JPMorgan to restate Q1 results, Q2 whaling loss hits $4.4B. JPMorgan (JPM) will restate its Q1 results because of the trading losses at its CIO unit and cut net income by $459M. The news came as the bank reported that its losses in Q2 from the trades were $4.4B, lower than the $9B expected. EPS in the quarter fell to $1.21 from $1.27, while revenue slipped to $5B from $5.4B, although both numbers beat forecasts. Shares were +1.35% premarket; make of it what you will.
Chinese GDP growth falls to 3-year low but sends markets higher. China's Q2 GDP growth dropped from 8.1% in Q1 to 7.6%, which was in line with expectations but the slowest for three years. Other data showed that June retail sales beat consensus by a bit, electricity production was flat, and industrial output missed forecasts by a bit. Global markets have risen on relief that GDP didn't contain a nasty surprise, but was bad enough that more stimulus could be on the cards.
Moody's downgrades Italy, bond yields fall in auction. Moody's yesterday downgraded Italy's sovereign debt by two notches to Baa2 from A3 and maintained a negative outlook, saying the country is now "more likely to experience a further sharp increase" in funding costs, or the loss of market access. So what happened in bond auctions today? Italy sold the full €5.25B it was aiming for at lower yields.
Top Stock News
Banks could be hit for $22B in Libor penalties. Twelve global banks publicly linked to the Libor scandal face up to $22B in combined regulatory penalties and damages to investors and counterparties, according to admittedly "crude" Morgan Stanley estimates. The calculation excludes the potential fallout from U.S. and EU cartel investigations, which could result in multibillion-dollar fines.
P&G mulls firing CEO Robert McDonald. Procter & Gamble's (PG) board is thinking about sacking CEO Robert McDonald, Bloomberg reports, with directors unhappy about his performance. They have also been contacting former executives about possibly taking over. The board's discussions influenced Bill Ackman's decision to take a large stake in P&G, and he apparently plans to call for management changes.
Vivendi confirms it's mulling selling Activision. Vivendi (OTCPK:VIVHY) Chairman Jean-Rene Fourtou has confirmed to Bloomberg reports that the conglomerate could sell its 61% stake in Activision (ATVI), although sources say potential suitors don't seem to be that interested. Those to demur include Microsoft (MSFT) and Disney (DIS), while China's Tencent (OTCPK:TCEHY) and Japan's Nexon don't have the cash.
Co-op closes in on discounted Lloyds branches. The Co-operative Group is near to agreeing to a deal to acquire 630 branches from Lloyds (LYG), the FT reports, although the weak environment means the price is likely to be a maximum of £1B, well below the previously suggested figure of £1.5B. The amount will probably be split into upfront and performance-based payments.
Regulator patience runs out in Cove battle. The U.K.'s Takeover Panel has had enough of the dilly dallying in the Cove Energy takeover saga, and has given the suitors, Shell (RDS.A) and Thailand's PTT, until Monday to make their final offers. If no bid is accepted, an auction will begin the next day. The problem is that shareholders don't seem to be interested in either offer.
Senate to dish the dirt on HSBC role in money laundering. A Senate panel is due on Tuesday to provide the details of HSBC's (HBC) role in the laundering of funds for or in Iran, Cuba, Mexico and other countries. HSBC executives are due to testify, including legal chief Stuart Levey, who was once a top Treasury official - on terrorism and finance.
Top Economic & Other News
Geithner warned BOE of Libor problems in 2008. Timothy Geithner sent a private memo to Bank of England governor Mervyn King in 2008 calling for six changes to improve Libor's credibility, documents seen by the WSJ show. It's clear Fed officials knew of Libor irregularities early on, though it's unclear how far they went to address the problem. The NY Fed is due to release additional documents today.
San Bernardino investigated for fixing the books. Authorities are probing San Bernardino following allegations by the Californian city's attorney that fraudulent accounting could have contributed to the problems that caused the council to vote for bankruptcy protection this week. On Monday, San Bernardino is due to receive a legal opinion on whether it needs to enter talks with creditors before filing for Chapter 9.
Clean-tech spending soars. Global clean energy investments totaled $59.6B in Q2, up 24% on quarter but down 18% on year. Chinese investments soared 92% Q/Q, as the government does whatever it can to support the industry, while U.S. and European investments rose 18% and 11% respectively. Higher solar spending hasn't yet created a bottom for struggling manufacturers, although some think one will soon arrive.
In Asia, Japan +0.1%. Hong Kong +0.3%. China flat. India -0.1%.
In Europe, at midday, London +0.6%. Paris +0.6%. Frankfurt +1.1%.
Futures at 7:00: Dow +0.4%. S&P +0.35%. Nasdaq +0.5%. Crude +1.2% to $87.13. Gold +1.2% to $1584.50.
Today's economic calendar:
8:30 Producer Price Index
9:55 Reuters/UofM Consumer Sentiment
1:20 PM Fed's Lockhart: ‘Regional and Mississippi Economy'
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