Wall Street News: Merger Mania Will Move Today's Markets

Wall Street news today, May 12, 2014: The Dow Jones Industrial Average was flat on Friday as the market looks ahead to a critical succession vote by Pro-Russian loyalists in the Ukraine. Unimpressive jobs data also played a factor in the markets' performance.

This morning, U.S. Futures and global markets were on the rise after China's State Council committed to greater market liberalization over the weekend.

Here's what you need to know to make your Monday profitable:

  • Wall Street NewsA Worrisome Trend: Pro-Russian separatists in Eastern Ukraine successfully voted to declare independence from their nation in an overwhelming vote this weekend. Despite the EU declaring the vote illegal, the Donetsk region has declared the right to decide whether it will remain a part of Ukraine, become independent, or join Russia.
  • Today's Economic Calendar: It's another light economic calendar today, with Philadelphia Federal Reserve President Charles Possner set to speak at noon and the Treasury Budget at 2 p.m.
  • Bugging the Room: Over the weekend, multiple reports stated that Herbalife Ltd. (NYSE: HLF) found private listening devices inside its Los Angeles headquarters. The bugs were found over the last years and were "non-governmental." The company has been fending off accusations that it is running a Ponzi scheme from activist investor Bill Ackman for more than a year, though the investor is not a suspect in this case.
  • The Deal That Won't Die: In an effort to spur support for a possible blockbuster merger, U.S. drugmaker Pfizer Inc. (NYSE: PFE) announced a commitment to ensure British research jobs would remain in the United Kingdom if it was able to purchase AstraZeneca Plc (NYSE: AZN) for $106 billion. Pfizer's CEO Ian Read will face questions on the deal from British lawmakers tomorrow.
  • Merger Mania: Another big deal in the food and beverage industry hit the wires today. Hillshire Brands Co. (NYSE: HSH) plans to purchase Pinnacle Foods Inc. (NYSE: PF) for nearly $6.6 billion or $18 per share and 0.50 shares of Hillshire Brands common stock. The deal will provide Hillshire's portfolio a number of new brands, including Duncan Hines bakery mixes and Birds Eye.
  • Red Flags for This Merger: The board of directors at Botox-manufacturer Allergan Inc. (NYSE: AGN) unanimously rejected a $48-billion hostile takeover bid by Valeant Pharmaceuticals International Inc. (NYSE: VRX). The deal made news last month after activist investor Bill Ackman led the charge and advised Valeant on the deal. The Allergan board feels that the offer undervalues its company and burdens shareholders with unnecessary risks.
  • Earnings Reports: Stay tuned for earnings reports from Concho Resources Inc. (NYSE: CXO), EV Energy Partners (Nasdaq: EVEP), Summit Hotel Properties (NYSE: INN), Horsehead Holding Corp. (Nasdaq: ZINC), Bridgepoint Education (NYSE: BPI), Enanta Pharmaceuticals (Nasdaq: ENTA), TICC Capital Corp. (Nasdaq: TICC), Mannkind Corp. (Nasdaq: MNKD), Penn Virginia Corp. (NYSE: PVA).

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Full U.S. Economic Calendar May 12, 2014

  • 4-Week Bill Announcement at 11 a.m.
  • 3-Month Bill Auction at 11:30 a.m.
  • 6-Month Bill Auction at 11:30 a.m.
  • Philadelphia Federal Reserve President Charles Plosser speaks at 12 p.m.
  • Treasury Budget at 2:00 p.m.

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About the Author

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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