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
Supreme Court to rule on Obamacare. The Supreme Court is set to decide this week on the constitutionality of the Patient Protection & Affordable Care Act, and could provide a verdict today. Of the possible outcomes, the court could uphold the whole statute; it could strike down part of the measures; it could invalidate the entire law; or it could decide that the challenge to the insurance requirement is premature. Here's a primer on how to trade the ruling.

Spain makes formal request for bank bailout. Spain has formally asked the Eurogroup for a bank rescue of up to €100B, which, says Economy Minister Luis De Guindos, should be enough to cover all the needs of the country's banks and provide a security buffer. Spain aims to set the final size of the bailout at a later date and hopes to complete it by July 9.

A-B InBev nears $10B+ deal to take control of Grupo Modelo. Anheuser-Busch InBev (NYSE:BUD) is reportedly close to a $10B-plus deal for the half of Mexico's Grupo Modelo that it doesn't already own. The family-controlled Modelo makes Corona and Pacifico beers along with its eponymous brands, and in 2008 disputed Anheuser-Busch's sale to Belgium's InBev, through which the latter obtained its noncontrolling Modelo stake.

Top Stock News
Samsung predicts massive July for new phone. Samsung (OTC:SSNLF) expects sales of its new Galaxy S III to top 10M units during July, making it the company's fastest-selling smartphone. Samsung has also forecast that Q2 earnings from its handset division will exceed Q1, defying market concerns that tight Galaxy supplies and a weak global market will hurt profitability.

Levinsohn refocusing Yahoo on $5B ads business. Yahoo (NASDAQ:YHOO) interim CEO Ross Levinsohn is refocusing the company on growing its $5B ad business, with plans to tie more ads to major events like the Super Bowl and bring extra content to its sites. The idea isn't new, but pushes aside a recent emphasis on generating additional e-commerce revenue. If the strategy is successful, Levinsohn may be able to ditch the "interim" from his title.

Page provides reassurance about his health. Google (NASDAQ:GOOG) CEO Larry Page has assured employees in an e-mail there's "nothing seriously wrong" with his health. News that Page will miss the Google I/O developer's conference and next month's Q2 earnings call on account of having lost his voice has resulted in speculation about the seriousness of his health issues.

Sony, Panasonic team up to develop TV technology. Sony (NYSE:SNE) and Panasonic (PC) have agreed to a TV tie-up in which they will work together to develop a new production technology for large-screen organic LED display panels. That the two rivals are teaming up underscores the financial difficulties facing both companies, each coming off a record annual loss.

SEC probes S&P CMBS decision. The SEC is reportedly looking into S&P's (MHP) last-minute decision to pull its ratings on a high-profile commercial-mortgage-backed security ((NYSEARCA:CMBS)) deal in July 2011. At the time, S&P's move sent the CMBS market into turmoil and delayed the deal by weeks. Regulators are trying to establish whether S&P used more lenient standards to rate new CMBSs than it used on outstanding deals.

RIM mulls wealth of options. Research In Motion (RIMM) might hawk its BlackBerry business to Amazon (NASDAQ:AMZN) or Facebook (NASDAQ:FB); sell or open up its messaging systems to Apple (NASDAQ:AAPL) or Google (GOOG); or keep the company whole and sell a large stake to Microsoft (NASDAQ:MSFT), The Sunday Times reports. For now, keep an eye on Q1 earnings this week.

Top Economic & Other News
California city on verge of bankruptcy. Stockton in California could this week become one of the biggest U.S. cities to file for bankruptcy with debts of $700M. Stockton, which has already defaulted on three sets of bonds, got into trouble due to high retiree costs for municipal workers, spending on a revitalization effort, and falling property-tax revenue.

States face huge additional liabilities on new pension rules. As Stockton heads for Chapter 9, new accounting rules set to be approved today could sharply raise (on paper) the massive pension shortfalls faced by states and municipalities. However, government officials insist the change is only cosmetic and won't force an alteration in their behavior or return assumptions. Prepare for "sticker shock" says a benefits consultant.

Greece on potential collision course with Troika. Greece's new coalition government could already be on a collision course with its Troika overlords after proposing to extend the country's "fiscal adjustment period" by at least two years to 2016. Outspoken German Finance Minister Wolfgang Schauble said on TV that Greece isn't trying hard enough.

BIS paints gloomy picture. The Bank for International Settlements' Annual Report, which was released yesterday, is full of uplifting statistics. For example, it would take 20 straight years of surpluses greater than 2% of GDP to bring debt/GDP ratios back to pre-crisis levels across most advanced economies. BIS General Manager Jaime Caruana warned that central banks' "emergency measures could have undesirable side effects if continued for too long."

Editors' Picks
Nokia: Start Of A Comeback?
Hedge Yourself Against A European Meltdown
Morgan Stanley And The Irrelevance Of Rating Agencies

Today's Markets:
In Asia, Japan -0.7%. Hong Kong -0.5%. China -1.6%. India -0.5%.
In Europe, at midday, London -0.6%. Paris -1.8%. Frankfurt -1.6%.
Futures at 7:00: Dow -0.6%. S&P -0.75%. Nasdaq -0.6%. Crude -1% to $78.98. Gold +0.15% to $1569.20.

Today's economic calendar:
8:30 Chicago Fed National Activity Index
10:00 New Home Sales
10:30 Dallas Fed Manufacturing Outlook

Notable earnings after today's close: APOL

See full real-time earnings coverage »

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