Wall Street Breakfast: Must-Know News 29 comments
-
Font Size:
-
Print
- TweetThis
- Obama draws a line on auto aid. The White House rejected a request by auto-parts suppliers for up to $10B in new aid, saying the government shouldn't get more involved in the industry's contraction and signaling there's a limit to how much taxpayer money can be sent to the auto industry. Suppliers are now turning to Congress for the money.
- Bidders for First Republic. Carlyle, Blackstone (BX) and TPG are reportedly leading a group of bidders in talks to buy Bank of America's (BAC) First Republic Bank. Bank of America inherited First Republic in its acquisition of Merrill Lynch, and could get as much as $700M for the San Francisco-based bank.
- Morgan bucks TARP. Sources say Morgan Stanley (MS) will repay its TARP money today, returning all $10B in loans. Today is the first day eligible banks can begin repaying government aid. Separately, Morgan is also planning to revamp its prime-brokerage unit to lure back hedge-fund clients that left the firm. As part of the changes, hedge-fund clients will be able to hold part of their assets in a Morgan-owned trust company rather than in the firm's brokerage units.
- Quotables. "Wall Street seems to maybe have a shorter memory about how close we were to the abyss than I would have expected." -Obama, ahead of today's release of financial overhaul plans. (Read a draft of the reforms (.pdf) )
- Virus shuts down Genzyme plants. Genzyme (GENZ) is shutting down production at its main U.S. plants for several weeks, after discovering a virus in one of the vats used to develop drugs. The closed plants include the only facility which produces two of Genzyme's best-sellers, and company officials said they expect to face shortages of both drugs as a result. This is the latest in a series of manufacturing missteps for Genzyme, and could cost the company $100-300M in lost revenue.
- Reynolds safe on patents. R.J. Reynolds (RAI) won a high-stakes patent case against Star Scientific (STSI) over a new method of curing tobacco that reduces certain cancer-causing toxins. Star had been seeking several hundred million dollars in patent-infringement damages, but the court ruled that Reynolds didn't infringe Star's curing patents and that the patents were invalid. Star plans to file a motion for a new trial. STSI -78.7% premarket (7:00 ET).
- BlackRock gets BGI. Barclays (BCS) accepted BlackRock's (BLK) $13.5B cash-and-stock offer for its Barclays Global Investors asset-management business, closing the door on any counterbids. Barclays will pay CVC Capital Partners $175M as compensation for exercising an option to reject CVC's earlier bid.
- Investors bet on BHP purchase. Credit-default swaps on BHP Billiton (BHP) rose 16% yesterday, the most in almost 8 months, on speculation the mining company is planning a large acquisition. Shareholders are eager for growth and are looking for a deal much bigger than the recent $5.8B venture signed with Rio Tinto (RTP). Merrill Lynch recently estimated the company could spend as much as $40B on any future acquisition. Shares -1.7% premarket (7:00 ET).
- Nuclear heats up. Power companies UniStar Nuclear Energy, NRG Energy (NRG), Scana Corp (SCG) and Southern Co. (SO) are expected to split $18.5B in federal financing to build the next generation of nuclear reactors. The government has not yet formally announced its picks, but sources say these four firms are the likely winners from a group of seventeen companies that applied for federal loan guarantees.
- Travel websites face payments over damages, taxes. Expedia (EXPE) and other online travel companies may have to pay millions of dollars in damages and uncollected taxes under recent court rulings in Georgia and Washington state. Expedia is also being sued in Texas, as is rival Orbitz Worldwide (OWW).
- Buy Chinese. Just a few months after slamming a proposed 'Buy American' clause in the U.S. economic rescue package, China has introduced a 'Buy Chinese' policy as part of its stimulus program, amplifying trade tensions and raising the possibility of retaliation. The policy, released jointly by nine government departments, says government procurement must use only Chinese products or services unless they're not available or can't be bought on reasonable terms.
- U.K. gets tougher on banks. U.K. Treasury chief Darling plans to tell banks they need to improve their governance and hold more capital against losses. The changes will move the U.K. farther away from the 'light touch' regulation that made it a magnet for banking activity.
- Retail sales fall. Chain store sales fell 4.5% in the first two weeks of June vs. last month, Redbook reported, worse than the -4.1% expected. According to ICSC, weekly sales were down 0.6% vs. last week as consumers faced rising gas prices and unfavorable weather.
- MBA apps fall. Mortgage applications fell 15.8% last week, MBA reported, as prospective buyers wait to see if interest rates will come back down. The average interest rate on 30-year fixed-rate mortgages fell to 5.5% from 5.57%.
- Housing starts beat expectations (.pdf). May Housing Starts of 532,000 came in above the 500K consensus. April starts were revised to 454K from 458K. Permits, an indication of future starts, were 518K. Starts were down 45.2% from last year's 971K.
