From Briefing.com: 4:36 pm Advanced Micro intends to commence concurrent public offerings of ~$600 mln of its common stock and $450 mln aggregate principal amount of its convertible senior notes due 2026 (AMD) :
Additionally, AMD expects to grant the underwriters a 30-day option to purchase up to approximately $90 mln of additional shares of common stock at the public offering price and up to $67.5 mln principal amount of additional convertible senior notes.
AMD intends to use net proceeds of $1,020 mln received from the offerings to repay its borrowings under its credit facility and/or to purchase its outstanding senior notes.
After the completion of a tender offer for its outstanding senior notes, AMD has the option, but not the obligation, to call any and all of the untendered 7.75 % senior notes due 2020 with any remaining net proceeds. AMD will use any remaining net proceeds for capital expenditures, working capital and other general corporate purposes.
4:17 pm Microchip narrowed Q2 sales/EPS guidance (MCHP) :
Co narrows guidance for Q2 (Sep) EPS to $0.85-0.89, prior $0.83-0.91 vs. $0.86 Capital IQ Consensus Estimate; sees Q2 (Sep) revs of +1-3% with a mid-point unchanged at 2%, prior guidance non-GAAP net sales to be flat to up 4% with a mid-point of up 2%. (~$852-869 vs. $859.86 mln Capital IQ Consensus Estimate.
Due to Microchip's recent acquisition of Atmel and the related purchase accounting, Microchip is not able to provide GAAP guidance at this time.
"Our business through the first two months of the September 2017 quarter is tracking towards our August 8, 2016 guidance... The integration activities associated with our acquisitions of Atmel and Micrel continue to make significant progress. Micrel's 6-inch fab in San Jose is on schedule to close in October 2016. Each of Atmel's 8-bit microcontroller, 32-bit microcontroller, wireless and memory business units that have substantial overlap with Microchip's business units are now fully integrated and each one is running as one business unit under a Microchip Vice President, with common roadmaps and Microchip's pricing discipline..."We have also implemented a strong operating expense discipline at Atmel with non-GAAP operating expenses for the Atmel business in the September quarter expected to be about 30% of net sales, down from over 40% of net sales at the close of the acquisition."
4:09 pm Sigma Designs beats by $0.06, reports revs in-line (SIGM) :
Reports Q2 (Jul) earnings of $0.07 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.01; revenues rose 5.2% year/year to $61.32 mln vs the $61.19 mln Capital IQ Consensus and vs prior guidance of $60-63 mln.
"We had a strong second quarter with revenue up 14% sequentially led by robust demand and early adoption of our Connected SmartTV Platforms business. With gross margins approaching 50% and continued control of our operating expenses, we delivered a healthy net income for the quarter."
4:10 pm : The stock market began an abbreviated week on a higher note as a weaker-than-expected reading of the ISM Non-Manufacturing Index for August led investors to dial back rate hike expectations for the year. The Nasdaq Composite (+0.5%) finished the day slightly ahead of the S&P 500 (+0.3%) and the Dow Jones Industrial Average (+0.3%).
The ISM Non-Manufacturing Index for August was a big disappointment, dropping to 51.4 (Briefing.com consensus 54.7) from 55.5 in July. The August reading was the lowest reading for this index since February 2010. The key takeaway from the report is that it appears as if both the manufacturing sector and the non-manufacturing sector experienced a noticeable slowing of activity in August.
The added takeaway is that the slowdown seen on both sides of the economy will likely leave the Fed reluctant to raise the fed funds rate at its September meeting. Recall that it was shown last week that the ISM Manufacturing Index dropped to 49.9 from 52.6 in July. A number below 50.0 denotes a general contraction in manufacturing activity. The U.S. Dollar Index (94.85,-0.99, -1.03%), fed funds futures, and the economically-sensitive financial sector (-0.1%) fell in response while Treasuries and defensively-oriented telecom services (+0.9%) and utilities (+1.1%) enjoyed a bid.
