PBOC cuts interest rates. The People's Bank of China has lowered its benchmark lending and deposit rates by 25 basis points to 6.31% and 3.25% respectively. In another easing move, banks will be allowed to offer loans at a 20% discount from the benchmark rate, whereas before they were allowed just 10%. The rate cuts have sent equity securities in Europe and the U.S. higher, while crude has turned from red to green (see below). Opinion: Will the ECB and Fed follow where China leads?
All change at the top. General Dynamics (GD) and Samsung (SSNLF.PK) are among a number of companies that have announced CEO changes. GD has appointed COO Phebe Novakovic to replace Jay Johnson, while Samsung has named Kwon Oh-hyun, who runs its chip and LCD units, to replace Choi Gee-sung. Ruby Tuesday's (RT) Sandy Beall is stepping down, while Tuesday Morning's (TUES) Kathleen Mason has been fired. Opinion: Samsung bets big on mirrorless digital cameras.
Bernanke the focus as Fed easing talk gets louder. Ben Bernanke is due to testify before the Joint Economic Committee of Congress today, when he'll be watched for indications that further easing may be on the way. Bernanke's appearance follows three Fed officials, including Vice Chair Janet Yellen, yesterday saying that the bank might need to take further action to support growth. Opinion: Are we backsliding to a double dip?
Top Stock News
Larry Ellison's cloud u-turn complete. Oracle (ORCL) yesterday unveiled a huge suite of cloud-services in a highly anticipated announcement, saying that not only will it roll out online versions of ERP and CRM applications, but also cloud-based database, app development, and analytics services. The breadth of Oracle's offering makes it a rival to Amazon Web Services (AMZN) and Microsoft's (MSFT) Azure as an infrastructure platform. Opinion: Cash in on Oracle's social media rush.
Apple continues IP war with Samsung. Apple (AAPL) is seeking a U.S. ban on Samsung's (SSNLF.PK) new flagship Galaxy S III, which is due to be sold by all four nationwide carriers, for patent violations. Apple might need to be wary about how far it goes: the FTC has said Motorola's (GOOG) efforts to ban the Xbox 360 (MSFT) and iPhone could be anti-competitive, given Motorola's reliance on standards-essential patents. Opinion: An income trade on Apple using weekly options.
Feds probe violations of FHA regulations. Federal officials are widening their probe into mortgage lenders to include potential breaches of the rules of a Federal Housing Administration program, the WSJ reports. If violations are discovered, banks could be forced to help cover some of the FHA's losses. Sources say subpoenas were recently issued to lenders that include MetLife (MET), SunTrust (STI) and U.S. Bancorp (USB). Press release: Sharp jump in FHA foreclosure starts.
It's getting harder to become a partner at Goldman Sachs. Goldman Sachs (GS) is expected to name fewer than 100 partners this fall, one of the smaller classes in recent memory, as the firm continues to shrink its overall head count, the NYT reports. At last count, there were 440 partners, down from 483 at the start of 2011. Ideally, according to a source, the firm would like to have 400-450. Opinion: Job insecurity at Goldman Sachs.
Nasdaq payout for Facebook fiasco falls short of losses. "Clearly we didn't succeed here" and we "owe the industry an apology," said Nasdaq OMX (NDAQ) CEO Robert Greifeld yesterday in reference to the botched Facebook (FB) debut. As compensation for the technical errors that plagued the IPO, Nasdaq will pay market makers and brokers $40M - well below the estimated losses of $100M+ - partly in the form of credits. Opinion: Nasdaq's gamble with Facebook's fortune.
Oil giants probe bribery allegations in Kazakhstan. Karachaganak Petroleum Operating (KPO), a Kazakhstani JV involving Eni (E), BG Group (BRGYY.PK), Chevron (CVX) and Lukoil, is probing allegations that KPO staff authorized DHL to pay bribes to Kazakh officials to facilitate the movement of goods through customs. It's not clear if U.S. authorities are investigating under the Foreign Corrupt Practices Act. Discussion: If you're not bribing, you're not trying.
Board oversight at firms strengthening - theoretically. The number of independent chairmen at S&P 500 companies has been steadily rising in recent years, as investors push to split the Chairman-CEO role for the sake of stronger board oversight of management. More than 20% of S&P 500 firms now have an independent chairman, up from 12% in 2007, and the trend looks likely to continue. Opinion: Carnival corporate governance issue.
Top Economic & Other News
Beige Book paints optimistic picture. While recent economic data has been grim and Fed officials talk of easing, there's little in the latest Beige Book that suggests additional Fed stimulus is needed. Growth continues at a moderate pace in all districts, with just Philadelphia experiencing a slowing in the rate of expansion. Residential real-estate activity improved in most areas, although the recovery remains fragile. Opinion: Jobs, growth and government spending.
Spain beats bond sale target but yields rise. Spain today sold €2.07B of bonds, above an expected range of €1B-€2B, although borrowing costs for 10-year paper rose to an average yield of 6.04% from 5.74% in a previous sale. In the secondary market, yields fell 12 bps to 6.16%. Opinion: How much trouble is Spain in?
Retailers confident in the consumers. Despite fears of a softening economy, retailers plan to increase capital spending to $35B this year from $29B in 2009, Fitch estimates, as they seek to improve the shopping experience. "Stores have to be entertainment, they have to be service-oriented, which has clearly become very, very important to the consumer," says consultant Laura Pomerantz. Opinion: Wal-Mart: Sell this retail giant.
In Asia, Japan +1.2%. Hong Kong +0.8%. China -0.7%. India +1.2%.
In Europe, at midday, London +0.9%. Paris +0.9%. Frankfurt +0.8%.
Futures at 7:00: Dow +0.5%. S&P +0.6%. Nasdaq +0.5%. Crude +0.3% to $85.26. Gold -0.8% to $1621.70.
Today's economic calendar:
5:45 Fed's Rosengren: 'Global Outlook and Risks'
7:00 BOE Rate Decision
8:30 Initial Jobless Claims
10:00 Hearing: Economic Outlook (Bernanke)
10:00 Quarterly Services Report
10:30 EIA Natural Gas Inventory
11:00 Fed's Lockhart: U.S. Economy and Monetary Policy
1:15 PM Fed's Kocherlakota: Monetary policy
3:00 PM Consumer Credit
3:30 PM Fed's Fisher: 'Implications of Renminbi Internationalization for the U.S. and Global Economy'
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: CMVT, LULU, NAV, SJM