By Yigal Grayeff and the Market Currents team
Sara Lee unit looks to sell $4.6B of shares in Dutch IPO. DE International, Sara Lee's (SLE) coffee and tea business, intends to sell up to $4.6B of shares in its IPO on the Amsterdam stock exchange, which it plans to undertake by mid-2012. Following the spin-off, Sara Lee shareholders will receive a $3 special dividend, and the company expects to release nearly $700M of deferred tax liabilities.
Japan deflation remains deeply rooted. Japanese January core CPI fell 0.1% on year vs. -0.1% in December and -0.2% expected, with the decline the fourth in a row. "The data reconfirm Japan’s deflation is deeply rooted," JP Morgan economist Masamichi Adachi said. Still, at least unemployment remains under control. While the jobless rate rose to 4.6% from 4.5% in December and topped expectations, the government attributed the increase to more new jobseekers entering the market.
Chu confident that world can make up for lost Iranian oil. There's enough spare capacity to make up for any Iranian oil that's lost to sanctions, U.S. Energy Secretary Steven Chu said yesterday. That's despite EIA data that shows it would be a close run thing. President Obama has until the end of the month to make a final determination on whether Chu is correct. Meanwhile, oil futures were -0.5% premarket as the market bought into a Saudi denial of a reported pipeline explosion in its Eastern province.
Investors seek to stop Empire State IPO. Investors in Empire State Realty Trust (ESB), the owner of the namesake building, are suing to halt the company's planned IPO, claiming the offering only benefits the Malkin Family, which controls the trust. The current IPO terms include a dual-class share structure in which the Malkins would receive Class B shares that are worth 50 votes a share.
EU leaders sign fiscal compact. Twenty-five of 27 EU leaders signed the new EU fiscal treaty - ominously titled Treaty on Stability, Co-ordination & Governance in the Economic & Monetary Union - at today's summit. Left out were the U.K. and the Czech Republic. The treaty now goes to the various parliaments for their approval.
ECB money goes round in circles. Commercial banks parked a record €777B ($1.03T) with the ECB overnight, with the paltry 0.25% interest rate they received below the 1% they're paying on the €1.2T in LTRO loans they've taken, and the almost 1% they could get on the open market. The deposits at the ECB highlight the continued lack of trust between European banks.
Barclays borrows €8.2B of cheap loans from ECB. Barclays (BCS) tapped LTRO II for €8.2B, an unexpected move as it had indicated it had no plans to take any funds and it didn't borrow any cash at the previous offer in December. Barclays intends to use the money to manage funding gaps in Spain and Portugal.
Deutsche Bank board rejects €800M settlement over Kirch. Deutsche Bank's (DB) board has refused to approve a proposed €800M settlement over decade-old claims that a former CEO helped drive German media company Kirch Group into bankruptcy. The decision is a rebuke to current CEO Josef Ackermann, who brokered the deal, and means litigation that has already cost the two sides around €100M will continue.
Peugeot may eventually build GM cars. GM (GM) cars may be assembled at Peugeot's (OTCPK:PEUGY) factories as part of the companies' alliance, although it wouldn't occur before 2016, Peugeot CEO Philippe Varin said today. Following much criticism of the deal, GM Vice Chairman Stephen Girsky defended it as being a low-risk venture that could lead to a broader agreement later.
Turbulence to continue for shipping industry. The shipping industry faces a "crisis" year in 2012, Andrew Broomhead, the CFO of Hong Kong operator Pacific Basin, has warned. The sector must grapple with a lack of funding, an oversupply of ships, and freight rates so poor that the Baltic Dry Index is already -56% YTD.
BofA denies plans to impose new fees. Bank of America (BAC) has denied reports that it is testing plans to charge customers for keeping a checking account. "Media reports this morning provided inaccurate information. (BofA) is not planning to increase checking account fees with our existing customers," the bank said yesterday. Perhaps Senator Dick Durbin, one of the bank's harshest critics, will be satisfied.
Gross promotes new "mom-and-pop" ETF. Bill Gross has taken to the airwaves to pump Pimco's highly anticipated Total Return ETF (TRXT), which was launched yesterday. One advantage of this "mom-and-pop" type of offering, Gross said, is that the fund yields 3.5% as opposed to the 2% on funds indexed to the market.
In Asia, Japan +0.7% to 9777. Hong Kong +0.8% to 21562. China +1.4% to 2461. India +0.3% to 17637.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt -0.1%.
Futures at 7:00: Dow -0.1%. S&P -0.2%. Nasdaq -0.1%. Crude -0.5% to $108.29. Gold -0.2% to $1718.40.
Friday's economic calendar:
8:30 ISM New York Business Index
8:00 PM Fed's Bullard: 'The U.S. Economy in the Aftermath of the Financial Crisis'
Earnings Results: Companies that beat EPS expectations last night and today include Ascena Retail Group (ASNA), Foot Locker (FL).
Those that missed forecasts include Tutor Perini (TPC).
For full real-time earnings coverage, please click here.