HSBC to make $7.68B profit on sale of Chinese insurance stake. HSBC (HBC) has agreed to sell its 15.6% stake in China's Ping An Insurance for $9.38B to Charoen Pokphand Group, which is controlled by Thailand's richest man, Dhanin Chearavanont. Having bought the holding for $1.7B in 2002-2005, HSBC will earn a profit of $7.68B. With the deal part of HSBC's strategy of selling non-core operations, analysts reckon its 19.9%, HK$79B ($10.19B) stake in China's Bank of Communications could be next.
Strike at Californian ports ends. Thousands of clerical staff and longshoremen at the ports of LA and Long Beach are due to return to work this morning after their employers and union representatives agreed to a deal late last night to end an eight day strike over work contracts. The stoppage had shut down 10 of the ports' 14 terminals and prevented the delivery of $760M of cargo a day.
EU fines top electronics companies $1.92B over cartels. EU regulators have slapped a group of electronics firms, including Philips (PHG), Samsung (SSNLF.PK) and Panasonic (PC), with combined fines of almost $1.92B over allegations they effectively ran two different cartels for television and computer tubes for over 20 years. The commission called the cartels amongst the "most organized" it has ever investigated.
Top Stock News
Samsung sets succession plan in place. Samsung Electronics (SSNLF.PK) has appointed the son of Chairman Lee Kun-hee, Jay Y Lee, as Vice Chairman, putting him in line to eventually take over from his father in the top job. Jay Lee is already Samsung's COO and President, and is a main point of contact for the company's main customers and rivals.
SEC investigates Big Lots CEO over trades. The SEC has reportedly launched a probe of retiring Big Lots (BIG) CEO Steven Fishman for selling $10M of the company's stock in March, just over a month before the firm disclosed slowing Q1 sales, which sent shares plunging 24% in one day. Fishman, whose retirement was announced yesterday, sold the stock outside of his 10b5-1 preset trading plan.
Pandora slumps on shock loss forecast. Pandora Media (P) shares cratered 18% in post-market trading yesterday after the Internet music company forecast an FQ4 loss per share of $0.06-$0.09 and revenue of $120M-$123M, both of which would miss analyst expectations. Pandora blamed its guidance on advertiser caution, partly due to the fiscal cliff. FQ3 topped Street consensus, though, as net income rose to $2.05M from $638,000, EPS came in at $0.05 and revenue jumped 60% to $120M.
Facebook to be added to Nasdaq 100. In a move that was always a question of when, not if, Facebook (FB) will be added to the Nasdaq 100 prior to the market open next Wednesday. This sort of inclusion can sometimes boost a stock, but it's hard to believe it hasn't been priced in. Facebook will replace Infosys (INFY), which is moving to the NYSE. Facebook shares were +1.9% premarket.
Repsol sues Chevron over YPF deal. Repsol (REPYY.PK) has sued Chevron (CVX) in a U.S. federal court over the latter's cooperation agreement with Argentina's YPF (YPF). Repsol argues that Chevron entered into its contract after Argentina expropriated the Spanish company's majority stake in YPF, and is seeking a declaration that the U.S. oil major has no rights under the agreement.
Detroit Three face a dilemma over car pile-up. Ford (F), GM (GM) and Chrysler are in a bit of a bind. Their inventories have piled up as output at their Japanese rivals recovers from the earthquake last year. To regain lost market share, Toyota (TM), Honda (HMC) and co. have been offering buyers deep incentives, an approach that has caused the Detroit Three big trouble in the past and which they're trying to avoid now.
Canadian Pacific outlines new strategy route. Canadian Pacific Railway (CP) is making a strategy shift, saying it intends to eliminate 1,700 positions by the end of the year as part of a number of moves to improve service, lower costs and increase efficiency. The planned job cuts for this year are part of a bigger effort to eliminate 4,500 employee or contract positions, or about 23% of the railroad's headcount, by 2016.
Top Economic & Other News
Senate passes $631.4B defense budget. The Senate yesterday unanimously approved a bill authorizing $631.4B for defense spending for this fiscal year, slightly below the House's $635.2B package. The Senate measures face a veto threat from President Obama over an amendment related to Guantanamo Bay detainees. Should Obama sign the act into law, contractors that would benefit include Huntington Ingalls Industries (HII), Boeing (BA) and GD (GD).
U.S. not seen as anywhere near the most clean. The U.S. is ranked 19th out of 176 countries in the 2012 Corruption Perceptions Index, which is put together by non-profit organization Transparency International. The U.S. achieved a score of 74 out of 100, with zero being "highly corrupt" and 100 "very clean." Denmark, Finland and New Zealand are tied for the title of the "cleanest" countries, while Somalia, North Korea and Afghanistan are the most corrupt.
In Asia, Japan +0.4%. Hong Kong +2.2%. China +2.9%. India +0.2%.
In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt +0.2%.
Futures at 7:00: Dow +0.4%. S&P +0.3%. Nasdaq +0.2%. Crude +0.2% to $88.67. Gold +0.5% to $1704.
Today's economic calendar:
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Productivity and Costs
10:00 Factory Orders
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories
Notable earnings before today's open: FRAN
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