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In Japan: Gravity. Isaac Newton paid Japan's equity markets a visit Thursday and it turns out that even Japanese stocks are subject to the law of gravity (who knew?). A confluence of factors sent the Nikkei (EWJ, DXJ) plunging 7.3% in a wild session where the swing from intraday high to low was ~9%. Yields on JGB 10s (JGBL) spiked above 1% at one point, as an already skittish and volatile market was further rattled by what have generally been perceived as hawkish comments out of Ben Bernanke and other Fed officials on Wednesday. Yields pulled back in late trading. Compounding the problem for Japanese stocks was the yen (FXY), which was strong against the dollar throughout (the USD/JPY pair traded down to 101.8 during the Asian session), and a weak read on Chinese manufacturing courtesy of the HSBC flash PMI, which printed in contraction territory

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Bird watching: Doves may offer policy hints in testimony, meeting minutes. Fed watchers (a title which nowadays seemingly encompasses nearly every market participant) will be listening closely to Ben Bernanke's testimony before the Joint Economic Committee (10 a.m.) in hopes of gleaning some hint as to the future course of monetary policy, even as the Chairman is likely to reveal little in his remarks. Perhaps more interesting will be minutes from the FOMC's latest policy meeting due, as usual, at 2:00 p.m.

A Dimon by any other name… A bid to strip Jamie Dimon of his chairmanship at JPMorgan (JPM) failed Tuesday when "only" one in three shareholders voted for a proposal to split the dual role of chairman and CEO. It appears the considerable time expended by the board over the past several weeks lobbying for votes indeed paid dividends (no pun intended) as support

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Senate says Apple used Irish subsidiaries to avoid taxes. A Senate report purports to show Apple (AAPL) used three Irish subsidiaries that have no tax residency in either Ireland or the U.S. to avoid paying taxes on some $74B in profits from 2009-2012. Although the practice was legal and is to a certain extent commonplace, the report says AAPL's scheme was unprecedented in terms of both its complexity and its brashness in the "use of multiple affiliates that had no semblance of a physical presence." The most glaring example is an Irish affiliate which reported profits of $30B over the period in question but paid no taxes whatsoever. Tim Cook will defend the company (which he says has done nothing wrong) before Congress today.

Cohen, SAC square off with prosecutors. A settlement between SAC Capital and the federal government regarding allegations of insider trading was likely

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In its quest for cool, Yahoo nabs Tumblr. Yahoo's (YHOO) board approved the $1.1B acquisition of popular blogging service Tumblr Sunday, the latest step in Marissa Mayer's quest to give the internet heavyweight a much-needed makeover. AllThingsD notes the deal is indicative of Mayer's strategy to increase YHOO's "cool factor" and relevancy with younger audiences. Tumblr, whose founder/CEO David Karp will reportedly stay at YHOO for the foreseeable future, also comes with a treasure trove of user-generated content, something YHOO covets. As for comparisons between Tumblr and YHOO's ill-fated 1999 acquisition of Geocities, Forbes notes Geocities faltered in part because a flood of ads drove users away; Tumblr seems to be avoiding that pitfall.

Actavis in $8.5B deal for Warner Chilcott. Actavis (ACT) confirmed it will buy Warner Chilcott (WCRX) for $8.5B in a stock for stock transaction Monday morning. The deal will see WCRX

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Divide grows on asset purchases. Fed officials are increasingly divided over the efficacy and appropriate duration of monthly asset purchases, speeches delivered this week indicate. Complicating matters is economic data which at times seems to convey conflicting messages regarding the health of the nascent recovery. For instance, while the employment landscape may be improving, some of that improvement may be attributable to discouraged workers exiting the labor force. This week, the heads of the Philadelphia, Dallas, and Richmond Federal Reserve Banks all suggested bond buying should be tapered immediately while Boston's Eric Rosengren maintained his stance in favor of the purchases. Of particular note is San Francisco Fed Chief John Williams, who said the Fed could reduce the pace of asset purchases "perhaps as early as this summer," assuming conditions remain stable.

