Wall Street Breakfast: Must-Know News

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.

Thai military chief General Prayuth Chan-ocha has imposed martial law as he looks to restore order following six months of sometimes violent and even deadly protests, which has brought the economy to the edge of recession. Chan-ocha's action comes amid a period of limbo for Thailand after a court dismissed Prime Minister Yingluck Shinawatra and nine ministers earlier this month for abuse of power. Thailand's SET stock index fell 1.1% today.

Credit Suisse has agreed to pay $2.6B and to plead guilty to helping U.S. citizens evade taxes. The plea is rare, with Credit Suisse (NYSE:CS) the first global bank in over a decade to admit to acting criminally in the U.S. Attorney General Eric Holder said the Swiss bank destroyed account records, hid transactions and "failed to take even the most basic steps to ensure compliance with tax laws." Notwithstanding, Credit Suisse's shares were +1.75% premarket.

A 13-judge Fifth Circuit Court of Appeals has confirmed lower-court rulings and rejected a BP (NYSE:BP) request to force claimants who want compensation for the 2010 Gulf oil spill to prove a direct link between the disaster and any losses they may have suffered. BP could now appeal to the Supreme Court. The company, which has so far taken a cumulative pretax charge of $42.7B for the spill, argues that forcing it to pay what it has said are "wholly fictitious" claims will cost it billions of dollars extra. Shares were -1% premarket.

Vodafone's FY EBITDA dropped 5.4% to £12.8B as revenue slipped 1.9% to £43.6B, with the carrier forecasting that FY 2015 EBITDA would fall to £11.4-11.9B. "Our operational performance has been mixed," says CEO Vittorio Colao. While Vodafone's (NASDAQ:VOD) "emerging-markets businesses have performed strongly," in Europe, the company continues "to face competitive, regulatory and macroeconomic pressures." Shares were -3.9% premarket.

Deutsche Bank has attracted over €20B worth of demand for its debut Additional Tier 1 paper, which is being sold in three tranches. Deutsche Bank (NYSE:DB) was planning to raise €3B-equivalent ahead of its annual meeting on Thursday. The debt adds to €8B of equity that the German bank issued over the weekend.

The European Commission has charged HSBC (NYSE:HSBC), JPMorgan (NYSE:JPM) and Credit Agricole (OTCPK:CRARY) with manipulating benchmark rates linked to the euro. The indictment comes after the EC slapped a record €1.7B ($2.3B) penalty on six banks last December for similar sins, including Deutsche Bank (DB), Royal Bank of Scotland (NYSE:RBS) and Citigroup (NYSE:C).

Jamie Dimon wants to remain as CEO of JPMorgan (JPM) for as many as five more years, Dimon has reportedly told investors. The new clarity is in contrast to comments Dimon made a year ago, when he hinted that he might leave the bank if shareholders voted to separate his roles of CEO and chairman. The report comes ahead of JPMorgan's annual meeting today.

JPMorgan and private-equity firm Lone Star are reportedly in the final stages of acquiring a portfolio of Spanish property loans from Germany's Commerzbank (OTCPK:CRZBF) for €3.7-3.9B (up to $5.4B). The assets comprise €1B of non-performing debt and €3.3B of performing loans backed by office blocks and shopping centers. The deal would be the latest in which foreign investors have been entering a property sector that suffered terribly from a massive bust during the financial crisis. JPMorgan's (JPM) shares rose 0.1% in AH trading.

China's Central Government Procurement Center has banned the use of Microsoft's (NASDAQ:MSFT) Windows 8 operating system on government systems, with Xinhua saying that the move is to ensure computer security after the company stopped supporting Windows XP. One wonders whether Microsoft is falling victim to a bit of tit-for-tat action after the U.S. accused five Chinese military officials of hacking into American nuclear, metal and solar companies to steal trade secrets.

London Stock Exchange is in exclusive negotiations with Northwestern Mutual Life Insurance to buy the latter's asset-management and stock index unit, Frank Russell, which could be reportedly worth $3B. The stock-index operations include the Russell 2000 barometer of small companies, while the investment business has $260B of assets under management. LSE's (OTCPK:LDNXF) shares were +0.45% in London at the time of writing.

Treasury Wine Estates has rejected a A$3.05B ($2.85B) offer from KKR (NYSE:KKR), saying that the A$4.70-a-share bid undervalues the Australian vintner. KKR's proposal follows a series of setbacks for Treasury (OTCPK:TSRYF), including poor U.S. sales that prompted the company to destroy thousands of gallons of wine last year. "KKR is looking to split it up, (and) clean up the U.S. business for an eventual trade buyer who can benefit from synergies," says portfolio manager Will Seddon.

Aeroflex has agreed to sell itself to British defense and aerospace firm Cobham (OTCPK:CBHMF) for $1.46B, including $540M of debt. Cobham is offering $10.50 a share for the U.S. wireless-communications company, which represents a premium of 26.1% over its close yesterday of $8.31. Aeroflex (NYSE:ARX) manufactures microelectronic components, measurement equipment and other parts for space, avionics and defense firms.

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Today's Markets:
In Asia, Japan +0.5% to 14075. Hong Kong +0.6% to 22835. China +0.15% to 2008. India +0.1% to 24377.
In Europe, at midday, London -0.5%. Paris -0.4%. Frankfurt -0.2%.
Futures at 6:20: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.1% to $102.71. Gold -0.2% to $1291.60.
Ten-year Treasury Yield -1 bps to 2.54%.

Today's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
12:30 PM Fed's Plosser: U.S. Economic Outlook

Notable earnings before today's open: AINV, DCI, DKS, EJ, HD, HGG, MDT, RRGB, SPLS, SSI, TJX

Notable earnings after today's close: ADI, CRM, HEI, INTU, TDW, VSAT

See full real-time earnings coverage »

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