting ahead of the opening bell. Allstate, Buffalo Wild Wings, GoPro, MetLife and Yum Brands highlight the names releasing their quarterly results after markets close.
Markets around the world are mostly lower. Japan’s Nikkei (-3.2%) led the decline in Asia and Spain’s IBEX (-1.3%) paces the losses in Europe. S&P 500 futures are up 3.75 points at 1901.25.
US economic data remains light. ADP Employment Change will be released at 8:15 a.m. ET and ISM Services are due out at 10 a.m. ET. Finally, crude oil inventories will cross the wires at 10:30 a.m. ET. The US 10-year yield is higher by 3 basis points at 1.87%.
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