J.C. Penney misses, looks forward. "One of our top priorities this year is to

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Japanese economy grows, but capex is weak. The Japanese economy grew 3.5% (annualized) in Q1 as rising stock prices made consumers more willing to spend, a partial confirmation of the effectiveness of Prime Minister Shinzo Abe's economic policies. On the other hand, capex fell 0.7% Q/Q on expectations of a 0.7% increase, proof the corporate sector is still skeptical regarding fiscal and monetary authorities' ability to wrest the country from the grip of deflation. The weak read on business investment weighed on Japanese stocks as the Nikkei fell 0.39% — the index did hold the 15,000 level.

IRS chief's resignation demanded, received, accepted. Acting IRS chief Steven Miller resigned Wednesday in the wake of the agency's admission it unfairly screened Tea Party groups seeking tax exempt status from 2010 onward. President Obama called the screening "inexcusable" and emphasized that the IRS was the very last

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French economy slips into recession. France slid into recession during Q1 as the French economy contracted 0.2% Q/Q after shrinking by the same amount in Q4. With unemployment at record levels and President François Hollande's popularity at all-time lows, the country faces an uphill battle to right the ship as it struggles to bring its deficit in line with the EU-mandated 3%, while simultaneously restoring growth. Economists project a 0.2% contraction for the full year and a survey of French citizens shows just 11% believe Hollande can bring down the jobless rate by year's end.

CBO slashes deficit estimate. The federal deficit will narrow to $642B in the fiscal year ending in September, the CBO said Tuesday — a meaningful improvement from February's projection of $845B. The revision comes courtesy of higher tax receipts and dividend payments to the Treasury from Fannie (FNMA.OB) and Freddie (FMCC.OB).

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Loeb pushes for Sony spinoff. Daniel Loeb, whose Third Point Capital has a 6.5% stake in Sony (SNE) worth some $1.1B, is pushing for a spinoff of the company's entertainment business including the film studio responsible for James Bond blockbuster "Skyfall" and the music label which houses big name artists such as Taylor Swift. Andrew Ross Sorkin says Loeb flew to Tokyo last weekend and hand-delivered a letter to CEO Kazuo Hirai praising the company's turnaround initiatives but calling for greater focus. In order to "ensure the success" of a potential spinoff, Third Point would be willing to put up $2B to backstop an IPO of around 15-20% of the entertainment arm, the letter said. Other corporate assets Loeb thinks could be ripe for a split include the company's insurance division.

U.S. oil boom fuels non-OPEC supply growth. Thanks to U.S. shale oil, demand for OPEC

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In China, economy sends mixed signals. Chinese industrial output growth printed at 9.3% in April, up from a seven-month low of 8.9% in March but still a whisker below economists' expectations of 9.4%. Investors were watching the data closely for signs of weakness after last week's trade data aroused suspicion for being too good to be true. Traders also got a read on the Chinese consumer as the National Bureau of Statistics said retail sales in the country grew 12.8% last month, matching forecasts. Despite the news, consumer discretionary stocks fell. Ultimately, investors once again came away with mixed feelings regarding the state of the Chinese economy.

Broken record: Nikkei rallies, yen falls. The yen (FXY) continued its slide early Monday, falling to a new four-and-a-half year low against the dollar (before recovering), helping the Nikkei (NKY) post another triple-digit gain on the session, rising 1.2%

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Dollar rises above ¥100, Nikkei Soars. For the first time since April of 2009, the yen (FXY) fell through the 100-level against the dollar, helping the Nikkei rally nearly 3% on the session and almost 7% on the week. Japanese equities (EWJ) are now trading at levels last seen in January of 2008. Japanese capital flows data finally showed what many had been waiting for since BOJ Governor Kuroda's shot across the bow at deflation: an outflow, as Japanese investors became net buyers of foreign bonds.

