Wall Street Breakfast: Apple Partners With Credit Card Providers For iPhone Wallet

by: Wall Street Breakfast
Wall Street Breakfast
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Japanese shares soared today, led by exporters and the yen slipping to a seven-month low against the dollar. Traders said a planned cabinet reshuffle by Prime Minister Shinzo Abe also supported sentiment. The Nikkei hit a seven-month high, climbing 1.2% to 15,668.60. The Topix rose 1.1% to 1,297, while the JPX-Nikkei Index 400 gained 1.1% to 11,763.89.

The European trade body in China has dismissed reports stating Beijing was planning to require foreign auto parts suppliers in the country to form local joint ventures. The rumors surfaced as Chinese regulators crack down on the country's auto industry, seeking to enforce a 2008 antitrust law. Last month, China issued $201M in fines against 12 Japanese companies for manipulating prices, while many foreign automakers have lowered their spare parts prices to appease local regulators.

The Markit Eurozone Manufacturing PMI released yesterday displayed the index falling to 50.7 in August vs. 51.8 in July and against a preliminary estimate of 50.8. "The slowdown in industry is likely to add further fuel to the fire for analysts expecting additional monetary or fiscal stimulus to be implemented," says Markit's Rob Dobson.

Russia's Energy Minister Alexander Novak has announced that Moscow and Kiev will hold a new round of talks revolving around their gas dispute on Sept. 6. The two are now awaiting the European Commission's decision whether their representative will join the negotiations.

Apple is planning a new partnership with major payment networks, including Visa (NYSE:V), MasterCard (NYSE:MA) and American Express (NYSE:AXP) to transform the next iPhone into a mobile wallet. The announcement follows earlier reports that the iPhone 6 will feature NFC and support a mobile payments platform. Along with a fingerprint recognition reader that debuted on Apple's (NASDAQ:AAPL) most recent iPhone, the NFC enabled device will be able to ensure secure payments.

McDonald's is raising the amount of audits it conducts at its suppliers in China, following July's food scandal which plagued the company's Chinese sales. McDonald's (NYSE:MCD) has also created a new food safety governance role in China and will launch a hotline by the end of the year to report issues of food safety. Pending an investigation by Chinese regulators, the company is still reviewing its relationship with parent OSI.

China's State Administration for Industry & Commerce has given Microsoft 20 days to respond to queries resulting from its investigation into the compatibility of its Windows operating system and Office software suite. At least 30 foreign companies have been recently probed by Chinese regulators as the government seeks to enforce a 2008 anti-trust law. Microsoft (NASDAQ:MSFT) says it is "serious about complying with China's laws and committed to addressing SAIC's questions and concerns".

Imperial Tobacco has closed approximately $13B of loans to finance its acquisition of several brands and assets of Reynolds American (NYSE:RAI). The financing covers the $7.1B acquisition of cigarette brands, Winston, Maverick, Kool, Salem and blu, which Reynolds wished to unload to clear the way for its merger with Lorillard (NYSE:LO). As part of the purchase, Imperial (ITYBY) will also take over Lorillard's national sales force, offices and production facilities.

EU regulators are now soliciting feedback from Facebook's (NASDAQ:FB) rivals and telecoms operators, after setting an Oct. 3 deadline to decide whether to clear the social network's $19B offer for WhatsApp. In a questionnaire sent to third parties, the EU competition watchdog asked if the deal would have a negative, neutral or positive impact on users of mobile messaging and social networks. U.S. regulators already gave the deal a green light in April.

Despite its first bid at T-Mobile USA being rebuffed, Iliad (OTC:ILIAF) says it is continuing to pursue a 56.6% stake of the mobile operator, and may now even partner with private equity funds to raise its offer. A report from Bloomberg last week announced that parent Deutsche Telekom (OTCQX:DTEGY) is open to holding talks to sell T-Mobile USA (NASDAQ:TMUS) at $35/share or more.

Telecom Italia is extending the deadline for completing the sale of its entire stake in Telecom Argentina (NYSE:TEO) to Sept. 25. The company agreed to sell the stake to Fintech for $960M last November. Meanwhile, Telecom Italia (NYSE:TI) might lose its investment from Telefonica (NYSE:TEF), following Chairman Cesar Alierta's announcement stating Telefonica will not want to remain a shareholder of Telecom Italia once it finalizes its deal for Vivendi's (OTCPK:VIVHY) GVT.

Founder Leonardo Del Vecchio is returning to lead Luxottica (NYSE:LUX) as executive chairman following the exit of CEO Andrea Guerra. Del Vecchio decided to replace Guerra following Guerra's rejection of his plans to take a more active role in the company and prepare it for his children. "When approaching 80, one must think about one's children: you can put in writing that succession plans had a determining role in the decision," says Del Vecchio.

Fending off a challenge from Under Armour, Nike (NYSE:NKE) will hold on to the Oklahoma City Thunder's Kevin Durant, signing him to a new deal possibly worth $300M over the next ten years, and $350M over the next 20. With Durant's original 7-year, $60M deal set to expire, Under Armour (NYSE:UA) had made an aggressive play for the superstar, but Nike had the right to match any offer as part of his previous contract.

Despite Akzo Nobel CEO Ton Buechner's cost cutting agenda, the chief exec is being singled out for a deal to buy Axalta Coating Systems for more than $7B. Bloomberg reports that Akzo Nobel (OTCQX:AKZOY) has not yet indicated if it will pursue the deal. Carlyle Group (NASDAQ:CG) purchased vehicle-coatings company Axalta from Dupont for $4.9B in February 2013 and filed for its IPO last month.

SoftBank says it will begin selling a humanoid robot named "Pepper", which is equipped with a laser sensor and 12 hours of battery life, at Sprint (NYSE:S) stores in the U.S. by next summer. The robot was originally targeted at families and the elderly before getting attention for business use since being unveiled in June. SoftBank (OTCPK:SFTBY) has developed Pepper with an open platform operating system, allowing customization for use in construction, health care and entertainment industries.

General Motors is readying production for cars with eye and head tracking technology that can tell whether drivers are distracted or alert them if they are not spending enough time looking in certain areas. The tracking devices will be provided by Seeing Machines (OTCPK:SEEMF), which has teamed up with Takata (OTCPK:TKTDY) to supply the equipment for up to 500K GM (NYSE:GM) vehicles over the next three to five years.

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Today's Markets:
In Asia, Japan +1.2% to 15669. Hong Kong flat at 24749. China +1.4% to 2266. India +0.6% to 27019.
In Europe, at midday, London +0.2%. Paris +0.4%. Frankfurt +0.9%.
Futures at 6:20: Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude -0.8% to $95.20. Gold -0.7% to $1278.50.
Ten-year Treasury Yield +5 bps to 2.39%

Today's economic calendar:
8:30 Gallup US Consumer Spending Measure
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
11:00 Global Manufacturing PMI
1:00 PM Gallup US ECI

Notable earnings before today's open: CONN

Notable earnings after today's close: AVNW, GWRE, PIKE, PRGN

See full real-time earnings coverage »

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