Dimon: JPMorgan's diversity cushioned loss. JPMorgan (JPM) CEO Jamie Dimon is due to testify in the Senate today about the bank's $2B+ trading blunder, where he will reject criticism that the bank's size is a problem. "Our strong capital position and diversified business model did what they were supposed to do: cushion us against an unexpected loss in one area of our business," Dimon will say, according to his prepared testimony. Now read: SA Discusses Whether Dimon's Lost His Credibility »
Shale boom to bring half a million jobs. The growth of shale gas in the U.S. will create 455,000 jobs from 2010-2015, an industry backed study predicts. However, half of those new jobs will be in just four states: Pennsylvania, Colorado, Louisiana and Texas, which will benefit the most due to its expertise and supply chain. One possible snag in the study is that it assumes natural gas prices will more than double. Now read: How To Profit From The Shale Gas Boom »
Healthcare spending to hit one fifth of GDP. U.S. healthcare spending will reach $4.8T in 2021, or almost 20% of GDP, from $3T in 2014, a government study projects. Last year, spending rose 3.9% and was equivalent to around 17.9% of GDP. The increases will be driven by an aging population, an improving economy and the healthcare overhaul, if it becomes law. Now read: Russell 3000 U.S. Healthcare Additions »
Top Stock News
CBS draws $2.7B in ad commitments for next season. CBS (CBS) has attracted around $2.7B in upfront ad sales for the TV season that starts in September, similar to last year, Bloomberg reports. The network leader enjoyed an ad rate increase of 8%-10% but sold less inventory. Disney's (DIS) ABC drew in $2.5B, also similar to 2011 but below expectations, the WSJ writes. Now read: Cushion The Summer Pullback With Comcast »
DoJ probes cable firms over online video allegations. The Justice Department has launched an antitrust investigation into whether cable companies are acting improperly to suppress competition from online video, the WSJ reports. DoJ officials have spoken to several Internet providers, including Netflix (NFLX), and are said to have questioned Comcast (CMCSA), Time Warner Cable (TWC) and others about issues such as data caps. Now read: New Lawsuit Threatens Netflix »
Libor traders could escape scott free but firms may be hit. Traders being investigated for possible Libor manipulation are unlikely to face criminal charges, Bloomberg reports, although their firms may be hit with record fines by the year end. RBS (RBS), Citigroup (C), UBS (UBS) and Deutsche Bank (DB) are among the firms being investigated by regulators worldwide. If the report proves to be true, it would be another case of the individual wrongdoers escaping scott free. Now read: Investor Trust At Stake In Libor Investigation »
Siemens and ABB eye $2B Elster. German gas- and electric-meter company Elster Group (ELT), which is majority owned by investment firm CVC Capital, is on the auction block and could fetch more than $2B, the WSJ reports. Siemens (SI) and ABB (ABB) are potential suitors.
Global Payments: Intruders may have accessed personal data. Global Payments (GPN) yesterday said the data breach it suffered earlier this year may have been broader than initially estimated. In addition to data from up to 1.5M accounts, hackers may also have gained access to personal information from Global Payments' merchant customers.
J&J receives U.S. approval for $19.7B Synthes acquisition. Johnson & Johnson (JNJ) expects to close its $19.7B purchase of Synthes tomorrow after receiving the all clear from U.S. regulators. A J&J subsidiary initiated around $12.9B in accelerated buyback agreements to help finance the cash-and-stock acquisition. The Synthes deal will add $0.03-0.05 to 2012 EPS, a turnaround from a prior forecast for a $0.22 reduction.
Top Economic & Other News
OPEC bickers while oil prices plunge. The eurozone crisis has helped shave around 20% off oil prices from their 2012 highs as the supply-demand ratio has narrowed, the latest IEA report shows. The slump accelerated in May, with downward pressure also stemming from a softening in China and excess supply from some big producers. Despite the trend, it's looking increasingly likely that tomorrow's OPEC meeting will end in a stalemate, CNBC reports.
Solar-panel market expected to double. The U.S. market for solar panels is likely to double this year, a new study predicts, spurred by falling prices and supportive government policies. Around 3,300 megawatts of solar panels are likely to be installed in 2012, but new tariffs on panels imported from China could contribute to slower growth in 2013.
Greek "bank jog" speeds up ahead of election. Greece's big banks have seen combined daily deposit outflows of €500M-€800M in recent days, Reuters reports, an accelerated outflow rate ahead of this weekend's elections on concerns the nation may move closer to abandoning the euro. Smaller banks have seen outflows of €10M-€30M.
Eurozone industrial output falls again. The contraction in the eurozone's industrial production accelerated in April vs. March, falling 0.8% on month and 2.3% on year. It's all very depressing, but if there's a straw to clutch, at least the figures were better than expected. The largest decreases were in Portugal, Italy and, notably, Germany (-2% on month).
Look what happens when you let banks fail. Iceland's central bank has raised its key rate by 25 bps to 5.75%. "The economic recovery is broadly based, and the growth in domestic demand is robust. Signs of recovery in the labour and real estate markets are steadily growing stronger," the bank said. Iceland is a bit of a pin-up for letting its banks fail and suffering economic collapse before recovering smartly. But then Iceland is tiny.
In Asia, Japan +0.6%. Hong Kong +0.8%. China +1.3%. India +0.1%.
In Europe, at midday, London flat. Paris -0.3%. Frankfurt -0.4%.
Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.2%. Crude -0.2% to $83.16. Gold -0.2% to $1610.30.
Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Retail Sales
10:00 Business Inventories
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Note Auction
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free -- Get it now »