Wall Street Breakfast: Must-Know News 19 comments
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- Swiss prepared to protect UBS data. The Swiss government said it would seize UBS (UBS) data to keep information about 52,000 American account holders out of the hands of the U.S. Justice Department. Claiming that any disclosures would force UBS to violate Swiss law, the Swiss government said it "will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS."
- SEC uncovers new Ponzi scheme. The SEC charged Dallas-based Provident Royalties LLC and its three principals with running a $485M oil-and-gas Ponzi scheme, promising more than 7,700 investors returns of up to 18%. In light of the SEC's lawsuit, a federal judge agreed to freeze Provident's assets and appoint a receiver.
- Rio workers detained in China. Rio Tinto (RTP) said four of its Shanghai-based employees have been detained by Chinese authorities, and at least one is being investigated on suspicions of espionage and stealing state secrets. Rio said it is "not aware of any evidence that would support such an investigation," and found the allegations 'surprising.' The four employees, including the general manager for China operations at Rio Tinto's iron-ore division, have been held since Sunday. Separately, Australian packaging group Amcor (AMCRY.PK) is reportedly nearing an agreement to buy some of Rio's assets in a deal that could be valued at up to $2.4B. RTP -14.3% premarket (7:00 ET).
- NRG snubs Exelon bid. NRG Energy's board unanimously rejected an unsolicited bid from Exelon (EXC), saying the offer is "not in the best interest of NRG stockholders in that it continues to substantially undervalue NRG." Last week, Exelon raised its all-stock offer 12.4%, to $7.73B.
- Boeing buys plant to speed Dreamliner. As rumored last week, Boeing (BA) has agreed to pay $580M for the Vought Aircraft Industries plant that makes sections of the 787 Dreamliner. When Boeing first announced plans for its distributed supply chain, it was praised for moving some of the risk off of its books, but the company now hopes its strategy reversal will give it greater control over the heavily-delayed project. Some analysts are less optimistic; Boeing may be underestimating the time it will take for FAA certification, delaying the plane into 2011.
- SEC eyes Jobs' health disclosures. The SEC is reportedly looking into Apple's (AAPL) disclosures about Steve Jobs' health, trying to determine how Jobs' condition went from 'relatively simple' to 'more complex' in the span of nine days. At question is how much Apple's board knew about Jobs' real condition at the time of his two January announcements, and whether Apple or Jobs misled investors with their disclosures. The SEC and Apple declined to comment.
- Google OS takes aim at MSFT. In a direct challenge to Microsoft (MSFT), Google (GOOG) announced on its blog that it has begun development of an open-source operating system based on Chrome. The software, which will be available in the second half of 2010, will initially target netbooks but the company hopes to scale the software up to regular PCs as well. Meanwhile, Gmail and several other Google products finally dropped their beta label, which could help Google achieve wider corporate adoption.
- AIG loses case with ex-CEO. A jury ruled that AIG's (AIG) case against former CEO Maurice 'Hank' Greenberg was 'weak' and that Greenberg didn't steal billions from a retirement fund. AIG had taken Starr International, a private company run by Greenberg, to court in an attempt to collect $4.3B in damages over millions of shares held and sold by Starr. AIG -4.9% premarket (7:00 ET).
- Antitrust fines for E.ON, GDF Suez. E.ON (EONGY.PK) and GDF Suez were each fined €553M ($768M) for violating EU antitrust rules by colluding on natural gas sales. The gas-transport agreements "deprived customers of more price competition and more choice of supplier in two of the largest gas markets in the EU," said Competition Commissioner Neelie Kroes, so "the commission has no alternative but to impose high fines."
- Tighter rules for U.K. banks. The U.K.'s Darling plans to outline tighter regulation for the British banking industry today, sources said, including a requirement that banks keep instructions on file for how to unwind their own businesses in order to assist regulators in the event of a potential rescue.
- Sony joins netbook crowd. Late to the game, Sony (SNE) said it will enter the netbook market with a new laptop to be launched in August that will sell for around $500. With the exception of Apple (AAPL), nearly every other major PC maker has already rolled out a netbook.
- MBA apps rise. Mortgage applications rose 10.9% last week, MBA reported. The average interest rate on 30-year fixed-rate mortgages was unchanged at 5.34%.
- Retail sales. Chain store sales fell 4.3% in the five weeks of June, Redbook said, worse than the -4.1% expected. According to ICSC, weekly sales were up 0.1% vs. last week.
