Wall Street Breakfast: Saudi Stock Market, Apple Orders, Chipmaker …

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Economy
The black boxes of downed flight MH17 have been handed over to Malaysian experts by separatist leader Aleksander Borodai. The transfer came after pressure was put on Ukrainian rebels and Russia to provide safe and unrestricted access to the crash site. EU foreign ministers will discuss another round of sanctions against Russia today as the country continues to violate Ukraine’s sovereignty and back separatists.

Saudi Arabia, the Middle East’s largest and most liquid market, is planning to open its $530B stock market to foreigners. The country is hoping the new move will increase international investment and cut dependence on oil revenue. In 2008, Saudi Arabia began permitting foreign investors indirect access through swaps, but is now looking to fully unlock its market. The Saudi Tadawul index is already up +14% this year.

Governor Rick Perry has ordered 1,000 members of the National Guard to the Texas border stating that “there can be no national security without border security.” Perry faults the White House of federal inaction and states that the placement will “tackle this crisis head-on.” White House press secretary Josh Earnest responded to the move by saying the border needs to be secured on a sustained basis, and not through a temporary National Guard deployment.

John Kerry arrived in Cairo last night to start negotiations and formulate a truce between Israel and Hamas. Last week, Egypt proposed a cease-fire plan that was quickly agreed to by Israel and the PLO, although Hamas rejected it stating that “it did not go far enough to lift the siege on the Gaza Strip.” President Obama is urging a return to the November 2012 ceasefire agreement but noted that “it will obviously not be easy.”

Argentina has once again asked Thomas Griesa, the U.S. District Judge handling the country’s bond payments case, to put a stay on his ruling which requires it to pay holdout investors $1.33B plus interest. Argentina is stressing that if it pays the holdouts, it would open the door to further liability and additional claims. The country has just over a week to avoid a default.

Stocks
Apple has placed orders for 70M-80M 4.7″ and 5.5″ iPhone 6 units – a sizable increase from the 50M-60M iPhone 5S/5C units Apple initially ordered last year. With shares up 26% since the FQ2 report, expectations have risen for today’s FQ3 earnings release. UBS (NYSE:UBS) just hiked its Apple (NASDAQ:AAPL) price target by $15 to $115, and raised its FQ3 estimates above consensus on data pointing to a mix shift towards the 5S and iPad Air.

ARM has announced a large increase in Q2 profit due to heavy growth from higher chip shipments and licensing revenue, translating into a rise of +5.6% in premarket action. Net income climbed to £55.5M ($94.8M) from £10.5M Y/Y, while revenue rose 9% to £187.1M ($319.6M). ARM’s (NASDAQ:ARMH) revenue often trails the market since half of its business comes from royalties. The company also raised its interim dividend 20% to 2.52 pence per share.

Despite the hype of a $4.7B European chipmaker merger last month, Austria’s AMS has failed to agree on a deal to buy Dialog Semiconductor (OTC:DLGNF). Dialog says that it still remains committed to expanding its portfolio and will focus on becoming a lead provider of analogue mixed signal semiconductors. Both companies supply chips to Apple, which accounts for approximately 80% of Dialog’s revenue.

Yahoo has confirmed its purchase of mobile analytics platform/ad network owner Flurry. The company promises Flurry’s offerings will help “make Yahoo (NASDAQ:YHOO) mobile experiences better through products that are more personalized and inspiring.” The WSJ reports that the purchase will cost more than $200M. The addition of Yahoo’s own apps to Flurry’s ad network should significantly increase the company’s scale.

IMAX has reached a deal with Shanghai Film, a Chinese owned film company, to open 19 new theaters in China. The new foreign investment comes after IMAX’s (NYSE:IMAX) revenue boost in China last year which rose 26% to $56.5M, and ahead of a planned public listing of its Chinese operations. The company expects to open the new theaters in the second half of 2015 and plans on adding more than 246 screens in the next five years.

Time Warner has amended its bylaws to remove a provision allowing shareholders to call a special board meeting – eliminating a potential avenue 21st Century Fox (NASDAQ:FOX) could have used to press an unsolicited takeover offer. The move is intended to give Time Warner (NYSE:TWX) shareholders more time to evaluate the merits of a tie-up, and to see how Fox and Time Warner perform in coming months against their operating targets.

With the help of its price hikes, Chipotle’s (NYSE:CMG) same-store sales rose 17.3% Y/Y in Q2, a marked improvement from Q1’s 13.4%. The company now expects mid-teens 2014 same-store growth, up from prior guidance of high-single digit growth. It still forecasts 180-195 new 2014 restaurant openings. 45 new restaurants were opened in Q2, raising the total count to 1,681.

Blackstone has agreed to buy U.K real estate business Max Property for £414M ($707M) in cash. Max Property focuses its operations on property flipping – reselling buildings at a profit after renovations or improvements. The acquisition will be executed by Marina Topco, a group controlled by Blackstone (NYSE:BX) Real Estate Partners Europe. Currently, Blackstone manages $80.4B of total real estate assets, including about $10B of debt.

Today’s Markets:
In Asia, Japan +0.8% to 15343. Hong Kong +1.7% to 23782. China +1% to 2075. India +1.21% to 26026.
In Europe, at midday, London +0.9%. Paris +0.9%. Frankfurt +0.9%.
Futures at 6:20: Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude +0.6% to $105.22. Gold -0.5% to $1309.60.
Ten-year Treasury Yield +2 bps to 2.49%

Today’s economic calendar:
7:45 ICSC Retail Store Sales
8:30 Consumer Price Index
8:55 Redbook Chain Store Sales
9:00 FHFA House Price Index
10:00 Existing Home Sales
10:00 Richmond Fed Mfg.