The benchmark index erased its opening loss by midday as heavily-weighted health care (+0.4%) and technology (+0.5%) demonstrated relative strength. The broader market settled near its best level of the day with seven sectors ending in the green. The defensively-oriented telecom services (+0.9%) and utilities (+1.1%) sectors followed energy (+1.5%) on the top of the board. Conversely, financials (-0.2%) and industrials (-0.3%) led the downside.
The commodity-sensitive energy space (+1.5%) demonstrated relative strength amid a string of M&A news and a rebound in dollar-denominated oil. EOG Resources (EOG 94.83, +5.92) rallied 6.7% after announcing a deal to merge with Yates Petroleum. The deal to merge is valued at approximately $2.5 billion. Spectra Energy (SE 41.00, +4.85) surged 13.4% after announcing a stock-for-stock merger with Enbridge (ENB 43.06, +2.07). For its part, WTI crude ended its pit session higher by 1.0% ($44.85/bbl; +$0.46).
In the technology sector (+0.5%), Facebook (FB 129.73, +3.22) outperformed, notching a fresh all-time high (129.94). Conversely, top-weighted Apple (AAPL 107.68, -0.05) ended lower by 0.1% ahead of tomorrow's special event. The company is expected to introduce the iPhone 7 at 13:00 ET. The PHLX Semiconductor Index (-0.2%) underperformed as iPhone suppliers weighed. Skyworks (SWKS 73.01, -1.61) and Qorvo (QRVO 56.02, -1.58) rounded out the price-weighted index.
The health care space (+0.4%) finished ahead of the broader market as biotechnology outperformed. In the group, Gilead Sciences (GILD 77.88, +0.99) jumped 1.3% after being upgraded to "Buy" from "Hold" at Jefferies. Separately, health care plan names underperformed with Cigna (CI 127.58, -0.60) losing 0.5% after reaffirming its full-year adjusted net income guidance.
The financial sector (-0.2%) underperformed amid diminishing rate hike expectations for the year and a downturn in Treasury yields. The fed funds futures market estimates the implied probability of a rate hike at the September meeting at 18.0%, falling from the prior session's estimate of 21.0%. Money center banks and life insurance names underperformed with Prudential (PRU 78.59, -0.90) and Wells Fargo (WFC 49.99, -0.56) declining 1.1% apiece.
Treasuries ended on a higher note with yields dropping through the curve. The yield on the 2-yr note ended lower by seven basis points (0.72%) while the yield on the 10-yr note settled lower by seven basis points (1.54%).
Today's participation was above the recent average as more than 835 million shares changed hands on the NYSE floor.
Today's economic data was limited to ISM Services for August:
The ISM Non-Manufacturing Index for August was a big disappointment, dropping to 51.4 (Briefing.com consensus 54.7) from 55.5 in July.
This was the lowest reading for this index since February 2010.
For further details on this economic release, be sure to visit Briefing.com's Economic Calendar page.
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index. Separately, the Job Openings and Labor Turnover Survey for July and the Fed's Beige Book for September will cross the wires at 10:00 ET and 14:00 ET, respectively. DJ30 +46.16 NASDAQ +26.01 SP500 +6.50 NASDAQ Adv/Vol/Dec 1578/1.628 bln/1357 NYSE Adv/Vol/Dec 1755/835.1 mln/1223
3:30 pm :
The dollar index hit new session lows, -1.1% around the 94.85 level, boosting commodities overall
Commodities, as measured by the Bloomberg Commodity Index, were up +0.5% around the 83.39 level
Crude oil reversed initial morning losses & closed at session highs after headlines citing Iran's President as being in support of measures to support an oil price recovery
October crude oil futures rose $0.46 (+1.0%) to $44.85/barrel
Contributing factors affecting the price of oil include:
The next OPEC meeting will take place in Algiers, Algeria from Sept 26-28
Iran's President came out with comments in support of measures to aid in an oil price recovery
