Wall Street Breakfast: Must-Know News

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 |  Includes: GM, QQQ, RWEOY, SFTBF, SHLD, SINA, SPY, VOD, YHOO
by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Economy
Quickly condemned by the U.S. as an illegal referendum, the overwhelming majority of Crimeans Sunday voted to secede from Ukraine and join Russia. Speaking to Russian President Putin, President Obama said the vote took place "under duress of Russian military intervention," and no diplomatic solution was possible amid "large-scale Russian military exercises on Ukraine's borders." A first round of sanctions could come as early as today, and EU leaders will meet to discuss their own. Next up? Will Russia move quickly to annex Ukraine or bide its time to allow for negotiations?

China doubled the yuan's trading band, now allowing the currency to move as much as 2% on either side of the daily central bank setting. The last such widening occurred about 2 years ago, when the band was widened to 1% from 0.5%. Not unexpected, this weekend's move continues a PBOC policy of trying to signal the end of one-way bets on the yuan. While volatility may increase, widening of the band has little meaning, says Bank of America's Lu Ting, as long as the central bank still sets a daily fix.

U.K. house prices hit a fresh record high this month, according to online agency Rightmove, which reported a 1.6% monthly gain and 6.8% annual rise in the average asking price on its site to £255,962. Kick-started by government programs and low interest rates, the recovery in the housing market is expected to continue thanks to tight inventory. "There is a greater sense of urgency among buyers," says Rightmove's Miles Shipside.

Stocks
Consolidation continues in Europe's fragmented telecom sector, with Vodafone (NASDAQ:VOD) inking a deal to buy Spanish cable company Ono SA for €7.2B ($10B). The U.K. player will assume Ono's €3.34B in debt and pay the rest in cash to Ono's shareholders. The planned Ono IPO approved just last week will obviously be preempted. Vodafone has struggled competing with Spanish telecoms offering bundled packages of high-speed home Internet, pay-TV, and cell phone service, but the Ono purchase will give it a much-needed fixed line operation.

Alibaba confirms reports of its intention to carry out its IPO in New York instead of Hong Kong. The Internet giant could reportedly raise more than $15B, which would make it the largest IPO ever by a Chinese company, and its market cap could start off at over $130B. Neither a date nor which exchange will win the listing have been decided upon yet. "A mix of Amazon, eBay and PayPal with a dash of Google thrown in," says the WSJ, describing the company, with "some uniquely Chinese characteristics." Among the investors expected to cash in on an IPO are Yahoo (NASDAQ:YHOO) and Softbank (OTCPK:SFTBF).

German utility company RWE AG agrees to sell its Dea oil and gas production unit to Russian billionaire Mikhail Fridman's L1 (LetterOne) Energy in a deal valued at about $7.1B. The move would give L1 energy assets in the U.K., Germany, and the North Sea, and RWE (OTCPK:RWEOY) much-needed cash after reporting its first full-year loss since WWII. The purchase is the first for L1, which has earmarked up to $10B for investments after the $14B Fridman and co-investor German Khan raked in from the sale of their stake in the TNK-BP oil venture. RWE is up 2.1% in Frankfurt action.

Sears' board approved the spin off of Lands' End to take place on April 4. Sears (NASDAQ:SHLD) owners of record as of March 24 will receive 0.3 shares of Lands' End - to trade on the Nasdaq under the symbol "LE" - for each share of Sears they hold. Prior to the spin, Lands' End will pay a debt-financed $500M dividend to Sears. The clothing business is the latest asset sale by Sears as it deals with mounting losses in its core operations.

General Motors has been sued for $6B-$10B over the faulty ignition switches which led it to recall 1.6M cars. Plaintiff lawyer Bob Hilliard said the lawsuit is about the fall in value of the vehicles rather than any deaths caused by the defect. Hilliard also believes GM shouldn't be protected from any problems stemming from before its bankruptcy, with the argument being that the company knew about the defect as it was going through Chapter 11 but didn't reveal it. "If you are aware of potential exposure to litigation and you don't reveal it, that's fraud," he said.

Chinese micro-blogging service Weibo has filed to raise $500M in a U.S. IPO. The company had 129M users at the end of last year vs. Twitter's 241M, but revenues are further behind, with Weibo bringing in $188M or $1.66 per user in 2013 against Twitter's $665M or $3.12 per user. A big deal in China's major, more cosmopolitan cities, Weibo now faces the challenge of breaking into the country's smaller, less tech-savvy burgs. There's also the censorship issue. Alibaba - planning its own U.S. IPO - is a 19% owner of Weibo. Sina (NASDAQ:SINA) owns 78%.

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Today's Markets:
In Asia, Japan -0.4% to 14278. Hong Kong -0.3% to 21474. China +1% to 2024. India closed.
In Europe, at midday, London +0.4%. Paris +0.7%. Frankfurt +0.6%.
Futures at 6:20: Dow +0.6%. S&P +0.6%. Nasdaq +0.7%. Crude -0.3% to $98.31. Gold flat at $1,379.
Ten-year Treasury Yield +3 bps to 2.68%.

Monday's economic calendar:
8:30 Empire State Mfg Survey
9:00 Treasury International Capital
9:15 Industrial Production
10:00 NAHB Housing Market Index

Notable earnings before Monday’s open: HNR, JASO, KIOR, LMIA, TNP

Notable earnings after Monday’s close: FF, GERN

See full real-time earnings coverage »

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