JPMorgan loses $2B in six weeks on "egregious" blunder. JPMorgan (JPM) has reportedly held discussions with U.K. regulators after revealing that its Chief Investment Office, headed by "London Whale" Bruno Iksil, took $2B in losses from a failed hedging strategy and could take another $1B in Q2. The WSJ reports that the FSA wants to know how the losses occurred and how to prevent them in the future. Opinion: JPM's embarrassing trading loss.
Facebook IPO oversubscribed. Despite much speculation about soft institutional demand for Facebook's (FB) IPO, Reuters reports that it's already oversubscribed. Facebook may even raise the price range from its $28-$35 spread. Meanwhile, the FTC is investigating Facebook's acquisition of Instagram in a probe that could last a year, the FT reports. In a fast-moving industry, who knows what the world will look like then? Opinion: Beware the Facebook first-day trap.
Top Stock News
Telefonica profit plunges. Telefonica's (TEF) Q1 net profit slumped 54% to €748M, well below the consensus of €1.31B, while revenue rose 0.5% to €15.5B. Latin American operations made a strong contribution but couldn't compensate for weakness in Europe, particularly in Spain and Italy. Opinion: Accounting for falling margins at Telefonica.
Arena surges after FDA panel backs obesity drug. An FDA advisory panel has overwhelmingly voted to recommend that the agency approve Arena Pharmaceuticals' (ARNA) weight-loss drug lorcaserin. With an estimated 78M American adults suffering from obesity, it's not a surprise that Arena's shares ballooned around 90% postmarket, taking rival Orexigen 10.45% higher as well. Opinion: Weight loss battle heats up for investors.
Yahoo CEO denies falsifying his record. Yahoo (YHOO) CEO Scott Thompson reportedly told company executives yesterday that he didn't falsify his academic record, nor did he even submit a resume. An NYT review shows that while Yahoo filings and Thompson's corporate PayPal biography mention a phantom computer science degree, it doesn't appear in eBay filings or in those of two firms in which he is a director. Yahoo's restructuring will lead to new highs in 2013.
What are you talking about Mr Chambers? In contrast to the pessimism on Europe from Cisco (CSCO) CEO John Chambers, Intel (INTC) yesterday gave a rosier outlook at its annual meeting, saying it hasn't observed a slowdown in the region. "I don't see what he's seeing," said CEO Paul Otellini of Chambers' remarks. Intel was also fairly upbeat about PC sales, especially to emerging markets. Opinion: Intel: Opportunity or overvalued?
Chesapeake has $1.4B of extra debt. Chesapeake Energy (CHK) is saddled with $1.4B of previously unreported liabilities that are due over the coming years from off-balance sheet deals, the WSJ reports. The company has commitments to banks requiring delivery of specific amounts of oil and gas. These so-called VPPs are essentially debts, with payments due in fuel rather than cash. Opinion: Activist investor's letters fails to rally Chesapeake.
Top Economic & Other News
EU offers Spain deficit deal. The EU will let Spain delay its 2013 deficit target by a year, the FT reports, but the government will have to allow an independent audit of the bank sector's restructuring - which is set to be approved today - and ensure more fiscal control over the country's spend-happy regions. The EU today forecast Spain will anyway badly miss its deficit goals this year and next. Opinion: Banco Santander: Tantalizing value or high-risk investing?
EC: EU enters recession. The EU is in a "mild recession," the European Commission said today, with a recovery "forecast to set in slowly from the second half of the year on." The term "mild recession" doesn't really capture the misery being experienced in the periphery, does it. Eurozone GDP will contract 0.3% this year and expand 1% in 2013. Opinion: Greek exit fears are growing.
Chinese economy continues to slow. China had a data dump today and it doesn't look pretty by their standards, although it's growth the West would kill for. April inflation fell to +3.4% on year from +3.6%, but industrial production rose a less-than-expected 9.3%, the slowest since 2009. Retail sales growth also fell to a three-year low, while that for fiscal revenues plunged. The calls for easing get louder. Opinion: Don't count China out.
Germany out to stop ECB liquidity rush causing bubble. Germany's Bafin financial regulator is monitoring how the country's banks are using the ECB's cheap 3-year loans as it looks to prevent "a new bubble" occurring. Although Bafin can’t stop banks from making certain investments, it can use capital surcharges, demand continuous reporting and start special audits to try to keep things from heating up. Opinion: The ECB tamed spreads, but now what?
New Jersey puts health-insurance exchange on hold. New Jersey Governor Chris Christie has brought down the hammer on his state's effort to create a health-insurance exchange - as required under the Affordable Care Act - saying it should wait until the Supreme Court decides whether to uphold the landmark federal law. Opinion: Centene hits the managed care sweet spot.
In Asia, Japan -0.6%. Hong Kong -1.3%. China -0.6%. India -0.8%.
In Europe, at midday, London -0.6%. Paris -1.0%. Frankfurt -0.6%.
Futures at 7:00: Dow -0.6%. S&P -0.6%. Nasdaq -0.3%. Crude -1.21% to $95.91. Gold -1% to $1579.60.
Today's economic calendar:
8:30 Producer Price Index
9:15 Fed's Fisher: 'Texas Banking Conditions'
9:55 Reuters/UofM Consumer Sentiment
Notable earnings before today's open: NVDA
Notable earnings after today's close: IAG