10 Things You Need To Know Today (DIA, SPY, SPX, QQQ, GE, YHOO)
Good morning! Here's what you need to know.
Scotland May Actually Vote 'Yes' For Independence. A new poll out of the U.K. revealed that voters favoring Scottish independence were in the lead. "While the vote (on Sept. 18) has been expected to be close for some time, very few gave the pro-Independence YES side much of a chance of actually winning," BI's Joe Weisenthal reported. "That's now officially changed, and it now looks like a coin-toss as to whether Scotland will leave Great Britain and become an independent nation."
The Pound Is Getting Destroyed. Amid all of this uncertainty, the British pound is getting slammed. It was down about 1% against the U.S. dollar and the euro early Monday.
Markets Are In The Red. In Europe, Britain's FTSE is down 0.9%, France's CAC 40 is down 0.3%, and Germany's DAX is down 0.1%. Asia closed mixed, with Japan's Nikkei up 0.2% and Hong Kong's Hang Seng down 0.2%. U.S. futures are a point down, with Dow futures down 28 points and S&P futures down 2.9 points.
China's Trade Report Was Good And Bad. China's exports jumped 9.4% in August, beating expectations for a 9.0% growth. This is reflects the better-than-expected health of China's trading partners around the world. Imports, however, unexpectedly fell by 2.4%; economists were forecasting a 3.0% gain.
Japan Shrinks More Than Expected. "Japan's economy shrank an annualized 7.1% in April-June from the previous quarter, more than a preliminary estimate, underscoring concerns the hit from an April increase in the sales tax may have been bigger than expected," reported Reuters' Leika Kihara. "The revised contraction was the biggest since January-March 2009, when the global financial crisis hit Japan's exports and factory output, keeping policymakers under pressure to expand fiscal and monetary stimulus should the economy fail to recover from the disruption of the April tax hike."
Germany's Trade Surplus Booms. Germany's exports jumped 4.7% in July, beating expectations for a 0.6% increase. This helped Germany's trade surplus widen to 23.4 billion euros, which compares with economists' expectations for 16.8 billion. "Today’s impressive rebound in Germany’s external balance is welcome news from the point of view of Q3 GDP growth, but also slightly difficult to square with a generally flat-lining trend in net trade in recent months," said Pantheon Macroeconomics' Claus Vistesen. "[T]he incoming numbers for factory orders and industrial production also showed some odd upside surprises in July, and it is still too early to say whether this marks the beginning of a new positive trend."
European Investor Confidence Crashes. The Sentix investor confidence index plunged to -9.8 in September from +2.7 in August. Investors were expecting a print of +1.4. "Today’s drop marks the lowest reading of the aggregate Sentix index since July 2013, and indicates that investors are still downbeat," noted Pantheon's Vistesen. "We had hoped for stabilization in investor sentiment this month given a rebound in equity prices, a weaker euro, and expectations of additional action by the ECB. But we are seeing little signs of this so far in this first investor survey for September."
Alibaba To Raise $21 Billion In Its IPO. In an SEC filing on Friday afternoon, Alibaba said it would offer up to 320 million shares for between $60 and $66 per share. This would put the company's market value at about $160 billion.
Yahoo!. "After pouring about $1 billion nine years ago into Alibaba Group Holding Ltd., Yahoo! Inc. is set to reap a massive haul as the Chinese e-commerce company goes public: more than $8 billion," reported Bloomberg's Brian Womack. "The payout would punctuate Yahoo’s long investment after Alibaba pushed up the value of the Sunnyvale, California-based Web portal over the years. A new war chest of cash would enable Yahoo to do more buybacks and potentially more acquisitions."
GE Appliances Are Heading To Electrolux. "Sweden's Electrolux said on Monday it would buy General Electric Co.'s appliances business for $3.3 billion in cash to double sales in North America and take on rival Whirlpool Corp. in its biggest ever deal," reported Reuters' Simon Johnson. "Electrolux, which sells under brands such as Frigidaire, AEG, and Zanussi as well as its own name, is already the world's second-largest home appliance maker after Whirlpool, but has its strongest market position in Europe."