- PPI inches up. May's Producer Price Index rose 0.2% from April, vs. consensus of +0.6% and +0.3% last month. Core PPI -0.1% vs. consensus of +0.1% and prior +0.1%. PPI is -5% vs. a year ago, while core PPI is +3% Y/Y.
- Industrial production dips down. May Industrial Production came in at -1.1% vs. consensus of -1% and last month's -0.7% (revised from -0.5%). Capacity utilization was 68.3% vs. last month's 69%.
Earnings: Wednesday Before Open
- FedEx (FDX): FQ4 EPS of $0.64 beats by $0.13. Revenue of $7.85B (+23.3%) vs. $8.32B. Sees FQ1 EPS of Q1, sees EPS of $0.30-0.45 vs. consensus of $0.68. (PR)
Earnings: Tuesday After Close
- Adobe (ADBE): FQ2 EPS of $0.35 in-line. Revenue of $705M (-20.5%) vs. $695M. Sees FQ3 EPS of $0.30-0.37, in-line, and revenue of $665-715M vs. $676M consensus. (PR)
Today's Markets
Asian markets closed mixed, but Europe is heading down while U.S. futures try to gain some traction.
- Asian markets: Nikkei +0.9% to 9,841. Hang Seng -0.45% to 18,085. Shanghai +1.2% to 2,810. BSE -2.9% to 14,523.
- In Europe at midday: London -1.1%. Paris -1.2%. Frankfurt -1.1%.
- Futures: Dow -0.2%. S&P -0.2%. Nasdaq +0.1%. Crude -0.85% to $69.87. Gold -0.2% to $930.30.
Wednesday's Economic Calendar
- Bernanke and FDIC's Bair speak at financial literacy summit
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
8:30 Current Account
10:30 EIA Petroleum Status - Notable earnings before Wednesday's open: FDX
Seeking Alpha editor Eli Hoffmann contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.
After you finish reading Wall Street BreakfastSeeking Alpha's Market Currentswill keep you current all day long.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
TraderMark
-
2
Don Dion
-
3
Cliff Wachtel
-
4
Mike Havrilla
-
5
James Quinn
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 29 comments:
How logical!!!!
No aid for auto parts. Non-union companys have no UAW votes to bribe/buy I guess.
Transparency at its finest.
Wall street can see the abyss for the fog of money Wash has been throwing at them.
misspell sorry
On Jun 17 08:57 AM richjoy403 wrote:
> Seems everyone who comments on Alpha postings has only negative things
> to say...it gets tiring!...did you expect that at this stage of the
> economic cycle ALL news would be good news?
On Jun 17 08:57 AM richjoy403 wrote:
> Seems everyone who comments on Alpha postings has only negative things
> to say...it gets tiring!...did you expect that at this stage of the
> economic cycle ALL news would be good news?
Do the bankers feel sorry for thier crimes? NO they are raising the rates they charge consumers to loan shark levels. The corruption is so blatant it is frightening.
Sorry I dont see anything positive to cheer about.
On Jun 17 08:57 AM richjoy403 wrote:
> Seems everyone who comments on Alpha postings has only negative things
> to say...it gets tiring!...did you expect that at this stage of the
> economic cycle ALL news would be good news?
Look, anyone, EVERYONE with money in the market the past three months is thrilled. There is a HUGE difference between the market and the economy. There is money to be made in EVERY market. And that sound you hear is the economy swirling in the bowl while the fed continues to flush it with more and more water (money).
Take off the rose colored glasses. We're NOT in Kansas anymore.
On Jun 17 09:12 AM Old Trader wrote:
> Possibly because the commenters dislike spin and denial? Just a thought...
>
Let the Chinese eat their own "cooking" and nothing else and see how inedible it is. Maybe when they get "fed up" they will start making better quality goods. Can you believe how bad Chinese-made stuff is?.....pure junk.
Don't blame the Chinese. It is Walmart, DollarTree and many, many other AMERICAN companies that are buying the crap and stocking their shelves with it. Worse, companies like Walmart keep sqeezing their suppliers - to make more profit - resulting in the makers cutting more and more corners.
This is just another piece of the American/multinational corporate greed machine that will say, do or sell anything - no matter how shoddy or fraudulent - to make a buck.
American financials solicit, buy, package and sell risky MBS's while other American companies rate them AAA. It is the financials' equivalent of soliciting cheap shoddy consumables, stocking stores with them and selling them to Americans with little or no sensibilities about what quality is.
In the American and global economies, GREED is the factor driving all the deteriorating sectors.
These days, to ignore the old Roman saying, "Let the buyer beware" is to risk getting taken. And it applies to stocks, real estate, retail and every other sector.
