Nikkei jumps 4.9% as Japan GDP revised up. Japan has revised its annualized Q1 GDP reading to 4.1% from an initial reading of 3.5%, helping to send the Nikkei (EWJ, DXJ) up 4.9%. A strengthening of the dollar against the yen following U.S. payroll data on Friday also helped boost stocks. However, Barclays warned that the GDP revision "should not be viewed as a reflection of economic strength," as it was mainly due to a quirk in the way the data is calculated.
Booz Allen employee source of NSA leaks. Government contractor Booz Allen Hamilton (NYSE:BAH) has become caught up in the revelations about the National Security Agency's surveillance programs after one of its employees, Edward Snowden, came forward as the source of the leaks. Booz Allen has said in securities filings that leaks could hurt its business - the firm generated 98% of its $5.76B in revenue in the last fiscal year from the government, with 23% coming from intelligence work.
Google agrees to $1.1B acquisition of Waze. Google (NASDAQ:GOOG) has reportedly agreed to acquire mobile traffic app company Waze for $1.1B. The deal "is all defense but great defense wins championships," tweets Howard Lindzon, CEO of social network StockTwits. Quartz's Gideon Lichfield argues that the transaction "would deal a death blow" to Apple's (NASDAQ:AAPL) and Facebook's (NASDAQ:FB) efforts to develop rival platforms. However, regulators could oppose any agreement given Google's dominance in mobile maps.
Top Stock News
Elan rejects latest Royalty Pharma offer. Elan (NYSE:ELN) has turned down Royalty Pharma's increased bid, saying that the U.S. investment firm still undervalues the Irish company and its Tysabri multiple sclerosis drug. Elan is also analyzing other interest after it received unsolicited inquiries. Royalty Pharma's latest offer could be worth as much as $8B, and comprises $13 a share - up from $12.50 previously - and an extra $2.50 if Tysabri achieves certain sales milestones.
IHS to buy R.L. Polk for $1.4B. IHS (IHS) has agreed to acquire R.L. Polk for $1.4B in a cash and equity deal that will provide the analytics company with the used-car shopping tool Carfax.
Apple poised to unveil new iOS, radio service... Apple (AAPL) is due to hold its annual developer conference this week, when it's expected to introduce its revamped iOS operating system, an update to its Mac OS, an Internet-radio service and new laptops. The new iOS will be the first under the development leadership of Apple's hardware design guru, Jonathan Ive, while the radio service comes after several missteps with cloud offerings.
...while Microsoft and Sony battle it out at E3. Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE) are set to provide more details today about their new flagship gaming consoles at the Electronic Entertainment Expo, which is taking place in LA. E3 comes in the midst of a slump in the gaming industry, while some of the newest and coolest kids on the block - the creators of hit smartphone games - are giving the expo a miss.
Battery maker Exide files for Chapter 11. Facing $31M in interest payments in August and the maturity of almost $52M in convertible debt the following month, Exide Technologies (XIDE) has filed for bankruptcy protection with liabilities of $1.14B and assets of over $1.89B. It's the lead-acid battery company's second filing in 11 years. Exide cited rising costs, Europe's slowdown and intense competition as reasons for its current problems. Still, Exide has obtained a $500M bankruptcy loan from JPMorgan (NYSE:JPM).
U.K. mulls selling 10% of Lloyds. The U.K. Treasury is reportedly considering selling a 10% stake in Lloyds (NYSE:LYG) by the end of the year, which would leave the government with 29%. Lloyds shares were -0.8% at 61.81 pence at midday in London, above the 61 pence at which the government would break even on its Lloyds stock. The speculation comes as a parliamentary commission finalizes a 600-page report about the banking sector.
French police question France Telecom CEO over public funds. French authorities have detained France Telecom (FTE) CEO Stephane Richard as part of a probe into the possible misuse of public funds. Richard is being questioned over his role in an arbitration process in 2008 that led to a significant payout to businessman Bernard Tapie. At the time, Richard was chief of staff to then Finance Minister and now IMF chief Christine Lagarde.
Top Economic & Other News
China's export growth slumps, inflation falls. China's export growth slowed sharply to 1% on year in May from 14.7% in April, reflecting a crackdown on invoicing, which is thought to have distorted the April data, especially regarding Hong Kong. Imports slipped 0.3 vs +16.8% the previous month, while inflation fell to 2.1% from 2.4% and producer prices slid 2.9%, with the figures indicating reduced domestic demand. Along with other data, the indicators helped depress market sentiment.
Japanese PM plans corporate tax cuts. Japanese Prime Minister Shinzo Abe intends to introduce tax cuts for capital expenditure in the autumn as part of the government's sweeping plan to pull the economy out of deflation. The lack of a nationwide reduction in corporate tax disappointed markets when Abe initially unveiled the program last week. He also wants to scrap regulations that shackle research and investment.
French industrial production surprises on the upside. French industrial output slayed consensus in April, jumping 2.2% on month vs -0.6% in March and forecasts of +0.3%. Production was boosted by strong growth in the manufacture of coke and refined petroleum products (+14.7%), as well as by smaller increases in the transport-equipment industry, and the electrical and electronic equipment sector. In contrast, industrial production in Italy slipped 0.3% vs -0.9% in March.
Alpha-Rich Stock Movers and Great Calls
1) Amerco (NASDAQ:UHAL) reported an earnings beat after-hours Wednesday and closed Thursday 21% above where it was when hedge fund Kerrisdale Capital Management laid out its bullish case for the under-followed stock in February.
Alpha-Rich Stocks To Watch
1) Electronic Arts (NASDAQ:EA). A major console transition, low R&D spending, and aggressive guidance leave EA's stock vulnerable. Buyside gaming expert Josh Burwick says 20% downside could be in play.
2) Statoil (NYSE:STO). Long-term investors could see over 70% upside to STO's valuation - which is substantially below all other oil majors - as production grows and a price fixing investigation is resolved.
Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA Pro subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA Pro and becoming a subscriber, click here.
In Asia, Japan +4.9% to 13514.2. Hong Kong +0.2% to 21615. China closed. India +0.1% to 19441.
In Europe, at midday, London +1.1%. Paris -0.2%. Frankfurt +1%.
Futures at 7:00: Dow +0.3%. S&P +0.4%. Nasdaq +0.35%. Crude +0.9% to $95.63. Gold -0.3% to $1379.40.
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