Debt impasse sends gold to another record. Spot gold has risen to another record high of $1,624.30 an ounce and the dollar has fallen to another record low against the Swiss franc as Democrats and Republicans pursue rival plans to lift the debt ceiling and lower debt after weekend negotiations again failed to bring an agreement. The sides are divided over how much to increase the limit by and how much to cut spending, with the Republicans proposing a more modest, short-term plan. However, it's not clear either program would persuade ratings agencies to maintain the U.S.'s AAA status.
Moody's cuts Greece to just above default. Moody's has cut Greece's ratings three notches to Ca and left it just one notch above default, which the agency said is "virtually 100%" likely to occur. Moody's said bondholders will suffer "substantial" losses on their Greek debt, although a report in Die Welt said German financial firms were prepared to accept a far higher write-down than the 21% eventually agreed to. At that level, Deutsche Bank (NYSE:DB) will actually show a profit on its holdings.
TI Q2 earnings predicted to fall. Texas Instruments (NYSE:TXN) is due to report its Q2 earnings after the bell, with EPS forecast to have fallen to $0.54 from $0.62 a year earlier and revenue to $3.44B from $3.5B. Declining Nokia (NYSE:NOK) orders will have played a big part, which, along with chip inventory concerns, has led TI to underperform Nasdaq by about 10% this year. Investors will look for signs TI is executing on its plans for analog chip dominance, fueled by a cutting-edge manufacturing facility and the firm's pending acquisition of National Semiconductor (NSM).
IPO market heats up. Dunkin' Brands Group (NASDAQ:DNKN) is set to be the largest of 11 IPOs this week in what could be the busiest week in nearly four years. Dunkin' plans to raise up to $400M on Nasdaq, although its food business doesn't provide the high growth Internet IPOs offer. Two other listings considered worth watching are those of C&J Energy Services (NYSE:CJES), which provides hydraulic-fracturing services for oil and gas, and defense firm ADS Tactical (ADSI).
Jefferson faces bankruptcy on sewage bonds. Jefferson County - home to Birmingham, Alabama - could late this week decide to file the largest municipal bankruptcy in U.S. history. Jefferson's distress comes from the Wall Street enabled borrowing to finance the "Taj Mahal of sewer-treatment plants" during the credit bubble, a scheme memorably chronicled by Rolling Stone's Matt Taibbi.
Samsung may top Apple in smartphone sales. Samsung (OTC:SSNLF) is estimated to have sold 18M-21M smartphones in Q2, which could put it beyond Apple's (NASDAQ:AAPL) sales of 20.3M and make it the sector leader. The estimates from Strategy Analytics show how Google's (NASDAQ:GOOG) Android OS - used in Samsung's Galaxy handset - has gained ground on the iPhone and highlights the high stakes involved in the patent disputes between the companies. Separately, Samsung plans to raise investment in memory chips this year despite economic uncertainty hitting component demand.
Bank of Ireland to receive €1.1B private investment. The beleaguered Irish banking system is set to receive a boost after private investors committed to buying €1.12B ($1.61B) in Bank of Ireland (NYSE:IRE) shares. The cash injection will lead to the government's stake falling to 15%-32% from 36% currently and save more taxpayer money from being funneled to the bank. It will also help Bank of Ireland meet requirements to raise €5.2B in new capital and buffer reserves by the end of July to cover future loan losses.
Iran, China discuss barter system. Iran and China are reportedly in negotiations about using a barter system to allow the latter to pay for up to $30B of oil debt with goods and services. The talks come as U.S. sanctions have made it extremely difficult to conduct dollar-denominated business with Iran. Another big debtor is India, which owes $5B, but unlike China doesn't have a major trading relationship with Iran.
TD Ameritrade to weigh E-Trade acquisition. TD Ameritrade (NASDAQ:AMTD) will reportedly discuss buying rival online-brokerage E-Trade Financial (NASDAQ:ETFC) at a board meeting tomorrow. The proposed discussion was prompted by a major E-Trade shareholder last week saying the company should consider selling itself. E-Trade is now exploring its options, although potential suitors could be put off by the company's troubled holdings of mortgage securities.
ING to sell Latin American insurance ops for €2.7B. ING (NYSE:ING) is to sell most of its Latin American insurance and investment management operations to Colombia's Gruposura de Inversiones Suramericana for €2.68B ($3.86B). The sale is the first major step in the divestment of ING's insurance and investment management activities as the Dutch bank complies with EU conditions for receiving a €10B state bailout in 2008.
Lloyds branch auction disappoints. Lloyds (NYSE:LYG) is reportedly considering the flotation of a portfolio of 632 branches after it received only two formal bids ahead of the first deadline for the assets. Moreover, one of the bids, from Co-op, was described as "lackluster," while its viability was questioned following the departure of Co-op's CEO on Friday. A major reason for the lack of offers is a £20B-£30B ($32.6B-$48.8B) funding gap. Lloyds may receive over £2B for the branches.
P-E firms to bid for Regions' brokerage ops. Regions Financial (NYSE:RF) is expected to today receive offers from several private equity firms for its Morgan Keegan brokerage unit, sources said. Blackstone (NYSE:BX), Stifel Financial (NYSE:SF) and Apollo (NYSE:APO) are among those likely to bid for Morgan Keegan, which has a book value of about $1.5B. The deadline comes a day before Regions reports its Q2 results.
Earnings Results: Today Premarket
In Asia, Japan -0.8% to 10050. Hong Kong -0.7% to 22293. China -3.0% to 2689. India +0.8% to 18871.
In Europe, at midday, London -0.2%. Paris -0.2%. Frankfurt -0.1%.
Futures at 7:00: Dow -0.8%. S&P -0.75%. Nasdaq -0.6%. Crude -1.1% to $98.75. Gold +1% to $1618.20.