Some of Russia's largest companies are starting to move their cash reserves to Asian banks as worries surface that Russia could eventually be completely shut out of U.S. dollar funding markets. Yesterday, the EU adopted its toughest Russian sanctions to date, including heavy restrictions on the country's financial markets, energy industry and a complete embargo of the arms trade between the two.
Fed policy jitters, sanctions on Russia, Argentina's default, deflation worries in Europe and a batch of weak earnings sent the Dow and S&P 500 plunging to finish their first monthly drop since January. Declines continued this morning as European shares fell for the third straight day and heavy losses plagued Asian stocks.
Negotiations over the World Trade Organization’s Trade Facilitation Agreement collapsed after its midnight deadline passed without India's full agreement to the pact. The deal's failure calls into question the ability of the WTO to serve as a forum for international accords as well as its status as an arbiter of trade disputes. The WTO estimated that the deal would have added more than $1T to the world economy by reducing the red tape at international borders.
France's Iliad says it has obtained financing for its $15B bid for T-Mobile USA (NASDAQ:TMUS) from BNP Paribas (OTC:BNPZY) and HSBC (NYSE:HSBC). Iliad (OTC:ILIAF) is offering a price of $33/share for a 56.6% stake of the company, and says that its bid values the other T-Mobile shares it won't own at $40.50. The newly announced offer still seems less attractive than Sprint's (NYSE:S) ~$40/share bid, but may stand strong due to Sprint's regulatory hurdles.
Judge Loretta Preska has ruled that Microsoft must turn over a customer's emails stored in a data center in Ireland to the U.S. government, following the company's refusal to do so due to privacy concerns. AT&T (NYSE:T), Apple (NASDAQ:AAPL), Cisco (NASDAQ:CSCO) and Verizon (NYSE:VZ) have all backed Microsoft's (NASDAQ:MSFT) objection to handing over the information, as they are concerned about a heavy revenue loss if customers fear their data is subject to seizure by U.S. investigators anywhere in the world.
Fiat shareholders are expected to approve a deal today over the Italian automaker's merger with its U.S. unit Chrysler. The merger will incorporate Fiat (FIATY) and Chrysler as a Dutch-registered company called Fiat Chrysler Automobiles, and will pave the way for a U.S. share listing. A two-thirds majority vote is needed to approve the deal.
MacRumors reports that the iPhone 6 launch date may now have been pushed over to Apple's (AAPL) "incredibly busy" month of October - citing a source knowledgeable about an internal Apple Retail Store meeting. Prior reports suggested that the new mobile-device would begin selling in September, although it now seems that Apple will only make its release date announcement in September, and begin selling the iPhone 6 in mid-October.
Southwest Airlines and SeaWorld are terminating their 26-year-old marketing relationship which will end at the close of this year. The announcement comes after Southwest (NYSE:LUV) felt continuing pressure from animal-rights activists to end its relationship with SeaWorld (NYSE:SEAS) due to animal cruelty. The airline however maintains it was strictly a business decision. "Southwest and SeaWorld mutually determined that we wanted to redirect resources in other directions," says Southwest spokeswoman Marilee McInnis.
Mobileye's IPO has been priced at $25 per share, valuing the road-safety technology company at approximately $5.3B. Mobileye (NYSE:MBLY) will raise about $208.3M from the offering, and shares will begin trading this morning on the NYSE. The Israeli company's collision-avoidance technology is used in more than 3M vehicles made by BMW (OTCPK:BAMXY), GM (NYSE:GM), and Tesla (NASDAQ:TSLA). Out of the 35.6M shares being offered, Mobileye is selling 8.33M while the rest are being sold by shareholders.
Petrobras shut production at one of its offshore oil platforms after a spill and fire broke out during maintenance. Petrobras (NYSE:PBR) says the fire occurred at the PNA-1 platform in the Namorado oil field during repairs and was extinguished. The platform, which produces ~2,400 bbl/day of oil, is one of the company's oldest and is undergoing repairs; it was the second fire at the platform in three months.
LyondellBasell has suspended purchases of Iraqi crude until further notice after coming under fire for buying modest quantities of the controversial oil over the last few months. "This Iraqi crude is apparently now the subject of an ownership dispute," says LyondellBasell (NYSE:LYB). "We have cancelled further purchases and will not accept delivery of any of the affected crude until the matter is appropriately resolved."
Several hundred claims against GM are expected to be filed this morning, as the automaker begins accepting claims for its faulty ignition switch compensation program. GM (GM) has set aside $400M for payouts, although the total amount of awards is not capped and could increase. Lawyers are willing to give the program a chance, since it does not stop them from suing GM while waiting to see how much of a payout they would be entitled to. However, plaintiffs that take a payout must drop their lawsuits.
Alpha Natural Resources announces plans to downsize its West Virginia mining operations, citing continuing weak markets, and current and impending EPA regulations that are weighing on central Appalachian operations. Alpha Natural Resources (ANR) is expected to cut ~1,100 jobs at 11 West Virginia surface mines, which produced 4.2M tons of thermal and metallurgical coal through H1 of this year.
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In Asia, Japan -0.6% to 15523. Hong Kong -0.9% to 24532. China -0.7% to 2185. India -1.6% to 25481.
In Europe, at midday, London -1.4%. Paris -1.4%. Frankfurt -2%.
Futures at 6:20: Dow -0.6%. S&P -0.7%. Nasdaq -0.7%. Crude -1% to $97.21. Gold +0.3% to $1286.10.
Ten-year Treasury Yield +2 bps to 2.58%
Today's economic calendar:
8:30 Nonfarm payrolls
8:30 Personal Income and Outlays
9:45 PMI Manufacturing Index
9:55 Reuters/UofM Consumer Sentiment
10:00 ISM Manufacturing Index
10:00 Construction Spending
11:00 Global Manufacturing PMI
Notable earnings before today's open: ALE, ARNA, AXL, BKW, CBM, CBOE, CHD, CLX, CPN, CVX, ENB, GVA, GWR, HCN, HLT, HPY, HTCH, IMGN, KCG, MGI, MT, NGLS, NSP, OMG, PG, PNM, RUTH, SPR, TDS, TESO, THRM, USM, WETF, WY, XLS
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