Wall Street Breakfast: Must-Know News 13 comments
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- India stocks up 17% on landslide victory. India's benchmark BSE Sensex index jumped a record 17% before trading was halted, and the rupee gained the most in two decades (+3.3%) after Prime Minister Manmohan Singh’s Congress Party won national elections in a decisive victory. With 262 of 543 seats, the most in almost two decades of fractious coalition politics, Singh should have enough power to further reduce barriers to foreign investment, which have been opposed by communist lawmakers. Five years ago the Sensex plunged 11% after Congress' ambiguous victory.
- Smaller banks need another $24B. Small and medium-sized U.S. banks would need to raise $24B to meet the capital standards set by the government in its stress tests of large institutions, according to research by investment bank Sandler O'Neill. As many as 500 more banks could close. Regulators have increased their focus on the next tier of lenders following the recent release of stress-test results.
- AIG hopes for $5-10B in AIA IPO. AIG (AIG) said Sunday (statement) it will speed up plans to list its Asian subsidiary, AIA, hoping to raise $5-10B, which it could use to pay back some $180B in government loans. AIG failed to sell a large stake in AIA earlier this year, prompting the move toward a Hong Kong IPO.
- Lloyds' Blank walks the plank. Shares of Lloyds (LYG) are up 4.3% premarket after it announced over the weekend that Chairman Victor Blank will stand down by June next year, a move analysts say could placate shareholder anger over its ill-timed acquisition of U.K. mortgage lender HBOS. Lloyds also said it will launch its £4B capital raise, intended to pay back preferred shares held by the government as part of its rescue package, on May 20.
- Brazil food giants talk tie-up. Brazil meat processors Sadia (SDA) and Perdigao (PDA) said they're in discussions of a merger that would rescue struggling Sadia, and create one of the world's largest frozen and processed food companies. In a report Thursday, Citigroup speculated the Brazil government could help finance a merger with as much as $750M.
- New taxes for life insurers? The Obama administration wants to tag life insurers with $12.8B in new taxes over the next decade, even as the sector recently garnered approval to receive TARP bailout funds. New proposals would restrict some tax breaks received by purchasers of insurance or insurance companies themselves. Industry followers say the changes could hit sales of corporate-owned life insurance.
- High-profile Madoff victims probed. The probe into who knew about Bernard Madoff's massive fraud has broadened to include high-profile investors including philanthropists Jeffry Picower and Stanley Chais, and Carl Shapiro, an old friend. Sources say investigators have evidence Picower and Chais sought - and received - better returns than other investors, sometimes reaching an astonishing 300-950% a year. A lawyer for Picower says his client was "totally shocked" by the fraud and was in no way complicit in it.
- Takeda to buy IDM Pharma. Takeda Pharmaceutical agreed Monday to acquire IDM Pharma (IDMI), a developer of anti-cancer treatments, for $2.64/share in an all-cash tender offer followed by a merger. Shares of IDM were recently +19% premarket to $2.02.
- Trump on Trump. Trump-watchers may, or may not, get a better idea of what Donald Trump's empire is really worth today, as his 2007 deposition explaining how he values his assets will be revealed in a hearing. A 2005 book estimated Trump's worth at $150-200M, a defamation Trump alleges cost him subsequent deals. At the time of the deposition, Trump called $4B "a very conservative" estimate, and said $6B is also a good number including brand value. In an interview yesterday, Trump cited $5B, not including brand value. The suit implicates author Timothy O'Brien, and publisher Warner Books (TWX).
- ECB hopes it's done with easing. European Central Bank governing council member Axel Weber said it's unlikely the ECB will take further action to address the financial crisis. "Unless circumstances worsen considerably, previous measures are adequate, in my view," Weber said, adding, "We would come to reassess our strategy only in the case of a dysfunctional banking system." Late last week, Eurostat reported euro-area GDP fell a record 2.5% in Q1 from Q4, sparking speculation of further rate cuts from the current 1% benchmark.