Non-OPEC producer Russia & Saudi Arabia (the two largest producers in the world collectively responsible for ~20% of global oil production) agreed to form a coalition to track oil markets and recommend action to OPEC members, announced after the G-20 Summit
Saudi Arabian oil minister has stated that he does not see the need for a production freeze at current price levels after the G-20 announcement
China released data on its strategic petroleum reserves, totalled 31.97 mln tons equal to 33-36 days of China's imports, China notes they have been stockpiling oil in anticipation of a future oil price recovery
The dollar index hits fresh lows of the session, notably -1.1% around the 94.82 level
Upcoming data:
EIA data will be released Thursday at 11:00 am ET, 30 min after natural gas inventory data
API data will be released tomorrow after the bell
Monthly IEA data will be released Sept 13
Natural gas consolidated near its morning lows, closed notably lower ahead of Thursday's inventory data
October natural gas closed $0.07 lower (-2.5%) at $2.72/MMBtu
EIA natural gas inventory data will be released at 10:30 am ET on Thursday, its normally scheduled time
In precious metals, gold & silver ended at highs of the day as the dollar index plummeted further in the afternoon
December gold ended today's session up $27.10 (+2.0%) to $1353.90/oz
December silver closed today's session $0.76 higher (+3.9%) at $20.13/oz
Base metal copper inched higher in afternoon pit trading
December copper closed $0.01 higher (+0.5%) at $2.09/lb
The stock market began the holiday-shortened week on amodestly higher note with the Nasdaq Composite (+0.5%) settling ahead of theS&P 500 (+0.3%). Equity indices stumbled at the start of the session,notching lows after the release of a disappointing ISM Services Index (51.4;Briefing.com consensus 54.7) for August. The report followed a weak ISMManufacturing Index (49.4; Briefing.com consensus 52.2), which was releasedlast week.
Rate hike expectations receded in the wake of the disappointingdata while stocks recovered their opening losses shortly thereafter. The energysector (+1.5%) led the market higher while technology (+0.5%) alsooutperformed.
Top-weighted sector components ended the day in mixedfashion with Alphabet (GOOGL 808.02, +11.15) and Facebook (FB 129.73, +3.22) posting gains while Apple(AAPL 107.68, -0.05) and Microsoft (MSFT 57.61, -0.06) lagged.
Apple slipped 0.1% ahead of tomorrow's product launch event,which is scheduled for 13:00 ET. The company is expected to unveil the next iterationof the iPhone tomorrow, but hype has been contained going into Wednesday.
On the earnings front, MarvellTechnology (MRVL 12.94, -0.07) fell 0.5% afterabove-consensus earnings were overshadowed by cautious guidance. Most otherchipmakers also struggled, sending the PHLX Semiconductor Index lower by 0.2%.
Elsewhere in technology, 3D printing names like 3D Systems (DDD 15.75, +0.83), Stratasys (SSYS 22.76, +0.83), and Voxeljet (VJET 4.32, +0.19) rallied after General Electric (GE 31.05, -0.24) announced it willacquire Arcam AB and SLM Solutions Group for $1.40 billion.
Taking a glance at other sectors: XLF -0.2%, XLV +0.4%, XLY +0.2%,XLI -0.3%, XLE +1.5%, XLP +0.2%, XLB -0.2%, XLU +1.1%, IYZ +0.2%
Other news among sector components:
SemiLEDs (LEDS 7.35, +0.94) received patent approval
Arris (ARRS 28.22, -0.23) pressured by WSJ report about FCC pushing for more competition in TV set-top box market
Pandora (P 14.52, +0.09) expected to provide information on licensing deals tomorrow, according to Re Code
Elsewhere in the tech space:
GoDaddy (GDDY 33.23, +0.55) agreed to acquire ManageWP, terms not disclosed
Nokia (NOK 5.74, -0.02) to offer EUR3.50/share for remaining Alcatel-Lucent shares
NVIDIA (NVDA 63.12, +0.59) investor PRIMECAP lowered passive stake to 4.75%
In reaction to quarterly results:
Marvell (MRVL 12.94, -0.07) beat earnings expectations, but guided cautiously.
Analyst actions:
MOMO was upgraded to Equal-Weight at Morgan Stanley, FNSR was upgraded to Buy at Stifel, and INTC was upgraded to Buy at Evercore ISI; CRTO was downgraded to Neutral at Susquehanna.
