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Anglo American walks away from Macarthur. Anglo American (OTCPK:AAUKY) has reportedly pulled out of advanced talks about making a counterbid for Macarthur Coal (OTC:MACDF). The move leaves the way open for Peabody Energy (BTU) and ArcelorMittal (MT), which have offered A$4.83B ($5.12B), or A$16 a share. China's Citic, owner of 24.5% in Macarthur, wants A$18 and is now considering how to facilitate a higher proposal. Peabody and Arcelor need 50.1% of shareholders to accept their bid, with the latter already owning 16.1%.

Boeing, Airbus vie for FedEx order. Federal Express (FDX) is in talks with Boeing (BA) and Airbus (OTCPK:EADSY) about multi-billion dollar orders for around 50 planes to replace its older fuel-hogging jets. FedEx's board may consider the issue at a meeting today, although a final announcement is not expected for a couple more months. In addition, FedEx’s movement on any deal may slow due to concerns about the economy and the dire situation at the U.S. Postal Service, for which FedEx is the largest contractor.

Doubt surrounds payroll tax cuts. Skepticism exists about the effectiveness of a main element of the jobs creation package that President Obama is due to present to Congress this evening - extending payroll tax cuts. Although, the measure could leave the average worker with an extra $1,000, it will cost the government $111.7B, so economist Martin Regalia doesn't think it's worth it. Meanwhile, a study from 24/7 Wall St. shows that presidential economic speeches before joint sessions of Congress have been largely ineffectual in moving policy or the economy.

Beige book: U.S. growing at modest pace. The U.S. economy is expanding at a "modest pace," the Fed's Beige Book reported, although "some areas experienced mixed or weakening activity." Five of the 12 Fed districts saw moderate growth, with the Philadelphia region "somewhat weaker." In addition, "stock market volatility and increased economic uncertainty led many contacts to downgrade or become more cautious about their near-term outlooks." Consumer spending grew, mostly as a result of stronger auto sales, but demand for other products was flat or fell in several regions.

Yuan to achieve "full convertibility" by 2015. Chinese officials have told EU business executives that the yuan will achieve "full convertibility" by 2015. If true, the move would be welcomed by the U.S. and EU, which have long complained that the currency is undervalued. Giving credence to the potential timeframe is an FT report that China will today formally support turning London into an offshore trading center for the renminbi. However, Standard Chartered's Stephen Green warns that 2015 sounds "a bit too early," especially given that global volatility "looks set to continue for the next few years."

BOE leaves rates unchanged. The Bank of England has left its benchmark interest rate at 0.5% and its Asset Purchase Program at £200B despite calls for more stimulus.

TI expected to reduce Q3 guidance. Analysts expect Texas Instruments (TXN) to cut its Q3 guidance when it gives a mid-quarter update, which is due today. Stifel Nicholas has lowered its estimates in advance, citing weak orders and pessimism regarding H2 demand. Still, Stifel maintained its Buy rating and a $37 price target; TI closed yesterday at $25.89. The Street has been predicting revenue of $3.54B and EPS of $0.60 for Q3.

Japan recovery stuttering. Disappointing economic data has placed further doubts on Japan's recovery from the March earthquake, especially given the high yen and a slowdown in global growth. The July current account surplus slumped an annualized 42.4% to ¥990.2B ($12.8B), with imports rising 13.6% month on month and exports falling 2.3%. Imports rose partly due to utilities ramping up purchases of non-nuclear fuel as reactors sat idle. Meanwhile, core machinery orders in July, a key indicator for corporate capital spending, dropped 8.2% on month, twice more than expected.

Libya ready to start oil output within two weeks. Libya will be able to restart oil production within two weeks, Oil & Finance Minister Ali Tarhouni said. Only 10%-20% of installations have been damaged during the six-month uprising, mostly due to vandalism and looting, while foreign companies have been encouraged to come back to Libya and recommence production. Rebel leaders have already told the firms that they will honor all existing contracts.

SEC braces itself for watchdog reports. The SEC inspector general is due to issue several reports this month related to allegations that the agency destroyed documents from preliminary inquiries; alleged conflicts of interest in payments to Bernard Madoff victims; the "revolving door" between the SEC and Wall Street; and the financial package offered to a former official. The findings could provide fodder for the agency's critics in Congress, particularly amongst the GOP, who want a radical overhaul of the SEC before it receives extra funding.

Amazon cuts deal with California over sales tax. Amazon (AMZN) has reached a tentative deal with Californian legislators that would enable it to postpone collecting sales taxes for another year, or until September 2012. In exchange, the company would drop its attempt to overturn the new state law that covers the issue. However, it's unclear whether Governor Jerry Brown supports the deal. Meanwhile, Adam Selipsky, the VP of Amazon Web Services, has told Reuters that the unit is profitable and will be for years to come.

Smithfield Q1 profit tops predictions. Smithfield Foods' (SFD) FQ1 adjusted EPS beat expectations and jumped 50% to $0.69, while revenue climbed 7% to $3.1B, boosted by increased sales in the company's pork segment and higher hog prices. Although Smithfield expects feed prices to continue to be elevated, the company has hedged its expenses for FY 2012 and sees "strong momentum."

IBM wins $1B renewal order with Vodafone India. IBM (IBM) has signed a contract extension reportedly worth $1B to manage the IT systems of Indian carrier Vodafone Essar (VOD) until 2017. The renewal marks a significant upgrade over the original deal, which was signed in 2007 and was worth $400M.

Today's Markets:
In Asia, Japan +0.3% to 8793. Hong Kong -0.7% to 19913. China -0.7% to 2499. India +0.6% to 17166.
In Europe, at midday, London +0.7%. Paris +0.7%. Frankfurt +0.9%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq +0.3%. Crude -0.35% at $89.03. Gold +1.1% to $1837.80.

Thursday's economic calendar:
8:30 Initial Jobless Claims
8:30 Trade Balance
10:00 Quarterly Services Report
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
1:00 PM Bernanke: Economic Outlook
3:00 PM Consumer Credit
4:30 PM Fed Balance Sheet
4:30 PM Money Supply
7:00 PM Pres. Obama to discuss jobs and economy


Earnings Results: Companies that beat EPS expectations last night and today include Smithfield Foods (SFD), Smith & Wesson (SWHC), Hovnanian (HOV). Those in line include AeroVironment (AVAV). Those that missed forecasts include SeaChange (SEAC), G-III Apparel (GIII). Full real-time earnings coverage here.

Notable earnings before Thursday's open: SFD

Notable earnings after Thursday's close: NSM

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Source: Wall Street Breakfast: Must-Know News