Argentina has sent a delegation to meet with court-appointed mediator Daniel Pollack in NY for last-minute talks to avert the country's second default in the last twelve years. An Argentine default would unlikely send shock-waves through emerging markets worldwide due to the country's isolation from the global capital markets, but it will hurt Argentina's domestic economy which already battles a recession and soaring inflation.
The oil tanker carrying 1M barrels of controversial Kurdish crude oil has been seized by U.S. marshals after U.S. Magistrate Judge Nancy Johnson issued an order and arrest warrant over the controversial cargo. The shipment will be moved ashore for safekeeping until the dispute is resolved. Kurdish officials have again been warned by the Iraqi government to stop the illegal exporting of crude from captured oil facilities in Iraq's north.
The U.S. and EU may place tougher sanctions on Russia as soon as today - aimed at the finance, defense and energy sectors of the country's economy. The EU, which is highly dependent on Russia's energy supplies, has not yet gone as far as the U.S. in hitting Russia’s $2T economy. Stock investors are pulling money out of Russia at an accelerating pace, with traders taking out $12.3M alone last week from the Market Vectors Russia ETF (NYSEARCA:RSX).
Following the New York Fed's examination of reporting and regulatory practices at Deutsche Bank (NYSE:DB), CFO Stefan Krause now says the bank will hire 500 employees in the U.S. to make sure its regulatory reporting complies with demands of local authorities. A letter sent from the New York Fed to Deutsche Bank (DB) was publicized last week stating that the bank suffered from several serious problems, including shoddy financial reporting and inadequate auditing.
Citigroup is planning to hire another 100 bankers to ramp up its commercial banking services in the Asia-Pacific region. The bank's new strategy will focus on small to medium-sized clients following its decline of business from high-value IPOs of Chinese state-owned companies. Citi (NYSE:C) will target firms with annual sales of between $10M to $500M with a wider range of financial products including services such as foreign exchange and cash management.
BP reports that Q2 net profits surged 65% Y/Y to $3.37B from $2.04B, boosted by high oil prices, but warned that more economic sanctions against Russia could hit performance. BP (NYSE:BP) added that its replacement-cost profit, the current accounting figure which excludes changes in the value of oil inventories, rose by almost a third to $3.18B. Production for Q2 fell 6% to 2.1M barrels a day, and the company highlighted that output would fall further in Q3 due to turnaround and seasonal maintenance activities.
Carlyle Group has entered advanced talks to acquire Acosta Sales and Marketing, a consumer goods marketing agency, currently owned by private equity group Thomas H. Lee Partners. The deal could value the latter at almost $5B including debt, and Carlyle (NASDAQ:CG) is likely to secure an agreement as early as this week. Carlyle is also currently involved with FleetCor Technologies (NYSE:FLT) for another big acquisition - a $3B takeover of Comdata.
KKR's next step to take full control of Germany-based WMF, a provider of cutlery and coffee machines, will be backed by a €600M leveraged financing loan. KKR (NYSE:KKR) already owns a 72% stake in WMF. Commerzbank (OTCPK:CRZBY) and Deutsche Bank (DB) are leading the debt financing to fund the deal which is due to be launched for syndication to investors after the summer.
Chinese regulators are investigating Microsoft over anti-monopoly concerns, saying the firm did not fully disclose information about its Windows operating system and Microsoft Office (NASDAQ:MSFT) application. China's State Administration for Industry & Commerce is additionally probing the company's vice president and senior managers, and has made copies of the firm's financial statements and contracts.
Aecom Technology is expected to announce its purchase of Hunt Construction today, a construction-management company that specializes in stadium work. The new acquisition is Aecom's (NYSE:ACM) second big purchase in two weeks, after buying URS (NYSE:URS) for $4B in cash and shares on July 14. With the new additions of Hunt and URS, Aecom's workforce will reach 95K in 150 countries and generate annual revenue of about $20B.
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In Asia, Japan +0.6% to 15618. Hong Kong +0.9% to 24641. China +0.2% to 2183. India -0.5% to 25991.
In Europe, at midday, London +0.2%. Paris flat. Frankfurt +0.1.
Futures at 6:20: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude flat at $101.63. Gold +0.4% to $1310.40.
Ten-year Treasury Yield -2 bps to 2.47%
Today's economic calendar:
FOMC meeting begins
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
1:00 PM Results of $35B, 5-Year Note Auction
Notable earnings before today's open: ACI, AET, AGCO, AIXG, AKS, ALLY, AMAG, AMG, ARW, AUDC, AVX, AXE, BP, CARB, CAS, CNX, CPLA, CRS, CVLT, CYNO, DIN, DSX, ECL, ENTG, ETN, ETR, FDP, FIS, FSS, GLT, GLW, GNC, GTI, HCA, HMC, HRS, HW, ICON, IP, IPGP, ITW, KLIC, LVLT, MDC, MDSO, MDXG, MHFI, MLM, MMC, MRK, MSO, NCI, NEE, NLSN, NMM, NOV, NYT, OSK, PCAR, PFE, POR, RAI, RYN, SAVE, SIRI, SNCR, ST, TLM, TRW, UAM, UBS, UBSI, UDR, UPS, UTHR, VSH, WDR, WM, WYNN, XYL, YNDX
Notable earnings after today's close: ACHC, ACMP, AEC, AEGN, AEGR, AFL, AJG, AMCC, AMGN, AMP, APC, APU, ARI, AXP, AXS, BGFV, BLDP, BOOM, BWLD, BXP, CALX, CAP, CBG, CBL, CEB, CEMP, CHMT, CHRW, CINF, CLD, CLMS, CPWR, CRAY, CSLT, CVD, DLR, DOX, DWA, EEFT, EQR, ESRX, EW, EXAM, EZPW, FARO, FBP, FISV, GAS, GNW, GPN, GPRE, HTA, HURN, IGT, INAP, INVN, IPHI, IVR, KIM, LNDC, MAR, MOVE, NATI, NCR, NEM, NEU, NFX, NTRI, NUVA, PEI, PLT, PNRA, QGEN, RBC, RGR, RKT, RNG, RNR, ROG, RPXC, RT, RUBI, SB, SLCA, SM, SQNM, TMH, TRN, TWTR, TX, UGI, ULTI, USNA, VRSK, VRTX, WNC, WSH, WTS, X, XCO, XPO
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