MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Sunday, May 26, 2013
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3:54 AM BOJ Governor Haruhiko Kuroda continues his campaign to calm the markets after last week's volatility, saying that Japan's banks are strong enough to withstand external shocks such as rising interest rates and a deteriorating economy. And should the economy recover, increasing rates wouldn't even have much of an impact on the soundness of banks. [Global & FX, Top Stories] Comment!
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3:41 AM The Department of Justice has filed a request asking the U.S. Bankruptcy Court in Manhattan to block the outline of AMR's (AAMRQ.PK) merger with US Airways (LCC), partly due to the $19.9M severance package that would be paid to outgoing AMR CEO Tom Horton. The DOJ's move follows the rejection of the package by Judge Sean Lane in March even though he approved the merger. [Consumer, M&A] 1 Comment
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3:28 AM BP (BP), Shell (RDS.A), Statoil (STO) and others have been sued for allegedly conspiring to fix the price of Brent Crude oil and futures contracts. The lawsuit, which was filed by Chicago-based commodity trading house Prime International, is the first such action following news of a European investigation into possible oil-price manipulation. [Energy] 1 Comment
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3:16 AM Visa (V) and MasterCard (MA) have sued trade groups and retailers that have rejected a $7.25B agreement over credit-card swipe charges, with the firms looking to prevent the defendants from seeking antitrust damages for the fees. The lawsuit on Friday came a day after 17 retailers, including Target (TGT) and Macy's (M), sued Visa and Mastercard over the charges. [Consumer, Financials] Comment!
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2:59 AM Fiat CEO (FIATY.PK) Sergio Marchionne has reportedly approached Goldman Sachs, BofA, Deutsche Bank and other banks about financing the Italian car maker's attempt to buy the 41.5% of Chrysler held by a union-run trust. The acquisition of the stake, which is worth $1.75-4.27B depending on whom you ask, would give Fiat access to Chrysler's $11.9B in cash and allow the combined company to carry out an IPO in New York. [Consumer, M&A] Comment!
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2:45 AM Two freight trains, one run by Union Pacific (UNP) and the other by BNSF Railway (BRK.A), collided at an intersection in Missouri yesterday, causing several cars to derail and injuring seven people. The derailment was the second this year involving a Union Pacific train on the stretch of track where yesterday's incident took place. [Consumer] Comment!
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2:36 AM Although he's just been reappointed as CEO of P&G (PG), one of A.G. Lafley's top priorities will reportedly be to find his successor. The problem Lafley faces is that several senior executives left during the tenure of Bob McDonald, including promising leaders such as Charles Bergh, now CEO of Levi Strauss, and new Baccarat boss Daniela Riccardi. [Consumer] Comment!
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Saturday, May 25, 2013
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10:55 PM Marchers in more than 400 cities across 52 countries took part in protests against Monsanto (MON) today, calling attention to what they say are dangers posed by genetically modified foods. Monsanto is "poisoning our children, poisoning our planet," claims one of the organizers. The company says its seeds help farmers produce more from their land while conserving resources such as water and energy. [Commodities, Consumer] 20 Comments
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6:30 PM To what extent should boards take direction from shareholders? Not much, in the eyes of CommonWealth REIT (CWH) and Urban Outfitters (URBN). Each has done a noble job of thumbing its nose at investors; the former by reinstating a director kicked out in a proxy vote, and the latter by finally giving into shareholders' wishes to elect a female director - by nominating the CEO's wife. (NYT, Gretchen Morgenson) 1 Comment
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6:00 PM Where's a GARP investor to look given a relative shortage of cheap growers? Barron's Jack Hough likes stocks "experiencing midlife growth spurts," particularly: Conn's (CONN), BioScrip (BIOS), JDS Uniphase (JDSU), and AFC Enterprises (AFCE). [Quick Ideas] Comment!
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5:30 PM Shares of Trimble Navigation Limited (TRMB) could rise 25% over the next year, Barron's says: "Over the past decade, as farmers embraced its technology, Trimble earnings grew at an annualized rate of 26%. This year, profits are likely to advance a more subdued 13%... As the construction sector rebounds and Trimble expands its end markets, profits should take off once again." [Quick Ideas] Comment!
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4:46 PM Barron's takes a liking to UTi Worldwide (UTIW): "As the restructuring proceeds and the airfreight market rebounds, profit margins could rise significantly, boosting earnings. The shares could rally 35% in the next 18 months." One criticism left unanswered: UTIW's margins are much thinner than those of freight-forwarding heavyweight Expeditors International of Washington (EXPD). [Quick Ideas] Comment!
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4:15 PM Apple's (AAPL) effective tax rate of 14% is just a smidgin lower than IBM at 15% and Google (GOOG) at 17%. And Apple's hardly on the lowest rung: Amazon's (AMZN) rate is just 6%, Ford's (F) 3%, and Carnival's (CCL) just 1%. In trying to untangle what S&P 500 companies pay in taxes, David Leonhardt finds top executives are exceptionally shrewd at holding tax rates down. (infographic) 23 Comments
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1:25 PM Blackstone (BX) plans to pull a "significant portion" of the ~$550M it has invested with Steve Cohen and SAC Capital in light of the ongoing insider trading investigation, according to a letter from pension consulting firm Russell Investments reviewed by Reuters. Blackstone's redemption request came "sometime before May 15," meaning the asset management firm made the decision prior to SAC's disclosure that it would no longer cooperate unconditionally with authorities and prior to news that Cohen himself had been subpoenaed. [Financials] 1 Comment
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9:01 AM Getting crowded? After a home-run of a buy idea by Oscar Schaefer at the Roundtable in January, Barron's is back with another bullish call on Hertz (HTZ) - only now the price is 55% higher, the $10B market cap company is a favorite of the hedge fund crowd, and the winners of a recent high-profile investment competition won by pitching a buy of the auto-rental leader. [Quick Ideas] 1 Comment
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8:25 AM Reuters’ Robert Campbell thinks Keystone XL (TRP) has become a victim of political posturing and says a rival plan, ETP's Trunkline, is being held to a far lower standard thanks to an incoherent U.S. environmental policy. But if a pipeline isn’t built, crude will move by more carbon intensive methods that also are susceptible to accidents. Indeed, moving oil by road or rail is no longer seen as a stopgap until pipelines are built. [Energy] 17 Comments
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Friday, May 24, 2013
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6:25 PM News Corp. (NWS, NWSA) expects to write down the value of its soon-to-be-independent publishing business by $1.2B-$1.4B this quarter, according to an SEC filing. The media company says "certain of its goodwill and intangible assets were potentially impaired” at the publishing business, which includes newspapers such as the NY Post and WSJ. [Consumer] 1 Comment
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6:02 PM Actavis (ACT) confirms that an Appeals Court has granted an injunction to AstraZeneca (AZN) to enjoin ACT from further distribution of its generic version of Pulmicort until AZN's appeal before the Court gets resolved. ACT launched its generic version on April 1, following a ruling that AZN's patent was invalid. The following day, the Court then issued a temporary restraining order blocking ACT's generic sales to permit AstraZeneca an opportunity to seek injunctive relief with the Federal Circuit. Shares -0.3% AH. [Healthcare] 1 Comment
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6:00 PM On the hour: S&P flat. 10-yr +0.02%. Euro +0.02% vs. dollar. Crude -0.44% to $93.84. Gold -0.47% to $1385.25. Comment!
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