CNBC's Domm: Today's Agenda in the Markets
An uptick in bond yields and rising oil prices are adding pressure to stock futures after yesterday's rocky trading day. Asian stocks were higher overnight, but European markets are wilting this morning.
Today is Blackstone's big day. The private equity firm's initial offering prices tonight and the firm makes its debut as a public company tomorrow. But the noise around taxing the partnership and others like it is getting louder as investors line up to get their shares. Both Treasury and the SEC have been asked to look into the taxation of public partnerships. The New York Times this morning reports that leaders of the tax-writing committees in Congress are considering an even broader proposal that would ensnare hedge funds and others beyond the private-equity partnerships in a new tax plan.
The Philadelphia Fed survey is due today at noon. Leading indicators for May are reported at 10 am New York time, and weekly jobless claims are reported before the bell.
The untangling of Bear Stearns hedge fund mess has Wall Street watching as the biggest brokers deal with the portfolio like so many unwanted hot potatoes. Our Charlie Gasparino was out ahead with reports throughout Wednesday on which firms were doing what as traders feared the street would be flooded with junk-heap mortgage debt.
"That was the main thing that pushed (Treasury yields) higher (yesterday). You could say that mortgages affected interest rates and the combination affected equities," says CNBC's Rick Santelli.
Rush to the Door
"Everybody who shares similar credit is going to be selling that to beat (firms) to the auction and there's going to be selling of Treasurys as well as traders try to lighten up and deal with margin calls on mortgage products. Think of the credit markets as an airplane losing altitude. They're throwing out the garbage which is all the subprime mortgages, but they're also throwing out the cases of champagne, which are the Treasurys," says Santelli.
Santelli says traders are telling him some of the urgency has gone from the market this morning and the move to unwind positions may be starting to run its course.
The Dow Jones board stepped up and took control of the process that will determine whether the publisher of the Wall Street Journal is sold to News Corp, another suitor or takes another course of action. The company said yesterday that its board would lead deliberations on the company's future. The statement came shortly after Myspace.com founder Brad Greenspan offered to buy 25% of Dow Jones for $60 a share, matching the price offered by News Corp.
In other deal news, Luxottica is buying Oakley for $2.1 billion, and Yahoo is buying Rivals.com.
Up and Down Wall Street
Keefe Brunette upgraded JP Morgan Chase this morning to "outperform" from "market perform." JP Morgan Chase, meanwhile, announced a health care claims and processing venture with McKesson this morning. Home Depot was downgraded by Piper Jaffray to "market perform" from "outperform."
Happy first day of summer!