- Euro zone trade surplus rises unexpectedly. The euro zone posted a surprise €0.4B trade surplus for March; economists were expecting a deficit of -€0.3B consensus. In a sign that trade flows may be starting to pick up again, exports (€108B, -17% y/y) and imports (€107.6B, -18% y/y) were both higher from a month ago. (see Eurostat's external trade report
Earnings: Monday Before Open
- Dr. Reddy's Laboratories (RDY): FQ4 net profit of INR1.56 billion vs. consensus of INR 1.17B. Revenue of INR16.78B. Shares +10.6% premarket. (DJ)
- Lowe's (LOW): Q1 EPS of $0.32 beats by $0.07. Revenue of $11.83B (-1.5%) vs. $11.63B. Comps fell 6.6%. Sees full-year EPS of $1.13-1.25 vs. $1.11. "The economic pressures on consumers remain intense, and bigger ticket projects continue to be postponed as wary home improvement consumers watch the economic climate and housing market dynamics very closely. But, as spring arrived, we saw relative strength in smaller, outdoor projects," firm says. (PR)
- Perfect World (PWRD): Q1 EPS of $0.62 beats by $0.16. Revenue of $62.2M (+40.1%) vs. $57M. Shares +8.2% premarket. (PR)
- State Street (STT) announces common stock offering of $1.5B. Says it sees full-year EPS of $4.25-4.50, vs. consensus of $3.83. Sees operating revenues down 12% Y/Y. Shares -3.9% premarket. (PR)
Today's Markets
Overseas markets were mixed Monday, and futures are marginally higher after spending much of the overnight session in the red.
- Asia: Nikkei -2.44% to 9,039. Hang Seng +1.38% to 17,023. Shanghai +0.28% to 2,653. BSE +17.34% to 14,284.
- Europe at midday: London +0.8%. Paris -0.1%. Frankfurt flat.
- Futures at 7:00: Dow +0.2% to 8282. S&P +0.3% to 886. Nasdaq +0.2%. Crude +1.5% to $57.22. Gold -0.1% to $930.60. 30-year Tsy +0.23%. Euro -0.2% vs. dollar. Yen -0.5%. Pound +0.5%.
Monday's Economic Calendar
- 1:00 PM NAHB Housing Market Index
1:00 PM Geithner Q&A on the economy - Notable earnings before Monday's open: LOW, PWRD, RDY
- Notable earnings after Monday's close: APP
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This article has 13 comments:
Our government seems hell-bent on making sure no programs remain for retirees who have to survive on interest or dividends.
Lloyds, being a bank, who bought HBOS in the UK, who had made many bad mortgage loans, have had to write down values here already, and will have more losses going forward, but insurers haven't yet been "stress tested" so bad news remains hidden.
This is one reason for insurers being offered bail-out funds, to head off the bad news at the pass. Trouble is, it doesn't make it any less bad.
Retired people reliant on insurance companies' payments for their income are right to be worried. We need to be told the truth not just about the banks and their bad assets, but the insurers too.
Our CREF check was reduced by about $668 per month starting in May 2009.
Here's the CREF announcement.
home.comcast.net/~bpayne37/whitman59/w...
We did have 7 years of good benefits from variable annuity CREF, however.
they belong together because they are both frauds..trump was exposed as a fraud more than 25 years ago when he wrote his book.."the art of the deal"...an associate of trumps revealed that all those "great deals" trump engineered were done by "money under the table"
On May 18 02:27 PM bbowen7 wrote:
> Interesting to post Madoff and Trump articles together.
PRESIDENT Barack Obama will give Iran until the end of the year to open talks with the US on its nuclear program before pushing for international sanctions. The president set his dialogue deadline for the first time following a meeting with Israeli Prime Minister Benjamin Netanyahu, who fears Tehran is preparing nuclear material to make an atom bomb. ...
"Iran openly calls for our destruction, which is unacceptable," he said.
www.news.com.au/herald...
Bibi may start WWIII.
Imam ghoft een rezhim-e ishghalgar-e qods bayad az safheh-ye ruzgar mahv shavad.
www.thetruthseeker.co....
Here may be the real problem. Both in the US and Iran ... and Israel too.
Thu Oct 02 01:00:00 CDT 2008 A new study released this week highlights what experts have been saying for years: the U.S. faces significant risk of power brownouts and blackouts as early as next summer that may cost tens of billions of dollars and threaten lives.
The study, "Lights Out In 2009?" warns that the U.S. "faces potentially crippling electricity brownouts and blackouts beginning in the summer of 2009, which may cost tens of billions of dollars and threaten lives." ...
www.utilityproducts.co...