Eurozone industrial production provides rare optimism. The eurozone's industrial output rose a monthly 0.6% in May, far better than forecasts for a 0.2% fall. Notably, Portugal grew 4.1%. The surprising news provides a bit of light in an otherwise gloomy economic picture, with the ECB warning of downside risks. "Economic growth...continues to remain weak, with heightened uncertainty weighing on confidence and sentiment." Top marks for stating the obvious.
J&J could face massive hip-replacement bill - again. Johnson & Johnson (NYSE:JNJ) could be liable to pay almost $4.8B to cover revision surgery for its Pinnacle metal-on-metal hip system, estimates attorney Brian Devine, who is handling cases in which the device has failed. That would add to the $3B J&J has shelled out following the recall of its ASR all-metal artificial hips two years ago.
Top Stock News
Blackstone in consortium bidding for $7B ING ops in Asia. Blackstone (NYSE:BX) is reportedly joining up with former AIA Group (OTCPK:AAIGF) chief Mark Wilson and Swiss Re (OTC:SWCEF) to bid for ING's (NYSE:ING) Asian insurance business. The consortium may offer €5B-€6B ($6.1B-$7.3B), which, at the upper end, would match the $7B that ING is looking for. Other bidders include AIA, Korea Life Insurance and Manulife (NYSE:MFC).
HSBC prepares for $1B penalties. HSBC (HBC) is bracing for fines of maybe $1B as it is set to apologize to Congress for a lack of controls that allowed the bank to be used for money laundering for terrorist and other criminal activities. ING was recently hit with a $619M fine for its role in laundering funds for Iran and Cuba, and the speculation is that HSBC's penalty will be higher.
Chevron, Transocean may get relief in Brazil oil-spill case. Investigators have concluded that Chevron's (NYSE:CVX) offshore oil spill in Brazil last year caused little environmental damage. Chevron and Transocean (NYSE:RIG) are facing criminal charges and fines of over $10B because of the incident. Meanwhile, Chevron yesterday said it expects Q2 earnings to top Q1 levels, as higher refining margins and asset sales offset a decline in upstream profits.
Supervalu mulls sale as profit sinks 46%. Supervalu (NYSE:SVU) is considering a sale of all or part of the company and has suspended its dividend after FQ1 earnings badly missed consensus. EPS plunged 46% to $0.19 and revenue dropped 4.5% to $10.6B, hurt by falling customer traffic at its traditional grocery stores as rivals cut prices. Shares plummeted 27% in AH trading.
Antenna-to-internet TV service to stay on air, for now. A New York court has denied a request for a preliminary injunction to shut down InterActiveCorp-backed (NASDAQ:IACI) Aereo. TV networks claim Aereo's service, which uses thousands of TV tuners to stream broadcast channels to mobile devices for $12 a month, violates their copyrights. Aereo claims its service is every bit as legal as a Slingbox.
Levinsohn set to be appointed Yahoo CEO. Ross Levinsohn is expected to be named Yahoo's (NASDAQ:YHOO) permanent CEO, the L.A. Times reports, adding that Yahoo's board was discussing the matter yesterday. The scoop is hardly surprising, given Chairman Fred Amoroso's support for Levinsohn, and Jason Kilar's apparent lack of interest in the job.
Shell, PTT elongate battle for Cove. Shell (NYSE:RDS.A) has extended its offer of almost $2B for Mozambique-focused explorer Cove Energy to July 25, the oil giant's fourth such extension. As of yesterday, just 3.27% of Cove's shares had been tendered to Shell, which is in a battle with Thai energy company PTT. Earlier this week, PTT extended its bid for Cove until tomorrow.
Top Economic & Other News
NY Fed warned of Libor problems four years ago. The New York Fed will tomorrow release documents showing it took "prompt action" in 2008 to highlight problems with Libor and press for reform, according to an official. It should be interesting, as the Libor scandal is slowly reeling in commercial and central banks alike.
BOJ expands asset program, but it's not more easing. The Bank of Japan has left its key rate unchanged, expanded its asset purchase program to ¥45T ($564B) from ¥40T, and cut its loan facility to ¥25T from ¥30T. "This is simply a technical move that shouldn't be considered to be monetary easing," says JPMorgan economist Masaaki Kanno.
Regulators scramble to file charges on crisis allegations. Regulators are running out of time to file civil charges for some of the alleged wrongdoing during the financial crisis, as the federal laws under which the SEC usually goes after fraud and other misdeeds have a five-year statute of limitations. Expect to see a flurry of charges, including, says the WSJ, against Mizuho Financial and other parties involved in a $1.6B mortgage-bond deal.
In Asia, Japan -1.5%. Hong Kong -2.0%. China +0.5%. India -1.5%.
In Europe, at midday, London -1.2%. Paris -0.5%. Frankfurt -1.0%.
Futures at 7:00: Dow -0.7%. S&P -0.8%. Nasdaq -0.7%. Crude -1.15% to $84.82. Gold -0.8% to $1563.30.
Today's economic calendar:
8:30 Initial Jobless Claims
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
2:00 PM Treasury Budget
3:40 PM Fed's Williams: Economic Outlook
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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