Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
EU fires €100B bazooka to solve Spanish banking woes. EU shares and U.S. stock futures were higher today after the EU agreed to provide Spain with €100B to rescue its banking system. The genius absurdity of it all is that as a member of the eurozone, the country is backstopping (and paying for some of) the bailout. It's no wonder that not all are convinced. Now read: One Step Closer To European Banking Union »

J&J agrees to $2.2B deal to settle marketing investigations. Johnson & Johnson (NYSE:JNJ) may announce this week that it has agreed to pay up to $2.2B to settle investigations into how it marketed its Risperdal antipsychotic treatment and other drugs, and claims it paid kickbacks to Omnicare (NYSE:OCR), Bloomberg reports. Unlike with the banks, J&J will make a misdemeanor plea, with the deal including a criminal penalty of as much as $600M. Now read: Should J&J Break Up? »

BP looks to settle Gulf claims with $15B offer. The haggling is well underway between BP (NYSE:BP) and U.S. authorities over how much the company should pay to resolve all criminal and civil penalties and damages from the Deepwater Horizon oil spill, the FT reports. BP wants to pay less than $15B and the DOJ is seeking $25B. A settlement could be reached by September, well before a possible trial in January. Now read: Litigation Risk Is Exaggerated »

Top Stock News
Banks brace for downgrades. Moody's could issue its expected downgrades of large banks this week, with the short-term debt of Bank of America (NYSE:BAC) and Citigroup (NYSE:C) set to possibly receive cuts from Prime-1 to Prime-2. In anticipation of Moody's action, money-market funds have been limiting some lending to banks, and municipal bond issuers have been switching bankers. Now read: Comparing Big Bank Level III Assets »

UnitedHealth to offer Obamacare benefits regardless of ruling. UnitedHealth (NYSE:UNH) has started to offer many of the benefits mandated by Obamacare and will continue to do so even if the Supreme Court voids some or all of the Act. One reason for UnitedHealth's action is that it's not that expensive. From now on, customers can, for example, keep their children on their health plans until age 26, although there will still be no coverage for children with pre-existing conditions. Now read: Winners From The Obamacare Ruling »

IATA forecasts more troubles for airlines. The global airline industry will probably post a second consecutive year of net profit declines, says the IATA, as the impact of the eurozone debt crisis offsets the boost from lower oil prices, stronger-than-expected growth in passenger traffic, and an improved freight market. In contrast, manufacturers are generally optimistic as they battle it out at the IATA Beijing summit, which is taking place this week. Now read: Challenges Facing The Airline Industry »

Geeks descend on Applefest. Apple's (NASDAQ:AAPL) Worldwide Developer Conference is due to kick off today, when CEO Tim Cook & co. are expected to unveil the next generation of the iOS operating system for the iPhone and iPad, MacBook updates, and the company's own mobile mapping software to compete with Google (NASDAQ:GOOG) Maps. As much as anything, the idea is to persuade developers to build apps for Apple first.

Telefonica to sell part of China Unicom stake for €1.1B. Spain's heavily indebted Telefonica (NYSE:TEF) has inked a deal to raise about €1.1B in cash by selling half of its shares in China Unicom (NYSE:CHU) back to the company. Telefonica will retain a 5% stake in the Chinese operator and said it remains committed to the two firms' "strategic alliance."

VW mulls buying into Navistar to take on Daimler. Volkswagen (OTCPK:VLKAF) is considering buying a stake in troubled U.S. truckmaker Navistar International (NYSE:NAV) in a move that could help VW close the gap with rival Daimler, the FT reports. Shares of Navistar fell 14% on Thursday after the company reported an FQ2 loss.

LME could choose buyer today. The London Metal Exchange is today expected to choose which takeover bid it will accept, The Daily Telegraph reports. IntercontinentalExchange (NYSE:ICE) has offered £1.3B ($2B) and rival Hong Kong Exchanges & Clearing just under that figure, although the latter is confident it is in the driving seat.

GE mulls streamlining GE Capital with asset sales. GE (NYSE:GE) may sell businesses in GE Capital's consumer-finance portfolio, the WSJ reports, potentially cutting the unit's loan portfolio by 16%. It would be an acknowledgement of investor concerns that GE owns what is essentially one of the country's largest banks.

Kodak patent auction falters. Eastman Kodak (EKDKQ.PK) has been unable to attract an all-important stalking-horse bidder for its portfolio of digital-camera patents, the WSJ reports. The sale is crucial to the firm emerging from bankruptcy, but its cause has been damaged by a recent ITC ruling that an image-preview patent, one of the most important, is invalid.

Top Economic & Other News
Fears that Italy could be next. Italy faces more scrutiny, not less, following Spain's bank bailout. Italy has over €2T of debt and is now a guarantor for 22% of Spain's bailout funds. Italy also confirmed that its Q1 GDP fell 0.8% on quarter. However, the country has a relatively healthy banking system, a jobless rate less than half of Spain's 24%, and it is on track to rein in its budget deficit.

China surprises on the upside and the downside. As some expected when the PBOC cut rates on Thursday, the weekend data dump from China wasn't pretty, but it wasn't all bad either. May exports grew 15.3% on year and imports 12.7%, well above expectations, while CPI increased less-than-forecast. On the flip side, industrial production and retail sales disappointed.

Today's Markets:
In Asia, Japan +2.0%. Hong Kong +2.4%. China +1.1%. India -0.3%.
In Europe, at midday, London +0.8%. Paris +1.3%. Frankfurt +1.8%.
Futures at 7:00: Dow +0.7%. S&P +0.6%. Nasdaq +0.7%. Crude +1% to $84.93. Gold +1% to $1592.80.

Today's economic calendar:
12:00 PM Fed's Williams: 'Challenges in Global Finance: The Role of Asia'
12:00 PM Fed's Lockhart: U.S. Economic and Monetary Policy
8:15 PM Fed's Evans speaks at the Loop Capital Markets

Notable earnings after today's close: FNSR

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