Asia Data Suffocates Markets (Tue, Jul 10 2012)

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DJIA -60 S&P 500 -7.3 Nasdaq -9

Economic Data

- (EU) OECD May Leading Index: 100.3 v 100.4 prior

- (CL) Chile Jun Trade Balance: $1.04B v $700Me; Total Exports: $6.9B v $6.5B prior; Total Imports: $5.9B v $6.7B prior

- (CL) Chile Jun Copper Exports: $3.8B v $3.3B prior

- (MX) Mexico Jun Consumer Prices M/M: 0.5% v 0.4e; Y/Y: 4.3% v 4.3%e; CPI Core M/M: 0.2% v 0.2%e

- (EU) ECB announces no weekly settlements in its Govt Bond Buying Program (SMP)

- (EU) ECB call for bids in 7-day and 1-month refi operations

- (UK) BOE buys £1.0B in 2015-2019 Gilts in reverse auction

- (MX) Mexico Jun Vehicle Production: No est v 228.1K prior; Vehicle Domestic Sales: No est v 80.3K prior; Vehicle Exports: No est v 187.0K prior

- (CA) Canada Q2 Business Outlook Future Sales: No est v 35 prior; BoC Senior Loan Officer Survey: No est v -16.9 prior

- US markets are in the red this morning following a slew of negative economic reports out of leading Asian economies. Japan's May machinery orders plunged 14.8% from April, consumer inflation in China eased more than expected in June while producer prices were in outright deflation for a fourth month, and Taiwan's June exports declined on a y/y basis for a fourth straight month. Equity indices in New York are not down further thanks to news that President Obama will call for a one-year extension of the Bush tax cuts for families earning less than $250K a year, plus perhaps some dovish Fed commentary from Evans and Rosengren overnight. In Europe, finance ministers are meeting to discuss crisis responses once again. Spain will sign an MOU with the EU for its bank rescue package today, with terms said to be centering around a 3-4% rate for 15-year loans. EUR/USD is flat, trading just below the 1.2300 level.

- Boeing and Airbus are going head-to-head at the UK's Farnborough Airshow this week. Airbus CEO said Boeing is taking a very aggressive pricing stance for narrowbody planes, but also said Airbus would top Boeing's total orders in the combined 2011-12 time period. Boeing warned that it faces challenging times thanks to the crisis and promised to take aggressive cost-cutting measures. However the biggest deal to emerge from the event so far was a Boeing order from Air Lease for 75 737 MAXs worth $7.2B.

- Guidance from a broad spectrum of firms has been pretty lousy heading into earnings season, which opens with Alcoa's report today after the close. Just this morning, industrial name Dover trimmed its FY12 to $4.70-4.85 from $4.80-5.00. According to Dover, the main factors driving the revision were a broadly weaker European economy, FX rate impacts and a slightly higher tax rate. However the news has not been all bad: SIRI gained 3% in the premarket after adjusting its FY12 revenue outlook slightly higher and disclosing very positive Q2 net adds. Also, small homebuilder Meritage offered preliminary Q2 metrics, including a 49% y/y gain in orders and a 62% y/y increase in backlog (shares of MTH are down on a 2M common share offering).

- Managed care name WellPoint agreed to acquire Amerigroup for $4.9B in cash, or about $92/shr, in an effort to expand its presence in the Medicaid space. WellPoint said the transaction would be accretive to earnings in 2013, including one-time transaction and integration costs.
Accretion is expected to increase in 2014 and exceed $1.00 per share by 2015. Thomson Reuters said it would buy electronic foreign exchange platform FX Alliance for about $625M in cash, or $22/shr. FX Alliance's customer base is predominantly on the buy side, including asset managers, corporations and hedge funds. In the renewable energy space, there was speculation, later denied, that China's Ming Yang was looking to acquire Vestas in a deal worth up to €1.5-2.0B.