Sweeping changes proposed on immigration reform. Senators will announce later today a plan for a major overhaul of immigration laws in the U.S. The deal which has been hashed out by Senators from both sides of the aisle will cover employer verification, guest workers, and border security. President Obama is expected to address the issue at a speech in Las Vegas tomorrow.
European stocks mixed with oil companies a concern. Stocks in Europe are having a tough time gaining any traction after falling oil prices added pressure on the shares of major oil companies. The tepid start to the week in Europe runs counter to Asia where a positive earning outlook for Chinese firms provided a boost for markets in China, Hong Kong, and Taiwan. In China, financial stocks rallied after regulators announced that they will increase the number of stocks they allow margin-trading and short-selling in by over 75% to 500 stocks.
Top Stock News
Fewer stores on tap for Barnes & Noble. Barnes & Noble (BKS) might close up to a third of all its retail stores over the next decade, according to one of the company's top execs. After peaking at over 700 consumer bookstores in 2008, a measured pace of closings would reduce the number of outlets to a range of 450 to 500 in order to reflect how B&N's business has evolved.
Toyota back in favor. A drop in the yen has helped to convince a dozen analysts covering Toyota (TM) to raise their earnings estimate for the next fiscal year. The group sees Toyota's net income for the fiscal year ending this March 31 tripling to a five-year high of ¥890.7B ($9.8B) and then climbing to ¥1.17T yen a year later.
General Motors revamps emerging market strategy. General Motors (GM) CEO Dan Akerson indicated the automaker will consider other joint venture partners in emerging markets outside of SAIC. Though nothing has been set in stone yet, indications are that GM and PSA Peugeot (OTC:PEUGY) may look to partner in Russia and Latin America.
Agrium strikes back. A defiant Agrium (AGU) continues to stand up to the calls from Jana Partners to split up its business. CEO Michael Wilson says the investor group has gained little traction with shareholders and that Agrium should stick with a goal of keeping an investment-grade balance sheet and seek accretive growth over share buybacks. The company raised its Q4 earnings forecast last week.
Starbucks continues battle in the U.K. Starbucks (SBUX) reportedly will hold back $158M pegged for investments in the U.K. after comments from Prime Minister David Cameron rubbed the company the wrong way. Mr. Cameron claimed the coffee giant must "wake up and smell the coffee" on the issue of tax avoidance. Starbucks had said it will review its tax payment policy, but appears to feel a bit singled out in the region.
Las Vegas Sands gets a lift in Macau. Regulators in China have approved a plan by Las Vegas Sands (LVS) to add crucial new gaming tables to its existing properties on the gambling mecca, according to sources. The 15% increase in tables could add as much as $511M in extra revenue to the company's coffers after tight caps from the government limited growth.
Samsung to invest heavily in China. China's state-run news agency reports that Samsung (GM:SSNLF) will invest $1.7B in its plant in the Jiangsu Province as it looks to keep up with demand for smartphones in the region. The investment will go to equipment and research for chip projects.
Largest Chinese shipper taking on water. Chinese shipping giant Cosco has warned it expects to report a large loss for 2012 due to the combination of weak demand in the dry bulk shipping market and escalated fuel costs. With a second consecutive year of stinging losses, the Chinese exchange may opt to put the company's stock in the "special treatment" category which will limit price movements to 5% swings.
Dole Foods could rise. A significant deal by Dole Food (DOLE) to sell off its packaged foods and fruit operations in Asia could set up the stock for huge gains over the next few years, speculates Barron's. The company has over 113K acres of prime real estate which if factored in at current prices brings the company's earnings multiple to an attractive valuation.
Top Economic & Other News
Profits up in Chinese industrial industry. Chinese industrial companies saw profits rise 17.3% in December to 895.2B yuan, down from November's torrid pace of 22.8%. Strong gains by power generations firms and food processing firms helped offset declines in the steel and chemical sectors.
Japan forecasts 2.5% growth. The government in Japan estimates GDP will increase 2.5% for the fiscal year which begins in April, higher than its previous outlook for 1.8% growth. Strong export outflows and higher capital spending from the government are both expected to provide boosts.
China urges for better trade relations with U.S. Chinese trade official Dai Bingguo said in a telephone conversation with Secretary of State Hillary Clinton that the superpowers should look to build a new type of relationship which will be mutually beneficial. The retiring Clinton is using her final days at State to keep chipping away at China over the level the government subsidizes its industries and on the issue of intellectual property theft.
In Asia, Japan -1.0% to 10824. Hong Kong +0.4% to 23672. China +2.4% to 2347. India +0.1% at 20103.
In Europe, at midday, London -0.1%. Paris +0.1%. Frankfurt -0.1%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude -0.1% to $95.82. Gold -0.3 to $1654.
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