The S&P 500 has posted its first monthly decline since November, closing down 0.8 per cent for April (Bloomberg). Chicago PMI data and small business hiring both showed signs of an economic slowdown in the last month (Reuters).
Microsoft will invest $605m in Barnes & Noble’s Nook, giving it a direct stake in the e-book wars. The company will take an $300m investment in an unnamed Barnes & Noble subsidiary. committing to invest a further $350m over the next five years (Reuters, TechCrunch). The deal values the new joint venture at $1.7bn, double Barnes & Noble’s previous market capitalisation. Barnes & Noble shares jumped 57 per cent by late afternoon as shorts rushed to cover (Financial Times). While the investment is small for Microsoft, a Nook stake gives Windows 8 a platform to contend with Apple and Amazon’s e-books businesses (Wall Street Journal).
Coca-Cola has said it isn’t in talks to buy Monster Beverage, but is talking about ‘the best ways to maximize the value of our relationship’, after the WSJ reported that Coke was considering its largest brand acquisition ever (Bloomberg, Wall Street Journal). Monster has just over a third of market share in US energy drinks, giving Coke one possible expansion route beyond slow-growing soft drinks, especially into Asia and emerging markets. But a surge in Monster shares could put Coca-Cola off talks (Financial Times).
Energy Transfer Partners will buy Sunoco for $5.3bn, in another sign of the changes being brought by the boom in US oil production. ETP wins access to Sunoco pipelines under the deal, allowing it to meet infrastructure demand from oilfields, in addition to diversifying cash-flow away from depressed natural gas prices (Financial Times). A hefty 22.5 per cent premium is on offer from ETP for Sunoco, which will likely enable it to avoid the bidding war which formed over Southern Union (Reuters).
Delta Airlines will pay $150m for a Pennsylvanian oil refinery. The acquisition from ConocoPhillips will help it cut fuel costs by $300m, the airline said (Associated Pres via WaPo). While analysts have puzzled over Delta’s entry into the tough East Coast refining business, a closure of the refinery would have pushed its import costs even higher (Reuters).
Chinese PMI data are widely expected to rise to 53.6. UK manufacturing PMI figures are forecast to fall back to 51.5 from March’s 52.1. Most of Europe is on May Day holiday.
US ISM Manufacturing is the indicator of the day. Consensus is for 53.0 though a weaker manufacturing outlook might mean a heavier drop from March’s 53.4.
– Relive Dick Fuld’s grammatically-challenged crisis emails.
– Whitney Tilson, Barnes & Noble, and a lesson in (non)confirmation bias.
– And Felix, on the e-book wars.
– Why you should be watching median wage growth, or the lack thereof.