- Reuters/Hazir Reka
Here is what you need to know.
Nestlé blames China for its lowered outlook. The Swiss food and drink behemoth Nestlé announced Friday that sales in the Asia, Oceania, and sub-Saharan Africa regions fell by 3.1%, pinning the blame at least partially on weakness in China. According to the company’s outlook, it expects full-year organic growth of “around 4.5% with improvements in margins and underlying earnings per share in constant currencies, and capital efficiency.” Burberry, Jaguar Land Rover, and Yum Brads are other Western companies to warn on China this week.
Yum Brands cut its 2015 forecast and shook up its board. The fast-food giant expects fourth-quarter same-store-sales in China of 0% to 4%, with positive numbers coming from KFC and negative ones coming from Pizza Hut. For the full year, it sees China same-store sales in the “low-single-digit negative.” Additionally, the company announced that activist investor Keith Meister would join its board of directors. Meister has previously proposed to break up the company.
Alibaba wants to buy the rest of Youku Tudou. The Chinese online retailer Alibaba wants to buy the rest of the video-streaming company Youku Tudou that it doesn’t already own. Alibaba has offered $26.60 per American Depositary Share, a 30.2% premium from Thursday’s closing price. According to Reuters, Alibaba already owns an 18.3% stake in Youku Tudou.
AstraZeneca’s diabetes drug combination is being delayed. Reuters reports that the Food and Drug Administration says it needs to see more clinical-trial data before it can approve AstraZeneca’s diabetes drug combination of saxagliptin and dapagliflozin. According to Morgan Stanley, such a request could delay the drug combination’s approval by a few years.
Wynn Resorts had a bad quarter. The casino giant announced earnings of $0.86 per share, which was in line with Wall Street estimates. But revenue tumbled 27.3% year-over-year to $996.3 million, missing the $1.03 billion that analysts were forecasting. The casino suffered through an abysmal quarter in Macau as revenue there crashed 37.9%. Revenue from Las Vegas was down 3.9%. “In my 45 years of experience, I’ve never seen anything like this before,” Wynn Entertainment CEO Steve Wynn said.
Nevada says daily fantasy sports is gambling. The Nevada Gaming Board says daily fantasy sports is gambling and the companies operating those websites need licenses if they want to do business in Nevada. A.G. Burnett, chairman of the control board, told Bloomberg the sites could not accept payment from customers in Nevada until they are licensed. This follows a Wall Street Journal report indicating the US Justice Department and FBI are looking into whether the daily fantasy-sports sites are violating federal law.
Kyle Bass’ Jazz patent challenge was declined. Kyle Bass’ challenge of Jazz Pharmaceuticals’ Xyrem patent has been rejected. According to Bloomberg, the Patent Trial and Appeal Board told Bass his arguments weren’t good enough to merit a second examination of the patent. The board also said Bass’ being a hedge fund manager didn’t factor into the decision.
Stock markets around the world continue higher. China’s Shanghai Composite (+1.6%) led the way higher in Asia, and Spain’s IBEX (+1.1%) paces the gain in Europe. S&P 500 futures, however, are lower by 4.00 points at 2,015.00.
Economic data flow. Industrial production and capacity utilization are due out at 9:15 a.m. ET while JOLTs Job Openings and University of Michigan consumer sentiment are released at 10 a.m. ET and Net Long-Term TIC Flows crosses the wires at 4 p.m. ET. The US 10-year yield is down 2 basis points at 2.00%.
Earnings reports wrap up for the week. General Electric, Honeywell, SunTrust Banks, and WW Grainger are among the companies set to release their quarterly results ahead of the opening bell.