Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
Cable operators plan revolution in video gaming. AT&T (NYSE:T), Verizon (NYSE:VZ), Comcast (NASDAQ:CMCSA) and Time Warner Cable (TWC) are looking to provide heavy duty video games - such as those from EA (NASDAQ:EA) - to TVs over their cable infrastructure, Bloomberg reports. The move would provide another major threat to console makers Sony (NYSE:SNE), Microsoft (NASDAQ:MSFT) and Nintendo (OTCPK:NTDOF), adding to that from smartphone games. However, operators still need to get the technology right.

Libor manipulation rife at RBS. RBS (NYSE:RBS) managers took part in the manipulation of global interest rates, Bloomberg reports, while traders collaborated with counterparts at other banks. There was also no Chinese wall at RBS: money-market traders who submitted the bank's Libor estimates sat on the same desk as derivatives traders whose profits depended on the rate, with the latter even making submissions themselves sometimes.

Top Stock News
AMR looks to renew pilot talks as flight disruptions rise. AMR (AAMRQ.PK) wants to resume negotiations with its pilots representatives amid a sharp jump in flight cancellations and delays that the bankrupt carrier says is caused by pilot-initiated maintenance requests and high rates of sick leave. What appears to be an unofficial work slowdown comes after AMR started cutting costs related to its pilots following a court ruling that allows the company to void its existing contract with them.

Ellison pledges $4.5B in Oracle shares as collateral. Larry Ellison last year more than tripled the amount of Oracle (NASDAQ:ORCL) shares that he "pledged as collateral to secure certain personal indebtedness, including various lines of credit." Ellison pledged 139M shares worth $4.5B vs. 40M shares in 2010 and the 1.1B shares he owns.

Tesla skids on earnings warning. Shares in Tesla Motors (NASDAQ:TSLA) reversed 7.5% premarket after the company warned that due to a "slower ramp in production," 2012 revenue will come in at $400M-$440M and that Q3 margins will be hurt. The company said it still expects to meet its production goal of 20,000 Model S deliveries for 2013.

Major StanChart shareholder considers selling $6B stake. Singapore state-investment fund Temasek has approached potential suitors for its 18%, $6.1B stake in Standard Chartered (OTCPK:SCBFF), the FT reports. The move could renew speculation about a takeover of the bank, which has in the past drawn interest from JPMorgan (NYSE:JPM) and Santander (NYSE:SAN), although StanChart's £34B market cap makes it a big fish to swallow.

Nasdaq, Amazon offer Wall Street Cloud. Nasdaq (NASDAQ:NDAQ) and Amazon Web Services (NASDAQ:AMZN) have joined up to offer Wall Street firms a service that will enable them to store key regulatory data on the latter's cloud infrastructure. The partnership, which should allow clients to sharply cut costs, marks Amazon's boldest foray into the financial sector, although security concerns could stymie growth.

Sony poised for $642M investment in Olympus. Sony (SNE) is likely to this week authorize an investment of ¥50B ($642M) in cash-strapped Olympus in return for a 10% stake, Reuters reports. The companies would create a JV to develop medical equipment, which would provide Sony with new sources of revenue. Meanwhile, Olympus and three former executives, including ex-chairman Tsuyoshi Kikukawa, have pleaded guilty to charges connected to the company's $1.7B accounting fraud.

New screen tech helps cause shortfall in iPhone 5 supply. Apple's (NASDAQ:AAPL) use of in-cell screen technology in the iPhone 5 may have contributed to a shortfall in supply when the device debuted at the weekend. In-cell screens, which combine the display and touch sensor, are harder to produce, with Sharp (OTCPK:SHCAY), one of Apple's three screen suppliers, in particular experiencing difficulties.

S&P reshuffles indexes. ADT, which is about to be spun off from Tyco (NYSE:TYC), and Pentair (NYSE:PNR) will replace Lexmark (NYSE:LXK) and DeVry (NYSE:DV) in the S&P 500 as of the close on Friday. Lexmark and DeVry will move to the S&P MidCap 400, where RadioShack (NYSE:RSH) will lose its place.

Top Economic & Other News
Corporations feast on low rates. U.S. corporate bond issuance is set to top $100B in September, which would be just the third time that the milestone has been topped since 1995. A wall of cash in search of yields amidst low rates have corporate treasurers rushing out issuance now just in case market jitters return again soon. "Investor appetite for corporate credit exposure remains unsated," says RBS's macro strategist.

How Spain's problems pose massive threat to German banks. Germany has a particular interest in helping Spain through its crisis, as the exposure of German lenders to the Mediterranean country is $139.9B, of which $45.9B is to banks. German institutions are particularly exposed to covered bonds, which are often backed by the collateral of consumer mortgages, whose values may have been affected by the cratering of the residential market.

Pork supply could drop to lowest per capita since 1975. The drought-induced rise in corn-feed costs led farmers to up the pace of hog slaughtering to a three-year high of 73.3M pigs from January-August, although farmers are making steep losses as pork prices fall. The increased slaughtering has prompted the USDA to estimate that supply will next year fall to the lowest per capita since 1975. That may well cause prices to rebound, although pork will still be cheaper than beef.

Regulators abandon plans for tougher crude market oversight. Iosco, an international group for financial regulators, has withdrawn proposals for increased oversight of the physical oil market after opposition from the IEA, OPEC and major oil companies, the FT reports. Iosco had wanted to use only completed deals to set benchmarks and to enforce mandatory reporting of transaction data, but will settle for the current system of bids and offers despite acknowledging the potential for manipulation.

Editors' Picks
Amazon's Imminent Liquidity Crunch And Share Price Collapse
A Yen-Dollar Ugly Contest
Caution: High Correlation Between Commodities and Equities

Today's Markets:
In Asia, Japan +0.3%. Hong Kong flat. China -0.2%. India +0.1%.
In Europe, at midday, London -0.2%. Paris -0.2%. Frankfurt -0.4%.
Futures at 7:00: Dow +0.1%. S&P flat. Nasdaq +0.1%. Crude +0.7% to $92.57. Gold +0.1% to $1766.90.

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 FHFA House Price Index
10:00 Richmond Fed Mfg.
12:00 PM Fed's Plosser: Economic Outlook
1:00 PM Results of $35B, 2-Year Note Auction

Notable earnings before today's open: CCL, FDS

Notable earnings after today's close: JBL

See full real-time earnings coverage »

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