Before markets open on Thursday, here’s what you need to know.
Anthem is on the verge of acquiring Cigna. A $US48 billion mega-merger between Anthem and Cigna could be announced as early as this week, people familiar with the matter told Reuters. Anthem has reportedly improved its previous offer of $US184 per share in cash and stock, and while the exact price isn’t known, the Wall Street Journal is reporting a deal could be worth $US187 per share. M&A has been prevalent in the health insurance space after the Supreme Court upheld Obamacare reforms. Earlier this month, Aetna announced it is buying Humana for $US37 billion
Bank of America has a new CFO. Bruce Thompson is stepping down as Bank of America’s CFO after 5 and a half years on the job. “As CFO, Bruce has put our company on a strong, stable financial foundation, with record levels of capital and liquidity,” CEO Brian Moynihan said in a statement. Thompson will be replaced by Paul Donofrio, who has 25 years of experience in global corporate and investment banking.
American Express posted a mixed quarter. The credit card giant announced earnings of $US1.42 per share, topping the Wall Street estimate by 10 cents. American Express’ bottom line was helped by the January announcement it would eliminate 4,000 jobs. Elsewhere, revenue slid 4% year-over-year to $US8.28 billion, which was shy of the $US8.40 billion that analysts were anticipating. Card services outside the US were a drag as revenue fell 9.6% versus last year.
The EU has filed antitrust suits against 6 major US film studios. Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox, and Warner Bros have all been named in an antitrust suit for restricting consumer access to content by not allowing Sky to broadcast their content outside of the UK and Ireland. “European consumers want to watch the pay-TV channels of their choice regardless of where they live or travel in the EU,” EU Commissioner Margrethe Vestager commented.
Greece can begin bailout talks. Greece’s parliament approved new reforms that pave the way for prime minister Alexis Tsipras to begin negotiating his country’s third bailout. Parliament overwhelmingly approved the measures by a tally of 230-63, but roughly a quarter of Tsirpas’ Syriza party voted against the reforms. According to the AP, Tsipras has said he will not resign despite the dissatisfaction within his party. Greece must make a payment of more than €3 billion ($US3.3 billion) to the European Central Bank of August 20. Greece’s 2-year yield is up 8 basis points at 22.71%.
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The latest issue of EY’s Capital Insights magazine includes an interview with Deutsche Telekom’s CFO and a look at M&A in the US. Read it now.
The Reserve Bank of New Zealand cut rates. New Zealand’s central bank lowered its benchmark interest rate 25 basis points to 3.00% as the slump dairy prices continues to weigh on the economy. While a rate cut was expected, economists debated if it was going to be 25 or 50 basis points. The central bank warned, “Some further easing seems likely.” The New Zealand dollar is higher by 1.6% at .6680.
Japan’s trade deficit narrowed. Japan’s trade deficit narrowed to ¥69 billion ($US556 million), down 92% compared to a year ago. The figure was helped by a 9.5% jump in the value of exports as the yen lingers near its weakest levels in eight years against the dollar. Shipments to North America climbed 17% compared to a year ago. Also helping was the continued weakness in commodity prices as the value of imports fell 2.9%. Japan’s yen is stronger by 0.2% at 123.78 per dollar.
Stock markets around the world are mostly higher. China’s Shanghai Composite (+2.4%) paced the gains in Asia and Britain’s FTSE (+0.3%) leads the advance in Europe. S&P 500 futures are up 3.00 points at 2111.00.
US economic data is light. Initial and continuing jobless claims cross the wires at 8:30 a.m. ET, while leading indicators is scheduled for release at 10 a.m. ET. Natural gas inventories will be announced at 10:30 a.m. ET. The US 10-year yield is unchanged at 2.32%.
Earnings season is in high gear. 3M, Bristol Myers, Caterpillar, Dow Chemical, General Motors, and McDonald’s are among the names reporting ahead of the opening bell. Amazon, AT&T, Starbucks, and Visa highlight the companies scheduled to report after the close.
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