Chinese inflation falls to 2.5 year low. China had a data dump today and it all points to the government carrying out more stimulus to boost the slowing economy. Inflation in July fell to a two-and-a-half year low of +1.8% on year from +2.2% in June, helped by falling food prices, while growth in industrial output and retails sales also declined.
StanChart mulls countersuing New York's DFS. Standard Chartered (OTC:SCBFF) is considering countersuing New York's Department of Financial Services for reputational damage following the latter's allegations about the bank's dealings in Iran, the FT reports. Several months ago, StanChart offered to pay a $5M fine for the $14M of transactions it agrees violated U.S. law but was rebuffed; the DFS is eyeing penalties of over $500M.
Top Stock News
Nestle top forecasts but warns about North America. Nestle's (OTC:NSRGY) H1 earnings beat expectations as net profit climbed 8.9% to 5.12B Swiss francs ($5.28B) and revenues 7.5% to 44.1B francs, while the closely watched organic sales figure rose 6.6%, although the latter metric was down from last year. Nestle, the world's biggest food company, maintained its FY outlook for organic sales growth of 5-6%, and improved margins and EPS, helped by falling raw-materials prices. However, it said North America is "challenging."
News Corp. swings to loss on massive impairment charge. News Corp. (NWS) swung to an FQ4 net loss of $1.55B from a profit of $683M a year earlier after taking $2.85B in non-cash restructuring and impairment charges. The loss comes as News Corp. works to split into two companies. Adjusted EPS fell to $0.32 from $0.35 and was in line with forecasts, although revenue slipped 6.6% and missed Street consensus.
Pratt & Whitney warns on layoff notices due to defense cuts. Pratt & Whitney (UTX) is still assessing its legal obligations about notifying staff over potential layoffs due to the automatic defense spending cuts that are due to hit in January. This is despite the Labor Department saying that the circumstances are too uncertain for a law about a 60-day warning period to apply. That period begins at the start of November, just days before the election.
Knight stock holdings hit $7B during IT disaster. Knight Capital (KCG) held around $7B of stocks at one point during its IT trading malfunction last week, but managed to sell $2.4B by the end of the day, the WSJ reports. Knight then offloaded the rest of the portfolio to Goldman Sachs (GS) after turning down a bid from UBS (UBS), but still took a loss of $440M from the whole disaster.
Mayer puts the emphasis on products. In her first days as Yahoo (YHOO) CEO, Marissa Mayer is focusing on product development, as expected, the WSJ reports. "I want you thinking about users," Mayer repeatedly says. In addition to expressing interest in developing or acquiring products in hyped areas such as mobile, social, and local services, Mayer wants to revamp Yahoo Search, although it isn't clear if this means ending the troubled Microsoft (MSFT) deal.
Citigroup scheme lets distressed homeowners stay put. Citigroup (C) has begun a pilot program that allows distressed homeowners to transfer ownership for a short period and become renters, with the rental payment less than that of the mortgage. Win-win? Homeowners get to stay in their houses and Citigroup - if things don't work out - has the title without having to go through foreclosure.
Zynga COO quits. Zynga (ZNGA) COO John Schappert has resigned from his position and from the board of the Internet games company. Schappert's departure comes a week after reports that CEO Mark Pincus had taken away his authority over Zynga's game development efforts, a move that wasn't well-received by investors. Shares were -2% premarket.
Top Economic & Other News
BOJ holds off on further easing. As expected, the Bank of Japan has left its benchmark interest rate at 0-0.1% and the size of its asset-purchase program at ¥70T ($89.3B), although it did indicate that it's willing to carry out further stimulus if the risks to the economy grow. Fears about growth were underscored by data showing that core machinery orders rose a far less-than-expected 5.6% in June after falling 14.8% in May.
Saudi Arabia reduces oil production in July. Saudi Arabia cut oil output in July to 9.8M bpd from 10.1M bpd in June - possibly due to a fall in oil prices - sending 9.7M bpd to the market and putting 100,000 bpd in storage, Reuters reports. Saudi had boosted oil production to the 30-year high of 10.1M bpd in April as it stepped up output to make up for the fall in Iranian supplies due to the international sanctions.
CFTC to propose insurance scheme for customers. CFTC Commissioner Bart Chilton is set to propose today an insurance scheme in which futures customers could obtain up to $250,000 protection for their money. The plan follows failures at MF Global and Peregrine Financial that resulted in $1.8B of client money going missing. However, the proposal faces skepticism and would need Congressional approval.
In Asia, Japan +1.1%. Hong Kong +1%. China +0.6%. India -0.2%.
In Europe, at midday, London -0.1%. Paris -0.2%. Frankfurt -0.7%.
Futures at 7:00: Dow flat. S&P -0.1%. Nasdaq +0.1%. Crude +0.2% to $93.53. Gold flat at $1616.
Today's economic calendar:
8:30 International Trade
8:30 Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Wholesale Trade
10:30 EIA Natural Gas Inventory
1:00 PM Results of $16B, 30-Year Note Auction
4:30 PM Fed Balance Sheet
4:30 PM Money Supply
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