August 15 Premarket Briefing: 10 Things You Should Know

NEW YORK (TheStreet) -- Here are 10 things you should know for Friday, Aug. 15:

1. -- U.S. stock futures were looking bullish Friday morning, riding on a rally Thursday afternoon and on a brighter outlook in European and Asian stocks.

European and Asian markets seemed intent on ignoring geopolitics this morning and focused instead on interest rates. Markets were taking the glass-half-full view after a volatile week.

2. -- The economic calendar in the U.S. on Friday includes the Producer Price Index for finished, intermediate and crude goods at 8:30 a.m.

3. -- U.S. stocks on Thursday rallied into the close, as economic indicators brightened somewhat and as conflicts in Ukraine, Gaza and Iraq calmed a bit.

The Dow Jones Industrial Average (DIA) closed up 0.37% to 16,713.58. The S&P 500 (SPY) was up 0.43% to 1,955.18. The Nasdaq (QQQ) also rose 0.43% to 4,453.00.

4. -- The world's largest soda-maker Coca-Cola (KO) is paying $2.2 billion in cash for a 16.7% stake in energy-drink upstart Monster Beverage (MNST). Coke will add two directors to Monster's board and will move ownership of its own energy drinks, Full Throttle and Burn, to Monster. Monster will in turn hand over its non-energy drinks business to Coke. And Coke will become Monster's preferred distributor around the world.

Energy drinks are a bright spot in the beverage industry, with a $27 billion global market, even as soda sales decline in developed markets.

Coke shares were trading up 1.44% in premarket trading on the news, to $40.76. And Monster shares were up a caffeine-fuelled 21.4% to $87. 

5. -- The eurozone's slow recovery and its entanglement in Russian trade sanctions has elicited some hand-wringing. Germany said its output shrank in the second quarter, and France also shows little sign of growth.

The German GDP fell 0.2% since last quarter, worse than economists expected. Demand has decreased for German goods. Worse still, Germany is Russia's largest trade partner in Europe, and Russia is slapping sanctions on trade in retaliation for European sanctions on Russia for its role in the conflict in Ukraine. This is the first time the German economy has shrunk since 2013.

France is responding more angrily to European austerity policy, demanding a change in direction for the eurozone and claiming it would no longer tighten monetary targets due to the soft recovery. 

6. -- Chinese Internet giant Alibaba, soon to IPO in the U.S. as BABA, has been vacuuming up two companies a month so far this year. But that acquisition streak may be risky, as the company discovered when a film company it had bought said that it discovered internal accounting flaws.

CEO Jack Ma's acquisitions this year have cost $4.6 billion. This may spur the company to vet its acquisitions a bit more stringently.

Yahoo! (YHOO) is a major shareholder in Alibaba, and it shares were off 0.77% in premarket trading, to $36.08. 

7. -- Senator Charles Schumer (D., N.Y) announced a plan to limit corporate tax deductions for companies that engage in inversion, the legal but controversial practice in which a U.S. company buys a foreign competitor and at least nominally shifts its headquarters overseas to reduce its tax rate.

Schumer said his goal was to stop "earnings stripping," in which companies move around debt and assets on paper to lower tax rates in the U.S.

Recent inversion deals include those by Medtronic (MDT) and AbbVie (ABBV). 

8. -- Metals and mining company BHP Billiton (BHP) said that it was planning a demerger of its aluminum, nickel and manganese asssets, potentially creating a $14 billion spinoff company. BHP now has a market cap of about $185 billion. The spinoff businesses don't add much to the company's earnings.

The Anglo-Australian mining company's shares were up 2.18% in premarket trading to $72.70. 

9. -- J.C. Penney (JCP) shares are up as the retailer beat estimates in its earnings report Thursday after the bell. Penney's reported a smaller-than-expected quarterly loss of $172 million on sales of $2.8 billion (compared to analyst estimates of $2.7 billion in sales). Comparable sales also rose 6%.

The results are a customer endorsement of CEO Mike Ullman's policies. Ullman was fired as CEO in 2011 and replaced with Ron Johnson. But Johnson's plan to end popular coupons and take "JCP" upscale ended after 17 months with the reinstallation of Ullman.

In premarket trading, J.C. Penney stock was up 3.29% to $10.08, crossing that important $10 mark for the first time since September 2013. 

10. -- Bill Ackman of Pershing Square Capital Management was on the J.C. Penney board till August 2013; now Ackman's hedge fund has sued the U.S. government over the terms of the $187.5 billion federally funded bailout of Fannie Mae (FNMA) and Freddie Mac (FMCC) in 2008. The Pershing Square suit claims that in its bailout the government schemed to "strip all profits" from Fannie and Freddie shareholders. The Treasury Department has used language in the initial bailout to justify keeping all profits from Fannie and Freddie.

Pershing Square said it wanted damages and restitution. The hedge fund owns about 10% of both Fannie and Freddie's shares. 

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Nora Morrison is an editor, writer and researcher on music, popular culture and business. She is an associate editor at TheStreet, and is on Twitter at No Ticker.

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