Here is what you need to know.
Lam Research is buying KLA Tencor. The semiconductor company Lam Research is buying KLA Tencor for about $10.6 billion. The merger will create a $19 billion behemoth that will rival Applied Materials, according to Reuters. The offer of $67.02 per KLA Tencor share represents a 24% premium to Tuesday’s closing price.
Chipotle earnings were light. The fast-casual burrito chain earned $4.59 per share, missing the $4.62 forecast. Revenue climbed 12.2% to $1.22 billion, matching analyst expectations. Same-store-sales growth of 2.6% edged out the 2.5% gain that Wall Street was anticipating, according to Bloomberg. Co-CEO Steve Ells said in a statement, “As we have grown our restaurants through the year, we are able to push our standards higher in what we can accomplish with our food culture.” He continued, “We have currently returned carnitas to 90% of our restaurants, and will look to bring it back to 100% of restaurants during the fourth quarter.”
Yahoo missed on the top and bottom lines. The search giant earned $0.15 per share, missing analyst estimates by a penny. Revenue sank 8.3% versus last year to $1.00 billion, shy of the $1.03 billion that Wall Street was anticipating. CEO Marissa Mayer said, “As we move into 2016, we will work to narrow our strategy, focusing on fewer products with higher quality to achieve improved growth and profitability.”
Syngenta’s CEO quit. Mike Mack has stepped down as CEO of the Swiss-based Syngenta. The surprise move comes just two months after Syngenta rejected a $47 billion takeover offer from its US rival Monsanto. CFO John Ramsey will serve as interim CEO. Reports suggest Monsanto could make another takeover attempt now that Mack is out, but Reuters says Ramsey probably won’t become a board member and the board isn’t expected to change its stance.
Ferrari goes public on Wednesday. The luxury automaker reportedly priced its initial public offering at $52 per share, the upper end of the $48-to-$52 range that was expected. At this pricing, Ferrari raises $890.5 million and is valued at approximately $9.82 billion. The stock will trade under the ticker RACE.
The IMF warned on the Middle East. The International Monetary Fund’s assessment of the Menap region, or the Middle East, North Africa, Afghanistan, and Pakistan, is a dire one. According to the IMF, growth will slow to 3.25% this year and 2.75% in 2016. Saudi Arabia, the region’s largest economy, and most of the other countries in the region will run out of financial assets in “less than five years” as a result of their ballooning deficits. In the region, only Kuwait, Qatar, and the United Arab Emirates can hold out for longer, according to the IMF.
Japan’s trade data was worrisome. Japan’s trade deficit narrowed to 114.5 billion yen from 569.7 billion yen, missing the expected surplus of 84.4 billion yen ($703 million). The export data was the real worry as growth slowed to just 0.6% compared with last year, well short of the 3.4% growth that was forecast. Imports slid 11.1% year-over-year, slightly outpacing the 11.7% drop that was expected. The Japanese yen is little changed near 120.00.
China got hit hard, but most markets are higher. China’s Shanghai Composite tumbled 3.1% to lag in Asian trade, while Japan’s Nikkei (+1.9%) led. In Europe, Germany’s DAX (+0.5%) paces the advance. S&P 500 futures are higher by 8.75 points at 2,029.25.
US economic data remains light. Crude-oil inventories will be released at 10:30 a.m. ET. The US 10-year yield is down 2 basis points at 2.04%.
The number of companies reporting continues to grow. Baker Hughes, Boeing, Coca-Cola, EMC, and General Motors highlight the names reporting before markets open. American Express, eBay, Las Vegas Sands, and Texas Instruments are among the companies releasing their quarterly results after markets close.