Eurozone business activity returns to growth. Eurozone business activity expanded for the first time in 18 months in July as composite PMI increased to 50.5 from 48.7 in June, while services PMI rose to 49.8 from 48.3. Germany's recovery gained momentum and the downturns in major economies such as France, Italy and Spain eased further. With manufacturing leading the way, the data raises "hopes that the region can finally claw its way out of its longest-running recession," Markit says.
HSBC's pretax profit rises 10% but misses forecasts. HSBC's (HBC) H1 pretax profit climbed 10% to $14.1B but missed consensus of $14.6B, while revenue slipped 7% to $34.4B. HSBC's profitability was boosted by a drop in costs and loan-impairment charges. However, the bank had to cope with muted economic growth in the West, and slowing expansion in China and the rest of Asia, while regulatory reforms added to expenses. Shares were -4% premarket.
New twist in Samsung-Apple patent battle. Samsung (OTC:SSNLF) has appealed against a June ruling from the International Trade Commission that prohibited the sale of certain Apple (AAPL) products in the U.S., as the commission found that the latter company only infringed one patent rather than the four that Samsung had claimed. At the weekend, U.S. Trade Representative Michael Froman overturned the ban, saying it gave Samsung "undue leverage" to delay rivals' use of a standard-setting technology.
Top Stock News
Lloyds aims to pay out 70% of earnings in dividends. Lloyds (LYG) CEO Antonio Horta-Osorio aims to begin paying up to 70% of the bank's earnings in dividends within three years, the FT reports. Horta-Osorio revealed the target at investor roadshows the bank has been carrying out ahead of the U.K. government starting to sell its 39% stake in the company. Lloyds also aims to boost its return on equity to 12.5-14.5% from 9% currently. Shares were +4% at midday in London.
Vodafone sues Telecom Italia for €1B+. Vodafone (VOD) is suing Telecom Italia (TI) for over €1B due to what the U.K. company calls TI's abuse of its dominant position in the Italian fixed-line telephone market. TI said its behavior was and is "totally correct," although Italy's competition authority apparently doesn't agree — it fined the carrier €104M earlier this year, a decision the company plans to appeal against.
Customers miss top shows as CBS blackout on TWC continues. The CBS (CBS) blackout on Time Warner Cable (TWC) in New York, Los Angeles, Dallas and other areas has continued, with little sign that the companies' dispute over fees is any closer to a resolution. The impasse has led to TWC customers missing leading shows such as "Dexter" and "Ray Donovan." Some analysts reckon the row could last up to six weeks, until the NFL season starts. Woe betide the companies if they haven't come to an agreement by then.
Cablevision CEO envisions dropping TV service. While Time Warner Cable (TWC) and CBS (CBS) have been at loggerheads, Cablevision (CVC) CEO James Dolan has said that his company could one day stop providing television services as consumers watch ever more video online, and instead make broadband Internet its main offering. The cable-TV industry is in a "bubble" due to the emphasis on providing packages of TV channels and could mature badly, Dolan said. He doesn't watch much television, and when he does, he prefers to do so with his children via Netflix's online service.
JPMorgan in talks to sell metals-storage unit. JPMorgan (JPM) is reportedly in negotiations to sell its metals-storage unit, Henry Bath, to London commodities broker Marex Spectron. JP Morgan last month said it would seek "strategic alternatives" for its physical oil, gas, power and metals trading division such as a joint venture, spin-off or sale. The move comes amid increasing regulatory and Senate scrutiny in the U.S. on banks' physical-commodity operations.
ING in negotiations to offload South Korean insurance business. ING (ING) is reportedly in exclusive talks to sell a controlling stake in its South Korean insurance unit to private-equity firm MBK Partners. Discussions are taking place on the basis of a 1.5-1.6T won ($1.3-1.4B) bid that MBK made for a 90% holding in an auction. The Dutch bank is selling the business as part of the conditions of the state bailout it received during the financial crisis.
American Axle Chairman Richard Dauch dies. Richard Dauch, the co-founder and Chairman of American Axle & Manufacturing (AXL), has died of cancer aged 71. Dauch was CEO of American Axle until 2012, when he gave way to his son, David Dauch. Along with two others, Dauch started American Axle in 1994 by acquiring five former GM plants and helped build it into a company with 2012 net profit of $368M and revenues of $3B.
New York Times selling Boston Globe for $70M. Boston Red Sox owner John Henry has agreed to acquire the Boston Globe from New York Times (NYT) for $70M in cash, far less than the $100M that the Boston paper was expected to fetch.
Top Economic & Other News
Berlusconi pledges support for Italian government. Italy's government looks secure for now after Silvio Berlusconi last night pledged that his People of Liberty (PDL) would continue to support the coalition, of which it's a member. The government had faced collapse after PDL members threatened a mass resignation from parliament unless Italian President Giorgio Napolitano pardoned Berlusconi for his conviction for tax fraud last week. Italian shares (EWI) were +0.1% at the time of writing.
China's service sector continued to expand in July. China's service sector grew last month, with the HSBC/Markit PMI holding steady at 51.3, while the "official" non-manufacturing PMI rose to 54.1 from 53.9 in June. However, the HSBC/Markit composite PMI, which combines manufacturing and services, slipped to 49.5 from 49.8 after manufacturing data last week showed contraction. "Without a sustained improvement in demand, services growth is likely to remain lackluster," HSBC said.
Australian PM calls election for September 7. Australian Prime Minister Kevin Rudd has called a general election for September 7. Rudd's Labor Party has reduced the poll lead of the right-of-center Liberal Party since he deposed Julia Gillard as PM six weeks ago. The Liberals have vowed to scrap mining and carbon taxes if they win the ballot, policies that would affect the likes of BHP (BHP), Rio Tinto (RIO), Peabody Energy (BTU), Vale (VALE), and Glencore (OTCPK:GLCNF).
Alpha-Rich Stock Movers and Great Calls
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In Asia, Japan -1.4% to 14258. Hong Kong +0.1% to 22222. China +1% to 2050. India +0.1% to 19,182.
In Europe, at midday, London +0.2%. Paris +0.3%. Frankfurt +0.1%.
Futures at 6:10: Dow flat. S&P flat. Nasdaq +0.1%. Crude -0.5% to $106.38. Gold flat at $1310.80.
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10:00 ISM Non-Manufacturing Index
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