Today - Wednesday, March 12, 2014
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- Global equities are mostly lower as concerns about China's economy apparently occupy market thinking following a plunge in exports even though the data is a few days old already.
- Copper is continuing to sell off and is -1.2% at $2.915 a pound after sharp losses yesterday.
- Japan -2.6%, Hong Kong -1.6%, China -0.2%, India flat.
- Euro Stoxx 50 -0.95%, London -0.9%, Paris -1.2%, Frankfurt -1.2%, Milan -0.3%, Madrid -0.9%.
- U.S. stock futures: Dow -0.1%. S&P -0.15%. Nasdaq -0.2%.
- President Barack Obama reportedly plans to issue an executive order that could allow millions more salaried workers to receive overtime by raising the salary threshold at which employers would have to make such payments.
- Currently, businesses don't have to pay overtime to those earning over $455 a week, or around $24,000 a year.
- It's unclear by how much the threshold will rise, although one proposal bandied about would more than double the level to $984 a week.
- Companies might be unhappy about the prospective move, as it could increase their costs.
- Media-holding company Cox Enterprises and London-based private-equity firm Apax Partners are interested in bidding for auto-sales Web site Cars.com, Bloomberg reports.
- A deal would add to the AutoTrader.com sites that Cox and Apax already own.
- Cars.com's owner, newspaper consortium Classified Ventures, is hoping to fetch $3B in a sale. Classified's investors are Gannett (GCI), McClatchy (MNI), Tribune (TRBAA), A.H. Belo (AHC) and Graham Holdings (GHC).
- Bill Ackman has accused Herbalife (HLF) of breaking direct-selling laws in China - the nutrition company's fastest growing market - by making recruits pay entry fees and allowing distributors to recruit new members.
- The allegations appear to be Ackman's latest attempt to prompt authorities to investigate Herbalife, on which he has a $1B short position.
- The company responded by saying it complies with Chinese rules, while legal experts in the country said the law is anyway unclear and enforcement is lax.
- Italian Prime Minister Matteo Renzi has proposed cutting taxes by up to €10B and to reform the labor market as part of an attempt to revive his country's moribund economy and reduce unemployment of a record 12.9%.
- The government will reportedly pay for the tax reductions by lowering spending, including by cutting the number of Lockheed Martin (LMT) F-35 jets that the armed forces will buy.
- Meanwhile, the lower house of parliament is set to pass an electoral reform bill designed to make Italy more governable, including by increasing voting thresholds.
- The FTSE MIB is -0.2%.
- ETFs: EWI, ITLY, ITLT
- AstraZeneca (AZN) will take a pretax impairment charge of $275M after agreeing to sell its Alderley Park R&D site in northern England to Manchester Science Parks, a public-private partnership group.
- AstraZeneca didn't provide financial terms of the deal, which is part of the company's plan to establish a new global R&D center in Cambridge. However, AstraZeneca will remain a key tenant on the site. (PR)
- Microsoft (MSFT) has named Mason Morfit, the President of activist investor ValueAct Capital, to its board and audit committee as part of a deal that was agreed in the summer.
- Microsoft offered Morfit the board seat in August after ValueAct Capital bought a $2B holding in the company in April and began to agitate for change.
- Microsoft also declared a quarterly dividend of $0.28 a share. The dividend is payable on June 12 to shareholders of record on May 15. The ex-dividend date will be May 13. (PR)
- Puerto Rico has sold $3.5B in tax-free bonds, above the $3B that the Commonwealth planned to sell, with the high yield of 8.727% helping to attract $16B in orders from 270 investors despite the risks - the government has been grappling with existing debt of $70B.
- The new paper will mature in 2035 and provides Puerto Rico with up to a year-and-a-half of liquidity.
- Related ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, SHM, BABZ, BABS, XMPT, SUB, NYF, PRB, PZT, SMB, CXA, SHYD, PWZ, PVI, SMMU, MUAF, INY, MUAE, MUAD, MUAC, VRD, MUAG, GMMB, MUAH, RVNU
- The Department of Justice is reportedly investigating General Motors (GM) over whether the company is criminally liable for its failure to properly disclose the problems with ignition switches that have been linked to the deaths of 13 people and which prompted the firm to recall 1.6M vehicles.
- The federal probe adds to investigations in the House, and by the National Highway Traffic Safety Administration and GM itself.
- Toyota (TM) has agreed to raise base salaries for its Japanese workers for the first time in six years amid soaring profits at the company, with staff set to receive an average increase of 2.9%.
- Other firms are also increasing wages, including Honda (HMC), Nissan (NSANF), Nippon Steel & Sumitomo Metal (NISTF), retailer Lawson and Daiwa Securities Group (DSEEY).
- The pay increases signal how major companies are paying heed to the government's exhortations to lift wages as part of the battle against deflation.
- Separately, Toyota has issued $1.75B of "green" bonds linked to auto loans that will be used to help finance vehicles that are powered by hybrid or alternative fuel.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, JYN, NKY, DBJP, EZJ, EWV, YCL, JPNL, ITF, JGBL, JPP, JGBT, JPNS, JGBB, HEWJ, FJP