Energy industry scales back as Isaac threatens Louisiana. Tropical Storm Isaac is set to become a hurricane today as it moves across the Gulf of Mexico towards Louisiana, with New Orleans in its path. In preparation, refineries have shut down, adding to the closure of crude and gas wells in the Gulf, while airlines have been cancelling flights. Landfall is expected to be today or tomorrow, on the seventh anniversary of Hurricane Katrina.
Boeing loses out to Airbus in $7B Philippine order. Airbus (EADSF.PK) has beaten Boeing (BA) to a $7B booking from Philippine Airlines, which ordered 10 long-haul A330-300 jets and 44 A321 planes, although the carrier is still interested in buying 777 and 787 aircraft. Airbus is also reportedly close to winning a deal for over 100 narrow-body jets from China.
AstraZeneca steals Roche exec for top job. AstraZeneca (AZN) has named Roche (RHHBY.OB) executive Pascal Soriot as its new CEO to replace David Brennan, who retired on June 1. Interim AstraZeneca CEO Simon Lowth will resume his position as CFO. Soriot has been the COO of Roche's pharmaceuticals division since 2010, prior to which he was CEO of Genentech and led its merger with Roche.
Top Stock News
Samsung vows to fight phone bans. Samsung (SSNLF.PK) "will take all necessary measures to ensure the availability of our products in the U.S.," the company said today in response to Apple's (AAPL) request to ban U.S. sales of eight of the South Korean firm's phones. The devices accounted for $1.3B of sales in H1. Apple's request follows its massive patent win last week.
GM to suspend Volt production. General Motors (GM) is reportedly set to halt the manufacturing of the Chevrolet Volt, at least temporarily. The plant that manufactures the hybrid sedan is slated to stop production for about four weeks in September and October. Sales of the Volt haven't met management expectations, reaching just over 10,000 in the U.S. versus expectations for 45,000 through the year-end.
Ford struggles against lower-cost rivals. Like GM (GM), Ford (F) is struggling in Europe, particularly with high labor costs at its decades-old factories. At Saarlouis in Germany, Ford pays workers €480 to make each Focus compact, whereas Hyundai pays €207 for the i30 at a four-year-old Czech plant. The result is that the Focus costs €960 more than the i30, and that Hyundai's sales in the region are rising while those of Ford are falling.
Lexmark to exit inkjet. Lexmark (LXK) intends to stop manufacturing inkjet hardware and sell its related technologies in a restructuring that will result in 1,700 job cuts. The overhaul will cost $160M pretax but bring savings of $95M annually from 2015. Lexmark will instead focus "on higher-value imaging and software." The company's exit from inkjet comes as H-P's (HPQ) printing business suffers as well.
FDA OKs Gilead's Quad tablet for HIV. The FDA has approved Gilead Sciences' (GILD) StribildT drug for treating HIV. The drug - once referred to as the "Quad" - simplifies therapy by combining four compounds into a once daily tablet.
Top Economic & Other News
Yields drop in Spanish, Italian bond auctions. Spain and Italy enjoyed falling yields and strong demand in bond auctions, possibly as a result of growing speculation about ECB and EU purchases of government debt. Spain sold €3.6B worth of three- and six-month paper, while Italy auctioned €3B of two-year bonds.
Japan becomes pessimistic about economy. The Japanese government has downgraded its assessment of the economy for the first time in 10 months in its latest monthly report, saying that risks include slowing overseas economies and sharp market fluctuations. The pessimism comes as JPMorgan and BNP Paribas forecast contraction of 0.3% and 0.9% respectively for Q3 GDP vs. consensus for 1% growth.
Draghi pulls out of Jackson Hole. ECB chief Mario Draghi has canceled his jaunt to the central bankers jamboree in Jackson Hole at the weekend, with the ECB citing his workload. "What's he working on?" asks Joe Wiesenthal. Bundesbank boss Jens Weidmann still plans to attend.
Manufacturers plea for tax cuts. With both presidential candidates proposing ideas to boost manufacturing, what companies want most are lower taxes and a simplified code. "It all sort of starts and stops right there," said Harley Davidson (HOG) CEO Keith Wandell of tax rates, while MIT professor David Simchi-Levi said the "corporate tax structure is driving manufacturing outside the country." Improved infrastructure and education would also help.
In Asia, Japan -0.6%. Hong Kong +0.1%. China +0.8%. India -0.3%.
In Europe, at midday, London -0.1%. Paris -0.7%. Frankfurt -0.6%.
Futures at 7:00: Dow flat. S&P flat. Nasdaq flat. Crude +0.6% to $96.03. Gold -0.7% to $1663.60.
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.
1:00 PM Results of $35B, 2-Year Note Auction
Notable earnings after today's close: EXM
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