It's kinda like a cat seeing how long it can slap a mouse around before it ups and dies... it looks like they are in it for the sport!
God forbid letting the economy deflate a little. Something I want to see in my lifetime: a deflationary downward adjustment in a social security check!!
About time the USA moves towards less energy dependence via nuclear. Windmills and solar are fine ideas but they rank way down on the cost/benefit scale when compared to nuclear or hydroelectric.
President 0bama deserves a compliment. Thank you Mr President
> stuff is?.....pure junk.
And yet Americans -- including yourself, no doubt -- line up to buy it.
What I don't get is why they are reading and posting! If a 'normal' person doesn't believe in our stock market, they should logically not be participating (and if they don't believe the data, they also can't short the market, because if they don't believe the data, they have no basis to short). If they are not participating, why are they reading and posting?
(Or, could it be that they want to talk down the market, so they can enter at lower prices?)
You're half right ;-) (Those damn birthdays just keep flyin' by)
On Jun 17 10:43 AM ljwaks wrote:
> Or maybe they are old and bitter.
Those Who Refuse To Look Will Never See.
The Anomaly Is More Important Than The Norm - It is the alarm that the paradigm is not correct.
Those that actually ponder the interaction of the complexities of Government And Finance are more aware of the shenanigans.
To Assume Benevolence Is Foolish.
Safety Is A Function Of Awareness.
It is not about being "Bitter" or "Attempting To Talk Down The Market". It Is about understanding how the "Cogs In The Machine Work Or Don't".
Recognition Of Danger Is Not Pessimistic.
Those Who Do Not Keep Track Of Where The Lions Are And Whether They Are Hungry Become "Big Kitty Snacks".
There are many "Actions And Events" that "Merit Anger" in recent history. The True Effects Will Be Seen Within Two Years.
"Ponder The Implications And Prepare For Contingency" Is The Prudent Plan.
On Jun 17 01:19 PM richjoy403 wrote:
> OK, I get it...there are a HUGE number of pissed-off folks posting
> here! They claim to see manipulation of data everywhere, and don't
> trust any of the stats used by investors to measure the health of
> the economy.
>
> What I don't get is why they are reading and posting! If a 'normal'
> person doesn't believe in our stock market, they should logically
> not be participating (and if they don't believe the data, they also
> can't short the market, because if they don't believe the data, they
> have no basis to short). If they are not participating, why are
> they reading and posting?
>
> (Or, could it be that they want to talk down the market, so they
> can enter at lower prices?)
Here at home, it would seem that the last bastion of Capitalism will be when the crook merchant gets the highest price for the rope used to hang him(per Michael Moore). That absurd joke doesn't seem so out of line after all the bad that has happened over the past few years or so. What a system...all me and no you or anyone else. What other end could a system such as that ever lead us to, and who ever thought it would work, knowing human nature as it is and always will be? Ironic cosmic mutations that we are.
On Jun 17 11:55 AM axelrod608 wrote:
> >> "Can you believe how bad Chinese-made stuff is?.....pure junk"
> >>
>
> Don't blame the Chinese. It is Walmart, DollarTree and many, many
> other AMERICAN companies that are buying the crap and stocking their
> shelves with it. Worse, companies like Walmart keep sqeezing their
> suppliers - to make more profit - resulting in the makers cutting
> more and more corners.
>
> This is just another piece of the American/multinational corporate
> greed machine that will say, do or sell anything - no matter how
> shoddy or fraudulent - to make a buck.
>
> American financials solicit, buy, package and sell risky MBS's while
> other American companies rate them AAA. It is the financials' equivalent
> of soliciting cheap shoddy consumables, stocking stores with them
> and selling them to Americans with little or no sensibilities about
> what quality is.
>
> In the American and global economies, GREED is the factor driving
> all the deteriorating sectors.
>
> These days, to ignore the old Roman saying, "Let the buyer beware"
> is to risk getting taken. And it applies to stocks, real estate,
> retail and every other sector.
Enjoy The Comfort Of Your Ignorance.
Germany Did Not Come To Atrocity Overnight.
On Jun 17 03:33 PM robert.b.ferguson wrote:
> PainfullyAware: Greetings. I would add that just because you are
> paranoid dosn't mean they are not out to get you. May the last politician
> be hung with the entrails of the last lawyer, oh wait they are the
> same huh?
bobbob - I bought my son a Lenovo computer several years ago. Despite the fact that he never defrag's it or does any maintenance and visits the riskiest gaming sites, it has performed flawlessly. It is made in china and is every bit as good as any other PC.
China can and does make top quality products, NONE of which you will ever find in a Walmart.
You missed the point of my earlier comment - blame the company that contracts with the chinese company to make cheap crap, which they then stock and sell here. Companies in EVERY country make products to specs provided by the company that buys them, not to a high quality spec.