Icahn, Southeastern to bid for Dell. Carl Icahn is partnering with Southeastern Asset to make an alternative bid to acquire Dell (DELL). Icahn and Southeastern will offer shareholders $12/share that can be taken in cash or stock, to go with the option to maintain additional shares in a recapitalized Dell. In a letter to Dell's board, Icahn/Southeastern effectively

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In surprise move, South Korea cuts rates. In a surprise move, the South Korean central bank cut interest rates by 25 basis points Thursday, calling economic activity in the eurozone and emerging markets "sluggish" and "weaker than initially expected." The cut took the base rate to 2.5%, its lowest level in two years and when combined with recent fiscal policy designed to bolster growth, should help "accelerate the recovery and increase the upside of Korea's GDP," one economist told the NY Times. South Korean stocks (EWY) rose 1.18% and the won fell 0.34% against the dollar.

In China, consumer prices rise, producer price deflation persists. Consumer prices rose 2.4% in China during April, up from 2.1% in March and slightly above economists' estimates, although still well below the government's 3.5% target. Producer prices — now in their fourteenth straight month of decline —

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China posts surplus on strong export growth. Fears that flagging demand in the U.S. and Europe would weigh heavily on China's trade data didn't play out as exports grew 14.7% in April, helping the country swing to a surplus of $18.16B after posting a slight deficit in March. The data surprised analysts, even as some said the numbers may be inflated: "This probably reflects some overinvoicing [as] it was inconsistent with cargo volumes," one economist told WSJ. Nevertheless, the data served to buoy regional markets as the Nikkei continued its ascent in Japan, rising 0.74% to yet another new five-year record high.

Toyota profits rise to pre-crisis levels. For the first time since before the financial crisis, Toyota (TM) posted a full year operating profit in excess of ¥1T on the back of a weaker yen. Net profit was ¥313.9B for the quarter ended

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Nikkei soars to near five-year high. In Japan, stocks came off a long weekend well-rested and promptly rallied to near five-year highs as the Nikkei surged 3.55% on the back of Friday's strong U.S. jobs data. Some say Japanese equities (EWJ) have further to run. "The P/E multiple on forward earnings is about 15x [and] for the last decade, the average multiple has been 19 times," one strategist told CNBC.

Australia's central bank cuts rates. The Reserve Bank of Australia cut rates for the seventh time in 18 months Tuesday, taking the benchmark cash-rate down 25 basis points to a record low 2.75%, surprising some forecasters who expected the rate to remain unchanged. At 2.5%, inflation in Australia is within the central bank's target range and the strong aussie has weighed on mining companies who say it undermines their export competitiveness. The Australian dollar fell

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Bain, Golden Gate close in on $6.5B BMC deal. Private-equity firms Bain and Golden Gate could reportedly announce a deal today to acquire BMC Software (BMC) for over $6.5B, with the $46-share-offer above the latter's close of $45.42 on Friday. The proposed deal would follow pressure from activist investor Paul Singer for BMC to sell itself. Singer, who holds 9.7% in BMC, has criticized the company for failing to realize the opportunity in Internet-based business software.

P-E firms mull $8B Neiman Marcus exit. Neiman Marcus owners TPG Capital and Warburg Pincus are reportedly considering a sale or an IPO of the luxury retailer, with the private-equity firms believing that they can pull in $8B for the department-store chain after buying it for $5.1B in 2005. If a deal is struck, the valuation could be of interest to investors of mall rivals Saks (SKS) and Nordstrom (JWN).

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Jobs data looms. Investors will get a fresh look at the U.S. employment picture Friday morning as nonfarm payrolls take center stage. Expectations are for a gain of 140K, although some began to worry after Wednesday's ADP private sector payrolls report came in well below consensus at 119K. Whatever the case, no one wants a repeat of March's report which missed expectations by a wide margin.

