Eurozone recovery at risk as industrial output falls. Eurozone industrial production returned to contraction in July, tumbling to -1.5% on month from +0.6% in June and missing consensus of +0.1%. You can't even blame the region's famously long summer holidays, as output fell 2.1% on year vs -0.4% in June. Italian production also slumped. The worse-than-expected figures bring into doubt the sustainability of the eurozone's nascent recovery and are somewhat in contrast to more upbeat PMI data. EU shares were mostly lower at the time of writing, while the euro was -0.2% at $1.3284.
Government shutdown begins to loom as funding bill delayed. House Republican leaders yesterday postponed a vote that would have approved the financing of the government through December. The delay came because of opposition among conservative Republicans to parts of the legislation related to the funding of Obamacare, which they want to strip out. The government faces a shutdown if legislation isn't approved by September 30. Democrats and Republicans also have until mid-October to agree on measures to lift the debt ceiling.
Michael Dell set to regain control of his baby. Michael Dell and Silver Lake are finally expected to win their battle to take Dell (DELL) private today, with their buyout proposal of $24.9B set to receive shareholder approval. The vote comes after Carl Icahn gave up on his attempt to gain control of the company earlier this week. Yesterday, Dell set indicative pricing on a $5.5B loan that will help pay for the acquisition.
Top Stock News
America Movil in takeover talks with KPN. Has Carlos Slim's bluff been called? Slim's America Movil (AMX, AMOV), which owns 29.8% in KPN (OTCPK:KKPNY), is in negotiations over a full takeover of the Dutch telecom carrier. America Movil had offered €7.2B ($9.58B) to acquire the shares in KPN it doesn't own but threatened to drop the bid in response to the KPN foundation adopting a poison pill.
Hacker steals data of 2M Vodafone customers. A hacker has stolen the personal information of 2M Vodafone Germany (VOD) customers in the latest cyber-attack on a major corporation. The data accessed included names, addresses, dates of birth, gender, sort codes and account numbers, but not credit-card information, passwords and PIN numbers. Vodafone said the attack was only possible with "insider knowledge" of the company's IT infrastructure. Police have already identified a suspect and seized his assets. Vodafone shares were -0.6% premarket.
EU plan on roaming charges could lead to telecom consolidation - analysts . The EU's plan to scrap roaming charges for incoming calls from July 2014 and put a limit on other tariffs, which it announced yesterday, could reduce margins significantly and leave the telecom sector open to consolidation, analysts reckon. Companies that will be hit by the rules include Telefonica (TEF), Vodafone (VOD) and Orange (ORAN), and it makes you wonder whether AT&T (T) will still want to make acquisitions in the EU.
Vivendi to study break-up into two. Under pressure from shareholders, Vivendi (OTCPK:VIVHY) plans to explore a separation into two companies: one comprising its French phone unit SFR and the other an international media group made up of the the rest of its businesses - Universal Music Group, pay-TV firm Canal Plus and Brazilian broadband provider GVT. "The board agreed there were no synergies between telecoms and content, and that was dragging down Vivendi," said 5% shareholder Vincent Bollore.
Umpqua to buy Sterling Financial for $2B. Oregon-based Umpqua Holdings (UMPQ) has agreed to acquire Sterling Financial (STSA) for $2B in a cash-and-stock deal that will create the West Coast's largest community bank. Private-equity firms Warburg Pincus and Thomas H. Lee, which own a total of 41.6% in Sterling, support the transaction. The combined company will have $22B in assets, $15B in loans, $16B in deposits and almost 400 branches across five states.
Pandora rises after naming online ad veteran as CEO. Pandora (P) shares climbed 4.8% in post-market trading after the online music-streaming service named Brian McAndrews as CEO and Chairman to replace Joe Kennedy, who has been in the top job for nine years and announced plans to step down in March. McAndrews was the CEO of online ad agency aQuantive, which was acquired by Microsoft (MSFT) for $6B.
Tablets to overtake PCs in Q4. Shipments of tablet computers will outstrip those of PCs for the first time in Q4, research firm IDC predicts, saying that tablet deliveries will reach 84.1M units and PC shipments 83.1M. Those benefiting from the trend include Apple (AAPL) and Samsung (OTC:SSNLF), while those suffering include H-P (HPQ), Microsoft (MSFT) and Dell (DELL). The total market for Internet-connected devices of desktops, laptops, smartphones and tablets is projected to climb 28% to $622.4B in 2013 and then to $735.1B in 2015.
Zuckerberg: Facebook engagement stronger on mobile than PCs. Countering the view that matching Facebook's (FB) huge share of PC usage on mobile will be tough due to it being one of many installed apps on the latter type of devices, Mark Zuckerberg stated at TechCrunch Disrupt that Facebook accounts for 1/5 of user time spent on mobile (per comScore) vs its 1/7 share on PCs. Zuckerberg also spent a lot of time talking up Facebook's efforts to grow its developer ecosystem.
Top Economic & Other News
EU probes three countries over corporate-tax deals. The EU has reportedly opened an informal investigation into Ireland, Luxembourg and Holland over tax agreements they may have struck with multinational corporations. The probe comes amid a furor over how major companies such as Starbucks (SBUX) and Apple (AAPL) use the nations to limit their global tax bills. If Brussels finds wrongdoing, it could force the countries to collect lost revenue from any unlawful deals.
Alpha-Rich Stock Movers and Great Calls
1) On September 3, Tim Travis explained why Aeropostale (ARO) was a perfect fit for a private-equity buyout. The stock is +10.5% since. Read article »
2) On June 13, Money Investor highlighted Rentrak's (RENT) disruptive business model and growing market share. The shares are +22.8% since. Read article »
Alpha-Rich Stocks To Watch
1) Nintendo (OTCPK:NTDOY): Maybe Apple can't catch 'em all, but iOS 7's enabling of game controllers may take a bite out of Nintendo's high-performing 3DS. A 20-30% downside is possible. Read article »
2) Merge Healthcare (MRGE) suffered from a poor earnings report, but its long-term prospects are healthier than they appear. Colin King, whose call on Dolan Company (DM) is up 67%, sees a 50% opportunity. Read article »
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In Asia, Japan -0.3% to 14387. Hong Kong +0.1% to 22954. China +0.6% to 2256. India -1.1% to 1978
In Europe, at midday, London -0.4%. Paris -0.4%. Frankfurt -0.3%.
Futures at 6:20: Dow -0.1%. S&P -0.2%. Nasdaq -0.1%. Crude +0.35% to $107.94. Gold -1.6% to $1342.50.
Today's economic calendar:
8:30 Initial Jobless Claims
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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