Prospect of intervention in Syria again weighs on markets. The increasing likelihood of Western military action against Syria has again rattled markets across the globe, although U.S. stock futures were slightly higher at the time of writing after sharp falls on Wall Street yesterday, while gold and oil continued to climb. Many Asian and European share indices fell, with some emerging-market asset classes continuing to suffer, whether they be equities or currencies (see Indian rupee below).
JPMorgan potential fines keep on growing. The Federal Housing Finance Agency wants JPMorgan (NYSE:JPM) to pay $6B to settle lawsuits over problematic mortgage bonds, a figure that would be at the high end of what the bank has calculated is its liability in the case. Meanwhile, JPMorgan is reportedly expected to have to pay $500-600M in a "global" settlement to resolve probes by various U.S. and U.K. authorities into its London Whale fiasco. The bank is also facing a fine of $80M over its dealings with retail customers during the recession.
Top Stock News
Legal costs for major U.S. banks top $100B. The U.S.'s six largest banks have accumulated legal costs of $103B so far since the financial crisis, Bloomberg calculates. Legal fees and litigation costs account for $56B and the rest is for payments to mortgage investors. JPMorgan's (JPM) legal bill is $21.3B and it has allocated $8.1B for mortgage buybacks, while Bank of America's (NYSE:BAC) legal expenses are $19.1B and its repurchase provisions $28.6B. The other banks are Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS).
Internet sales remain marginal for many major retailers. After almost two decades of Internet shopping in which Amazon (NASDAQ:AMZN) has become a behemoth, many major bricks and mortar retailers are still struggling to take advantage. Target (NYSE:TGT), for example, recently told investors that its digital sales have grown by double digits, but when pressed by the SEC, said they're an "immaterial amount." Fifth & Pacific (FNP) has informed shareholders that it's "ravenously growing business in e-commerce," but then said that providing a specific figure isn't relevant.
BofA to pay $160M in racial discrimination case. Bank of America (BAC) has agreed to pay $160M to settle a lawsuit brought by black financial advisers, who accused the bank of not giving them the same opportunities as white staff in investment teams and account distribution. The first lawsuit was filed in 2005 on behalf of Nashville-based George McReynolds, who still works for the company, and grew into one that encompassed the claims of hundreds of others.
Judge to limit Apple oversight to eBook deals. District Judge Denise Cote intends to limit the scope of the government's proposed supervision of Apple's (NASDAQ:AAPL) content deals following her finding that the company fixed e-book prices. The oversight would cover just e-books, and not other areas such as movies, music and TV shows, as the Department of Justice had requested. Cote also intends to order Apple to appoint an external antitrust monitor on a limited basis.
FCC playing peacemaker in CBS-TWC row. The Federal Communications Commission is working to resolve the fee dispute between CBS (NYSE:CBS) and Time Warner Cable (NYSE:TWC) that's prevented 3M of the latter's customers from receiving CBS programming since August 2. Unofficially, the sides have until September 8 to reach a deal, when CBS is due to broadcast its first NFL game of the season.
Groupon plans to buy warehouses to take on Amazon. Groupon (NASDAQ:GRPN) is looking to acquire at least three warehouses to support its fast-growing direct e-commerce product sales, CEO Eric Lefkofsky has said. The idea is that bringing shipping and fulfillment in-house will improve margins, which have been pressured by the growth. With the building of a fulfillment infrastructure, Groupon is looking to take on Amazon (AMZN), whose construction of warehouses has been prodigious.
Las Vegas Sands escapes with small fine in probe. Las Vegas Sands (NYSE:LVS) will pay $47M as part of a deal with the Justice Department to resolve a money laundering investigation. LVS will accept the DOJ's assertion that it failed to report suspicious financial activity by one of its customers, but the company will avoid criminal prosecution. The probe reflects concerns that casinos may enable customers to gamble using proceeds from illegal activities.
Top Economic & Other News
Rupee free-fall continues. The Indian rupee's collapse shows no sign of abating, with the currency hitting yet another record low of 68.71 to the dollar as the tension in the Middle East adds to the Fed's prospective tapering and domestic economic problems as reasons to sell. However, shares have recovered from earlier losses and were +0.2% at the time of writing. The collapse in the rupee is causing havoc for companies, as it's boosting import costs at the same time that consumer spending is falling.
Alpha-Rich Stock Movers and Great Calls
1) On Friday, MBAValueInvestor made the case for Nuverra Environmental's (NYSE:NES) shares being overvalued. The stock is -18.7% since. Read article »
2) On July 1, Igor Novgorodtsev explained why Rick's Cabaret (NASDAQ:RICK) could double as several catalysts play out. The stock is +17.4% to date. Read article »
Alpha-Rich Stocks To Watch
1) Health Net (NYSE:HNT) has multiple tailwinds that haven't yet been factored into analyst models. Insurance executive Ashleigh Rogers sees 20-30% upside. Read article »
2) USG Corp (NYSE:USG) has exposure to residential and commercial markets, new construction and remodels, and stands to benefit from whatever form the recovery of construction spending takes. The stock has 35% upside. Read article »
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 -1.5% to 13338. Hong Kong -1.6% to 21525. China -0.1% to 2101. India +0.2% to 17996.
In Europe, at midday, London -0.5%. Paris -0.3%. Frankfurt -0.9%.
Futures at 6:20: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +0.9% to $109.96. Gold +0.35% to $1425.20.
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free -- Get it now »