Earnings: Wednesday Before Open
- Family Dollar Stores (FDO): Q3 EPS of $0.62 beats by $0.03. Revenue of $1.8B (+8.3%) in-line. (PR)
- Pepsi Bottling Group (PBG): Q2 EPS of $0.78 beats by $0.05. Revenue of $3.3B (-7%) vs. $3.4B. (PR)
Earnings: Tuesday After Close
- Ruby Tuesday (RT): FQ4 EPS of $0.28 beats by $0.09. Revenue of $317M (-7%) vs. $304M. Same-store sales decreased 3.2% at company-owned restaurants and 6.9% at franchised stores. Sees FY10 EPS of $0.50-0.65 vs. $0.55. (PR)
Today's Markets
- In Asia, Nikkei -2.35% to 9,421. Hang Seng -0.8% to 17,721. Shanghai -0.3% to 3,081. BSE -2.8% to 13,769.
- In Europe at midday, London -0.05%. Paris -0.6%. Frankfurt -0.2%.
- U.S. futures: Dow flat. S&P flat. Nasdaq +0.1%. Crude -0.7% to $62.47. Gold -0.9% to $920.50.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
10:30 EIA Petroleum Status
12:55 PM Fed's Evans speaks on non-traditional monetary policy
1:15 PM FDIC's Bair speaks at interagency conference
3:00 PM Consumer Credit - Notable earnings before Wednesday's open: FDO, PBG
- Notable earnings after Wednesday's close: AA
Seeking Alpha editor Eli Hoffmann contributed to this post.
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This article has 19 comments:
On Jul 08 08:40 AM axelrod608 wrote:
> Readers take note - Seeking Alpha plans to keep the new format. I
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the swiss don't want to see all that money flood out of their banks. there are other tax havens. i find it gratifying to see tax hungry invasive politicians thwarted.
i am in the middle of thomas payne's "common sense", a most interesting read.
I find your Daily Alert very useful so that I can keep up with the market trend while I am in Vietnam. Step it up .
Thank you.
Mr.Truyen Pham
Email: pdoanhnhan6188@gmail.com
Distillates stocks were up 3.4M barrels
Gasoline stocks were up 767,000 barrels
Crude stocks were down 1.4M barrels (had expected down 2.4M)
This is a net build of approx. 2.8M barrels. This would seem to add fuel to the drop in oil prices.
It will be interesting to see the EIA statistics this morning at 7:30am.
"The global economy is beginning to pull out of recession but the recovery is expected to be sluggish, according to the latest economic update from the International Monetary Fund released Wednesday. The IMF raised its forecast for growth in 2010 to a 2.5% rate, which is higher than the 1.9% growth rate forecast in April. There is much less concern about systemic failure in the financial system. A gradual recovery in the U.S. seems on track, the IMF said. Japan is stabilizing after a dismal first quarter. Growth in the euro-area is expected to strengthen more slowly than elsewhere. Inflation pressures remain low, the agency said. Risks for sustained deflation are small."
This good news is thought to be at least partially responsible for the early lift in the markets today.
The S&P is starting to slide, but the market manipulation going on is still holding up the financials: at our expense, and when they do go down, those holding these stocks will be hit again. But the CEOs and others will still be ok, especially now they are getting higher pay to make up for no bonuses!
Distillate stocks up 3.7M barrels
Gasoline stocks up 1.9M barrels
Crude stocks down 2.9M barrels
This is an overall build of 2.7M barrels. This is an almost identical number to the American Petroleum Institute overall number yesterday.
Look at the companies in this area, because they are the techs that will lead any market rally in due course (though not just yet, as we're still a long way from recovery). VM Ware (VMW) is a favorite for me, though there are several others worth a look.
The Swiss government's approach is interesting, isn't it? I'm getting a little concerned over the 'Big Brother" aspect of governments. They seem to get involved in every aspect of our lives and it gets to be stifling, to say the least.
The S & P has already had a lost decade, and now with housing prices looking more in line with productive value of the owners, the economy will take on growth on a sound footing. i think prices need to pull back another 15% on houses, maybe even 20%. Oil manipulation is very likely--it should be pricing for the rest of the year at 45$ and this is unsustainable for future development so it will be artificially propped up when the decline strikes in maybe august. Our greater danger lies in deflation, when people start to play wait and see, then we can expect another meltdown by january. But for now we are good and the VIX knows it. Just some thoughts from an amateur. I tend to agree with the older traders that government spells trouble and the stimulus might get inflated just to fulfil political expediancy---it will be a hard pill to swallow in about 3 years--but for now deflation will sink us first.
After all, we are not on this earth just to be income generating drones for our governments and we are perfectly entitled to keep most of the payments we receive for our efforts for our own use.
One Finance Minister of a so-called Tax Haven said that when income taxes were introduced in the early 1900's all countries claimed around the same percentages of people's earnings but over the years some countries substantially raised their taxes and those that did not do so became labeled as tax evasion centres.