BOE split revives prospect of more QE. Division at the Bank of England over monetary policy has unexpectedly revived the possibility that the BOE could renew its bond-buying. Policy makers voted 6-3 this month to leave purchases on hold, with the dissenters, who included Governor Mervyn King, calling for an increase of £25B. The last time the bank was this split was in June last year - a month later it backed a £50B rise in bond-buying. Sterling was -0.9% at $1.529 at midday in Europe as it traded at its lowest levels in over a year.
Kloppers steps down as BHP Billiton CEO. BHP Billiton (BHP) CEO Marius Kloppers has become the latest mining boss to resign and will leave the company on May 10. Kloppers will be replaced by Andrew Mackenzie, the head of BHP's non-ferrous metals division. Kloppers' departure comes after the company's adjusted profit plummeted to $5.68B in July-December from $10B a year earlier following $3B in writedowns at the firm's aluminum and nickel businesses.
Foxconn halts recruitment in China due to falling iPhone 5 orders. Foxconn has frozen hiring at almost all its factories in China, as the company is reportedly slowing production in response to reduced orders for Apple's (AAPL) iPhone 5. With workers staying at the company for less than 13 months on average, Foxconn's headcount could fall by tens of thousands.
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Boeing workers divided over new contract, strike. Boeing's (BA) 15,500 engineers have accepted the company's new four-year contract offer, but its 7,400 technical employees have rejected it and authorized the Speea union to call a strike at any time. Speea negotiators now hope to restart talks with Boeing over an agreement for the technical workers. Meanwhile, Wall Street is becoming increasingly nervous about the strain on Boeing's finances from the 787 grounding.
Dell's net profit falls 31%. Dell's FQ4 earnings beat expectations, which might provide ammunition for investors who want a higher buyout price, but the numbers were still ugly. EPS came in at $0.04, net profit slumped 31% to $530M and revenue dropped 11% to $14.31B. Sales of notebooks, desktops and 3rd-party software/peripherals all fell sharply, although servers/networking was still a bright spot as revenues climbed 18%.
Sony set to launch new PlayStation. Sony (SNE) is expected to introduce the PlayStation 4 in New York today as it seeks to revive an electronics business that's badly in need of a hit. The event comes after a lackluster launch of Nintendo's (NTDOY.PK) Wii U amid the rise of casual gaming on mobile devices, and gets in ahead of any announcement by Microsoft (MSFT) about a rumored successor to the Xbox 360.
FBI to probe potential Heinz insider trading. The FBI is reportedly launching a criminal investigation into certain trades made ahead of the announcement of the $23B acquisition of Heinz (HNZ). At least one trader bet that Heinz would gain 8.1% through the June expiry, a trade that paid off more than 18X when the deal was announced last week.
Vodafone among five winners of U.K. 4G spectrum. The U.K.'s auction of 4G spectrum has raised £2.34B, below the government's expectation of £3.5B and well below the £22B raised in a 3G auction in 2000. Five operators won spectrum, including Vodafone (VOD) with a bid of £791M, Everything Everywhere (DTEGF.PK, FTE) with £589M, Telefonica's (TEF) O2 with £550M, and BT's (BT) Niche with £186.5M.
Chances of Life Technologies sale fall. The prospects for a sale of Life Technologies (LIFE), which has a market cap of $10.9B, are reportedly diminishing following a sharp increase in the company's share price this year due to merger speculation. One potential suitor for the biomedical lab-equipment firm, Thermo Fisher (TMO), has stopped pursuing a deal, while private-equity firms such as Blackstone (BX) and KKR (KKR) have made bids significantly below what Life's board would accept.
BP gains $3.5B boost ahead of oil-spill trial. BP (BP) has won an early victory ahead of a civil trial next week over the Gulf oil disaster, with a judge yesterday agreeing with the company's claim that it collected 810,000 barrels of oil from the spill site. The crude should therefore be excluded from the calculations of any penalties that BP may face. The ruling could cut the maximum fine by up to $3.5B.
Top Economic & Other News
Michigan faces decision over Detroit takeover. Michigan Governor Rick Snyder has to decide whether to appoint an emergency manager for Detroit after a review team concluded that the city suffers "operational dysfunction" and faces a fiscal emergency due to its "chronic deficits and its long-term liabilities." Ultimately, Detroit might have to one day carry out what would be the biggest municipal bankruptcy filing in U.S. history.
Japan's trade deficit hits fresh record. Japan's trade deficit increased to a record ¥1.63T ($17.4B) in January from ¥641.5B in December, due to the sharply weaker yen and higher energy imports. However, exports climbed for the first time in eight months, growing 6.4% on year to ¥4.8T, with sales to China increasing for the first time since May. Exports to the U.S. were +10.9% but to the EU -4.5%. Imports rose 7.3% to ¥6.43T.
In Asia, Japan +0.8% to 11468. Hong Kong +0.7% to 23307. China +0.6% to 2397. India flat at 19643.
In Europe, at midday, London +0.3%. Paris -0.2%. Frankfurt +0.1%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq flat. Crude +0.6% to $96.94. Gold -0.7% to $1592.20.
Today's economic calendar:
7:00 MBA Mortgage Applications
7:45 ICSC Retail Store Sales
8:30 Producer Price Index
8:30 Housing Starts
8:55 Redbook Chain Store Sales
2:00 PM FOMC minutes
Notable earnings after today's close: AUY, CAKE, CROX, CXO, DEPO, ETE, ETP, FLR, FST, GDP, GNK, HLX, IAG, IDCC, JACK, KBR, PAAS, PPO, PVA, RBCN, RGP, SAM, SB, SM, SNPS, STAG, STR, SXL, SYNC, SZYM, TRN, TSLA, UNTD, WLT, WMB, WPZ, XCO
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