Congress considers kicking the fiscal cliff...down the road. Republican and Democratic leaders in both houses of Congress are discussing proposals that would put off having to worry about the "fiscal cliff" until after the election. They're considering a bill that would delay automatic spending cuts from January until March, Bloomberg reports, as well as extend the George Bush tax cuts and fund the government for the same period.
Murdoch mulls splitting News Corp. Rupert Murdoch may reportedly split News Corp. (NASDAQ:NWS) into two companies, one focused on publishing and the other on entertainment. Internal discussions are said to be at an advanced stage. Shareholders have been pushing to separate the larger film and TV operations from publishing, which has been hit by scandal and an industry slowdown.
EU looks to emasculate fiscal sovereignty even further. Doubling down on austerity, Brussels will be given the power to rewrite national budgets for eurozone countries that breach debt and deficit rules, according to a draft report for Thursday's summit that was seen by the FT. The proposals are part of a broader effort to form a closer fiscal union and also include steps towards at least the study of issuing common debt.
Top Stock News
KKR creates $4B war chest for infrastructure and energy. KKR (NYSE:KKR) has accumulated around $4B to invest in infrastructure and energy deals as the P-E firm looks beyond corporate takeovers. Rivals Blackstone (NYSE:BX) and Carlyle (NASDAQ:CG) are also trying to expand the scope of their investments, as attractive leveraged buyouts remain somewhat elusive.
Sandberg provides female face to Facebook board. Facebook (NASDAQ:FB) has named COO Sheryl Sandberg, widely considered to be the second-most-powerful person at the company, to its board of directors. Sandberg's appointment follows reports that Facebook was looking to add more board members, including at least one woman.
Survey underscores impact of "showrooming". A recent comScore survey drives home the devastating impact the showroom phenomenon, whereby consumers check out items in physical stores before buying them online, is having on Best Buy (NYSE:BBY). Over 60% of survey respondents said they have bought a consumer-electronics item online after viewing it in a store, well above 43% for apparel, 29% for books, and 22% for appliances and toys.
Coca-Cola to invest $5B in India. Coca-Cola (NYSE:KO) has more than doubled its investment plans for India as it looks to benefit from the fast growth of the non-alcoholic drinks market, saying it now intends to spend $5B in the country by 2020 rather than just $2B by 2017, as the company previously disclosed. The investment is also "core" to Coca-Cola achieving its target of doubling revenues this decade.
Vivendi to appeal €765M verdict in Liberty lawsuit. Vivendi (OTCPK:VIVHY) intends to appeal €765M ($956M) in damages awarded to Liberty Media (NASDAQ:LMCA) in a breach of contract and fraud suit against the French congolomerate. The suit relates to a stock swap that accompanied Vivendi's 2001 purchase of USA Network from Liberty Media.
Regional banks step in to pick up lending slack. As the top banks cut assets to meet stricter capital requirements, smaller banks are picking up the slack, Bloomberg data indicates. Lending by JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) dropped 4.9% on year to $3.04T in Q1, while loans at the 17 smallest firms in the KBW Bank Index (BKX) climbed 9.8% to $1.27T.
Top Economic & Other News
Low oil prices help offset looming Iranian embargo. The EU has ratified its decision to start an embargo on Iranian oil on July 1, with the sharp fall in prices - WTI crude traded as low as $78.03 yesterday - helping allay fears that the sanctions will spark a price rise which would harm the global economy.
Austerity in the U.K. The U.K.'s May budget deficit jumped to £17.9B from £15.2B a year ago, and ahead of forecasts for £14.8B. Spending rose 7.9% and revenue declined 1.6% as a weak/recessionary economy trumped attempts at budget cuts. Meanwhile, Bank of England Governor King has continued to lay the groundwork for further QE, telling Parliament he's "struck" by how much things have deteriorated in the last six weeks.
Moody's wields the knife to Spanish banks. Moody's has cut the long-term debt and deposit ratings of 28 Spanish banks by between one and four notches. The move follows this month's downgrade of the country's sovereign debt. The only banks rated above the sovereign are Banco Santander (NYSE:SAN) and Santander Consumer Finance, due to their diversification and sufficient Tier 1 capital.
Bankers, regulators wary of revamping Libor. The U.K. bankers and regulators tasked with reviewing Libor in the wake of regulatory probes are resisting calls to overhaul the rate, because structural changes risk invalidating trillions of dollars of contracts, Bloomberg reports. Instead, the group will call for increased scrutiny.
Corn crop at risk from heatwave - Gartman. The heatwave hitting the Midwest could wreak havoc on the U.S. crop, says strategic investor Dennis Gartman. Without a "soaker of consequence" by Independence Day, the crop could drop beneath 14B bushels, "and that's the game changer." The effects could then ripple across a wide range of other industries, including candy and renewable fuels.
In Asia, Japan -0.8%. Hong Kong +0.5%. China -0.1%. India +0.1%.
In Europe, at midday, London +0.2%. Paris +0.2%. Frankfurt +0.1%.
Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude +0.1% to $79.29. Gold -0.3% to $1584.10.
Today's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
Notable earnings after today's close: HRB
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