Japan's economic expansion slows sharply. Japan's GDP growth unexpectedly slumped to 1.4% in Q2 from 5.5% in Q1, coming in well below forecasts of 2.3% and hurt by weak consumer spending. The strong yen - cruising near an all-time high vs. the greenback for much of the last year, and hitting record highs vs. the euro - also gets plenty of ink, but demographic math is surely working against speedy growth as well.
Google wields the knife to Motorola. Google (GOOG) is slashing 20% of Motorola Mobility's workforce, or over 4,000 employees, having already let go of 40% of Motorola's VPs and replaced the CEO. The cuts are part of an effort to create a streamlined Motorola focused on a small number of smartphone and R&D projects. Reports have indicated Motorola's cable hardware unit will soon be on the block.
Robo-signing spreads to credit-card industry. Debt-collection lawsuits based on erroneous and even forged documents, incomplete records, and generic testimony from witnesses - sound familiar? The NYT finds that robo-signing is alive and well, but this time in the practices of credit-card companies such as American Express (AXP), Citigroup (C) and Discover Financial (DFS). Regulators are looking into the matter.
Top Stock News
BofA's disposals continue with $1B sale. Bank of America (BAC) has agreed to sell Merrill Lynch's private bank outside the U.S. to Switzerland's Julius Baer for around $1B. The deal is the latest in a series of divestitures by BofA, which needs a strong cash position to meet Basel III requirements and to pay for all its legal liabilities.
WellPoint board backs CEO as pressure rises. WellPoint (WLP) Director Lenox Baker has backed under-fire CEO Angela Braly, saying that she "has done a great job" and that there is no move by the board to fire her. In contrast, shareholder Omega says, "There's a universal view that the CEO is the wrong CEO to lead the business." Braly may have bought herself time with the recent $4.9B acquisition of Amerigroup (AGP), which is due to close in 2013.
AMR CEO talks up merger with US Airways. A merger between US Airways (LCC) and AMR (AAMRQ.PK) is looking more likely after the bankrupt carrier's CEO, Tom Horton, told the FT that a deal "may be an attractive option" and that a decision could be just weeks away. AMR is still exploring its options, including other combinations and remaining independent.
StanChart in talks with regulators to settle Iran allegations. Standard Chartered (SCBFF.PK) is reportedly in discussions with multiple authorities to settle, possibly this week, the investigations into its dealings with Iran. One set of talks is with New York's Department of Financial Services and the other with federal agencies, highlighting the divide between the authorities. StanChart is due to meet the DFS on Wednesday to plead for its license to operate in the state.
JPMorgan aims for $1B profit boost with revamp. JPMorgan (JPM) is targeting an annual increase in pretax profit of $1B within five years from its plan to merge its corporate and investment banks, and its treasury and securities services business. JPMorgan's 2011 pretax profit was $10.4B However, the bank is abandoning its return-on-equity goal of 17%, due to tougher regulation.
Ingersoll could be set for break-up after Peltz joins board. Ingersoll-Rand (IR) has named Nelson Peltz as a board member, three months after the activist investor's Trian fund bought a 7% stake in the Ireland-based conglomerate. Peltz has been pushing for a break-up of Ingersoll's main business units into three publicly traded companies in order to improve shareholder return, and the company is evaluating this and other proposals.
NBC hopes to build on golden Olympics with new shows. Comcast's (CMCSA) NBC hopes the ratings boost it got from the London Olympics will continue as it rolls out new shows that it heavily promoted during the games. With a total audience of over 210M, the Olympics is the second-most watched event in U.S. TV history. However, NBC's record of introducing programs during and after the games is wretched, with just 27% making it past season one since 1996.
Kodak patent auction continues to be tame. The auction of Eastman Kodak's (EKDKQ.PK) 1,100 digital-camera patents has become increasingly complex but the bids so far are well below $500M, the WSJ reports. The lack of premium offers could put in doubt Kodak's ability to emerge from bankruptcy protection. The participating consortia include one that involves Apple (AAPL) and Microsoft (MSFT), and another Google (GOOG) and Samsung (SSNLF.PK).
Grand jury to open over Peregrine collapse. A grand jury is set to convene today over Peregrine Financial's collapse, with company President Russell Wasendorf Jr. expected to testify. Wasendorf has not been charged with any wrongdoing and denies any knowledge of the fraud allegedly carried out by his father, who has the same name.
Top Economic & Other News
Romney picking Ryan could hit dollar and help gold. SA author Christian Magoon reckons Mitt Romney's choice of uber-conservative Paul Ryan as his VP running mate will "beat up the dollar" in the short term and so help gold prices to rally. That's because the choice "ensures an escalation of the assault on the fiscal state of the Union."
PBOC may act cautiously over further easing. While markets have been anticipating more easing from the PBOC to boost Chinese growth, some observers, including those with links to top decision makers, believe the central bank is holding off on major measures in order to give previous action more time to work. Moreover, UBS economist Wang Tao points out that open-market operations in July injected 800B yuan ($130B) into the banking system.
Global privatization cut in half. Volatile markets and political uncertainty led the amount raised in privatizations to more than halve to $94.4B in 2011 from a record $213.6B in 2010, with $34.6B worth of divestitures canceled. The largest deal was the U.S.'s sale of a $6.1B stake in AIG, while the leading seller was China with 19 deals worth $14.2B.
In Asia, Japan -0.1%. Hong Kong -0.3%. China -1.5%. India +0.4%.
In Europe, at midday, London flat. Paris +0.4%. Frankfurt +0.3%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq +0.1%. Crude +0.9% to $93.67. Gold +0.2% to $1625.80.
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