ECB delivers on rate cut expectation. As expected by most (if not all) analysts, the ECB cut its benchmark rate by 25 basis points Thursday, as rising eurozone unemployment and low inflation provided the perfect backdrop for further monetary easing. Despite the move, some were quick to point out the comparatively feeble character of the ECB's policy response record: They are "still lagging far behind other central banks in [their] support for the economy," one economist told WSJ. Mario

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FOMC signals flexibility in asset purchases. One would be hard pressed to point out the differences between Wednesday's FOMC policy statement and that released in March. There was one new sentence however: "The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes." The consensus seems to be that, taken with unchanged inflation language, the new nod to flexibility tacitly suggests an increase in the size of monthly asset purchases may be on the horizon. Esther George, once again the lone brave hawk amongst a flock of aggressive doves, dissented for the third time in as many meetings.

ECB seen cutting rates. The Fed did its part Wednesday to perpetuate the global monetary easing status quo and the Bank of Japan has gone above and beyond. Now it's the

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Fed doves to fly. Economists expect the Fed to exhibit a more somber tone on the U.S. economy and the outlook for the nascent recovery when the FOMC wraps up its two-day policy meeting today. Since the Fed last met, unemployment data, retail sales, and GDP have all come in weaker than expected. Meanwhile, inflation has weakened, providing ample scope for the still-dovish policy committee to stand pat on asset purchases and reiterate its collective commitment (the now obligatory Esther George dissent notwithstanding) to easy money policies.

China PMI slips. China's official PMI for April slipped to 50.6 from 50.9 in March — analysts polled by Reuters expected a reading of 51.0. Markets were likely prepped for the weakish print after HSBC's "flash" PMI printed at 50.5 for April, missing expectations by a full point. Both reports cited weakness in new export orders, a reflection of

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U.S. national debt to fall in Q2. In what certainly seems like an unlikely turn of events, the U.S. government will retire $35B in bonds, notes, and bills during the second quarter, as spending cuts and higher tax receipts allow the Treasury to defy projections which showed net debt outstanding rising by over $100B during the three month period. If the national debt does indeed fall, it will be the first quarterly reduction since 2007. The respite will of course be short-lived, as the Treasury plans to borrow $223B from July through September, WSJ said.

In Japan, spending soars and unemployment falls. Abenomics got a vote of confidence from Japanese consumers in March as household spending jumped the most in nine years, while the jobless rate in Japan fell to a four year low. Spending rose 5.2% Y/Y, obliterating estimates of a 1.8% increase, as

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Greece to get new aid. European officials are set to approve a long-delayed €2.8B tranche of bailout money for Greece after the country's parliament passed a reform law Sunday which calls for the dismissal of 15,000 workers by the end of 2014 and the extension of a property tax assessed through citizens' electric bills. The next obstacle for Greece is winning approval for a €6B disbursement it needs by May 20 in order to repay a maturing bond held by the ECB.

Italy's new government takes office. Italian stocks (EWI) rallied the day after the country's new prime minister Enrico Letta was sworn in amid gunfire. The country struggled to install a government and teetered on the edge of political deadlock following fractious elections in February and five inconclusive presidential votes earlier this month. New economic minister Fabrizio Saccomanni has ambitious plans for lowering the country's

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Amazon's profit falls as investment glut continues. Amazon's (AMZN) Q1 net profit dropped 37% to $82M as EPS of $0.18 beat forecasts and revenue jumped 22% to $16.07B but missed expectations. It's the same old story for Amazon, with the company continuing to spend prodigiously in order to fuel its sales growth. While shares dropped 3.2% premarket, Stifel Nicolaus analyst Jordan Rohan says investors were encouraged by Amazon's comments that it's not suffering from weakness in Europe as much as eBay (EBAY).

Samsung's profit jumps 42%. Samsung's (SSNLF.PK) Q1 net profit jumped 42% to a record high KRW7.15T ($6.4B), while sales increased 16.8% to KRW52.9T as the company cemented its domination in the cellular phone market (see below). With the Galaxy S4 going on sale today in South Korea and tomorrow in other countries, analysts expect Samsung's profit to keep rising.

ADM to acquire GrainCorp