Japanese economy grows 4.1% but can it last? Japan's Q1 GDP rose at an annualized clip of 4.1% and outstripped consensus of 3.5%, driven by a strong rebound in exports and by post-earthquake reconstruction spending. However, this means that the expansion - which is high compared with Japan's moribund developed peers - may well be unsustainable. Opinion: Take a bullish stance on Japanese equities.
Wal-Mart tops forecasts. Wal-Mart's (WMT) Q1 EPS of $1.09 beat by $0.05. Revenue grew 8.6% to $112.3B and beat by $1.8B. Expects Q2 EPS of $1.13-$1.18 vs. consensus of $1.16. Shares were +1.5% premarket. Opinion: Wal-Mart is a bargain at $58.
JPM trading loss grows by 50%. Following JPMorgan's (JPM) massive trading loss, which the NYT says has grown to $3B, the White House has intensified talks with the Treasury about ensuring a tough interpretation of the Volcker Rule, the WSJ reports. The trouble is, even if JPM violated the spirit of Volcker, it may have found a legal way to work around the fine print. Opinion: Do the banks have a stranglehold on policy?
Top Stock News
SEC probes Dendreon, possibly over Provenge. Dendreon (DNDN) yesterday confirmed that the SEC has opened an investigation, which could be connected to lawsuits accusing the company of misleading investors over Provenge. While Dendreon had initially been bullish about the prostate-cancer treatment, it shocked the market in August 2011 when it said that adoption was slow and it cut its revenue forecast. That caused Dendreon's stock to plunge over 65% in one day. Opinion: For Dendreon, a little light but a lot of tunnel.
RBC, Credit Suisse bid for $2B BofA unit. Royal Bank of Canada (RY) and Credit Suisse (CS) are among the suitors who have made initial offers for Bank of America's (BAC) non-U.S. wealth-management business, Reuters reports. The unit, which could fetch around $2B, is being auctioned off because BofA reportedly considers it too small to produce meaningful profits. Opinion: Royal Bank of Canada is well-positioned.
Boyd shares buoyed by $1.45B Peninsula bet. Boyd Gaming (BYD) plans to acquire Peninsula Gaming for $1.45B in a deal that will add five new casino properties at locations in Iowa, Kansas, and Louisiana. Under the agreement, Boyd will make an additional payment in 2016 if the Kansas property's EBITDA exceeds $105M in 2015. Boyd shares climbed 5.2% post-market. Opinion: Bullish thoughts on casinos.
Southwest to save $1B by delaying 737 deliveries. Southwest Airlines (LUV) has deferred the deliveries of 30 Boeing (BA) 737-800 jets by four years, saving over $1B as it extends a cap on its fleet size and works to curb rising costs until it hits its financial targets. Although travel demand is strong, Southwest CEO Gary Kelly wants to slow growth until the airline achieves a 15% return on invested capital. Opinion: No reason to own Southwest at these prices.
HSBC on track with $3.5B cost-cutting program. HSBC (HBC) today said it's on track to meet the top end of its goal of slashing up to $3.5B in costs by the end of next year. The bank is also doubling its target to $2B for generating extra revenue from increased cooperation between its businesses. Opinion: Finding high yields in global bank stocks.
Pinterest: 20M users, little revenue, worth $1.5B. Silicon Valley's latest darling, Pinterest, has raised $100M at a valuation of $1.5B, the WSJ reports. That's up from $200M in the start-up's last funding round in late 2011. The company, which operates an online scrapbooking Web site, has 20M users compared with 1M in July, but is hazy on how it will increase the little revenue that it generates. Opinion: Why internet companies are less than ideal investments.
You know what is almost here. Four months after it initially filed to go public, the biggest tech IPO in history is almost upon us. Facebook (FB) is due to price the offering tonight and start trading tomorrow. While the company was initially reluctant to list, by all accounts, investor response has been "nothing short of pandemonium," says one CNN source. Opinion: Placing a value on Facebook.
Top Economic & Other News
Big banks need to plug $566B hole to meet Basel III - Fitch. The world's 29 largest banks will need to raise another $566B in capital by 2018 to meet tougher Basel III standards, Fitch has estimated. The amount represents a 23% increase on what banks held at the end of 2011, or roughly equivalent to three times their combined annual earnings. U.S. banks will be hit particularly hard by the relative capital requirements for risky activities. Opinion: How simple rules can mitigate risk.
The Fed chews the fat over guidance. The FOMC discussed providing greater clarity about the conditions that might trigger a change in monetary policy, the latest minutes show. Justin Wolfers of the National Bureau of Economic Research is skeptical: "We have a plan. We don't plan to follow it. But our plan to revise our plans isn't a plan either...(it's) painfully clear that forward guidance is mostly (baloney)." Opinion: Central bank distortion damages risk measures.
In Asia, Japan +0.9%. Hong Kong -0.3%. China +1.4%. India +0.3%.
In Europe, at midday, London -1.1%. Paris -0.9%. Frankfurt -0.7%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq -0.1%. Crude flat at to $92.84. Gold +0.7% to $1547.10.
Today's economic calendar:
8:30 Initial Jobless Claims
10:00 E-Commerce Retail Sales
10:00 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
12:35 PM Fed's Bullard: 'U.S. Economy and Monetary Policy'
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: AAP, CSC, CTC, DLTR, GME, LONG, PCP, ROST, SHLD, WMT