Nokia plunges as Elop continues to slash and burn. Nokia (NOK) announced yet another profit warning and further job cuts of 10,000, sending shares spiralling 9.3% premarket. Nokia expects its Q2 operating margin at its handset unit to fall below the Q1 level of -3% as it struggles to make inroads in the smartphone market. Nokia will also take restructuring charges of €1.25B. Stephen Elop's job-cut count is now almost 40,000; how long will it be before he's part of that statistic? Now read: Nokia May Slip 30% By 2013 »
Spanish yields race towards 7%. Spanish 10-year bond yields jumped 18 bps to hit a record high of 6.97% as investors reacted to severe downgrades from Moody's and Egan Jones. Meanwhile, data shows that Spanish banks borrowed a record €324.6B from the ECB in May, up from €319.9B in April, casting doubt over whether the proposed €100B banking bailout will be sufficient. Now read: Europe's Sick Horses All Rounded Up And Ready To Go »
Stockton heading for bankruptcy. It's increasingly likely that Stockton, California will default on some of its debt, Moody's warned yesterday, as the city faces a July 1 deadline for confidential talks with its creditors aimed at averting bankruptcy. Now read: This Part Of The Bond Market Has Real Value »
Top Stock News
Microsoft looks to hammer out $1B+ Yammer deal. Microsoft (MSFT) is in talks to buy Yammer, a provider of enterprise social networking sites, Bloomberg reports, and could end up paying over $1B. Yammer would join an extensive list of Microsoft products that enable business collaboration, including SharePoint, Exchange, Lync, and Skype. Now read: Microsoft Is Defining Innovation »
Apple fails in attempt to stop Galaxy launch. Apple's (AAPL) efforts to prevent the June 21 launch of Samsung's (SSNLF.PK) flagship Galaxy S III, which has seen huge pre-orders, have been denied by U.S. District Judge Lucy Koh, who appears to be getting fed up with the enormous volume of lawsuits being thrown around. A trial is now set for July 30. Now read: The Galaxy S III Supply Chain Winners »
Amazon boosting cloud music service. Amazon (AMZN) is wrapping up licensing deals with major studios for its cloud music service, CNET reports. Amazon already has agreements with Universal, EMI, and Sony Music (SNE), and is in late-stage negotiations with Warner Music. The deals will allow Amazon to offer an iTunes Match-like ability to stream content a user owns without requiring an upload. Now read: Amazon's A Safe Idea For Losing Money »
Smithfield falls after missing forecasts. Smithfield Foods (SFD) FQ4 earnings missed expectations as EPS came in at $0.43 vs. consensus of $0.54, while revenue edged up 3% to $3.2B. Shares were -4.3% premarket even though FY 2012 net income of $361.3M was the second best in Smithfield's history, and the company is "optimistic about what the future holds."
Top Economic & Other News
Italian yields rise in bond auction. The action has continued in Italy as well as in Spain, with yields jumping in a €4.5B Italian bond auction. While that was the top of the government's target range of €2.75B-€4.5B, the three-year rate increased from 3.91% in mid-May to 5.3% today, the highest since December. In the secondary market, though, 10-year yields were up just 1 bps at 6.23%.
Merkel changing mind over eurozone debt sharing. With the eurozone debt crisis again threatening to spiral out of control, Angela Merkel is ready to drop her opposition to the idea of a €2.3T "Redemption Pact" that would repay excess sovereign debt over 20 years, The Daily Telegraph reports. The concept is modeled on Alexander Hamilton's Sinking Fund in 1790, which was used to pay off debts from the American revolutionary war.
CPI seen contracting for first time in two years. May inflation data is due out this morning, with economists expecting that falling energy prices helped CPI drop 0.2% on month, the first decline in two years. In April, there was no change. Core CPI is seen at +0.2%. If the cost of living has fallen, talk of further Fed easing may well get louder.
Banks start to crank up foreclosure machinery. Foreclosure starts rose 16% on year in May to 109,051, the first such increase in 27 months as banks recommenced the repossession machinery following the $25B national mortgage abuse settlement earlier this year. Overall foreclosure activity climbed 9.1% on month to almost 206,000 properties.
Wall Street mulls new corporate bond market. Money managers and major banks are discussing the possible creation of a stock-market equivalent for corporate bonds, the WSJ reports, with sources saying the parties are interested in setting up a centralized electronic market where all participants can trade bonds freely with one another. The discussions, still in an early stage, highlight the concern over regulatory shifts that some fear will make bond trading more expensive.
SNB reiterates swissie pledge. The Swiss National Bank has maintained its euro/franc ceiling of 1.20 and "will enforce it with the utmost determination," and remains prepared to buy foreign currency in unlimited quantities for this purpose. "Even at the current rate, the Swiss franc is still high," the bank said. The SNB also kept its target range for three-month Libor at 0-0.25%.
Oil flat ahead of OPEC meeting. Oil was flat premarket at 8-month lows ahead of an OPEC meeting today, where members are likely to maintain their output ceiling despite the recent price declines and despite some sharply divergent views expressed in recent days.
In Asia, Japan -0.2%. Hong Kong -1.1%. China -1%. India -1.2%.
In Europe, at midday, London -0.5%. Paris -0.5%. Frankfurt -0.5%.
Futures at 7:00: Dow +0.1%. S&P +0.2%. Nasdaq +0.1%. Crude flat at $82.59. Gold +0.1% to $1620.40.
Today's economic calendar:
8:30 Consumer Price Index
8:30 Initial Jobless Claims
8:30 Current Account
8:30 Real Earnings
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today's open: KR, PIR, SFD